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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Answer Team Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 78705  
Subject: Re: Investing for Mom Date: 8/10/1999 10:47 AM
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I calculate you need about 7.8% return on your $300K to make up the shortfall in your mother's income. You should be able to come close with a laddered maturity bond portfolio in investment grade bonds. The $23K or so income would incur some income taxes that are not included in the 7.8%, so you would expect to slowly work down your principle covering them, but the tax bill should be about 15% or $3.5K/yr. Your funds should last for well over 30 yrs. Rising costs of your mother's care are probably a greater concern.

To set up a corporate bond portfolio, see the trust department at your bank, a broker, or a financial planner.

If the bonds are investment grade, rated A or better, your risk is minimal. You can get higher yield, but then you take a risk of investment loss.
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