Ask Terry Questions Elderly Invesment

Elderly Invesment

By Terry Savage on December 29, 2014 | Financial Planning / Retirement

Hi Terry,
Both of my parents are living and just sold their home (only asset). How should they invest their money? They will both be living with me, however, we would like to invest wisely for further expense of nursing home if needed. Their financial planner is suggesting an annuity. We do have HCPOA and POA in place. We live in SC.

Thank you!

Terry Says:  I can’t imagine why the financial planner is suggesting an annuity, since they are obviously at an advanced age.  Even an annuity that pays out if one of them passes away risks losing principal balance if they die within a few years.  And you lose all flexibility with the cash to make their lives easier.

I’m suggesting that you just keep the money in the bank, earning next to nothing — but available for their care.  This brings up all kinds of “spend down” issue if one (or both) should require extended custodial care.  The spouse remaining “at home” can keep a limited amount of assets (and social security income), but the rest of the money would have to be “spent down” for the first to need care.  Yes, you could run through that amount quickly.  But even if you “get the money out of their names” by gifting it to yourselves, Medicaid would “look back” to recover any money moved within the past 5 years.  An elder law attorney ( would be able to give you specific advice.  But this “financial planner” seems to be working for the commission in an annuity, not necessarily in their best interests!

Oh, PS — ask your tax advisor about deducting your parents as dependents on your own tax return.



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