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Subject:  Plan For Mom Date:  6/6/2003  1:50 PM
Author:  splotto Number:  7424 of 35576


My mother asked me for some investment advice and I wanted to tap the well of wisdom here before I passed it on to her.

My mother will be retiring this September at age 62. She will be receiving a lump-sum payout by her employer. It will be roughly $100k.

She will also be receiving approximately $3,800 per month (after-tax/tax free). This is more then she needs to live on and will be saving the remainder every month (or squandering it on a lavish lifestyle so as to deprive her son of any inheritance <g>).

She asked me, being the Foolish son that I am, what I would recommend that she do with the $100k. She had already talked to an “advisor” who recommended stock mutual funds so she could “double her money in 10 years.”

Her number one priority is that the money be maintained and not decrease.

My initial suggestion is this:

10% in a money market account (ING, etc)
10% in I/EE Bonds (so at least that is tax deferred)
40% in a 5 year CD ladder (to protect against rising rates)
40% in short term municipal bonds, 5 yrs. Max. (held to maturity)

The 10% in cash and 10% in savings bonds provides her w