Corporate bonds: IGLB, SPLB
High yield corporate bonds: IHYV, USHY, FALN
Senior loans: SRLN
Preferred stock: PFF, PSK
High yield stock: SPYD, FDVV, XSHD
If she’s very risk averse (per your OP), I wouldn’t pick VOO or any other general stock fund that mimics the broad market that has a history of dropping 50% and taking a couple of years to recover. Especially when the yield is nothing special and, at her age, she may or may not have the time to wait it out for a recovery, and she’s highly reliant on drawing down her savings to live.
Per your OP, “she lives a mostly modest lifestyle” yet later you say “she probably spends about $40-50K per year”. On what? We spend less than that for a household of 4!
Still, if she has $950K, at her current rate of spending, it would last 19 to 23 years, not including income it might generate.
Here’s a link showing the type of income that I could easily generate with $950K using what I consider fairly conservative ETFs:
Portfolio Visualizer IGLB, PFF, VPU
I wouldn’t put the whole $950K in any one investment, contrary to the illustration. But it shows the wide range of income possible. Even the lowest yielding of the 3, VPU, generates more income than what you think she’s spending. I used VPU to give an example of a more conservative stock investment that has the same testing period as the other 2 ETFs.
If you split the $950K evenly among the 3, it would look like this:
An Even Allocation Among IGLB, PFF, VPU
Notice that such a portfolio would have generated over $50K in dividends per year since Jan. 2010, plus the value would have grown to over $1.4M. No need to worry about outliving funds, IMO.
I stand by my earlier recommendations. Use Portfolio Visualizer to input some conservative mutual fund and/or ETF symbols of corporate bonds, government bonds, preferred stocks, income-generating common stocks. Look at the possibilities. Show them to your relative. Pay attention to the Max Drawdown column and the time it took to recover.