This is a very good idea. She should be funding the maximum allowable by law each year.Andy12345 wrote: ↑Sun Mar 26, 2023 2:26 pmUnfortunately her work does not offer 401k. I suggested that she fund a tIRA for the next four years while she is still able to do so.OldSport wrote: ↑Sun Mar 26, 2023 1:59 pm Does your mom have access to 401k, 403b or other tax advantaged accounts through work? If her work does not offer, she can take a tax break on a traditional IRA.
For her income being single, she is solidly in the 22% tax bracket for a good portion of her income.
Contributing as much as she can to that would be helpful as that would give her tax savings at her marginal 22% rate, and be able to withdraw after retirement at a much lower tax rate.
Her situation would be a classic textbook example of the benefits of using tax advantaged accounts.
Probably a simple tax advantaged portfolio of 50/50 or 60/40 would be more than good enough, saving as much as she is comfortable, but at least an additional $10k/yr, ideally maxing it out.
You and she also need to see if she could collect SS from her ex-husband. There are specific rules that you can research (length of marriage, length of time since the divorce, etc.) In my case, I had to make an appointment at the local SS office, bring my divorce decree, and they were able to print out an estimate for what I could collect on my own SS vs. my ex-husband's. I believe I also had to bring my ex-husband's social security number. Do not do this by phone. The SS reps on the phone gave me bad advice that was incorrect.