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Spend your money on things that are meaningful to you. Vacations, sponsorships, charities. I pulled most of my funds out of the stock market several years ago. Only have about 10% in the market now and the rest sits in CD’s or rental properties. Interest rate on CD’s is a joke but at age 72, I am very risk adverse.
My DH wants to take a year-long cruise and we may do that!
Growing money to leave maximum inheritance could be the most meaningful thing to the OP, in which case some other people here might have investment advice. But if his meaningful things are of more self-oriented nature, he should spend on them now. He is statistically most likely to live 10 more years, to the age of 87, and if he lives past the age of 87, chances are that his scope of interest and action will be much narrower. If he has enough financial backup for ongoing expenses and emergencies, the time to spend any extra $ is now. The reason why I intend to take ss at 70, and why I have longevity annuities that start late ($8k/mo at the age of 80, $10k/mo at 85, and $13k/mo at 90) is so that I can spend all I can think of from 62 to 80.
I am 77 years old, in moderately good health, with $250,000 in cash (in an account that has ~$1.25 Million). Just wondering what this community suggest I do with that cash. Thanks in advance for your suggestions.
A basic question is what is your source of income you live off of? How dependent is it on that 1.25 million?
If you have pensions and SS especially if married it may well be that those sources provide all of your income for living and enjoying life. Rather than choosing to flush left over money down the toilet monthly you continue to invest in after tax accounts that continue in this boom market. Does this sound like you? If so there are many like you who have benefited from a roaring bull market. If you waited until 70 to take your SS or your spouse did it helped to maximize your monthly income now. Is that you?
If this is you saying so might help focus the responses to provide you real life alternatives geared to you.
Also your portfolio is 1.25 million and your cash holding is 250k which is 20% cash allocation. Is that per your plan allocation and as your after tax portfolio grew you added cash to keep your allocation. Now while 20% sounds reasonable for emergencies, health care etc etc etc. The actual dollar amount exceeds what you reasonably need.
Do you in addition have tax sheltered accounts that are just growing and only touched for RMD's which you have been taking for about 7 years and reinvesting? If so your after tax accounts not needed just grow and grown. Again you are not alone and others are asking that same question.
Responses in this forum tend to be centered on living in retirement off of SS and or tax sheltered investments with your income being based on draw down etc etc.
Having $250K cash in a ~$1.25M portfolio may seem like a big fortune to the large majority of people but it could be 'just sufficient' for a retired older couple living in a high COL area.
Even if the couple has enough income to cover all their daily expenses without drawing down their savings, they still have to prepare for major health care cost and other near-end-of-life care like assisted living and nursing homes.
I did a quick check on CCRC typical costs and here is what I found
A CCRC — also known as a “life plan community” — generally requires an entrance fee of between $100,000 and $1 million.1 The average fee is about $300,000
.....
Life care or extended contracts. These provide for unlimited amenities and assisted living, medical and nursing care without additional charges. As such, life care contracts generally come with the highest entrance fees and monthly fees ranging from $2,500 to $5,000.
▪ Modified contracts. Medical services are covered up to a specified level, beyond which the resident must pay additional for services. Entrance fees are lower than for life care contracts and monthly fees tend to range from $1,500 to $2,500.
▪ Pay-as-you-go contracts. This option offers the lowest entrance fees and, in many cases, the lowest monthly fees, but residents must pay market rates for medical services if they use assisted living or skilled nursing care.
If I was the OP, here are the things which I will do (assuming that all current expenses including taxes are taken care of with dependable sources of income):
1. Spend some of the cash on what he and his family enjoy be it vacation, foods, drinks, cars, electronic gadgets, charities etc.
2. Leave enough cash in the portfolio for fun, discretionary spending for say about 3-5 years and replenish the cash bucket as needed.
3. Move the remaining cash to equities to earn more returns to prepare for late life expenses and/or provide for the surviving spouse/heirs.
P.S. I have not reached the OP's age yet but the above actions are exactly what I am doing ;-)_
Having $250K cash in a ~$1.25M portfolio may seem like a big fortune to the large majority of people but it could be 'just sufficient' for a retired older couple living in a high COL area.
Even if the couple has enough income to cover all their daily expenses without drawing down their savings, they still have to prepare for major health care cost and other near-end-of-life care like assisted living and nursing homes.
I did a quick check on CCRC typical costs and here is what I found
If I was the OP, here are the things which I will do (assuming that all current expenses including taxes are taken care of with dependable sources of income):
1. Spend some of the cash on what he and his family enjoy be it vacation, foods, drinks, cars, electronic gadgets, charities etc.
2. Leave enough cash in the portfolio for fun, discretionary spending for say about 3-5 years and replenish the cash bucket as needed.
3. Move the remaining cash to equities to earn more returns in preparation for end-of-life care.
Also folks are assuming they are living off of that money and they may well not need it and are able to do all the things folks are suggesting independent of that 1.2M portfolio.
Thank you for the detailed research :-). This is actually an example of what Millenials seem to consider "business enterprise". I looked up Patri Friedman, and he was born in 1976, which is not technically Millenial but towards the end of GenX, however, the post-1975 or so vintages are de facto culturally Millenials. That generation is marked by a combination of astonishing cluelessness and supreme arrogance, having no idea of how much they don't know, while simultaneously believing they are the crown of creation :-)..........
I do find that account rather incredible myself. Even if we put aside my sea service, deep water salvage, antiquity theft, Cod Fish Wars, Greenpeace background, one would think that a modern idealist, with all the knowledge they have of how previous generations have really messed up the planet.............
..................would realize some kind of conclusion that you just can't dump a ship at sea without a care, realize by now that there are reasons for such laws.
PS- I just checked, and renting an inside cabin on a cruise ship for one person for one year starts at $1,300 per month!!! Wow! That is not much! The OP could actually rent that cabin for the rest of his average life expectancy, and probably not even use up the entire $250k despite inflation. I am getting more interested in this! I could totally do it in my more advanced age, and if I get covid on the ship, so be it!
PPS- correction, the rent starting at $1,300 is just for living on some cruise ship permanently parked somewhere near Panama Canal, not for actual cruising the world. Well, that's not so interesting. So the rental is probably out. But I could still see buying a cabin!
I am assuming your monthly income is adequately taking care all your expenses?
If that's the case, you have two choices 1) Invest it, or 2) Hide under the mattress, or 3) Give it away (charity)...
What about spending it? A leisurely cruise, maybe. A nice camera? A show cat that you keep as a house pet? Your spending ideas are probably different than mine.
You DO realize you can't take it with you. You're 77. My mom was in good health at 77 and died at 80. Several of my friends were fit as a fiddle at 65 and never made it to 70. Tomorrow is not even close to guaranteed at your age. And the one's that are 90 and still alive? They couldn't care less what's left for them to spend. It just isn't important to people that age. Their day to day needs are very simple.
Spend it down to the minimum "emergency" amount you might need in the event of something catastrophic. That's for you to determine. With that much dough, it's time for your own personal Christmas. Think about what you always wanted and get it - regardless of the cost. 2 or 3 storey home? Get an elevator. Steps are very dangerous at your age.
If you honestly earned that dough, for godsakes don't let it plop into some lazy relatives lap. Especially one you haven't seen in 25 years. That's silly.
Last edited by TwinbrookNine; 12-29-2021 at 01:12 AM..
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A leisurely cruise, maybe. A nice camera? A show cat that you keep as a house pet? Your spending ideas are probably different than mine. 
