No. of Recommendations: 0
Greetings, ExRacer, and welcome. You asked:

Mom has just sold their home of many years and is moving with Dad to a retirement community. They're in their eighties and have lived comfortably on their meager pension and social security income.

Now, their future is tied up in the proceeds from the house sale. Mom wants it to be safe and I want it to keep ahead of inflation and maybe even grow a little.

But will she listen to her little boy (aged 52) who she still remembers squandering his allowance on the many things eight-year-olds love to buy?

I've been thinking lately that some laddered CD's would give Mom the peace of mind she's looking for and give her a little more interest than her 2% checking account. But with interest rates as low as they are, my fear is her after-tax return won't keep up with inflation.

And, in my opinion, annuities for eighty-somethings are foolish.

Are there any other options I should be considering at this point in their lives?


Given your mom's aversion to risk (or desire for "safety") and the age of both your parents, laddered CDs and/or bonds would appear appropriate. Yes, they will lose some to inflation, but at today's low rates it won't be a killer. My father is 88 and has been retired since age 65. He has kept nearly all his cash in bonds throughout that time. He knows and can see more should have been in stocks, but as a product of the depression he just doesn't want the downside risk. It's his money and his happiness. To me, as long as he doesn't run out (which he won't), that's all that counts.

Regards…..Pixy
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.