Help With Mom’s Asset Allocation

Summary

Jill on Money with Jill Schlesinger
Episode: Help With Mom’s Asset Allocation
Date: June 19, 2026

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Overview

In this episode, Jill Schlesinger fields a call from Sue in New Jersey, who is seeking advice on managing her 75-year-old mother’s investment portfolio. Sue’s mom is highly risk-averse, lives frugally, and is dependent on Social Security and supplemental support from Sue. The primary challenge discussed in the episode is balancing the desire for portfolio growth with Mom’s strong aversion to market volatility and loss. The conversation explores practical strategies for simplifying and de-risking an older retiree's investment portfolio while acknowledging emotional realities.

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Key Discussion Points & Insights

Sue's Situation: Caring for a Risk-Averse Parent

• Mom’s Profile: 75 years old, cash-poor for much of her life due to prioritizing kids’ education, lives in a high-cost area, frugal, no debt, uses public transport, no car, very little comfort with risk.
• Income & Expenses:
  • Social Security: ~$2,100/month (covers rent).
  • Sue provides an additional $700/month.
  • Mom has not had to draw from investments for living expenses yet.

“She’s always been so incredibly frugal. She’s pretty happy with that extra cash flow. And I’m like, that’s ridiculously small amounts.”
— Sue (07:40)

Current Financial Assets

• Vanguard Investment Account: $120,000 (taxable, not a retirement account)
  • $44K in Vanguard High Dividend Yield ETF
  • $23K in Target Retirement Income Fund (VTINX)
  • Remainder in various funds, including small cap value and international
• Cash: ~$30,000 (bank)
• No CDs or other safe fixed income products.

Jill: “So most of this, I mean, you’ve got the high yield, but you got the small caps... you’re basically investing a bunch of this money. Is there anything big coming up that she would need the money for?” (08:43)

The Emotional Challenge: Risk Tolerance Reality Check

• Mom previously panicked during downturns, notably in 2008.
• The recent bull market has left Mom’s portfolio “doing a little too well,” but Sue fears another market drop will send Mom back “off the cliff.”

Memorable Quote:
“She wants the best of both worlds. She wants to make money, yet she freaks out every time the market goes down. So you can’t have it both ways.”
— Mark (Co-host/Producer, 14:26)

Asset Allocation Recommendations

Building a Safer, Simpler Portfolio

1. Increase Safe Assets: Add CDs or Money Market

   • Move a portion of the $120K into bank CDs (suggested: 1, 2, and 3-year ladders) or a high-yield money market fund.
   • Target: Have three years’ supplemental expenses in safe places (approx. $20K+).

   Mark: “I would probably have three years' worth [of the $700/month supplement] in a safe place.” (09:56)

2. Simplify Holdings

   • Consolidate from many funds to just 2–3:
     • U.S. Market Index Fund (conservative allocation)
     • International Index Fund (small allocation)
     • Money Market/High-Yield CDs
   • Could consider the Vanguard Target Retirement Income Fund (VTINX) for simplicity—mostly bonds, small allocation to equities.

   Jill: “You have three funds, call it a day... what we’re trying to do here is to grow this money with a little bit of risk, but also have some money market account in case something happens and we need to write a check for Mom.” (12:33)

3. Regular Risk Assessment

   • Before making changes, have an honest talk with Mom to determine how much loss she can actually handle (“If the $100K turned into $80K, could she manage that?”).
   • If even mild volatility is intolerable, dial back equities further or just use CDs/money markets.

   Jill: “If she was risk-averse in 2008, she’s even more risk-averse today.” (15:40)

4. Adjust As Needed

   • Be prepared that Mom might regret being too conservative if markets rise—accept “damned if you do, damned if you don’t.”

   Jill: “We’re going to make all these changes and then the stock market’s gonna keep going up and poor sue is gonna have to deal with her mother saying, ‘Well, why’d we get out of that? It went up.’” (17:32)

Emotional Realities & Role Reversal

• Sue is the “safety valve”: In the end, the parent’s real financial safety net is the child.
• Adult children often face the impossible challenge of optimizing returns while managing parental anxiety.

Jill’s Big Picture Insight:
“We hear about this all the time: ‘I want my money to grow, and I really like the idea of being invested. But when it goes down, I freak out.’... At the end of the day, sometimes there’s just a line in the sand for people around risk, and I think we have to reconcile that.” (15:55)

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Notable Quotes & Memorable Moments

• On the impossible dual mandate:

  • Mark: “She wants the best. She wants to make money, yet she freaks out every time the market goes down. So you can’t have it both ways.” (14:26)

• On simplifying for clarity and peace:

  • Jill: “You have three funds, call it a day.” (12:33)

• On the limits of managing someone else’s risk tolerance:

  • Jill: “The safety valve for mom is Sue herself. So it’s tough, right? It is very hard to have it both ways.” (16:16)

• On the emotional toll and family responsibility:

  • Jill: “Sue is a wonderful child. So if you’re worried about your parents, you’re trying to invest for them, they’re poor, putting their future in your hands and you’d like some help, we are here for you.” (17:42)

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Timestamps for Key Segments

• [03:40] Sue describes her mom’s financial background and resistance to risk/investment advice
• [05:36] Detailed breakdown of income sources and Sue’s involvement
• [08:00] Current Vanguard account allocations and portfolio “mess”
• [09:20] Discussion of moving money into less risky assets before “something bad happens”
• [10:45] Debate: How much to have in CDs or money market? Simplicity vs. growth vs. volatility
• [14:08] Realization: Mom can’t tolerate much (if any) loss—needs smaller equity allocation
• [15:55] Jill’s summary of the emotional/psychological challenge for low-risk retirees
• [17:32] The no-win situation: regret if markets rise following defensive changes

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Takeaways for Listeners

• Understand real risk tolerance: Especially for seniors, prioritize portfolio structures that allow peaceful sleep, even at the cost of lower returns.
• Simplify: Consider a two- or three-fund solution with a heavy cash/CD buffer for those highly averse to loss.
• Plan for emotions, not just numbers: The right portfolio won’t matter if the account owner freaks out and demands changes in a downturn.
• Family is often the real “safety buffer”: Adult children should be honest about what assistance they can provide and build portfolios accordingly.
• Accept the challenge: Sometimes you can’t “win” both growth and comfort—prioritize what matters most to the person whose money it is.

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For more, submit your own questions at jillonmoney.com.

Transcript

[Jill]

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welcome to the Jill On Money Show. It's Friday, June 19th Juneteenth so a lot of you have the day off today and that may mean that you are listening to this over the weekend or doing something different. Whatever is going on for you we are here to help you make sense of whatever's going on in your financial life. If you've got a question, just go to our website, jillonmoney.com now jillonmoney.com click the contact us button, write us a note. And if you would like to join us live, just check the box. Mark will do everything else while you're on the website. Don't forget to sign up for the free weekly newsletter and also check out our subscription service, Jill on Money Live. We just had a great webinar on Social Security earlier this week. And if you want to just buy that single episode, that one webinar, you can do so for $15. Or if you want to make sure that you can join us throughout the year, you spend $45 and you'll be able to join us for four fresh new webinars throughout the next 12 months. So check it out. Okay. Today we are joined by sue from the Garden State, New Jersey. Hello, sue, welcome to the program. What can we do for you?

[Sue]

Hi, Mark and Jill. My mom is very risk averse to the stock market and I've been listening to you guys. So I've been trying to get her to invest in something besides the savings account. She cashed out of her retirement in 2008 when she was still working. Now she's 75. Probably was it two or three years ago, she finally, I, I was trying to get her to get to various like investment advisors that I was recommending that seemed like they were fiduciaries and she's, she kept looking at them and you know what, because she takes the bus. So I was like, you could, you know, get to them very easily next town over. And I was like, I'll pay for the initial consult, everything. She's like, no, you do it for me. I don't want to pay them anymore. Okay, so here I go from looking at my stock market, my investments, which I'm very comfortable with, to I'm like, what do I put a retired person's money? And I, I didn't research this at all. So then I went to a few reliable ones and then I added a few other things and now it's just a big old mess. I, the last stock market crash, she, I just basically had to keep her off the cliff the whole time. And I was like, oh no. You know, I was like, okay, mod, trust me, don't look, don't look at your investments right now. Just don't look today. Please trust me. And she trusts me. So, okay, we managed to hold on. I told her that's, you know, well, for the next few years, you know, let's make sure you have extra cash. Let's take it out now. I'm like, it's a dip. I don't really care right now. I'm like, as long as you take out enough. So I was like, my plan was, okay, 4%, let's take out 4% for the next three. Three years. And she was willing to do that. And that way, I was able to not make her lose everything. Since then, it's done well, but I'm like, it's done a little too well because. And then some things are too high. And I'm like, I just need to simplify this thing again. Here I am asking, please help me.

[Jill]

Okay, so mom's 75, right? And what does she live on now? What, she's got Social Security?

[Sue]

She's got Social Security. Her rent is basically the whole Social Security. She lives in a high cost of living area in an apartment. And she put us in that town when we were young. She was basically cash poor the whole time just so we could get a really good education. And she fell in love with that town. I'm like, okay, fine, you can stay there. And so she's got her Social Security, which was basically equal to the rent. So I was like, okay, we're gonna help Mom a little bit. I managed to, at one point, convince her to give me access to her checking account. And then I just magically transferred some money. So besides that, she's got an extra, at this point, 700amonth from me. Okay. And besides that, she's got this investment account. So what does it have in there right now? Like 120. 130.

[Jill]

100 and 120 grand. And that investment account is inside of a retirement account. In other words, when you pull money. No, no, she does it.

[Sue]

No, she cashed it all out. I ended up putting it into Vanguard account.

[Jill]

Okay, got it. So there's 120 in a Vanguard account. And what about just cash on hand, like, you know, in a bank, a CD, anything like that?

[Sue]

No, she's got no CDs. I think her only cash right now, I would say, say, is around 30,000.

[Jill]

That's so 120,000 in a Vanguard account. And you said her Social Security covers her rent. How much is that? How much is the Social Security at this point?

[Sue]

I think the rent and Social Security are on 21.

[Jill]

Okay, and then you're adding $700 a month to the Account?

[Sue]

Yes.

[Jill]

And then what else is she pulling from that investment account to live on? Like, I'm just trying to get a

[Sue]

sense of, like, she hasn't touched it. She's. She's okay.

[Jill]

So she can live on. She can live on the $2100 a month of Social Security and the 700amonth that you give her. Right.

[Sue]

I think because she's, she's always been so incredibly frugal. She's pretty happy with that extra cash flow. And I'm like, that's ridiculously small amounts.

[Jill]

Listen, whatever. If she's okay, she's okay. We're not going to change her around. In the Vanguard account, what have you invested in inside of that account?

[Sue]

Okay, we started off doing a lot of. The majority of it was Vanguard Target Date Retirement. So now I have the majority of it actually in ETF high yield dividend. Vanguard high dividend yields. That's got 44,000.

[Jill]

Okay.

[Sue]

Target day retirement got 23,000. And then I like my small caps value and small cap regular.

[Jill]

So, I mean, what. So with the target date, what is the year that says on that like it's a 20? What?

[Sue]

Oh, it's not. No, it's, it's, it's not Target Date Retirement. It's one of the ones. It's vtia T I N X. It's when she's already in retirement.

[Jill]

Okay, Got it. Okay. So. Okay. I just want to make sure I got that right. Okay. So most of this, I mean, you've got the, the high yield, but you got the small caps. You got, you're, you're basically investing a bunch of this money. And she's. Is there anything big coming up that she would need the money for? Any car or anything like that or nothing like that?

[Sue]

No. She wanted to make sure she could get her dental work. No, she's never driven no car. She's public transportation. She's got zero debt. So it's pretty, pretty simple living. I wanted to take her off the cliff after I let it fall because she freaked out. So now I'm like, let's just make

[Jill]

it more like some of this money. I would get some of this money out of risky stuff just before something bad happens. That's my feeling.

[Sue]

Yes. I think that's because I. Right.

[Jill]

If there's 30 grand in cash right now, one thing I might do is if I looked at 120 beyond that, I would say, all right, well, I think I probably. And you know, maybe I want to put some. Maybe I want to buy some CDs can you buy CDs in Vanguard? I think you can, can't you? That they have.

[Mark]

Yeah.

[Jill]

All right, so how much you want in CDs, Mark? What do you think?

[Mark]

I would. I mean, if that extra $700 a month is basically what's allowing her to live, then, you know, I would probably have three years worth.

[Jill]

Okay, so we want you to have 20 grand in CDs. Okay. So of your. Of the money that's in this. 120. I would take 20 grand. You can PR. You can ask Vanguard what their CD rates are. Or in her cash account, you could just open this up at a bank and buy a one year and a three year cd.

[Sue]

I think I'll just go through the bank. I didn't even know Vanguard.

[Jill]

Yeah, they do, but like, if you can go through the bank, you can just put in like seven grand and you, you can go seven, seven, seven 21 grand and buy a one, a two and a three year CD. Okay, now with the rest of the money, Mark, what do you want to do with this?

[Mark]

Yeah, even though we still have, you know, even though we have three years worth of money in a safe place, I would still have the account overall conservative.

[Jill]

Yeah, definitely.

[Mark]

I mean, right now. Right now, you know, if I counted right, there's either 10 or 12 funds in there. I don't see the need for that. I mean, you could really just. Right, you could really just pick for your mom. Just have one fund that's invested in stocks and one fund that's invested in a bond fund. But I'm not sure you want to do a bond fund. You can just have half of it in a money market account for all I care.

[Jill]

Yeah, I mean, I was thinking that you could have. Vanguard has an extended market index. You could have the bulk of the money in there. I mean, at the target date fund, does it have any stocks in the one that she's in right now?

[Mark]

That fund, the, the Vanguard Target retirement income fund is basically 67, 68% in some sort of a bond fund. So I mean, that could be like. I mean, she could almost have everything in that fund. That one fund.

[Jill]

Yeah, she's going to draw. She. But she's not going to be happy.

[Sue]

That's the only one that's really been dropping. I'm like, okay. The other ones are basically keeping her content. So.

[Jill]

Yeah, but if the market drops, you're in. You're screwed. But let's. Here's, here's one way to think about it. I would probably have Half of my money in like, okay, so remember, we're taking $21,000 out. There's going to be a hundred grand left, right? So I would probably take. Of my extended market. I'd probably put 30 in the extended market, maybe 40. If she really can manage that risk. You can have like 40, 40 grand in there. You can put, put 10 grand in an international index and the rest of the money can go into a money market account. 40, 10, 50. That.

[Sue]

Perfect.

[Jill]

That could be kind of like a very boring account. If she, if you can't. And she can't take bonds and movement, then we'll keep a little extra money in cash. Make sure that you ask Vanguard for a high yielding money market account. Not like nothing crazy, but like all this other stuff gets cleaned up. You have, you know, three funds, call it a day. And we're really, what we're trying to do here, sue, is that we're trying to presume that if you. Look, I don't know what's going on in your own life. If you can afford this 700amonth, that's fine. But if you just would like to be able to make sure that we grow this money with a little bit of risk, but also have some money market market account in case something happens and we need to write a check for mom that it's there for her. And, you know, I think that you've done an excellent job of just trying to manage it for her. It sounds like there's a lot of emotion around all of this. I want to try to make it so that you guys can just stick to this portfolio. If the stock market were to drop by 20%, okay, if you went into like a big bear market and you felt like your mother could not keep any of this money invested, then you will have to make a different choice. You might have to just buy CDs. So I think you should be honest. Before we even do a lot of this, I think you should be honest with your mom and say, hey, mom, if the, if the hundred grand turned into 80 grand, would you, like, could she manage that? Could you think she could stomach that?

[Sue]

No, that's. That's exactly what's happened. She basically lost 20,000 last time and she was freaking out. So now we.

[Jill]

So, Mark, Mark, do you think we should have less money in the stock market index? I'm going down. I'm going. Maybe it's 30.

[Mark]

She wants the best of both worlds. She wants the best. She wants. She wants to make money, yet she freaks out every time the Market goes down. So you can't have it both ways.

[Sue]

The thing is, mom only wants to make 4%, so we could really go low.

[Mark]

I mean, you can put everything in a money market fund and do that,

[Jill]

and you could buy. You could just buy a bunch of CDs for her and call it a day. You can buy like a 1, 2, a 3, a 4. You can make a bond. You can make a CD ladder with a bunch of this money. Okay. And you can try to buy and. And put some money in CDs. Just, you know, every. You can put, like, make a bond ladder with 7 or 8,000 or $10,000 in. In CDs, and as they mature, you could keep some money in a stock market index, some money in an international index. But, you know, if you had 120 total and she just had 20 grand in a stock market index, and that 20 turned into 16, you know, one month, it won't bother her. But if it's. If it's more. You have to figure out what. The point at which she just starts to freak out, what amount of money starts to freak her out. Does that make sense?

[Sue]

No, it makes perfect sense. I think she just didn't have any growing at all before. So now then.

[Jill]

I know. And you've grown it. I mean, I think that the issue is that if she was risk averse in 2008, she's even more risk averse today.

[Sue]

Yeah. I mean, it seems as things.

[Jill]

So I think for everyone listening, here's the challenge that sue raises for her mom. It's like, I don't want the risk of owning a stock, but when the stock market's going up and bonds are not performing, I don't like that either. And sue knows that for her mom to kind of age, she wants to try to make more on the money than the inflation rate that she's confronted with. But I guess at the end of the day, sometimes there's just a line in the sand for people around risk. And I think we have to reconcile that. I mean, there isn't a ton of money here. We know that there's 30 grand that's in cash, and there's $120,000 in a Vanguard account. Should some of that money come out and just go into CDs? Should half of it be in CDs? And then a small fraction in an index fund, a smaller fraction in an international index fund? Maybe that's just it. And you know what, Mark? Maybe that's okay. Because really, the safety valve for mom is sue herself. So it's tough, right? I mean, it's very hard. As you pointed out, Mark, it is very hard to have it both ways. We hear about this from people all the time, which is I want my money to grow and I really like the idea of being invested. But when it goes down, she freaks out. We already know she freaks out. So the question is, how can we take advantage of the fact that sue did a very good job of rebuilding this account? Get out now before something bad happens. You know what's gonna happen, Mark? We're gonna make all these changes and then the stock market's gonna keep going up and poor sue is gonna have to deal with her mother saying, well, why'd we get out of that? It went up.

[Mark]

Damned if you do, damned if you don't.

[Jill]

Sue is a wonderful child. So if you're worried about your parents, you're trying to invest for them, they're poor, putting their future in your hands and you'd like some help, we are here for you. Just go to our website, jillonmoney.com, click the contact us button, write us a note if you would like to join us live. Check the box. Mark will do everything else. You can subscribe to us on the Odyssey app or wherever you find your favorite podcasts. And speaking of Odyssey, we are distributed by the lovely folks at Odyssey. Our music is composed by Joel Goodman. Mark Mark Tularsio is the best executive producer in the whole wide world. He also is the guy who runs my entire website, jillonmoney.com if you wouldn't mind, please try to do something nice for someone else today. Change your work, change your wealth, change your life. Thank you for listening and we'll talk to you on Monday. Nerds.

[Narrator]

Today's episode is sponsored by NerdWallet's Smart Money podcast. Personal finance can feel like a pop quiz you didn't study for. This podcast is your study guide. On NerdWallet's Smart Money podcast, you'll hear from trusted journalists who explain the why behind major financial decisions. You'll get research backed insights and clear pros and cons. Whether you're planning a big purchase or just want to grow your wealth, make your next financial move with confidence. Follow NerdWallet's Smart Money podcast on your favorite podcast app. Sometimes historic events suck. Oh, it shouldn't suck is learning about history. I do that through storytelling. History that doesn't suck is a chart topping history telling podcast chronicling the epic story of America decade by decade from the 18th century to the 20th original music and immersive sound design. Accompany us on our storytelling journey. Listen to and follow history that doesn't suck. An Odyssey Podcast, available now on Apple Podcasts, Spotify or wherever you get your podcasts.