Thank you. Your feedback is very helpful.Welcome to the forum.
Do each of your parents have a durable POA (DPOA) naming you as their agent for financial matters? If you will be helping them, you want copies of these so they can be put on file with their banks and financial institutions so they recognize your legal authority to act for your parents.
Get a firm handle on their annual gross spend (which you think is $200k) and their retirement income by source (SS, pension, etc.). Also review their tax return(s) as you want to understand how any investment decisions you make impact their taxes and the cost of Medicare premiums (IRMAA).
Your parents likely have sufficient assets for their needs (even if they need long-term care) and will likely leave an inheritance to heirs. Hopefully their estate planning including Wills, DPOAs and healthcare POAs/advance directives are in place and up-to-date.
As far as asset allocation, consider having ~8-10 years of net annual spend in income with the balance in equities. That may or may not be 70/30.
It would be more tax efficient for your parents to hold 100% equity in their Taxable account (+ some spending cash/emergency fund in a MMF) and 100% equity in their Roth accounts. Hold fixed income and whatever equity necessary to reach their desired portfolio allocation in tax deferred.
For cash flow purposes, don’t reinvest dividends in Taxable. Let the dividends plus RMDs go into the Taxable MMF to fund spending.
Your parents could have a simple low-cost DIY portfolio at Schwab without paying a tax cost to switch. Here is a 70/30 portfolio (10% of equity in international) example:
Taxable:
4% Schwab MMF
23% SWTSX, total U.S. stock fund
Father Roth:
0.5% SPY, S&P500
Mother Roth:
0.5% SPY, S&P500
65.4% Father Traditional IRA: - rollover SEP IRA into here
7% SWISX, total international stock fund
~38% SWTSX, total U.S. stock fund
~20% fixed income such as a U.S. bond fund
Mother Traditional IRA:
1.1% VOO S&P500
4.5% Annuity - provide details on this
1% Empower IRA - it does not make sense that this cannot be rolled over to your father’s Schwab IRA
Are both your parents still driving? Consider buying new vehicles with the latest safety features.
We have requested DPOA paperwork from Schwab. On first request Schwab has not sent anything and would like a phone call with the FA to 'talk about this'.
We are reviewing expenses. We haven't reviewed healthcare and Medicare expenses, yet. We will do this.
Yes, their directives are up-to-date. Thank you.
You are recommending 8-10 years in equities, yes? (200K X 10 = 2 million). Ok. I think I understand.
"For cash flow purposes, don’t reinvest dividends in Taxable. Let the dividends plus RMDs go into the Taxable MMF to fund spending." Thank you. Currently, they have never touched the money in their taxable account. With all of this advice, we are working on converting the MMF to equities.
My dad really appreciates the comments about the cars. My mom says once her car requires a lot of repairs, she doesn't want to replace it and they will go down to one car. My dad drives every day. Comments are very appreciated.
Statistics: Posted by kid3 — Mon Jan 19, 2026 10:51 am — Replies 20 — Views 1203