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My wife and I have found ourselves, as many boomers have also, taking care of Mom and Dad. The most difficult situation lately has become advising them on money matters. My leanings are towards the foolish side of the spectrum while Mom leans toward coffee cans. Dad can't remember what he had for lunch, so his advice tends to be most interesting <g>.

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? Your suggestions will be most welcome.


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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
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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.


Take a look at goverment backed mortgage securities (Ginnia Mae} Could buy direct or a mutual fund.
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<<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.

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.
>>

Read O'Shaughnessey's latest book "How to Retire Rich". Look at the "Utility/dividend" strategy. The dividend yield is almost as good as bonds/CDs but with enough growth to offset inflation.

Good luck,
Ray
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