Helping a 78 year old family member who has approximately $211,000 saved, plus $1000/month in social security. Here is the breakdown:
In Brokerage Accounts at Vanguard:
59,000 in a Traditional IRA (VTINX Vanguard Target Retirement Income Investor)
129,000 in VMFXX (Vanguard Federal Money Market Fund), which is also the Settlement Fund. The 1-year return has been 5.36%
21,000 in Texas Instruments (TXN) held since around the late 1990s or early 2000s (I am not sure the tax basis)
Other:
1500 in Checking & Savings accounts
1000/month in Social Security payments
Rents, and does not own home
Tax Background: Family member has not been filing taxes, saying that their income is below the taxable threshold of around 14,000/year. I am not sure if social security "counts" toward this taxable income threshold or not. If it matters, the person lives in Florida where I believe social security is not taxed.
Some Overall Goals (not all are equal): Maintain a relatively low-risk but decent-yield portfolio to supplement social security income over the lifetime. Simplify asset management by having assets consolidated into few funds. Maintain low/no taxes.
Tentative Plans: Family member would like to sell their last remaining solo stock of Texas Instruments and roll it into the money market fund, VMFXX making around 5% as long as interest rates remain high, but of course this can drop and would cut into earnings. Rationale of selling TXN is to ease management (through consolidating this last remaining "solo" stock) and reduce overall market exposure in the portfolio.
Questions:
1) Does selling Texas Instruments (TXN) stock seem a reasonable approach, given the goals?
2) If not, why?
3) If so, would you recommend selling everything at once and, if so, would this necessitate filing a tax return, and would the tax liability likely be high? Alternatively, could sell in smaller "chunks" if this would help avoid tax exposure.
4) Family member generally withdraws about 6-7% out per year (13,200/year) to supplement social security. At the age of 78 and in good health: Could the family member increase the transfers to 10 or 15% per year and expect it to last through the life course and final year(s) expenses? Rents and does not own a home.
5) Any other advice on this general portfolio and strategy are welcome.
Thank you!
In Brokerage Accounts at Vanguard:
59,000 in a Traditional IRA (VTINX Vanguard Target Retirement Income Investor)
129,000 in VMFXX (Vanguard Federal Money Market Fund), which is also the Settlement Fund. The 1-year return has been 5.36%
21,000 in Texas Instruments (TXN) held since around the late 1990s or early 2000s (I am not sure the tax basis)
Other:
1500 in Checking & Savings accounts
1000/month in Social Security payments
Rents, and does not own home
Tax Background: Family member has not been filing taxes, saying that their income is below the taxable threshold of around 14,000/year. I am not sure if social security "counts" toward this taxable income threshold or not. If it matters, the person lives in Florida where I believe social security is not taxed.
Some Overall Goals (not all are equal): Maintain a relatively low-risk but decent-yield portfolio to supplement social security income over the lifetime. Simplify asset management by having assets consolidated into few funds. Maintain low/no taxes.
Tentative Plans: Family member would like to sell their last remaining solo stock of Texas Instruments and roll it into the money market fund, VMFXX making around 5% as long as interest rates remain high, but of course this can drop and would cut into earnings. Rationale of selling TXN is to ease management (through consolidating this last remaining "solo" stock) and reduce overall market exposure in the portfolio.
Questions:
1) Does selling Texas Instruments (TXN) stock seem a reasonable approach, given the goals?
2) If not, why?
3) If so, would you recommend selling everything at once and, if so, would this necessitate filing a tax return, and would the tax liability likely be high? Alternatively, could sell in smaller "chunks" if this would help avoid tax exposure.
4) Family member generally withdraws about 6-7% out per year (13,200/year) to supplement social security. At the age of 78 and in good health: Could the family member increase the transfers to 10 or 15% per year and expect it to last through the life course and final year(s) expenses? Rents and does not own a home.
5) Any other advice on this general portfolio and strategy are welcome.
Thank you!
Statistics: Posted by bueller_bueller — Wed Nov 06, 2024 11:34 pm — Replies 1 — Views 146