[lukeh]

What is your definition of "maximum stability? FDIC insured, government backed, backed by an insurance company?

What does she need the money to do? Does she need to live off the income? Is it an emergency fund that she needs liquid? Is it money that has been sitting for decades that she never plans to use and leave to the kids?

How much are we talking...$10,000 or $100,000?

How old is mom...65 or 85?

Has she done any estate planning? What is the plan if she needs assisted living.

Hard to answer your question unless you know the answer to these and other questions.

As was mentioned, well diversified portfolio is usually the correct answer.

If you leave it all sit in the bank it will earn crap and she won't keep up with inflation. If you dump it all in the market it could be worth less when she needs the money. That is why you come up with different buckets for the money. If she has a portion that she doesn't plan on touching for life then that should go in something like a balanced fund, utilities, market linked CD....

If she needs to keep some liquid for short term needs that needs to stay safe in the bank or credit union.

If she needs it to provide an income to live on one place to look at is a bond fund and take 1% less than what the yield of the fund is. I have done great with high yield bond funds and using this strategy. My income has stayed level while my principal has grown at the same time. Sure the share price will move around but by taking less than what it yields she will be constantly buying more shares and if it's income she needs then who cares if the share price moves around some.

Another option is that their are some annuities out there that will pay 5% for life. I'm usually not a big annuity fan but in certain situations they make sense. If mom needs an insured 5% income for life to make ends meet that isn't a bad option to think about.

The loan option isn't a bad one but you can get a 15yr rate of 2.5% which isn't a super great rate for mom and by paying mom you lose the mortgage deduction. Also, what if mom has a stroke and needs the cash back ASAP to pay for care. If that happens when rates are up around 7% you will wish you just locked into a fixed rate at 2.5%.