My mother (90 yrs) recently sold her house and has moved into an apartment. Her problem is how she is going to invest the money she received from the house so that she can derive some additional income in order to pay additional expenses that she will have to pay each month. She has set up a systematic withdrawal plan putting most of the proceeds in a money market fund. We have read many articles about planning but none when a lump sum comes at her age. Suggestions please!!
A lot depends on your mothers comfort level with risk. Better than a money market would be a laddered maturity investment portfolio. (You will find these discussed along with links to current interest rates on the Bond and Fixed Incomes Board in the Investors Roundtable Folder). CD's may be a place to begin. Investment grade corporate bonds would pay somewhat better yield (7+% these days) without much risk.The Foolish wisdom is to put part of the funds into an index mutual fund to provide some inflation protection. You may want to consider this depending on your mothers needs.Best of luck to you.
Read O'Shaughnessey's book "How to Retire Rich". Look in the back where he discusses the "utilty/dividend screen".This screen picks the highest yielding stocks that are rated highest for safety by Value Line.Ray
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