... what to do? My mother's house has sold, and I will be receiving a not-that-large sum of money ($150K) that, aside from her social security and her small pension, is the whole amount of money she will have forever and ever. As the POA and responsible party, I need to figure out what to do with the money to maximize income so that her last years in a nursing home are not burdensome to her or to us.Granted, it's not a lot of money. However, even as a complete neophyte to the world of finance, I have a suspicion I can do better than a money market or other savings-type account. Any ideas?
The sum of money you decribed is not a large amount when medical and living expenses are taken into account. Do not take excessive risks with the funds. Here is the allocation I would suggest (this is my subjective opinion):30% Money Market Funds or CD's 20% Low Risk (AA rating) Bonds20% Higher Risk Bond Fund15% S&P 500 Index15% Dividend Growth Mutual FundWith a pension and Social Security income, she should be able to afford a few more years of capital growth. As she ages, and current income becomes more important, consider reducing the Stock percentages to 5 - 10% and transfering those funds into the bond allocations.My best wishes for your mothers continued health and prosperity.- Matt
Thanks. I should have been clear that she is already in a nursing/assisted living home, and her income is insufficient to support the expense of the facility (it runs about $3,000 a month, plus medications and other expenses). Does this change your advice?
Given this new information, I would recommend reducing the S&P allocation to 10% (or less, depending on current income needs vs. availability gap) and forgetting about the mutual fund (invest that in the higher return bonds instead). This is just my two cents - I would also recommend consulting with friends and possibly a financial advisor....- Matt
My mom is in a nursing home. Before medicaid kicked in she had to pay her full way of about $4500/month until all savings were gone and proceeds from sale of home were used up. Her pension and social security now goes to the nursing home to partially pay her own way and medicaid makes up the difference.So, see an estate lawyer to see if any of your mother's assets can be shifted to the family. Unfortunately, no matter how astute your investment efforts are, Mom will pay her full way as long as she's able.
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