Helping my 66yo dad survive his retirement gap: Real Estate vs. Renting + Investing. Critique my plan?

Hi everyone,

Throwaway account for obvious reasons. I’m helping my father (66 years old - not so RE in the end) plan his finances for retirement. He recently asked me to help him decide between buying a property to eliminate rent or keeping his capital invested to generate income.

I’ve built a model and a strategy for him, but given the stakes (his livelihood), I would love a sanity check from this community.

The Situation

• Age: 66, retired.

• Assets: ~€250,000 cash available.

• Pension: €1,800 / month.

• Expenses: ~€3,000 / month (rent included).

• The Problem: He has a structural deficit of -€1,200 / month.

• Goal: Make the €250k capital last as long as possible to cover this gap (ideally 15-20+ years).

The Scenarios I Modeled

I ran the numbers on three scenarios. The results were pretty stark, heavily favoring renting and investing over buying property, mostly due to liquidity risks.

Scenario	Strategy	Outcome
1. Buy Small Property	Buy a €200k apartment.	Failure. Requires 54% of capital upfront. Remaining cash isn't enough to generate yield. Liquid cash runs out at age 71. He'd be "house rich, cash poor."
2. Buy Nice Property	Buy a €280k apartment.	Immediate Failure. 87% of capital gone immediately. Cash flow negative in Year 1.
3. Rent + Invest	Keep renting, invest ~€205k (after emergency fund).	Recommended. Portfolio yield covers part of the rent. Capital depletion projected at age ~86 (median scenario).

The Proposed Strategy (Scenario 3 Details)

Since Scenario 3 is the only one that doesn't go bust in 5 years, here is the allocation I am proposing for him.

• Emergency Fund: ~€18k (6 months expenses) kept in a high-yield savings account.

• Investment Portfolio: ~€205k.

• Allocation: 30% Stocks / 70% Bonds.

• Rationale: We need stability over high growth. The bonds act as a shock absorber while the 30% stocks are there to fight inflation over a 15-year horizon.

• Instruments (ETFs):

• Stocks: Vanguard FTSE All-World (VWCE) - Accumulating.

• Bonds: Vanguard Global Aggregate Bond - Hedged to Euro.

Stress Testing (Monte Carlo)

I didn't just want to use "average returns." I ran a Monte Carlo simulation (1,000 runs) using two different data sets:

1. Historical Returns (Optimistic): Median survival age is 86.
2. Conservative Forecasts (Pessimistic): Assuming lower future returns. Median survival age is 80-81.

Even in the pessimistic model, the probability of the portfolio surviving the next 12-13 years is 100%.

My Questions for you

1. Allocation: Is 30/70 too conservative given he needs the capital to last 20 years? Inflation is my biggest worry with such high bond exposure, but he cannot afford a 40% drawdown.
2. Withdrawal Rate: He effectively needs to withdraw about 6-7% of the portfolio initially to cover the gap. I know this is way above the "4% rule," but we are depleting capital, not preserving it forever. Does this seem manageable for 15 years?
3. Real Estate Psychological Barrier: He struggles with the idea of "throwing money out the window" on rent. Do you have arguments to help a senior understand that liquidity > equity at this stage of life?

Context: We are in Belgium (so no capital gains tax on stocks if held long term, but transaction taxes apply).

Thanks for your insights!