I have an unfortunate situation with My sister in law but probably not uncommon. She has unfortunately never invested and has a decent amount in cash reserves (total unknown) but I do know that she has ~$30k right now to invest. I figured it's a good idea to start a Roth IRA right now and invest the $8k for 2025 and in Jan invest the $8600 for 2026. Knowing that 100% S&P 500 would be too much risk for her situation, what would be a good conservative mix that would still provide a decent return? And what are ideas for the remaining $13k?

  • For someone in their mid 60's who has never invested before, I would go with a mix of equities and bonds or a balanced fund (or maybe some of both).
    For equities, either VT (my preference), or VTI or SPYM, possibly paired with some international (VXUS, IXUS, or VYMI) if she is open to international.
    For bonds, I like BIV and FBND
    For balanced funds: I would look for something 60/40 or more conservative. Options really depend a lot on where she opens her accounts. AOR (iShares Core 60/40 Balanced) and AOK (iShares Core 80/20 Balanced) would work at any brokerage. A lot of balanced funds are actively managed and higher expense than I like, but my take on working with older folks (I am that age myself!) and people new to investing is that they can be very drawn to these funds and take some comfort in them, particularly if they have a name they have heard before and/or have been around a long time, like the Puritan Fund and the Wellington Fund.
    At Fidelity: FPURX (Puritan Fund), FRYBX (Fidelity 50% Allocation Fund), TRRIX (T Rowe Price Retirement Balanced Fund), RPBAX (T Rowe Price Balanced Fund), INPFX (American Funds Conservative Growth & Income) (I believe these last two are fee-free/load waived at Fidelity but am not positive).
    At Vanguard: VWELX (Wellington Fund), VGSTX (Vanguard Star Fund), VSMGX (Vanguard LifeStrategy Moderate Growth), VBIAX (Vanguard Balanced Index Fund), VSCGX (Vanguard LifeStrategy Conservative Growth), VTINX (Vanguard Target Retirement Income)
    At Schwab: SWOBX (Schwab Balanced Fund), BALFX (American Funds Balanced Fund), RPBAX (T Rowe Price Balanced Fund). The last two should be no transaction fee and load-waived at Schwab.
    Passively managed funds (my preference) are in bold.

    parent

    This is very helpful info, thanks!

    parent root
  • parent

  • Does she have any debts, mortgages included?

    parent

    No debts.

    parent root

    When does she expect to retire? Does she own a house? Any medical issues on the horizon? How is her car? What caused her to start thinking about investing now?

    parent root

  • At this point the most important thing is to insure that she max out her social security benefit by retiring later at 67. Don't retire early

    For investment, should need to look into very conservative portfolio. Ideally she should not have too much cash. I suggest permanent portfolio, all-weather portfolio, or bogle's 3 fund portfolio. For 3-fund portfolio, I suggest AOR (60% global stocks, 40% bonds), AOM (40% / 60%), or AOK (30% / 70%). I am not a financial advisor tho

    parent

  • I would not go 100% stocks at 60 years old.

    Here’s what I would do: 30% VOO, 30% VXUS, 30% VTG, 10% GLD

    parent