Grandparent's Retirement

[yader]

Hi all,

 

My grandparents have moved into assisted living, sold the house, and are now trying to figure out a way to make ends meet.  Monthly income of $6000.  Monthly assisted living expenses of $7500.  We've got a $600,000 nest egg of theirs to work with and would love to make 4-5% a year.

 

Stipulations: No annuities.  We'd like to preserve as much of the lump sum as we can for health costs down the road.

 

Advice?  Do you have trusted advisors?

 

Thanks!

-yader

[yader]

Not sure how I missed it :/

 

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/advice-needed-security-selection-for-a-couple-on-ssi/

[stahleyp]

Is the income from like a pension or social security? If so, you guys only need to generate like $1500 a month then, right?

[plato1976]

yes, not a big issue to me, sounds like

btw: $6000 SSI seems good

 

Is the income from like a pension or social security? If so, you guys only need to generate like $1500 a month then, right?

[constructive]

I would start by making a full budget - not just the cost of assisted living, but all other expenses and taxes too. Then based on that, you have an annual withdrawal target from the portfolio. I'm guessing it will be around 5-6%? A little higher than recommended, but for most people it works out fine.

 

If they are comfortable with it, I would weight conservative, dividend paying stocks (either individually or in ETFs) a little heavier than bonds / cash. Most retirement financial advice emphasizing bonds is the product of an era when interest rates were substantially higher than they are now.

[ragnarisapirate]

Somewhat sarcastically, how about stocks with a high margin of safety, that have an identifiable catalyst in the next, say 2 years?

 

If a recession comes, your dividend plays may not work out. Bonds and like securities aren't really yielding much now anyway.