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I am trying to help guide an aging parent, pushing 75, on the best course of action. Their health is not great. They have been a lifetime renter so own no property.
They currently have around 700k in Schwab. 350k in close to 60 different stocks!!! 75k in ETF and Mutual funds, and 200k just sitting in cash which I have tried to encourage her to put into a money market.
At this stage of life what is the direction to go?
She is risk adverse and having some cognitive challenges.
DaveAre you prepared to take over Power of Attorney? With cognitive challenges, she may not be able to legally hand over the reins to someone, and she could be very susceptible to financial scammers.
LoriSpend down the cash and let the investments grow. If they need the money eventually for LTC expenses, selling the appreciated assets could be offset by the LTC expenses being medical deductions on the tax returns.
If it is not needed, then the heirs get the step up basis at the time of death.
JenniferI have a family member who has a large amount in individually stocks, maybe even more than your parent. We watch them to harvest losses but most have appreciated so much that it isn’t worth selling them at this point.
They are also sitting on a similar amount of cash.
My plan is to leave the current investments alone until the person passes and then sell everything to take advantage of the step up basis.
BunnyI accept that my aging parents lived through different financial experiences than me and have bigger aversion to risk.
For them, they feel most comfortable with a CD ladder.
Super low risk, preserving their wealth against inflation.
NoaIn a similar situation with an older family member, I recommended the book the simple path to wealth, showed them where it recommended 80%VTSAX 20% bonds, and did that.
I also shared we are following a similar strategy, and told her siblings what I was going to do before I did it.
My biggest fear is having people turn against me in a market downturn.
My second biggest fear is her getting scammed by someone along the way.
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