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Bill & Gail

Posted: Mon Jun 25, 2007 6:43 pm

Guest

What %, if any, should a million dollar portfolio of an 85 year old lady
contain of:

Income Trusts?

IPO's?

Segregated or "Protected" Investments with premature redemption penalties?

Thanks for your input.

Bill

PeterL

Posted: Mon Jun 25, 2007 6:43 pm

Guest

On Jun 25, 9:33 am, "Bill & Gail" <j...@sentex.net> wrote:

Quote:

Does she need current income? If so how much? Does she have heirs?
Would she like to leave anything to her heirs?

Dave Dodson

Posted: Mon Jun 25, 2007 6:43 pm

Guest

On Jun 25, 11:33 am, "Bill & Gail" <j...@sentex.net> wrote:

Quote:

What %, if any, should a million dollar portfolio of an 85 year old lady
contain of:

Some questions:
What is the purpose of the portfolio?
How much income does she need from the portfolio?
What is her state of health?
What is her risk tolerance?
What is her current allocation, and what are her concerns about it?

Dave

joeNOSPAM@bea.com

Posted: Tue Jun 26, 2007 1:00 am

Guest

An excellent portfolio for an 85-year-old can be had
with zero percentage of those. Who is making these
choices for her? Quo vadis? Follow the fees.
Joe

Jim

Posted: Tue Jun 26, 2007 1:00 am

Guest

Bill & Gail wrote:

Quote:

What %, if any, should a million dollar portfolio of an 85 year old
lady contain of

considering high probability of death within 10 years or sooner, as liquid
as possible, money market, CD, style, as opposed to anything of the equity
type

both bond and equity markets may do poorly over the next few years

darkness39@yahoo.com

Posted: Wed Jun 27, 2007 4:14 pm

Guest

On Jun 25, 5:33 pm, "Bill & Gail" <j...@sentex.net> wrote:

Quote:

What %, if any, should a million dollar portfolio of an 85 year old lady
contain of:

Income Trusts?

Are we in Canada? Then 0 to 20%, but Income Trusts are being phased
out.

Quote:

IPO's?

0%. IPOs on average underperform the market as a whole.

Quote:

Segregated or "Protected" Investments with premature redemption penalties?

Quote:

Thanks for your input.

Bill

Bill

Her portfolio should be c. 80% fixed income: typically investment
grade corporate and government bonds of short to medium term. For a
US taxpayer, possibly some tax exempt bond funds (depending on tax
rate and state of residency).

You can make a case for a small weighting in REITs (c. 10%) eg in a
REIT index fund.

And also 10% in a money market fund.

Ron Peterson

Posted: Tue Jul 03, 2007 9:01 am

Guest

On Jun 25, 11:33 am, "Bill & Gail" <j...@sentex.net> wrote:

Quote:

What %, if any, should a million dollar portfolio of an 85 year old lady
contain of:

Immediate annuities would probably be a good choice.

--
Ron

Guest

Posted: Tue Jul 03, 2007 2:53 pm

Ron Peterson <ron@shell.core.com> writes:

Quote:

On Jun 25, 11:33 am, "Bill & Gail" <j...@sentex.net> wrote:
What %, if any, should a million dollar portfolio of an 85 year old lady
contain of:

Immediate annuities would probably be a good choice.

That's a very bold thing to say not knowing much more
about her situation.

She may want to leave an estate, she may already have
a pension, etc.

The OP didn't tell us enough to really make a good plan,
but jumping to annuities (which may very well be suitable,
at least for a part of that million) without knowing more
is a bit much.

An 85 year old woman in my state can get an immediate
fixed annuity which pays out about $144,000/yr. Of
course, her heirs get nothing and that may be fine
with her, but that's a pretty huge presumption and a
pretty high payout (due very much to her life expectancy).

I'd say to work the other way around - what are this
woman's actual income requirements - total up her
cost of living (conservatively - meaning err on the side
of her spending more, not less), subtract any existing
pension/SS, then maybe find an annuity which pays that
much and take there rest and invest separately - as
conservatively or aggressively as she likes (since the
rest is mostly play money plus insurance against
inflation). ie. annuities may play a role, but they
are likely only part of the story and we really just
don't know enough to make better suggestions.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

Ron Peterson

Posted: Tue Jul 03, 2007 6:04 pm

Guest

On Jul 3, 5:53 am, BreadWithS...@fractious.net wrote:

Quote:

Ron Peterson <r...@shell.core.com> writes:
On Jun 25, 11:33 am, "Bill & Gail" <j...@sentex.net> wrote:
What %, if any, should a million dollar portfolio of an 85 year old lady
contain of:

Immediate annuities would probably be a good choice.

That's a very bold thing to say not knowing much more
about her situation.

It's something that no one else mentioned.

Quote:

She may want to leave an estate, she may already have
a pension, etc.

She can give away $11,000 per year to each of her loved ones.

Quote:

An 85 year old woman in my state can get an immediate
fixed annuity which pays out about $144,000/yr. Of
course, her heirs get nothing and that may be fine
with her, but that's a pretty huge presumption and a
pretty high payout (due very much to her life expectancy).

If she needs to go into some form of assisted living, she may well
need up to 50% of that now, and 100% of that 10 years from now.

Quote:

ie. annuities may play a role, but they
are likely only part of the story and we really just
don't know enough to make better suggestions.

You're right that more information is needed. But that didn't stop
others from commenting.

--
Ron

joetaxpayer

Posted: Tue Jul 03, 2007 6:04 pm

Guest

Ron Peterson wrote:

Quote:

She can give away $11,000 per year to each of her loved ones.

Well, it's $12,000, has been as of 2006.

I'm thinking she can give each of her 16 great grand children $60,000
into a 529 account, as these accounts permit a 5 yr look-ahead on gifts.
That way she gets the growth out of her estate as well. A Form 709 is
required, but no gift tax due, and her $1M credit is not tapped. If she
dies before the fifth year, the prorated money is treated as part of the
estate, but not any growth. This is a fast way to get $960K out of her
estate. Of course she can still gift $12,000 to other descendants or
anyone she wishes.
JOE

Guest

Posted: Tue Jul 03, 2007 6:04 pm

Ron Peterson <ron@shell.core.com> writes:

Quote:

On Jul 3, 5:53 am, BreadWithS...@fractious.net wrote:

ie. annuities may play a role, but they
are likely only part of the story and we really just
don't know enough to make better suggestions.

You're right that more information is needed. But that didn't stop
others from commenting.

Fair enough and my comment wasn't meant only for you. Sorry
if it seemed that way.

FWIW, the OP suggested IPOs and other things which are
even harder for me to figure out how they ought to
factor into an 85 yr old's portfolio...

Moreover, the more I look at things, the more I can
see immediate annuities as likely to play significant
roles in folks portfolios as they retire and beyond
and I think they are somewhat underutilized at the
moment. As the proportion of folks with real pensions
diminishes, they make a lot of sense. Unfortunately,
there's so much confusion about insurance products and
such hideous (and usually inappropriate) hard selling
of VAs that I'm afraid that folks hear "annuities" and
may tune them out some, even the ones which do make
sense. Thanks for bringing them up.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

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