85-year-old parents just sold their home
Hi Terry,
My 85-year-old parents just sold their home of 55 years. Unfortunately, they never planned well for a retirement. After the sale they received $170,000. They live on Social Security nothing else. Now they’re in a retirement apartment that costs $4500 a month. Their Social Security combined is $4000. They need to invest some of that $170,000 to earn interest, but also have a portion of it accessible each year in order to make ends meet.
Thank you for any guidance.
Terry Says
Well, it looks like they’ve done pretty well for not planning. And now, the most important thing is to keep that money safe and not risk ANY of it. I hope they have their health insurance (Medicare, and a supplement?) covered in their budget. And at age 85, they certainly should be able to dip into that $170,000 to the tune of $1,000- $1500 a month if necessary. The rest should be saved for true emergencies.
So go to the bank and put $100,000 in a 6-month CD, which should pay at least 3.5%, which will slightly beat inflation. And then put the rest in a money market deposit account, which should pay around 3%. They can have money transferred every month from the money market account into their household checking account, where their SS checks go. Encourage them to spend some money dining out, or maybe taking a short trip if they are up to it.
It’s a blessing that they have lived to this age, are reasonably healthy (I presume), and have some savings. And most importantly, they have a daughter who really cares about them. Make these years the best ones for them — as they have done for you.
