My Mother is 85 years old and can't maintain her house anymore. She will be selling house and living off proceeds and Social Security and renting an apartment. I just looked at the 10-yr and 30-yr yields and they are looking pretty good. Thought a conservative strategy might be to purchase increments of $25K worth of 10-yr (or 30-yr) treasuries (so she can sell off a portion if needed and not have to sell all) and keep it invested at a decent rate (today is 4.44% & 4.622%)
Then, she can live off of her earnings and SS and keep her principal intact.
Of course there is the risk that the 10-yr yields could rise, thus making her investment worth less if she wanted to sell off one of the chunks of 10-yr treasuries.
I also considered building a bond ladder, having $30k come available every year but am concerned about reinvestment risk there. This honestly might be the the best bet because it would help ensure she doesn't have to take a loss selling a treasury when (if) the yields are higher.
I also thought about putting her age in treasuries and the remainder in a SPY but she obviously doesn't have a long time horizon to weather a significant drop in the equity portion (even though it would be small compared to the treasury side.)
What is the wisdom of this group on this? I want her to have a nice stable income but also have the ability to sell off of some of her treasuries if something major or more costly pops up (like assisted living.)
Then, she can live off of her earnings and SS and keep her principal intact.
Of course there is the risk that the 10-yr yields could rise, thus making her investment worth less if she wanted to sell off one of the chunks of 10-yr treasuries.
I also considered building a bond ladder, having $30k come available every year but am concerned about reinvestment risk there. This honestly might be the the best bet because it would help ensure she doesn't have to take a loss selling a treasury when (if) the yields are higher.
I also thought about putting her age in treasuries and the remainder in a SPY but she obviously doesn't have a long time horizon to weather a significant drop in the equity portion (even though it would be small compared to the treasury side.)
What is the wisdom of this group on this? I want her to have a nice stable income but also have the ability to sell off of some of her treasuries if something major or more costly pops up (like assisted living.)
Statistics: Posted by srcfo — Fri Nov 15, 2024 3:51 pm — Replies 6 — Views 663