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I need some advice. I'm trying to help my parents make some smart financial choices and help them realize some of their dreams.

My parents are retired teachers, aged 64 and 62. They are both drawing public-school pensions and Social Security at this point, and they live quite comfortably in a nice ranch house they've paid off. They tend to carry one auto loan at a time, and like to take a lot of road trips. They're hinting strongly that they would like grandchildren :-)

I've done pretty darned well with my own IRAs, so mom has asked for some advice on what they should do. I have a good basic knowledge of investing, but am no pro, and the strategy that makes sense for me makes no sense for them, of course. She didn't even really know what they had -- just that a big chunk was in guaranteed interest; They want income and preservation of capital. They are quite risk-averse, having lost a chunk of their savings in the tech bubble. They are not at all confident investors, and are suspicious of financial planners/advisors because they feel (with justification) that they're not always getting good unbiased advice. (And what financial planner worth trusting would have two 50-something teachers invested heavily in tech stocks in 2000?).

Mom's initial idea was to "give" me $1000 and let me try to invest for them. I told her that was pointless, because even spectacular returns would only yield her a couple hundred bucks, and brokerage fees would be such a high load on that, my hands would be tied... I said it made a lot more sense to let me have a look at their entire portfolio and just get an idea where they were.

Here's what I found: They each have about $50,000 in IRAs through AXA/Equitable. My father has moved ALL of his IRA into a Guaranteed Interest Account which is yielding 3% this year. This makes me cringe. Mom is only about half (52%) in the Guaranteed Interest Account, and the rest in a basket of 4 mutual funds: 25% domestic blue chips, 13% int'l blue chips, and about 6% each in mid-cap value and small-cap value. So yes -- their combined portfoilio is 75% in Guaranteed Interest, currently earning 3%.

Add to the mix this: They want to purchase a vacation home "Up North" which would cost about $200,000. They have a very nice place in mind, and my wife and I have told them we could be 1/4 partners. The place is almost a "turnkey" situation -- relatively new and in great shape. It looks like they would get prime mortgage rates at around 6% right now.

Their income is quite secure, but it seems to me that there are quite low-risk ways to boost their returns a few percentage points (dividend stocks, CDs heck even Tresuries). And of course it doesn't make sense to hold a 6% mortgage and hold too much money in 3% Guaranteed Interest.

So the question is: What's the best way to help them make this happen?

I think I've laid out the basic scenario, but if I've omitted something crucial, just ask.
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