My grandmother, age 94, has decided she no longer feels up to managing her money, and wants me to "take over." She is just about to go from a relatively independent apartment to an assisted living situation, and - I fear - her modest pension will no longer be enough to meet her expenses. Her assets total about 70,000 in various odd accounts that fast talking salesmen have convinced her to buy into, and she gets about 5 to 6 percent return on non FIDC insured accounts. I need both income and safety. I am a joint tenant on all of her accounts, and will have a power of attorney as well. Basically she just wants the bills to come to me and doesn't want to think about this stuff anymore. Where do I start?
Basically she just wants the bills to come to me and doesn't want to think about this stuff anymore. Where do I start?First, you need to do a complete accounting. How much money is where? What surrender charges would have to be paid to move any of the accounts? What bills will she have (how much & when)? What other income does she have (pension, social security, etc.) to pay her bills?Once you have a better feel for how much income she needs from her investments and how much she has to invest, you can start to make some more intelligent plans.The standard recommendation seems to be putting 5 year's worth of income in a series of CD's (each year a CD matures and provides that year's income and enough if withdrawn from the other investments to buy the new CD 5 year's out). This provides maximum safety for near-term needs. If the market is down in a given year, you have the opportunity to NOT buy the next CD in the sequence and simply buy 2 CD's the next year when the market is in better shape. As to what to do with the rest of the money, that depends on how much there is. No offense, but as your grandmother is 94, maintaining cash flow for 30-40 years in retirement really isn't a concern any more. Depending on her income needs and available assetts, you may just want to put all of her assetts into a money market account or the like and just let her draw it down as she needs to.But the first thing you HAVE to do, is find the money and do up a budget on her bills to find out where she stands today.Sacto Fool
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