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Concerned about older parents making radical change in portfolio

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  • Avatar dermie 
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    Just found out that my father (retired physician in his 70s) is planning to pull close to 800k from a diversified vanguard target retirement fund and put it all in a money market fund due to concern for possible coming downturn. He also already took my mother’s savings ~400k and put in vanguard wellsley fund (~58% bonds). They also have a house that is paid off. Obviously their financial situation is very different from my own (just finished residency) since they are both retired (mother is mid 60’s) but they are both in very good health. I’m just concerned that this is not very diversified (especially my fathers) and not protected against inflation. I don’t want to weigh in too much since it’s their money but don’t want to see them make a bad financial decisions.

    #240190 Reply
    CordMcNally CordMcNally 
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    I may have missed the question but, unfortunately, unless they ask you for advice then I don’t think they are looking for your advice. Personal finance is personal. Your father may feel that his asset allocation is currently to risky for their liking. You can certainly try to bring up finances in conversation and you can give your opinion but for the most part, like it or not, it’s mainly none of your business. Look on the bright side, there’s WAY worse decisions he could be making.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #240193 Reply
    Avatar dermie 
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    Sorry I should have clarified: my mother does not know much about finances and wanted my advice to make sure that he is not acting impulsively with their savings. I’m also relatively new to investing so wasn’t sure if this was something concerning and worth discussing with him since he is not receiving any other financial advice.

    #240196 Reply
    Avatar jhwkr542 
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    my mother does not know much about finances and wanted my advice to make sure that he is not acting impulsively with their savings.

    Click to expand…

    He is. As long as it’s not dementia, you probably don’t have a say in it. If you have your mother’s ear, I’d tell her they could use a financial planner. A good CFP would certainly pay for themselves it sounds like.

    #240198 Reply
    CordMcNally CordMcNally 
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    I’m also relatively new to investing so wasn’t sure if this was something concerning and worth discussing with him since he is not receiving any other financial advice.

    Click to expand…

    It’s never a great idea to have (at least what appears to be) a significant change in asset allocation. It’s tough to give specific recommendations without knowing all the details as well as their goals.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #240199 Reply
    childay childay 
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    significant change in asset allocation

    Click to expand…

    Sounds questionable.  Is this all their savings?  What type of account(s)?

    #240206 Reply
    childay childay 
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    my mother does not know much about finances and wanted my advice to make sure that he is not acting impulsively with their savings.

    Click to expand…

    He is. As long as it’s not dementia, you probably don’t have a say in it. If you have your mother’s ear, I’d tell her they could use a financial planner. A good CFP would certainly pay for themselves it sounds like.

    Click to expand…

    Yes agreed that would avoid OP being the annoying meddling child at least

    #240207 Reply
    Avatar EndoRobert 
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    Is this all the money they have?

    Isn’t the worst situation, $1.2m, even if invested very conservatively, paid off house, plus a doctor’s-salary social security contributions. Unless they have crazy overheard, would imagine they’ll be ok.

    #240208 Reply
    IntensiveCareBear IntensiveCareBear 
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    MYOB

    "Hmm, that sounds risky." - motto of the middle class

    #240209 Reply
    Lordosis Lordosis 
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    What if you convince him to change back to a more reasonable AA then the market does downturn?   Even if it is the right thing to do he may not realize it and unjustifiably blame you for the misfortune.

    “Never let your sense of morals prevent you from doing what is right.”

    #240219 Reply
    Avatar Phantasos 
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    Much better to impulsively go from aggressive -> conservative allocation than the other way around. Good thing he realized that the prior allocation was too risky before a downturn rather than after one.

    There is no way around it though, less risky portfolios have lower returns over time.

    "The problem with internet quotes is that you can't always depend on their accuracy" - Abraham Lincoln, 1864

    #240222 Reply
    Zzyzx Zzyzx 
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    Just found out that my father (retired physician in his 70s) is planning to pull close to 800k from a diversified vanguard target retirement fund and put it all in a money market fund due to concern for possible coming downturn. He also already took my mother’s savings ~400k and put in vanguard wellsley fund (~58% bonds). They also have a house that is paid off. Obviously their financial situation is very different from my own (just finished residency) since they are both retired (mother is mid 60’s) but they are both in very good health. I’m just concerned that this is not very diversified (especially my fathers) and not protected against inflation. I don’t want to weigh in too much since it’s their money but don’t want to see them make a bad financial decisions.

    Click to expand…

    this sounds perfectly fine – retired 70 yr old who has beaten the game should rebalance during volatile markets.  retirement income funds like wellsley are solid, they’re actively managed to try to protect against inflation.  Are you aware that he is anticipating RMD’s?

    It’s psychosomatic. You need a lobotomy. I’ll get a saw.

    #240228 Reply
    Avatar Peds 
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    What are their assets and AA?

    #240229 Reply
    wonka31 wonka31 
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    Joined: 03/24/2018

    If this is 10-30% of their net worth, this probably isn’t unreasonable given their age. Need more info from OP.

    #240231 Reply

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