I asked awhile ago about moving my dad's Edward Jones revocable trust account to another brokerage (viewtopic.php?p=7850894&hilit=Edward+Jones#p7850894). We have initiated the move to Fidelity. I met with a Fidelity rep who helped me set up the trust account and initiate the transfer. The agent will also help me with the tax issues some of you raised in the previous thread. (Thanks!)
I'm looking for alternate suggestions to my current plan, described below, that I can consider as I move forward with my Dad's investments. Brief recap from the previous thread:
Dad will be 86 in October. He is legally blind (severe macular degeneration) and has Parkinson's Disease (stage 1, I think). He was diagnosed in early 2019 and seems to be progressing very slowly (a good thing) but I have to assume he could worsen at any point. His Mom lived to 96 and he has a couple other relatives that were equally long-lived. His mom lost her short-term memory in her late 80s or early 90s. I have to assume that long-term care will be in his future, with some form of dementia.
His taxable portfolio is $680,000. He does not have any tax-advantaged retirement accounts. He receives about $42,000 annually in COLA'd pensions. He does not receive SS (he was a Fed employee under the CSRS system). He has good medical insurance through Blue Cross Blue Shield, Medicare (inc Plan B), and Veteran's Affairs. Mom is deceased so he files single.
I still want (hope) to grow his portfolio so I am thinking about investing in these Fidelity funds:
60% Total Stock Market Index (FSKAX)
20% Short-term Treasury Bond Index (FUMBX)
20% Inflation-protected Bond Index (FIPDX)
My current plan for if and when he goes into assisted living / LTC: I will put the first year's worth of expenses into cash instruments (accounting for his pension income), and place most of the rest in a TIPS ladder to ensure adequate annual income. If I had to implement this plan today for a nursing home, I could purchase enough rungs to last through 2032 (age 94). Each annual rung would be $80,000. Any funds not invested in the ladder would remain in FSKAX to hopefully grow for a bit longer.
When coupled with his pension, the ladder should cover the cost of a private room in the nursing home affiliated with his current retirement community. I'm trying to budget for private room but realize that semi-private might be necessary. I realize that memory care will add considerably to the costs. Clearly, the more time that passes before he needs additional care, the better his financial prospects. Fortunately, he is still living independently and in good overall health.
I am 62 and in good health but should something happen to me, my sister takes over as trustee and PoA. She is 58 and in good health but has no investing experience. I need to keep the portfolio simple in case she has to take over.
My question is this: if you were in this situation (or have been), how would you invest his account to try to maximize his long-term care needs? I'm sure I have not considered all possibilities. The more information I have, the more comfortable I will feel moving ahead.
As always, thank you so much for your generous input.
3cat
I'm looking for alternate suggestions to my current plan, described below, that I can consider as I move forward with my Dad's investments. Brief recap from the previous thread:
Dad will be 86 in October. He is legally blind (severe macular degeneration) and has Parkinson's Disease (stage 1, I think). He was diagnosed in early 2019 and seems to be progressing very slowly (a good thing) but I have to assume he could worsen at any point. His Mom lived to 96 and he has a couple other relatives that were equally long-lived. His mom lost her short-term memory in her late 80s or early 90s. I have to assume that long-term care will be in his future, with some form of dementia.
His taxable portfolio is $680,000. He does not have any tax-advantaged retirement accounts. He receives about $42,000 annually in COLA'd pensions. He does not receive SS (he was a Fed employee under the CSRS system). He has good medical insurance through Blue Cross Blue Shield, Medicare (inc Plan B), and Veteran's Affairs. Mom is deceased so he files single.
I still want (hope) to grow his portfolio so I am thinking about investing in these Fidelity funds:
60% Total Stock Market Index (FSKAX)
20% Short-term Treasury Bond Index (FUMBX)
20% Inflation-protected Bond Index (FIPDX)
My current plan for if and when he goes into assisted living / LTC: I will put the first year's worth of expenses into cash instruments (accounting for his pension income), and place most of the rest in a TIPS ladder to ensure adequate annual income. If I had to implement this plan today for a nursing home, I could purchase enough rungs to last through 2032 (age 94). Each annual rung would be $80,000. Any funds not invested in the ladder would remain in FSKAX to hopefully grow for a bit longer.
When coupled with his pension, the ladder should cover the cost of a private room in the nursing home affiliated with his current retirement community. I'm trying to budget for private room but realize that semi-private might be necessary. I realize that memory care will add considerably to the costs. Clearly, the more time that passes before he needs additional care, the better his financial prospects. Fortunately, he is still living independently and in good overall health.
I am 62 and in good health but should something happen to me, my sister takes over as trustee and PoA. She is 58 and in good health but has no investing experience. I need to keep the portfolio simple in case she has to take over.
My question is this: if you were in this situation (or have been), how would you invest his account to try to maximize his long-term care needs? I'm sure I have not considered all possibilities. The more information I have, the more comfortable I will feel moving ahead.
As always, thank you so much for your generous input.
3cat
Statistics: Posted by 3cat — Sun Aug 18, 2024 4:58 am — Replies 5 — Views 417