[USER]

Asking for my family.. My parents currently have 300k in cash in savings and high yield savings. They’re retirement age.

Is there anything we can do to better invest or increase this without losing it.

My parents will probably be living off of a pension from my father’s career. Their house is paid off.

Thank you

[Amy]

Knowing what to do with the $300K requires having a fuller picture of your parents’ total financial plan. The spending power of the pension payments will erode over time with inflation.

How much of their living expenses now and in the future will the pension cover? Will they collect Social Security? Do they have investments?

Consider meeting with an advice-only advisor to review your parents’ full financial picture. The advisor will give advice on what to do and your parents can then go implement that plan on their own.

[Michelle]

Honestly, I’d probably encourage them to work with a CFP who can help then make a smart decision that they understand and keep them from doing things that will hurt them. For instance, it sounds like they could handle a bit of risk.

But probably not doing it themselves because they’d see the market drop and pull their money.

They need a good guide which they feel confident in and comfortable with.

Also, check out: How to manage 4% withdrawal rate in retirement?

[Mike]

Where are they? Different countries have different laws, but I would recommend meeting with an elder law attorney.

[John]

An easy option could be a target date retirement fund, choosing 2024 or earlier. It would be very stable, but some growth as well.

[Jay]

Hard to tell without more details. Do they have other retirement accounts outside the pension? Does the pension fully cover their expenses? Are they expecting to use any of these money for a future expense?

I would say save some for an emergency fund, if not yet completed. If pension fully covers expenses, I don’t see why they can’t invest more into stocks than bonds. As others eluded to, potentially a 60/40 or maybe even 70/30 allocation, depending on their risk tolerance and potential future reliance on the money.

Don’t miss: 30yo couple, $320k income, $40k liquid, $150k retirement, $70k business loan, advice?

[Golden]

Hold 2-3 years of expenses in cash. The rest can go into a 60/40 allocation index ETF.

[Christopher]

US treasuries (short term) may have a higher yield than the current HYSA and are exempt from state and local taxes (if applicable).

Setting up a 4-week or 8-week T bill ladder is pretty easy.

It probably won’t always be that way, but for now it can get a bit more yield without taking on risk.

[Author]

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