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Subject:  Re: Mom's investments Date:  1/20/2001  9:34 PM
Author:  hberes Number:  27352 of 88826

My mother took me into her confidence three days ago, after one of her investments tanked. It was a limited partnership in shipping containers, that works like a pyramid scheme. Sigh.

So. Here are the stats. I need you opinions please...

Mom's age-82
$ to invest-$33,000.
$ needed every month-$163. (the balance is covered by Social Security)

I've run the calculators here on the Fool and it seems that conservative vehicles like bonds, T-Bills, CDs and the like just won't last as long as she might (we've a long-lived family). Looks like she'll need *at least* 13.5% to make it to age 100. 15% would be better.

At the same time, she can't gamble on a portfolio of high-risk stocks or funds.

I've run Morningstar screens on classically Foolish funds (management 3 yrs. or more, no-load, expense ratio less than 1%, 5-yr. return greater than SP500, turnover less than 25%), but also know that past performance is no guarentee, etc.

Vanguard 500 Index and be done with it?


Maybe I'm missing something, but the money you have should be plenty.

Length of withdrawl (till death): 18 years (at age 100)
Current investment: $33,000
Monthly withdrawl: $163

How many months is 18 years? 18 years x 12 months/year = 216 months

What would happen if you earned 0%? The money would run out after 202 withdrawls (202 x $163 = $32926).

That would be 14 withdrawls short, with 0% interest. With a money market account at 5%, you could easily earn $2282 (14 x $163) over the life of the investment to make it last a full 18 years.

Personally, I would leave 2-3 years worth of withdrawls in a Money Market account. Then stagger the rest in CDs.


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