Originally Posted by Pooh
Good shit. I will be relaying all of this to him.
Sounds like the worst possible time to make money through traditional means unfortunately.
We know rates aren't going to spike anytime soon, and I agree stocks aren't the place to be either with the recent run up.
You need a respected pro. Talk to family and friends to find a qualified and trusted advisor. There are factors here beyond what investments to pick. When to take SS? What is your father's health like and how long does he expect to live? He's going to need some real talk beyond just the investment.
Also, baseball cards.
The main problem here is in algebraic language you just asked us to solve for x
A+b-C/d*e+f-(G+h) = X
To put it another way we have no idea what the variables are as it relates to your father.
We don't know how old he is
How is is health
Does he have any family needs like a severely retarded brother or crippled grandson (I hope not)
You said he has a check due for $500K.... Is this the first one or the 4th of 4? Any tax implications if so?
You said he has a mortgage and its because the $$ is free. How much cash does he have on hand.
What do the rest of his assets look like?
He have an insurance policy open?
A professional fiduciary worth his salt will ask all these questions and a whole lot more. I and others on this board can help answer some questions but you won't get the best results for your father without filling in the unknowns.
I respect your point but you must of missed my point of using a fiduciary.I don't recommend using a professional. You can find everything you need to know for free online. Most of these scumbags will try to sell your father tax free municipal bonds and they take a hefty cut on the back end. You could buy those same bonds using etrade without the middle man fee. There is really nothing your father can do in this interest rate environment to make money unless he wants to gamble in real estate or stocks.
A non fiduciary money asshole is a grad school jerk who is hired by a company to sell you "products" that they get a % of.
A fiduciary works for you and gets no commissions on what they recommended. They charge an up front fee but in the end you get professional advice that works for your agenda, not his.
I answered most of this in the OP. I will do it again.
1. 61 years old.
2. Health is fine, no major issues
3. This check is the final payment for the balance of sale, he has been collecting monthly installments for 3 years after initial lump sum (he paid all debts/ exc mortgage off with)
4. Minimal cash on hand, under 50k.
5. Not much in the way of other assets, the business was the main one.
6. What like life insurance? No clue.
He has mentioned that he will be taking SS at 62, pretty much right when he gets this check. (he gets check a month later.) That will make up some of the income loss, but not nearly all of it. Just trying to figure a way to keep the income flowing as best he can.
I'm going to guess that it would be more beneficial to wait on social security until 65 and use money from this sale, but you need a pro, bro.
NBH - good info. You filled in some of the picture for sure. But #3 can be such a complex situation you really need a professional to help. If your dad was a Walmart greeter for 20 years it would be easy to help. This is a complex situation a professional should help with.
Sounds like this will be a majority of his best egg when it arrives. With no other savings he's going to want to play it conservative. It helps that he can collect at 62. Is that right? I thought it was an older age?
Good problems to have though.
I'm in the collect as early as posible camp for a man, but I'll have no issues living in a 1 bedroom condo near the beach on a fixed income.
Yes this is going to be the majority of what he will be living on the rest of the way. He also has some decent equity in his house, probably around 200k.
The only thing I am not clear on is the tax situation with that last payment. I know he paid a LOT in taxes when he got the first big check, but don't know if it just pertained to that money, and he still has to do the same thing with this new money.
I am going to see him this week maybe I can clear some of it up.
give half to Pooh and half to Djchaps
To be frank, he'll prolly only be able to earn at most $10k-$12k/year in a safe portfolio (a mix of CDs and dividend-bearing blue chip stocks). Sad to say it, but he should be looking to get another job to help tide himself over. Else, if he doesn't have a decent amount of SocSec money coming his way in a few years, he'll be eating into his capital very quickly, and it'll be gone, along with the equity in his house, in prolly 15 years.Yes this is going to be the majority of what he will be living on the rest of the way. He also has some decent equity in his house, probably around 200k.
The only thing I am not clear on is the tax situation with that last payment. I know he paid a LOT in taxes when he got the first big check, but don't know if it just pertained to that money, and he still has to do the same thing with this new money.
I am going to see him this week maybe I can clear some of it up.
Or he can expect to need to rely upon the generosity of his children to help cover his expenses not so distantly in the future.
Last edited by MumblesBadly; 06-07-2016 at 05:13 PM. Reason: Added range
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The benefit to having a consultation with a fee only planner who is a fiduciary is they can ask the right questions to figure out the optimal strategy. Your father may have a very low risk tolerance which is fine, but as others have alluded to in this interest rate environment the trade off for that security are very low returns. He very well may run the risk of outliving his assets based on his income needs if he is too conservative. It's not just drawing down the assets, it's factoring inflation in as well. But we don't know his income needs and expectations for standard of living in retirement. A good planner can explain the implications of not taking enough risk versus taking too much risk etc and how that impacts him and can show illustrations with numbers. They are hypothetical but can be very helpful.Yes this is going to be the majority of what he will be living on the rest of the way. He also has some decent equity in his house, probably around 200k.
The only thing I am not clear on is the tax situation with that last payment. I know he paid a LOT in taxes when he got the first big check, but don't know if it just pertained to that money, and he still has to do the same thing with this new money.
I am going to see him this week maybe I can clear some of it up.
There are a shit ton of bad advisors out there who rape clients on fees, but they're not all bad. Honestly in most cases of you have less than a certain amount of investable assets you're usually better off doing it yourself until you pass that threshold as the fees you pay aren't worth it. In my opinion your Dad is past that threshold, particularly since he's a fairly novice investor.
Just my two cents.
No its the logical school . . .Buy bitcoin, silver and gold? Are you legit retarded? Is that the Glen Beck School of Economics?
Because the dad is drawing social security before age 65 he may only earn salary or wages of $15.300 without penalty...part of the bargain for social security is get the aged out of the work force to make room for younger workers--in return, younger workers and employers pay social security tax..so at best he can only have a minimum wage job or a part-time job; or if self employed and married, his wife if younger can take the income he earns in excess of 15,300...
(long before there was a PFA i had my Grenade & Crossbones avatar at DD)
Unless he expects to die before receiving many years of payments, the penalty for working while receiving SocSec could be a good reason to delay receiving SocSec until the payments are maximized.Because the dad is drawing social security before age 65 he may only earn salary or wages of $15.300 without penalty...part of the bargain for social security is get the aged out of the work force to make room for younger workers--in return, younger workers and employers pay social security tax..so at best he can only have a minimum wage job or a part-time job; or if self employed and married, his wife if younger can take the income he earns in excess of 15,300...
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No its the logical school . . .
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drop it on lottery....Why not
Admittedly I know very little regarding investment funds, stocks, RRSP. Other than to know that it could go either way.
The most money in the shortest time for me has been investing in realistate house, and two rental condos, I did also buy a apartment in Vancouver and did the tits and lipstick Reno took four months to complete but made after all the costs almost 65k I did most of the work my self so I guess less concidering wages I should have recived. The other I would say fluke investment was when I bought over 200k in USD at par with CAD when I decided to renovate our cabin. Could have cashed 30% profit in a short time, lol that dident happen though.
Most people I know have made reasonably good return flipping houses and apartments, and rental apartments,
This may be a route to investigate for him if he is handy?
Good Luck
all hail Hydra
Originally Posted by DanDruff:Since I'm a 6'2" Republican with an average-sized nose and a last name which doesn't end with "stein", "man", or "berg", I can hide among the goyim and remain undetected unless I open my mouth about money matters.
at that age your best bet are TIPS (inflation protected treasuries) or a really diversified bond fund...
if you are going to do a diversified fund, look to vanguard...they are the gold standard of funds...low cost (most of their shit is under like 25bps per year which is really good) and good long term returns...
Use all the money to stake people in the WSOP, LDO.
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