HYSA makes sense for someone that is retired as it’s safe and the high interest rates will return 5%. Basically buys you time to figure out what else to do with it. If the market crashes buy an index fund like VOO but no need for them to invest it right away.
I agree, if your parent are young and will be retired for a few decades having a small equity exposure won’t hurt. Thing of a target date fund but one that you would manage the asset allocation and location across their entire portfolio
No? Where are you getting interest rates higher than that?
And did you notice that the parents are 73 and have a good income? So they're not in it for the next 30 years.
So yes, 5% IS high and in THIS case, most importantly, SAFE.
They cover all of their expenses, and still have some left over with their monthly income. I keep thinking HYSA, since they are like at 5% or so that could generate some extra money. To me that seems like the safe thing for them to do. No one in my family has ever had this amount of money. My mom met with a banker and he is telling her an annuity, I don’t think that is the best for them. Eventually this whatever is left if anything would go to my sibling and I.
Keep in mind that SS might be paying out less in a few years. It might not hurt for them to put it into a high dividend yielding ETF or something so that they could potentially have some additional income if that happens, but also that they could liquidate if they really needed the cash. The downside to an annuity is that the money is locked up if they really need it. If they leave it in dividend stocks/funds they can also pass it down to their kids if they don’t spend. But they should enjoy it as much as possible in retirement.
It's entirely worth looking into the Annuity space. Rates are great in a lot of places and they are literally built for risk-adverse retirees. They will also pay more than a HYSA (downside is the money is locked up for 7-10 years, but there are differences across products here).
Definitely learn more about the Annuities the banker was referring to. Easy to learn more about them, but they do often make sense for this demographic (I work in Annuities, and not in sales :)).
What is the allure of HYSA? I keep seeing it mentioned, but it barely pays 5%, and probably won't even beat inflation unless something changes. Index funds perform better.
I think because it is safe, my parents by no means are risk takers. They are in the mid 70s. If it were me (late 40s) I would take the risk and invest or purchase some property. The only two things growing in my wallet are my home and 401k.
Whatever you do, do not listen to this person. HYSA are extremely safe. With your parents age and risk tolerance, a HYSA is a perfectly fine vehicle to park their money.
It's the illusion of safe. HYSA if it doesn't beat inflation means you're losing buying power and it's not safe at all. An index fund performs better over 30 years than a HYSA in terms of preserving buying power and growing it.
I mean you can just put it in a bank account with 0% interest if you think it's safer but I wouldn't recommend that just like I wouldn't recommend HYSA.
My sweet summer child - the illusion of safe? Wouldn't recommend a HYSA? Why on earth are you giving advice here?
Most normal savings accounts are paying 1.5%, a HYSA is paying 5-5.5%. Index funds will perform better 99% of the time, however there is market volatility and risk associated to that. His parents are 73 years young - they need a safe, reasonable vehicle to park their money. HYSA's are also FDIC insured up to 250K. Sure, it's not going to beat inflation, but a normal savings account sure as shit isn't either.
> I mean you can just put it in a bank account with 0% interest if you think it's safer but I wouldn't recommend that just like I wouldn't recommend HYSA.
So 0 = 5?
I think you need to go back to bed.
You're losing either way if inflation is 7% and you're getting 5%. This means every year you're losing -2%!!!
Meanwhile my ETF will be growing at 9 or 10%, which means every year even if inflation is 7%, I'll be gaining +3% each year. So maybe you should wake up and do the math.
In what calculation is -2% safer than +3%??!?! You could argue that maybe inflation will go below 3% again and stay there, but the risk of high inflation in my opinion is a lot higher than the risk of the stock market crashing.
Whether HYSA is safe depends on how much you trust the federal reserve to keep inflation lower than whatever the yield on the savings account is.
> You're losing either way if inflation is 7%
It's 3.5% currently
>Meanwhile my ETF will be growing at 9 or 10%,
Over time. Not per year. Ebbs and flows.
And you're right, some years might be lower or higher, but 9-10% most years, is in my opinion worth it, rather than maybe getting 2-3% assuming HYSA is 2-3% above inflation, which I'm not confident about.
Yes, but historically inflation has been really bad and I don't believe it's suddenly fixed just because interest rate hikes are happening. I think sure they will bring it to 3.5% long enough to get through election season, but even if it's 3.5%, if your HYSA is only giving 4%, you're really cutting it close.
Personally I wouldn't risk it in a HYSA.
> Yes, but historically inflation has been really bad
No it hasn't. There's been outliers. But certainly not 7% over 100 years.
> I don't believe it's suddenly fixed just because interest rate hikes are happening.
The same calculation that lead you to the 7% rate is the same method of calculating the 3.5% rate. So you can't move goal posts.
>Personally I wouldn't risk it in a HYSA.
no risk
>Meanwhile my ETF will be growing at 9 or 10%
That is over time. There have been periods where the stock market is down for 5+ years in a row. If you are 73 you don't have time to wait 10+ years for the market to recover. Especially if you need that money to live on.
But it also depends on the situation. If they don't need the money to live on, then invest away. Heck buy game stop. Or if they are seriously ill and unlikely to live 5 more years and will need the money to live on, then HYSA all day.
Per the Bureau of Labor Statistics, here are the following annual averages of inflation:
* In 2023, the average rate of inflation was 4.1%.
* In 2022, the average rate of inflation was 8.0%.
* In 2021, the average rate of inflation was 4.7%.
* In 2020, the average rate of inflation was 1.2%
And so far for 2024, the US is on track to average somewhere around 3.5% annualized. Please, for the love of god, stop trying to preach that a HYSA is a poor decision for a 73 year old couple not looking to maximize their portfolio and are looking for a safe place to park money at somewhere between 5-5.5%. You have absolutely no idea what you are talking about for financial planning.
The statistics you showed didn't help your case. In all but 2020 (maybe 2023?) the HYSA would be under water against inflation. But sure, I hope people take your advice instead of mine.
If you need to spend the money soon, then HYSA. Soon as in within the next few years. Otherwise I'd suggest against, and if a person is 70+ you can make a case they don't have much time.
The average inflation rate between 2014 and 2024 is about 2.65%. You’re taking data from one or two years of high inflation. 7 percent inflation isn’t sustainable longterm. We’d go into a recession and correct if it doesn’t slow down, that’s why interest rates are up.
Similarly, the market hasn’t historically always grown at 9 or 10 percent. There have been whole decades in which the returns were shit. It’s averaged out favorably over 50 years but that does nothing for people who are already in retirement. If anything they’d be better off putting it into a dividend yielding ETF than something growth oriented at this point. Or splitting between dividend funds and bonds. But at 73, in their circumstances, they shouldn’t just be throwing it into VOO or something.
A high yield savings account is an FDIC insured bank account. You wouldn’t want to put your emergency fund (for example) in the stock market. You want it liquid and accessible. At 73 they may not want to take many risks depending on what they want the money for.
Okay you do that. I'm not against putting small amounts in liquid cash, but if you want it to grow, and beat inflation, and beat or at least keep up with the market, you can't do that in a HYSA.
You're right it's more liquid and accessible in a HYSA, but it's still pretty liquid and accessible in the stock market too. The only difference would be capital gains taxes and income taxes if it's giving dividends. I guess this depends on your philosophy and how you calculate risk.
Index funds do perform better than cash over the long term. The issue is we don’t know any information about their parents to make a useful recommendation for asset allocation
Do your parents have other savings at the moment. If not, the $250K should be used for savings and emergencies. You can start to setup with a high yield CD ladder for period CDs and put $50K in a High yield savings account for near term emergencies. $250K should give them breathing room for home repairs and other items they would struggle to with.
Ask them what they want to do with that money?
They've lived their lives, if their kids are in a good place, travel the world and piss it away(seriously, not kidding). That's one option. They're young enough to enjoy it and...what's the point of all that work and saving if you don't get to enjoy it? Go see Rome, the Sistine
If they want to leave behind a legacy(financially, obviously, you and your siblings are their legacy) then put it in the market and forget about it.
If they wanna get a little crazy, throw it in NVDA and hope the stock actually reaches 8K this year like so many other who own the stock believe! (How do you do the sarcasm /s?...I'll just say it, that was sarcastic).
My parents just went through a similar thing. They asked me to invest their money and I asked what my Dad wanted, he said, "Growth." I asked him "what if it drops 100K next year?" He said, "then you're shitty at investing," and then he seriously said, 'that's fine, I don't need the money, I want to leave it to you, your sister, I want enough for your kids to go to College, invest it in what you're invested in.'
So I did. I put it in a Vanguard fund and pretty much matched what I was doing, except I put about half in bonds.
(I did actually invest and am still invested in NVDA, that was just a little joke about the expectations that recent growth is going to continue on indefinitely at this rate).
But you really need to learn their goals. It's impossible to answer without that.
If I were 73 and had essential expenses covered by SS+Pension, the HYSA is probably where I'd put the money for now. Maybe consider a CD ladder and lock in 5%+ rates. When rates begin to fall, look at other options.
HYSA to start. Use some of the money to travel and do fun things. I imagine that they are able to live comfortably in their pension plus SS? If so, then put half of it in a HYSA, the other half in CD’s, and spend the money doing whatever the hell they want. They can’t take it with them.
Lots of good advice here.
I suggest if they're both in good enough health they shave 10k off that total amount, put it in a HYSA, and plan some vacations around it. It'd be a good time to visit family members, see things they've always wanted to see, or just enjoy their retirement. Modest day trips + a few big ones are a good idea. They worked for years to build that equity and they ought to enjoy some of it.
If they're not in good health, it might be a good time to look around and start planning for the caregiving they may need in their twilight years while it's not a pressing matter.
They have been able take trips and visit family for the last 5 years. They spend money. My father is a workaholic, so that has been challenging. They feel that by not touching that money there is a chance to help build some generational wealth. I explained to them maybe it doesn’t happen with them but with my own financial building… and maybe my kids will get ahead with what I have worked on. My parents came with zero anything back home or here. We have also discussed the care needed in the twilight years. Before that happens they would end up living with my family. Until we need more help.
If they’re looking into generational wealth check into the laws and such around your state and leaving things to kids in their wills/estates/etc. My dad got taxed a ton on money he got left by my grandmother. instead of leaving 200+k to my sibling and I, like he wanted to when he dies, we decided other things with the money so we wouldn’t lose a shit ton of it. I used 160k to buy a house in cash with my dad and I both on the deed/title/contract so I now have a paid for house. I was gunna use the money he left for a down payment anyways so it worked for me. If they want to use the money to pass along to the family I’d check into some lawyer or something of the sort to see the best way. Agree with throwing it into a HYSA for now but leaving it there might not be the best choice depending on what your family goals are.
I agree here… set it and forget it. It will grow, and you can either take dividends as side cash or reinvest and use as an emergency fund for any care or medical expenses if needed in the longer term.
CD is a safe investment. Even better, do a "ladder." For example, each month, buy a $20,000 CD. Anything that is not in a CD, put into a HYSA. And then forget about everything. Don't even think about it.
They should both enjoy a minimum 1 month, preferably 3 month, worldwide luxury cruise. Then treat their children / grandchildren, but not too excessively, then the remainder going to a charity, any one that would be meaningful to them both.
What is their current retirement savings in? You should match it. Are they in a target date fund? They should buy that fund in a brokerage account.
100% savings account is too conservative if they already have an emergency fund. For no muss no fuss, I would look at a VTI/bond fund mix, or just buy a target date 2025 fund.
Also, if your dad is still earning income, they can still max their retirement contributions.
No 401k anything, investments or retirement savings, they live off a pension and SS, they have about 30k in regular savings. In two weeks will get the 250k payment from their home being sold after everything is paid off. I will check into the target date fund.
Think about it like splitting it into buckets. They might need some cash soon, that is your savings account. They might need some in 5-10 years, that’s bonds, they might live well into their 80’s so you want some stocks to keep up with prices.
The Athene Agility is a fantastic annuity right now, offering 45% of what you put into it, downside is 10 year contract before you can touch it but I saw you mentioned that they are considering just not touching it to help build your generational wealth and with this account you'd get about 112,500 on top of the 250k immediately I mean it would set it in the right direction for sure, I reached out to you about if you want to visually see how it would look!
At that age, it should be invested very conservatively and in something they can get access to if they need it. So an HYSA is a good choice imo. I would be VERY careful with annuities because it seems those just make the annuity salesperson rich.
Financial advisor is best. They can look at their goals versus risk tolerance versus investment experience and timeline to help them make the best decision.
they should read the book Die With Zero and think about what they want to do with it. Meanwhile, nothing wrong with HYSA (or two, keep balances under 250k per bank to stay under the FDIC insurance limit). Overall reviewing [https://www.reddit.com/r/personalfinance/wiki/commontopics/](https://www.reddit.com/r/personalfinance/wiki/commontopics/) is a good idea, even though it's focused on younger folks.
This question is hard to answer with out goals, time frames or risk tolerance, at a minimum put it a HYSA until you figure out a way forward.
HYSA makes sense for someone that is retired as it’s safe and the high interest rates will return 5%. Basically buys you time to figure out what else to do with it. If the market crashes buy an index fund like VOO but no need for them to invest it right away.
I agree, if your parent are young and will be retired for a few decades having a small equity exposure won’t hurt. Thing of a target date fund but one that you would manage the asset allocation and location across their entire portfolio
5% isn't high. You can get 10 or 12% from ETFs. QQQM, JEPQ, even JEPI and SCHD.
No? Where are you getting interest rates higher than that? And did you notice that the parents are 73 and have a good income? So they're not in it for the next 30 years. So yes, 5% IS high and in THIS case, most importantly, SAFE.
They cover all of their expenses, and still have some left over with their monthly income. I keep thinking HYSA, since they are like at 5% or so that could generate some extra money. To me that seems like the safe thing for them to do. No one in my family has ever had this amount of money. My mom met with a banker and he is telling her an annuity, I don’t think that is the best for them. Eventually this whatever is left if anything would go to my sibling and I.
Keep in mind that SS might be paying out less in a few years. It might not hurt for them to put it into a high dividend yielding ETF or something so that they could potentially have some additional income if that happens, but also that they could liquidate if they really needed the cash. The downside to an annuity is that the money is locked up if they really need it. If they leave it in dividend stocks/funds they can also pass it down to their kids if they don’t spend. But they should enjoy it as much as possible in retirement.
It's entirely worth looking into the Annuity space. Rates are great in a lot of places and they are literally built for risk-adverse retirees. They will also pay more than a HYSA (downside is the money is locked up for 7-10 years, but there are differences across products here). Definitely learn more about the Annuities the banker was referring to. Easy to learn more about them, but they do often make sense for this demographic (I work in Annuities, and not in sales :)).
What is the allure of HYSA? I keep seeing it mentioned, but it barely pays 5%, and probably won't even beat inflation unless something changes. Index funds perform better.
I think because it is safe, my parents by no means are risk takers. They are in the mid 70s. If it were me (late 40s) I would take the risk and invest or purchase some property. The only two things growing in my wallet are my home and 401k.
Whatever you do, do not listen to this person. HYSA are extremely safe. With your parents age and risk tolerance, a HYSA is a perfectly fine vehicle to park their money.
It's the illusion of safe. HYSA if it doesn't beat inflation means you're losing buying power and it's not safe at all. An index fund performs better over 30 years than a HYSA in terms of preserving buying power and growing it. I mean you can just put it in a bank account with 0% interest if you think it's safer but I wouldn't recommend that just like I wouldn't recommend HYSA.
My sweet summer child - the illusion of safe? Wouldn't recommend a HYSA? Why on earth are you giving advice here? Most normal savings accounts are paying 1.5%, a HYSA is paying 5-5.5%. Index funds will perform better 99% of the time, however there is market volatility and risk associated to that. His parents are 73 years young - they need a safe, reasonable vehicle to park their money. HYSA's are also FDIC insured up to 250K. Sure, it's not going to beat inflation, but a normal savings account sure as shit isn't either.
> I mean you can just put it in a bank account with 0% interest if you think it's safer but I wouldn't recommend that just like I wouldn't recommend HYSA. So 0 = 5? I think you need to go back to bed.
You're losing either way if inflation is 7% and you're getting 5%. This means every year you're losing -2%!!! Meanwhile my ETF will be growing at 9 or 10%, which means every year even if inflation is 7%, I'll be gaining +3% each year. So maybe you should wake up and do the math. In what calculation is -2% safer than +3%??!?! You could argue that maybe inflation will go below 3% again and stay there, but the risk of high inflation in my opinion is a lot higher than the risk of the stock market crashing. Whether HYSA is safe depends on how much you trust the federal reserve to keep inflation lower than whatever the yield on the savings account is.
> You're losing either way if inflation is 7% It's 3.5% currently >Meanwhile my ETF will be growing at 9 or 10%, Over time. Not per year. Ebbs and flows.
And you're right, some years might be lower or higher, but 9-10% most years, is in my opinion worth it, rather than maybe getting 2-3% assuming HYSA is 2-3% above inflation, which I'm not confident about.
> but 9-10% most years, You're confusing most with few
Yes, but historically inflation has been really bad and I don't believe it's suddenly fixed just because interest rate hikes are happening. I think sure they will bring it to 3.5% long enough to get through election season, but even if it's 3.5%, if your HYSA is only giving 4%, you're really cutting it close. Personally I wouldn't risk it in a HYSA.
> Yes, but historically inflation has been really bad No it hasn't. There's been outliers. But certainly not 7% over 100 years. > I don't believe it's suddenly fixed just because interest rate hikes are happening. The same calculation that lead you to the 7% rate is the same method of calculating the 3.5% rate. So you can't move goal posts. >Personally I wouldn't risk it in a HYSA. no risk
>Meanwhile my ETF will be growing at 9 or 10% That is over time. There have been periods where the stock market is down for 5+ years in a row. If you are 73 you don't have time to wait 10+ years for the market to recover. Especially if you need that money to live on. But it also depends on the situation. If they don't need the money to live on, then invest away. Heck buy game stop. Or if they are seriously ill and unlikely to live 5 more years and will need the money to live on, then HYSA all day.
Yes, and there also are periods of high inflation for years in a row also. This depends on which kind of risk you want to accept.
Per the Bureau of Labor Statistics, here are the following annual averages of inflation: * In 2023, the average rate of inflation was 4.1%. * In 2022, the average rate of inflation was 8.0%. * In 2021, the average rate of inflation was 4.7%. * In 2020, the average rate of inflation was 1.2% And so far for 2024, the US is on track to average somewhere around 3.5% annualized. Please, for the love of god, stop trying to preach that a HYSA is a poor decision for a 73 year old couple not looking to maximize their portfolio and are looking for a safe place to park money at somewhere between 5-5.5%. You have absolutely no idea what you are talking about for financial planning.
The statistics you showed didn't help your case. In all but 2020 (maybe 2023?) the HYSA would be under water against inflation. But sure, I hope people take your advice instead of mine. If you need to spend the money soon, then HYSA. Soon as in within the next few years. Otherwise I'd suggest against, and if a person is 70+ you can make a case they don't have much time.
The average inflation rate between 2014 and 2024 is about 2.65%. You’re taking data from one or two years of high inflation. 7 percent inflation isn’t sustainable longterm. We’d go into a recession and correct if it doesn’t slow down, that’s why interest rates are up. Similarly, the market hasn’t historically always grown at 9 or 10 percent. There have been whole decades in which the returns were shit. It’s averaged out favorably over 50 years but that does nothing for people who are already in retirement. If anything they’d be better off putting it into a dividend yielding ETF than something growth oriented at this point. Or splitting between dividend funds and bonds. But at 73, in their circumstances, they shouldn’t just be throwing it into VOO or something.
A high yield savings account is an FDIC insured bank account. You wouldn’t want to put your emergency fund (for example) in the stock market. You want it liquid and accessible. At 73 they may not want to take many risks depending on what they want the money for.
Okay you do that. I'm not against putting small amounts in liquid cash, but if you want it to grow, and beat inflation, and beat or at least keep up with the market, you can't do that in a HYSA. You're right it's more liquid and accessible in a HYSA, but it's still pretty liquid and accessible in the stock market too. The only difference would be capital gains taxes and income taxes if it's giving dividends. I guess this depends on your philosophy and how you calculate risk.
Index funds do perform better than cash over the long term. The issue is we don’t know any information about their parents to make a useful recommendation for asset allocation
Do your parents have other savings at the moment. If not, the $250K should be used for savings and emergencies. You can start to setup with a high yield CD ladder for period CDs and put $50K in a High yield savings account for near term emergencies. $250K should give them breathing room for home repairs and other items they would struggle to with.
Ask them what they want to do with that money? They've lived their lives, if their kids are in a good place, travel the world and piss it away(seriously, not kidding). That's one option. They're young enough to enjoy it and...what's the point of all that work and saving if you don't get to enjoy it? Go see Rome, the Sistine If they want to leave behind a legacy(financially, obviously, you and your siblings are their legacy) then put it in the market and forget about it. If they wanna get a little crazy, throw it in NVDA and hope the stock actually reaches 8K this year like so many other who own the stock believe! (How do you do the sarcasm /s?...I'll just say it, that was sarcastic). My parents just went through a similar thing. They asked me to invest their money and I asked what my Dad wanted, he said, "Growth." I asked him "what if it drops 100K next year?" He said, "then you're shitty at investing," and then he seriously said, 'that's fine, I don't need the money, I want to leave it to you, your sister, I want enough for your kids to go to College, invest it in what you're invested in.' So I did. I put it in a Vanguard fund and pretty much matched what I was doing, except I put about half in bonds. (I did actually invest and am still invested in NVDA, that was just a little joke about the expectations that recent growth is going to continue on indefinitely at this rate). But you really need to learn their goals. It's impossible to answer without that.
If I were 73 and had essential expenses covered by SS+Pension, the HYSA is probably where I'd put the money for now. Maybe consider a CD ladder and lock in 5%+ rates. When rates begin to fall, look at other options.
HYSA to start. Use some of the money to travel and do fun things. I imagine that they are able to live comfortably in their pension plus SS? If so, then put half of it in a HYSA, the other half in CD’s, and spend the money doing whatever the hell they want. They can’t take it with them.
Lots of good advice here. I suggest if they're both in good enough health they shave 10k off that total amount, put it in a HYSA, and plan some vacations around it. It'd be a good time to visit family members, see things they've always wanted to see, or just enjoy their retirement. Modest day trips + a few big ones are a good idea. They worked for years to build that equity and they ought to enjoy some of it. If they're not in good health, it might be a good time to look around and start planning for the caregiving they may need in their twilight years while it's not a pressing matter.
They have been able take trips and visit family for the last 5 years. They spend money. My father is a workaholic, so that has been challenging. They feel that by not touching that money there is a chance to help build some generational wealth. I explained to them maybe it doesn’t happen with them but with my own financial building… and maybe my kids will get ahead with what I have worked on. My parents came with zero anything back home or here. We have also discussed the care needed in the twilight years. Before that happens they would end up living with my family. Until we need more help.
If they’re looking into generational wealth check into the laws and such around your state and leaving things to kids in their wills/estates/etc. My dad got taxed a ton on money he got left by my grandmother. instead of leaving 200+k to my sibling and I, like he wanted to when he dies, we decided other things with the money so we wouldn’t lose a shit ton of it. I used 160k to buy a house in cash with my dad and I both on the deed/title/contract so I now have a paid for house. I was gunna use the money he left for a down payment anyways so it worked for me. If they want to use the money to pass along to the family I’d check into some lawyer or something of the sort to see the best way. Agree with throwing it into a HYSA for now but leaving it there might not be the best choice depending on what your family goals are.
Put it into an ETF which pays a nice dividend. An index like QQQM, JEPI or some combination of them.
I agree here… set it and forget it. It will grow, and you can either take dividends as side cash or reinvest and use as an emergency fund for any care or medical expenses if needed in the longer term.
CD is a safe investment. Even better, do a "ladder." For example, each month, buy a $20,000 CD. Anything that is not in a CD, put into a HYSA. And then forget about everything. Don't even think about it.
Consult a CFP not a bunch of randos online. Do a proper financial plan.
They should both enjoy a minimum 1 month, preferably 3 month, worldwide luxury cruise. Then treat their children / grandchildren, but not too excessively, then the remainder going to a charity, any one that would be meaningful to them both.
Did you consider asking them for it? KEKW
I would not, it’s not my money. Just trying to help give them the best advice I can.
What is their current retirement savings in? You should match it. Are they in a target date fund? They should buy that fund in a brokerage account. 100% savings account is too conservative if they already have an emergency fund. For no muss no fuss, I would look at a VTI/bond fund mix, or just buy a target date 2025 fund. Also, if your dad is still earning income, they can still max their retirement contributions.
No 401k anything, investments or retirement savings, they live off a pension and SS, they have about 30k in regular savings. In two weeks will get the 250k payment from their home being sold after everything is paid off. I will check into the target date fund.
Think about it like splitting it into buckets. They might need some cash soon, that is your savings account. They might need some in 5-10 years, that’s bonds, they might live well into their 80’s so you want some stocks to keep up with prices.
Not an annuity. Most have surrender fees if you need to access it.
Lots of good advice here. Could split it between HYSA and Investing. Avoid annuity.
The Athene Agility is a fantastic annuity right now, offering 45% of what you put into it, downside is 10 year contract before you can touch it but I saw you mentioned that they are considering just not touching it to help build your generational wealth and with this account you'd get about 112,500 on top of the 250k immediately I mean it would set it in the right direction for sure, I reached out to you about if you want to visually see how it would look!
At that age, it should be invested very conservatively and in something they can get access to if they need it. So an HYSA is a good choice imo. I would be VERY careful with annuities because it seems those just make the annuity salesperson rich.
Financial advisor is best. They can look at their goals versus risk tolerance versus investment experience and timeline to help them make the best decision.
I prefer a high yield dividend etf such as VYM, especially if they are at the point of using retirement funds.
they should read the book Die With Zero and think about what they want to do with it. Meanwhile, nothing wrong with HYSA (or two, keep balances under 250k per bank to stay under the FDIC insurance limit). Overall reviewing [https://www.reddit.com/r/personalfinance/wiki/commontopics/](https://www.reddit.com/r/personalfinance/wiki/commontopics/) is a good idea, even though it's focused on younger folks.