Any finance/IRA investment gurus in the house? need suggestions for retired parents

Russell James · 01-15-2011, 11:29 AM

Trying to help my parents with an investment choice. They are retired, late 70s. They have their main nest egg in great shape. Very diversified and solid investments. My question is they have a chunk of cash outside of their IRAs that I would like to help them pick something to earn a little return on. But very very safely. We want this to be their emergency fund, easily convertible to cash. Dad's health may need nursing care/home in a year or two or three. 1 year would probably be the soonest worst case they would want to access it as cash.

As they have had to make required withdrawls from the IRAs, they've stuck that money and some other savings into a brokerage account at Fidelity. Instead of just sitting there as cash, any suggestion on a very safe 1 to 2 year investment? We've started with just part of it in a tax free municial bond fund. But I'd like to think about a couple other very safe options to keep it diversified. CDs don't pay squat right now. Any suggestions?

Thanks much!

Berean · 01-15-2011, 11:33 AM

Seriously, they should take the surplus cash and go on a cruise and enjoy their retirement.

jhempsrt4 · 01-15-2011, 11:56 AM

Quote:

Originally Posted by Berean

Seriously, they should take the surplus cash and go on a cruise and enjoy their retirement.

I'm with this guy. They earned the money, they should enjoy it before it is too late.

Russell James · 01-15-2011, 12:08 PM

My dad's health is not up for cruises unfortunately. My mom is in a care provider role for him, so travel is really limited. Enjoying the day with a couple good walks is their speed lately. My mom someday may get back to being a world travelling retiree. So I think they just want to park the cash for a couple years, and if dad needs it for a nursing home, they want that account to be easily converted to cash.

Spooker_Doodles · 01-15-2011, 05:59 PM

They should talk to whoever is handling their retirement accounts. Tell them what you want. I am saving for a house right now so I said I wanted short term investing where I can take it out when I found something. As long as the interest rate is more than a bank you are coming out ahead provided that is where it is sitting currently.

Mr Twisty · 01-15-2011, 06:52 PM

If you get into anything commanding higher interest rates, there will be risk involved. Are they willing to take some risk it'll be worth LESS, 2 years down the road?

USMCSSGT-RET · 01-15-2011, 11:27 PM

Unfortunately, at a 1-2 year term, CD's or bonds are your only options that are safe, secure, and will generate a guaranteed return. A CD is a good choice due to its liquidity. My company has a 1 year CD paying 2.86% dividends at an APR of 2.9%, but you can only put in $3K principal. Other than that, like you said, most rates aren't great, but they're better than nothing.

01-15-2011, 11:29 AM	#1
Russell James Drives: '15 SS 1LE, '69 Z28 drag car Join Date: Dec 2009 Location: Mich Posts: 4,482	Any finance/IRA investment gurus in the house? need suggestions for retired parents Trying to help my parents with an investment choice. They are retired, late 70s. They have their main nest egg in great shape. Very diversified and solid investments. My question is they have a chunk of cash outside of their IRAs that I would like to help them pick something to earn a little return on. But very very safely. We want this to be their emergency fund, easily convertible to cash. Dad's health may need nursing care/home in a year or two or three. 1 year would probably be the soonest worst case they would want to access it as cash. As they have had to make required withdrawls from the IRAs, they've stuck that money and some other savings into a brokerage account at Fidelity. Instead of just sitting there as cash, any suggestion on a very safe 1 to 2 year investment? We've started with just part of it in a tax free municial bond fund. But I'd like to think about a couple other very safe options to keep it diversified. CDs don't pay squat right now. Any suggestions? Thanks much!

01-15-2011, 06:52 PM	#6
Mr Twisty Drives: the 2nd amendment home Join Date: May 2008 Location: OK Posts: 14,763	If you get into anything commanding higher interest rates, there will be risk involved. Are they willing to take some risk it'll be worth LESS, 2 years down the road? __________________ "They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -- Benjamin Franklin lib·er·ty /ˈlibərdē/ noun 1. the state of being free within society from oppressive restrictions imposed by authority on one's way of life, behavior, or political views

01-15-2011, 11:27 PM	#7
USMCSSGT-RET Drives: '14 SIM 2LT/RS Vert Join Date: Aug 2010 Location: Concord, NC Posts: 1,412	Unfortunately, at a 1-2 year term, CD's or bonds are your only options that are safe, secure, and will generate a guaranteed return. A CD is a good choice due to its liquidity. My company has a 1 year CD paying 2.86% dividends at an APR of 2.9%, but you can only put in $3K principal. Other than that, like you said, most rates aren't great, but they're better than nothing. __________________

01-15-2011, 11:33 AM	#2
Berean Drives: Truck Join Date: Apr 2010 Location: Home Posts: 2,439	Seriously, they should take the surplus cash and go on a cruise and enjoy their retirement.

01-15-2011, 12:08 PM	#4
Russell James Drives: '15 SS 1LE, '69 Z28 drag car Join Date: Dec 2009 Location: Mich Posts: 4,482	My dad's health is not up for cruises unfortunately. My mom is in a care provider role for him, so travel is really limited. Enjoying the day with a couple good walks is their speed lately. My mom someday may get back to being a world travelling retiree. So I think they just want to park the cash for a couple years, and if dad needs it for a nursing home, they want that account to be easily converted to cash.

01-15-2011, 05:59 PM	#5
Spooker_Doodles Z28, Berlin Blue, BLK Int Drives: 2003 Chevy S10 Join Date: Apr 2009 Location: Anchorage, Alaska Posts: 109	They should talk to whoever is handling their retirement accounts. Tell them what you want. I am saving for a house right now so I said I wanted short term investing where I can take it out when I found something. As long as the interest rate is more than a bank you are coming out ahead provided that is where it is sitting currently.