Personal Finance

Investment ideas for grandma

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  • Feb 4th, 2015 6:52 pm
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[OP]
Newbie
Dec 1, 2009
7 posts
Canada

Investment ideas for grandma

Hi,

My grandpa died and left some money to my grandma. She does not really have a lot of money otherwise and is just renting a place. She has about 70-100K and wants some investment advice. I have experience with some stocks and the TD e-series. I think perhaps investing some in the e-series and maybe GIC's? She does need to live off the interest everything month as she is either wise broke. She currently has it in a savings account which seems like a waste at the current rates.

Any advice?
Thanks.
9 replies
Deal Expert
Oct 6, 2005
16512 posts
2183 upvotes
How old is your grandma, is she in good health? If your family has good genetics, you may want to look at an annuity.

Here is RBC's explanation of an annuity:
Purchase an Annuity
An annuity is essentially a contract between an individual and an insurance company to provide a guaranteed income stream for the individual's life or for a fixed term. In purchasing an annuity you must decide whether all or a portion of your RRSP will be used to purchase an annuity as well as determine the type of annuity that should be purchased based on your retirement and estate objectives. This decision can be complicated since there are many options to choose from. The amount of annuity income received will depend on the annuity option chosen and factors such as life expectancy, current age, sex, health, amount invested and interest rates at the time of purchase. By purchasing an annuity, you are locking in current interest rates on the investment for the annuity's duration.

Various types of annuities can be purchased with RRSP funds, including a:

Life annuity, with or without a guarantee
Joint life annuity, with or without a guarantee
Term-certain annuity to age 90
More details here: http://www.moneysense.ca/retire/annuiti ... -annuities

$100K will buy her about $600 a month in payments for the rest of her life.
Deal Addict
User avatar
Nov 9, 2003
2689 posts
273 upvotes
Whatever you do make sure it's extremely low risk.
Deal Addict
Aug 5, 2006
3969 posts
1415 upvotes
Global Village
Agreed, I would avoid anything non-guaranteed for her. Max TFSA's and take advantage of HISA, GIC offers with a banking institution she is most comfortable with.
Deal Addict
Sep 11, 2006
1480 posts
340 upvotes
elchoco wrote:
Feb 1st, 2015 9:59 pm
Hi,

My grandpa died and left some money to my grandma. She does not really have a lot of money otherwise and is just renting a place. She has about 70-100K and wants some investment advice. I have experience with some stocks and the TD e-series. I think perhaps investing some in the e-series and maybe GIC's? She does need to live off the interest everything month as she is either wise broke. She currently has it in a savings account which seems like a waste at the current rates.

Any advice?
Thanks.
Forget e-savings or any type of investment with loss potential. I assume your grandma is at least 80, cash in savings account like she has it. It's not a waste at her age.
Member
Feb 15, 2010
445 posts
264 upvotes
Surrey
So the facts are:
1. She's old
2. Is heavily dependent on these funds for daily living.

Conclusion: Maintain low risk GIC and funds in a savings account. Any investments outside of this bear too much risk for her, she's not in it for the long run. If the value goes down she will be even worse off and have less for day to day living.
[OP]
Newbie
Dec 1, 2009
7 posts
Canada
Thanks for everyone's replies. I forgot to mention she is only 57 and very healthy. She is not retired... She is looking to invest the money and use the interest she can generate from it.
Deal Addict
User avatar
Nov 9, 2003
2689 posts
273 upvotes
That changes everything,
Deal Addict
Sep 11, 2006
1480 posts
340 upvotes
mpt wrote:
Feb 2nd, 2015 11:23 am
That changes everything,
:lol: probably an important point to mention that she's 57.

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