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I don't want to get to E/N but basically my mom and dad just got divorced and my mom has not much going for her. Income Alimony - $2800 for 8 years (when this runs out my mom will be 65) Watching my sisters kids - $200/week Assets (still getting a handle on this) Savings - $10,000 Checking - $6,000 Loan to grandpa - $10,000 (not sure what is up with this but he is good for it) 401K - $87,000 (with fidelity but she is sending some paperwork about it and what we need to do) Pension - Something about this not exactly sure, gets part of my dads Social Security- ??? I think she gets part (half?) of my dads but she doesn't have any for her. She ran a daycare for 20 years but my dad made it so she never made money or something, then for 10 years she did medical code billing for my grandpas office but again some magic accounting and she never made any money so never paid in. Not exactly sure the whole deal here either. Expenses Phone - $120 Health Insurance - $133 (next year up to $400 maybe...obamacare...) Storage Unit - $100 (she got half the stuff but this will go away after we figure something out) Gas - $200 (estimate) Groceries - $0 (living with my grandparents and they pay for this, also no housing expense etc.) Eating Out - $50 Personal Expense - $25 Hair - $15 (My other sister does her hair) Clothes - $50 (estimate) Car Maintenance - $50 Registration - $10 Insurance - $80 Dog - $45 Monthly Total - ~$900 (maybe up to $1200 next year) So that is basically the story. What I need to know is where to invest my her money and how. I am doubtful that she can stick to the budget but I believe she will try. The alimony is taxed, helping my sister is just cash. I am hoping that she can invest $1500 a month. If she is good for 8 years she might have a pretty decent amount for retirement, we will see. My brother and hair dresser sister will be no help if she has no money. My sister with kids and I are preparing to set money aside since we are probably the only hope. That sister and her husband will have to execute most of the plan since I am about 2000 miles away. Let me know what questions you have and if you can help me figure this all out.
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Sep 13, 2014 06:03
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| # ? Apr 24, 2024 16:31 |
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If she was married to your dad for at least 10 years, and does not remarry, she is entitled to half his social security benefit. She should also be able to qualify for medicare if they were married for that ten year period. She should probably try and delay taking social security until age 70 to increase her benefit, since 50% of a shady sounding tax avoider's SS benefit probably isn't that much. The pension sounds like an important thing to figure out, since even if it will only pay her $300 per month in retirement, that would be like having another $100k right now. So a small amount of guaranteed monthly income can be a huge deal. If she is a relatively conservative person (just stereotyping here) then I would suggest you look for a balanced fund that it somewhere around 40% stock and 60% bonds and just put everything in that. It will keep it as simple as possible without huge value swings but still some better upside potential than just bonds/savings. People love the Vanguard Wellesley Income Fund for that, and I'm sure Fidelity has similar options - or you can roll your Fidelity 401k over to Vanguard and just invest there. Call Vanguard and they will walk you through it.
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Sep 13, 2014 09:07
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With 20 years experience, can she run a home-based daycare for income? A couple more kids at $150/week would add solid income. How about potential inheritance? Is she the beneficiary of her parents? Will she get the house eventually? Is there equity in the house? Or will she have to find a place to live eventually? Does she have any possessions from the marriage to sell? Also, you should probably have her sit down with a flat-fee based financial adviser to figure out the 401k transfer, social security, the pension, and asset allocation. Make sure the adviser has a fiduciary responsibility and isn't making commission. I forget which credential that one is.
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Sep 13, 2014 13:20
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Cell phone is too much money. $340/mo for auto expenses for someone with no job is too much money. She qualifies for a healthcare subsidy and should only have to pay a maximum of about $260/mo.  Thanks ObamaThe average salary for medical coding and billing is $32k, and if she becomes a Certified Professional Coder, it goes up to $42k. She should probably look into working and saving for her rapidly approaching future instead of living off alimony and her parents. That'd solve the healthcare problem, too. And also this problem.. quote:If alimony is ordered, you will generally have to pay a specified amount each month until:
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Sep 15, 2014 19:47
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Thanks for the replies so far I will be able to review and respond later tonight.
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Sep 15, 2014 23:56
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| # ? Apr 24, 2024 16:31 |
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Droo posted:If she was married to your dad for at least 10 years, and does not remarry, she is entitled to half his social security benefit. She should also be able to qualify for medicare if they were married for that ten year period. She should probably try and delay taking social security until age 70 to increase her benefit, since 50% of a shady sounding tax avoider's SS benefit probably isn't that much. They were married for 35 years so good there. I will let her know about delaying taking anything until she is 70. I should clarify that my dad always had a corporate job so he has paid in for 38 years. He did the funny math on my moms home business and when she was a independent contractor doing medical billing. quote:The pension sounds like an important thing to figure out, since even if it will only pay her $300 per month in retirement, that would be like having another $100k right now. So a small amount of guaranteed monthly income can be a huge deal. Agreed. I will see if I can find out more information on this. quote:If she is a relatively conservative person (just stereotyping here) then I would suggest you look for a balanced fund that it somewhere around 40% stock and 60% bonds and just put everything in that. It will keep it as simple as possible without huge value swings but still some better upside potential than just bonds/savings. People love the Vanguard Wellesley Income Fund for that, and I'm sure Fidelity has similar options - or you can roll your Fidelity 401k over to Vanguard and just invest there. Call Vanguard and they will walk you through it. I would like her to be with Vangaurd (it is what I have and I like it a lot). I will talk with her about what she wants to do and get my sister to help out. Dik Hz posted:With 20 years experience, can she run a home-based daycare for income? A couple more kids at $150/week would add solid income. This is a good idea but right now she only watches the kids Tuesday and Wednesday and drives about an hour south to get there. My sister only works 3 days a week so just how it works out. quote:How about potential inheritance? Is she the beneficiary of her parents? Will she get the house eventually? Is there equity in the house? Or will she have to find a place to live eventually? I will say potentially. I know my grandparents told me they are writing her more into the will. The house potentially has equity but honestly I have no idea on the grandparents finances. I don't think she will have to find a place to live anytime soon and I told her she has no choice but to stay where she is (it is only been about 2 months). quote:Does she have any possessions from the marriage to sell? Yes, in storage now. All I will say is it is emotional at the moment. quote:Also, you should probably have her sit down with a flat-fee based financial adviser to figure out the 401k transfer, social security, the pension, and asset allocation. Make sure the adviser has a fiduciary responsibility and isn't making commission. I forget which credential that one is. Thanks, I will check it out. a worthy uhh posted:Cell phone is too much money. I agree but I don't think that is going to change anytime soon. quote:$340/mo for auto expenses for someone with no job is too much money. She lives in a place that you have to have a car. My sisters both live about an hour away. It is a 2012 Ford Escape, paid off. Also we are estimating here a bit. Maintenance is basically for brakes, oil, and tires. quote:She qualifies for a healthcare subsidy and should only have to pay a maximum of about $260/mo. I will check it out. Right now it is $133/mo, the healthcare person on the phone estimated it at the $400 for next year. Open enrollment is soon so we will see what happens. quote:The average salary for medical coding and billing is $32k, and if she becomes a Certified Professional Coder, it goes up to $42k. I will see if my sister can talk her into this and getting back to work. quote:She should probably look into working and saving for her rapidly approaching future instead of living off alimony and her parents. That'd solve the healthcare problem, too. Umm ok. What do you think my sister and I are trying to do? She was married for 35 years, my dad cheated on her the last 3 years (and got married to the lady 2 months after the divorce) and she is all kinds of messed up. I would not say she is living off her parents. She is basically taking care of them, cleaning the house (5500 sqft lake house), cooking all the meals (except when she is at my sisters with the kids), my grandma is pretty sick so she takes her where she needs to go and helps her get around. By no means is she just mooching it up. quote:And also this problem.. I suppose this could be a problem. I assume my dad would need to initiate it? I am the only sibling that talks to him really so not sure if he wants to cut that all off. I guess on the money front do/can I have her put all her money into the 401k? Should she open a Roth since she gets 'income'? She knows she needs to save and I think she is willing to.
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Sep 16, 2014 04:32
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