Investing For Parental Assistance

Jennifer thinks her parents will run out of money in 10 or 15 years. She and her husband are considering a taxable investment at $500 a month so that they can help her parents later. Dave likes the idea.

QUESTION: Jennifer in Tampa says her parents are struggling and in ill health. Jennifer thinks they will run out of money in 10 or 15 years. She and her husband are considering doing a taxable investment at about $500 a month so that they can help her parents later without impacting their lives. Dave likes the idea.

ANSWER: Yes, I would do that. I like that idea. It’s a little different than what I normally would think about, but I see where you’re going. Worst-case scenario for your parents, if something were to happen to them, then you would just have this money. You didn’t use it, in other words. Best-case scenario, they do better than you think they’re going to do, and you don’t need to use this money. You certainly could use it as the last stroke to pay off the house. It’s really not a permanent decision for it to not be used on the house. But for now, we’re going to stay a little bit more liquid knowing that we’ve got some potential extended family needs. I’m with you. I like it.