Is 86/14 too steep of an AA for a 95 year old?

[FlaGator]

She lives on SS, so her needs from the portfolio would be long term care if needed. Heirs are DW, and her 2 siblings. I've briefly brought up to DW's siblings about a year ago how their mom's portfolio outperformed mine and that I suspected that their mom's risk should probably be lessened. They seemed agreeable. I get the feeling that they would be angry with me if the market tumbled and she lost a bundle. One BIL is adamant that I lower the risk. I think I will give them the details before I go see the FA.

I suspect that I can at least convince the FA that 40/60 would be the maximum risk she should take. Even the heirs are at ages where the current 84/16 is too risky for them.

With that info, I'd just move it all to cash/equivalents for liquidity and eliminate risk. Heirs can invest as they wish.

 

[ivinsfan]

After reading this thread , I see a couple different thought patterns..one is going to cash so Mom can pay all her "possible" if needed nursing home bills. The other is kind of implied as to what the possible heirs might think of DM's investment portfolio. This kind of works at cross purposes. Obviously if Mom has long held stock positions, cashing them out will trigger a large tax bill. So Mom's assets will obviously decline. Same deal if the assets are in and IRA or such. Also any stepped up basis in these after tax assets will vanish if they are cashed out. MIL is 95 years old and living at home.

Would a possible solution be to cash out the equivalent of a years worth of nursing home or assisted living care at the minute she actually enters long term care. You mentioned she lives on SS is there any IRA distribution included in that mix? It seems like there might be some middle ground here...

 

[bada bing]

If it was me doing the managing for my mom, I'd dial it back to 20/80. And I did.

The consideration I'd put into the mix is, what happens if mom's portfolio fails ? If her required spending overdraws her account, are you "on the hook" to make up the difference ? That was the understood situation with my siblings for my mom. She should have her portfolio managed prudently, get her necessary level of care, and if it failed we would backstop it. Thinking of it that way may or may not change your attitude. It did for me. My mom's portfolio became an extension of mine, because her liabilities also became mine in the worst case.

My mom passed 6 weeks ago. She had less than a year's expenses remaining in her account at the time.

 

[ivinsfan]

Well if someone outlives their assets Medicaid will step in. What happens if you cash out a parent ,all the converted cash is gone and the market stays high? In that scenario staying in the market and cashing out the money as you need it makes sense..It's too bad we don't have the power to see into the future. But I'd guess nursing home price increases will outpace inflation and interest rates.

 

[Koolau]

If it was me doing the managing for my mom, I'd dial it back to 20/80. And I did.

The consideration I'd put into the mix is, what happens if mom's portfolio fails ? If her required spending overdraws her account, are you "on the hook" to make up the difference ? That was the understood situation with my siblings for my mom. She should have her portfolio managed prudently, get her necessary level of care, and if it failed we would backstop it. Thinking of it that way may or may not change your attitude. It did for me. My mom's portfolio became an extension of mine, because her liabilities also became mine in the worst case.

My mom passed 6 weeks ago. She had less than a year's expenses remaining in her account at the time.

Sometimes these things w*rk out. I've mentioned elsewhere that I wrote one last check to the nursing facility just after mom passed. There was not enough money left in her checking account for the next month had she lived (her funeral was pre-paid.)

 

[Ronstar]

After reading this thread , I see a couple different thought patterns..one is going to cash so Mom can pay all her "possible" if needed nursing home bills. The other is kind of implied as to what the possible heirs might think of DM's investment portfolio. This kind of works at cross purposes. Obviously if Mom has long held stock positions, cashing them out will trigger a large tax bill. So Mom's assets will obviously decline. Same deal if the assets are in and IRA or such. Also any stepped up basis in these after tax assets will vanish if they are cashed out. MIL is 95 years old and living at home.

Would a possible solution be to cash out the equivalent of a years worth of nursing home or assisted living care at the minute she actually enters long term care. You mentioned she lives on SS is there any IRA distribution included in that mix? It seems like there might be some middle ground here...

I like the withdraw one year at a time idea! Yes she has RMD's from her IRA (about $900 per month) in the income mix with SS. But not much left in the IRA. Most of her $ is in a taxable account.

If it was me doing the managing for my mom, I'd dial it back to 20/80. And I did.

The consideration I'd put into the mix is, what happens if mom's portfolio fails ? If her required spending overdraws her account, are you "on the hook" to make up the difference ? That was the understood situation with my siblings for my mom. She should have her portfolio managed prudently, get her necessary level of care, and if it failed we would backstop it. Thinking of it that way may or may not change your attitude. It did for me. My mom's portfolio became an extension of mine, because her liabilities also became mine in the worst case.

My mom passed 6 weeks ago. She had less than a year's expenses remaining in her account at the time.

Sorry for your loss bada bing. And thanks for sharing how you handled your DM's finances.