I am POA for my 88 year old Dad. Some thoughts:
1. SS longevity tool suggests a 78 year old male has a life expectancy of 10 more years or so. That means half of 78 year old men alive today will still be living 10 years from now. Someone with $10MM probably has a longer life expectancy.
2. As POA, I'm required to look after my Dad's finances with basically a fiduciary standard in mind. If I know what he wants or would want (and I do), then I have to do that. I am not permitted to (and do not) take my siblings' and my preferences into account when managing my Dad's finances.
Because of the above two points, I think the suggestions to manage for the beneficiaries are premature and less than ideal, even as I see the practicalities of it and understand the reasoning.
As my Dad was losing his mental acuity, I did try to have a number of conversations with him so I could learn how he wanted things handled on topics such as gifting, taxation, living arrangements, medical decisions, etc., taking notes as needed. Now that he's far more reliant on me and my siblings, I use those discussions and notes to guide my actions. On unforeseen stuff, I use a combination of things: his history and character over the past fifty years, common sense, and input from my siblings (thankfully there are an odd number of us so I just go with majority rules or consensus).
ETA: On your actual question, I would consider what his asset allocation was before you got involved, whether he's expressed any concerns about his asset allocation or market volatility, what the historical variation of his portfolio is and what the impacts of that variation would be on his lifestyle if things turned south, any needs to preserve assets for things like his LTC or his legacy goals if any, etc. But on the face of it, a 60ish/40ish (can't tell exactly given your OP) portfolio for a 78 year old doesn't seem out of line to me, especially since $15K a month represents $180K a year, which is 1.8% on a $10MM portfolio, and his actual WR% would be a bit lower since you have some of that $15K covered by non-portfolio sources. If the rental property is a hassle or if he doesn't like it any more you could look into getting rid of that, although there might be tax benefits to holding it until death in terms of depreciation recapture and capital gains.
1. SS longevity tool suggests a 78 year old male has a life expectancy of 10 more years or so. That means half of 78 year old men alive today will still be living 10 years from now. Someone with $10MM probably has a longer life expectancy.
2. As POA, I'm required to look after my Dad's finances with basically a fiduciary standard in mind. If I know what he wants or would want (and I do), then I have to do that. I am not permitted to (and do not) take my siblings' and my preferences into account when managing my Dad's finances.
Because of the above two points, I think the suggestions to manage for the beneficiaries are premature and less than ideal, even as I see the practicalities of it and understand the reasoning.
As my Dad was losing his mental acuity, I did try to have a number of conversations with him so I could learn how he wanted things handled on topics such as gifting, taxation, living arrangements, medical decisions, etc., taking notes as needed. Now that he's far more reliant on me and my siblings, I use those discussions and notes to guide my actions. On unforeseen stuff, I use a combination of things: his history and character over the past fifty years, common sense, and input from my siblings (thankfully there are an odd number of us so I just go with majority rules or consensus).
ETA: On your actual question, I would consider what his asset allocation was before you got involved, whether he's expressed any concerns about his asset allocation or market volatility, what the historical variation of his portfolio is and what the impacts of that variation would be on his lifestyle if things turned south, any needs to preserve assets for things like his LTC or his legacy goals if any, etc. But on the face of it, a 60ish/40ish (can't tell exactly given your OP) portfolio for a 78 year old doesn't seem out of line to me, especially since $15K a month represents $180K a year, which is 1.8% on a $10MM portfolio, and his actual WR% would be a bit lower since you have some of that $15K covered by non-portfolio sources. If the rental property is a hassle or if he doesn't like it any more you could look into getting rid of that, although there might be tax benefits to holding it until death in terms of depreciation recapture and capital gains.
Statistics: Posted by secondcor521 — Mon Jul 15, 2024 11:42 pm
