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    • economic
    • By economic 16th Apr 18, 12:13 PM
    • 2,935Posts
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    economic
    Parents in retirement - any ideas what to do with cash?
    • #1
    • 16th Apr 18, 12:13 PM
    Parents in retirement - any ideas what to do with cash? 16th Apr 18 at 12:13 PM
    Hi

    My parents have recently taken "early" retirement at the age of 62. Given cash deposit accounts are so poor, they are wondering what to do with the cash and was wondering if anyone has any ideas? Below is a summary of their current position:

    - Mortgage free house worth 650k (only in my dads name), a bit too big for them as me and my sibling have moved out so possibility to downsize (and upsize in location) but given transaction costs etc it certainly wont be to "release equity".

    - Cash savings in ISA and high interest accounts of around 370k. Yeh i know its losing money due to inflation...! Hence the main question.

    - S&S ISA worth 230k - mainly dividend stocks but also some growth funds too. Ignoring accumulation funds, the annual cashflow of dividends is roughly 4k - actual cash that hits the account and can be readily withdrawn.

    - SIPP pension worth 190-200k - plan is for that to remain untouched and passed onto me and my sibling IHT free.

    - Dad receives annuity income of around 12-13k.

    - Dad will eventually inherit from his parents - a share in a house worth (his share only) 200k and share in a commercial property worth (his share only) 300k. The commercial property is rented now for 28-30k so his share would be say 14k.

    - Parents should receive state pension of 18-19k in 3-4 years - unless the government changes things of course.

    Their annual expenditure is quite low with all the necessaries including food coming to around 12k a year. holidays etc would probably amount to 10-15k. So in total their expenditure is around 30k to be conservative.

    Given the above, does anyone have any suggestions what to do with the cash? Its not like they need a return on the money given their income from annuity + dividends is 16k and the shortfall can be made up easily from the cash until they receive state pension by which time the income will cover fully their expenses. But its still a good idea to think about given inflation is probably their main concern?

    thanks
Page 1
    • Dox
    • By Dox 16th Apr 18, 1:39 PM
    • 352 Posts
    • 199 Thanks
    Dox
    • #2
    • 16th Apr 18, 1:39 PM
    • #2
    • 16th Apr 18, 1:39 PM
    Given the amounts of cash involved (now and in the foreseeable future), maybe their best idea is to spend some of it getting some proper financial advice, based on a full understanding of all their circumstances.
    • economic
    • By economic 16th Apr 18, 1:56 PM
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    economic
    • #3
    • 16th Apr 18, 1:56 PM
    • #3
    • 16th Apr 18, 1:56 PM
    Given the amounts of cash involved (now and in the foreseeable future), maybe their best idea is to spend some of it getting some proper financial advice, based on a full understanding of all their circumstances.
    Originally posted by Dox
    I rather get advice from the many posters on here then one single advisor who may have other interests.
    • Keep pedalling
    • By Keep pedalling 16th Apr 18, 2:35 PM
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    Keep pedalling
    • #4
    • 16th Apr 18, 2:35 PM
    • #4
    • 16th Apr 18, 2:35 PM
    I rather get advice from the many posters on here then one single advisor who may have other interests.
    Originally posted by economic
    Maybe, but do they also want advice from a bunch of unqualified strangers on the web?
    • economic
    • By economic 16th Apr 18, 2:40 PM
    • 2,935 Posts
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    economic
    • #5
    • 16th Apr 18, 2:40 PM
    • #5
    • 16th Apr 18, 2:40 PM
    Maybe, but do they also want advice from a bunch of unqualified strangers on the web?
    Originally posted by Keep pedalling
    They are happy for all sorts of advice and then review it all to see what is best.

    Being unqualified doesn't mean it will be bad advice. There are many posters on here who actually provide very good advice. I myself have benefited immensely from these people.
    • Dox
    • By Dox 16th Apr 18, 2:42 PM
    • 352 Posts
    • 199 Thanks
    Dox
    • #6
    • 16th Apr 18, 2:42 PM
    • #6
    • 16th Apr 18, 2:42 PM
    I rather get advice from the many posters on here then one single advisor who may have other interests.
    Originally posted by economic
    Nobody here is qualified (or stupid enough) to give advice when they only have a brief outline of facts you see as the most important. Maybe your parents would do well to accept responsibility for their own financial future by seeing an independent financial adviser - the clue is in the job title.
    • Brynsam
    • By Brynsam 16th Apr 18, 2:46 PM
    • 755 Posts
    • 474 Thanks
    Brynsam
    • #7
    • 16th Apr 18, 2:46 PM
    • #7
    • 16th Apr 18, 2:46 PM
    Nobody here is qualified (or stupid enough) to give advice when they only have a brief outline of facts you see as the most important. Maybe your parents would do well to accept responsibility for their own financial future by seeing an independent financial adviser - the clue is in the job title.
    Originally posted by Dox
    Why do people never want to spend money on the things that are really important? So often it's the small details which are really relevant, so let your parents spend a bit of your inheritance, OP - you might get more in the long run!
    • Keep pedalling
    • By Keep pedalling 16th Apr 18, 2:58 PM
    • 4,843 Posts
    • 5,388 Thanks
    Keep pedalling
    • #8
    • 16th Apr 18, 2:58 PM
    • #8
    • 16th Apr 18, 2:58 PM
    Why do people never want to spend money on the things that are really important? So often it's the small details which are really relevant, so let your parents spend a bit of your inheritance, OP - you might get more in the long run!
    Originally posted by Brynsam
    Especially as they are already in IHT territory.
    • Robin9
    • By Robin9 16th Apr 18, 3:23 PM
    • 2,455 Posts
    • 1,598 Thanks
    Robin9
    • #9
    • 16th Apr 18, 3:23 PM
    • #9
    • 16th Apr 18, 3:23 PM
    This estate is about 2,000,000. Worth spending 10k on surely.


    PS I told my parents to spend, enjoy - and they did !
    Never pay on an estimated bill
    • Linton
    • By Linton 16th Apr 18, 3:27 PM
    • 9,333 Posts
    • 9,459 Thanks
    Linton
    It doesnt make sense to me to look at the cash in isolation. With that level of wealth in a variety of current and future assets one really needs a top down financial/income tax/IHT plan identifying the objectives and specifying how they are to be achieved. What they do with the cash would naturally fall out of the plan.

    If they dont have the experience and knowledge to create such a plan themselves I believe they should work with a professional who does. It wont be that simple if as I suspect their objectives are not clear especially if they dont realise what level of income could be sustained.
    • Daniel54
    • By Daniel54 16th Apr 18, 7:46 PM
    • 598 Posts
    • 702 Thanks
    Daniel54
    I agree with Linton and others that your parents need to have a plan,both in terms of capital and income spending in retirement as well as estate planning to mitigate excess capital being subject to IHT.

    For example,in terms of inheritance your father may decide to use a deed of variation to avoid the money/assets falling into his estate.That decision will have an influence on how he chooses to deploy his remaining wealth at this point in time.

    My plan at age 64 works for me,but I would not have got there without the original and continuing input from my IFA

    Seems to me your parents would benefit from advice on retirement and estate planning.The latter is most definitely not something to DIY unless they are totally up to speed with all the options available.
    • Daniel54
    • By Daniel54 16th Apr 18, 8:19 PM
    • 598 Posts
    • 702 Thanks
    Daniel54
    This estate is about 2,000,000. Worth spending 10k on surely.


    PS I told my parents to spend, enjoy - and they did !
    Originally posted by Robin9
    Initial advice should be a lot less than 10k

    My parents had a lot of fun in retirement running jump horses,which is not cheap!

    They still left me an inheritance for which I am very grateful.
    • MEM62
    • By MEM62 17th Apr 18, 11:01 AM
    • 1,529 Posts
    • 1,154 Thanks
    MEM62
    I rather get advice from the many posters on here then one single advisor who may have other interests.
    Originally posted by economic
    Posters who, although knowledgeable and well meaning, do not know the full details of you parents situation (Ages, life expectancies/health, goals, inheritance planning wishes to name but a few) as opposed to proper financial advice from a qualified expert.

    Hmmmmm....... Struggling to understand how you see this as the preferable option. Perhaps you are clinging onto the old clich! that IFA's are cowboys only sell you the products that they make the most money on. In the main, those days are long gone.

    With the sums involved you parents need proper advice.
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