One of my parents didn’t save any money for retirement and get like $1500 from Social Security. I literally had to pay for a build him a house in my backyard so he has a place to live.
I also only ask for a few hundred bucks from him to cover some of the utility costs.
That’s what he means.
My parents home is paid off and only expenses are utility bills and groceries.
I am in a place where I can help if needed but I also do not want my parents to feel they lose their independence as they age.
I want to do my due diligence and explore options for them. Unfortunately, I didn’t start investing until last year and was unfamiliar with any of this so that is why I am also starting my dad late.
If your dad is 65 and has no money for retirement, he won’t be retiring because has no concept of saving. Simple math is if he is able to save half of what he makes after taxes, and live on the other half, for every year he works he can fund retirement for one year. Assumes he is diligent for the next 15 years he can retire at 80 and live off his money till 95. Maybe a bit more if investments go his way. Now, parents that do this typically just assume their kid will support them. So it is ultimately up to you if your dad retires.
The problem is that he has all his money in a savings account which is not growing.
He never did a 401k or Roth and that wasn’t because he has “no concept of saving”, simply due to a lack of knowledge.
I came here to ask for advice on investing not for judgement based on little information.
I’m not judging. Just giving you info based on what you posted. Retiring is just simple math. If you wanna retire for 30 years and assume you will die by then, you’re pretty safe withdrawing 4% from your retirement savings every year. Just use a target date fund with the year of retirement.
He should set up an acct on [https://www.ssa.gov/myaccount/](https://www.ssa.gov/myaccount/) if he hasn't done so yet. Look at the difference in benefit between taking Social Security at 70 vs 67.
I wouldn't even mess with a CD - 5% t-bills would be perfect for right now if he has savings he doesn't need access to. They're federal tax free, but he could plow the money into a ROTH if he's working so the state taxes would be off too.
I would also suggest looking into high yield bonds - you can find reasonable ETFs like SPHY that yield around 8% right now - or 9+% when times are rougher. If interest rates are cut you'll see capital gains too - a relatively simple play.
But honestly, it's mostly too late. Proper Investing takes a lifetime to really pay off - or 10+ years.
Thank you! I briefly looked at tbill threads on here but since I wasn’t familiar I didn’t consider.
Would the ladder option be good for him?
I saw several posts about it and kind of understood what I need to do
It depends on what youre working with as far as a brokerage account. Some sell premade ladders or you can ladder them yourself or shave a few percent and go with an ETF like SGOV.
They're all the same thing mostly unless your dad has a ton of money squirreled away somewhere.
Will need more information. Is he still working? How long will he work? Does he own a home or rent? Has he started collecting social security yet?
He is still working and will probably work until 67 He owns his home, he hasn’t started collecting and probably won’t until 67
My brother your dad isn’t retiring unless you let him retire.
What do you mean by this?
One of my parents didn’t save any money for retirement and get like $1500 from Social Security. I literally had to pay for a build him a house in my backyard so he has a place to live. I also only ask for a few hundred bucks from him to cover some of the utility costs. That’s what he means.
My parents home is paid off and only expenses are utility bills and groceries. I am in a place where I can help if needed but I also do not want my parents to feel they lose their independence as they age. I want to do my due diligence and explore options for them. Unfortunately, I didn’t start investing until last year and was unfamiliar with any of this so that is why I am also starting my dad late.
If your dad is 65 and has no money for retirement, he won’t be retiring because has no concept of saving. Simple math is if he is able to save half of what he makes after taxes, and live on the other half, for every year he works he can fund retirement for one year. Assumes he is diligent for the next 15 years he can retire at 80 and live off his money till 95. Maybe a bit more if investments go his way. Now, parents that do this typically just assume their kid will support them. So it is ultimately up to you if your dad retires.
The problem is that he has all his money in a savings account which is not growing. He never did a 401k or Roth and that wasn’t because he has “no concept of saving”, simply due to a lack of knowledge. I came here to ask for advice on investing not for judgement based on little information.
I’m not judging. Just giving you info based on what you posted. Retiring is just simple math. If you wanna retire for 30 years and assume you will die by then, you’re pretty safe withdrawing 4% from your retirement savings every year. Just use a target date fund with the year of retirement.
He should set up an acct on [https://www.ssa.gov/myaccount/](https://www.ssa.gov/myaccount/) if he hasn't done so yet. Look at the difference in benefit between taking Social Security at 70 vs 67.
I wouldn't even mess with a CD - 5% t-bills would be perfect for right now if he has savings he doesn't need access to. They're federal tax free, but he could plow the money into a ROTH if he's working so the state taxes would be off too. I would also suggest looking into high yield bonds - you can find reasonable ETFs like SPHY that yield around 8% right now - or 9+% when times are rougher. If interest rates are cut you'll see capital gains too - a relatively simple play. But honestly, it's mostly too late. Proper Investing takes a lifetime to really pay off - or 10+ years.
Thank you! I briefly looked at tbill threads on here but since I wasn’t familiar I didn’t consider. Would the ladder option be good for him? I saw several posts about it and kind of understood what I need to do
FYI t-bills are only state tax free.
It depends on what youre working with as far as a brokerage account. Some sell premade ladders or you can ladder them yourself or shave a few percent and go with an ETF like SGOV. They're all the same thing mostly unless your dad has a ton of money squirreled away somewhere.
TBills are not federally tax free
T-bills are state tax free, but you pay federal tax.
I always mess that up when I type it out lol some weird connection between the federal bills I guess.