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<< My mom is turning 60, and because of our foolish finances we are not sure whether she'll be able to retire at 65 or 70. Her mutual funds have not done too well. Since becoming a Fool, I've wanted her to invest using one of the Dow or S&P stock strategies talked about on the Motley Fool. But I just want to make sure that these strategies are sound for a person who might need the money (for a retirement income) in five years. What is the Foolish thing to do? I appreciate whatever Foolishness you're able to provide.
[email protected] >>

Good Morning Nicolas and a Foolish Welcome to You and Mom!

To date index investing has stood the test of time rather well. There are a couple of points to be made. First it is passive investing. That's not bad, per se, but you need to understand that that is what your are doing. Next some of the indices are much more volitile than others. This can be good or bad. Given the situation as I see it in your posting I would be looking hard at a Wilshire 5000 index and or the SP/Barra value index as the principal holding. You could supplement that with other indices if you and Mom wished.

As you probably know the great indexer is the Vanguard Group of Funds but also see the following.

Some other things you and Mom need to do together. First visit our retirement section and spend a good deal of time there getting information on reirement and planning. Here are two links. This is part on of a multi-part series on planning retirement. This is the lead page on TMF. There are links to a board in here that you may want to post to.

Get an estimate of Mom's Social Security benefits. Local offices have the request form. Also get an estimate of pension benefits if appropriate.

There is still time for Mom to open IRAs to the extend that she has the resources to do so.

Look into fixed income investing for the time when Mom will want (possibly need) a predictible stream of regular income.

To the extent possible Mom should be doing much if not most of this and you should be helping as necessary. So plan on some bonding time.

All The Foolish Best to You Both!
Peter Lincoln

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