#### PandaBear

##### Recycles dryer sheets

- Joined
- Mar 11, 2014

- Messages
- 320

I am helping her with her finances and thought I'd turn here first for any ideas or suggestions.

The basics are as follows:

1. She has about 175K in an IRA.

2. She is a teacher, but hasn't been working very long. She will get a pension. Based on her current salary, she'll get about 36K per year. I imagine it will go up a little.

3. She has SS but will be highly impacted by WEP. At 67 she would get about $608 per month. If she waits to 70, it goes up to about $895. I do realize those numbers will change due to inflation.

4. Her new home is on a 15 year mortgage. With her paying an extra $200 a month and me paying the same, we can get it down four years, 6 months, to 10.5 years instead of 15. If I bump up my contribution to 3k per year, we can make that 4 years, 11 months reduction. It really doesn't seem to matter if I make one yearly payment or 12 monthly payments.

5. Her car payment finishes in November. She will then start putting that amount (about $300) in savings for a new car. She has a 2019 Honda, So we think she can get many more years out of it.

6. She works a second job for the census and makes about $800 per month (just started recently). She is putting that in savings.

7. An inheritance is unlikely.

8. I will pay for her to have 2 vacations a year (which I have done since she divorced). So she will have that for "quality of life" as well.

I do have questions...

Would she be better off adding that $300 from the car payment to her mortgage? If she pays $200 extra per month, she reduces the mortgage by 5 years, 10 months.

She wants to start putting money in an IRA. I am thinking she should do a Roth IRA, so she can keep her tax liability low in retirement. But I don't know for sure.

Her ex husband has worked longer and at a higher pay, so I'm sure has a higher social security. When she gets her estimates, are they including what he does? I'm not even sure how that works. How does that work? Is it based on what gives her more?

On the one had, she gets almost $300 a month more waiting until 70 for SS. But it would take 6 years to "make up" the difference. One option could be to retire from teaching and do three more years of census, to get the higher amount at 70. Then fully retire.

I believe she can work the census even if she takes SS at 67 and she can make any amount. Am I correct?

She lives in Missouri. I don't know what benefits there are for low income seniors...is there a place I can start?

While she was not estranged from our family during her marriage, she was controlled by her spouse and treated poorly. We seldom saw her or her children and they moved out of our area long ago. Since 2020, we have become very close again and I have my sister back. It's a true blessing for me. So I want to make sure I do right be her and give her the best advice possible (she wants me to do this...it's not her "thing", she is busy with 2 jobs and she trusts my advice).

Thank you for any advice you can provide.