Planning for parents
Hi, I’ve been managing my parents’ finances for a while and recently realised they have some spare cash, so I’m considering changing the approach.
They have no outstanding debts, with the central 5R fully paid off. One is fully retired and on CPF Life, while the other is on a rolling contract earning $60K to $100K annually, varying with bonuses, and also withdrawing from CPF Life. The total monthly payout is approximately $3K.
Housing plan: Downgrade to a 3R BTO in a prime location with all options for OCS selected, so minimal renovation is required. However, all furniture and appliances will need to be bought brand new. We expect at least $700K-$800K from the sale of our current house to fund the $400K new flat.
Medisave accounts are capped; the retiree does not have any ISP (cannot buy in but at least there’s Medishield), while the employed parent is covered under the normal ISP with a rider.
Lifestyle: They eat out daily (mostly at food courts, but restaurants on weekends) and travel often to SEA. Plans are to take longer and further trips, which will be sponsored.
Currently sitting on:
~$400K cash in a savings account (uninvested)
~$30K invested (SRS in Amundi, small position in MLT and UOB)
Expected to also withdraw from three endowments/WLP (maturing in the next 2-3 years), which will provide an additional $150-$250K of cash flow.
As my parents are very low risk, I have only maximised the savings accounts’ bonuses and high yield previously. But with the current sentiments, I’m considering putting half of the cash sitting in banks into local banks (because they’re not open to any other investment instruments).
Is this feasible? Open to hearing any other strategies. My main goal is for them to have a better passive income/yield as compared to what they’re receiving now.