Tuesday, May 26, 2015

What advice do you have for someone over with little retirement savings?


It is a long story with many details that aren't worth going into. My mother is a widow. My father had mental issues and took his life when I was 10. He left nothing. It was like starting over, with a funeral bill, mortgage, etc. She was a stay at home mom. She didn't have a college degree and wasn't very academic. She struggled with low-paying retail jobs trying to raise my brother and I.

I have tried to look out for her and help her out with whatever I could. I'm worried about her retirement. She is not planning to retire until about 67. She's making about 20K gross per year now. I am soon to be promoted at work. I'm single, not dating anyone currently, very frugal in my own life by choice, and not really planning on having any kids of my own. She has about 10 years before retirement and I want to make the most of it for her. She may still work a low-hours part-time job even after retiring and getting social security. She should get over 1000 per month at 67, not sure of the exact number.

I'm planning to help her kickstart emergency savings. I have convinced her to invest 100 percent via her employer's 401K ESOP plan into the company stock for now. Not forever, just for now. I feel that it will have a 5 for 1 split within a couple of years and I want her to build a crazy amount of shares before the split and basically wait for the price to rise again.
Added (1). I did my research and I'm 90 percent sure that the stock will split well and will rise again. She'll get a couple of hundred thousand out of it within 3-5 years and it will be partially moved over into another account during the process to avoid total loss in case anything did go wrong.

I need a second option for her to also invest into and use to funnel this ESOP into. What else is best at this later stage? Target retirement date accounts would have such a low risk that they wouldn't grow.
Added (2). She's contributing to it considerably and I'm also going to contribute quite heavily. I want to help her build 500K to 750K in that 10 years. It may sound insane, but I know that it can be done somehow.

Any advice on the second account option so as to not have all eggs in one basket? Obviously, something well diversified, but with growth.
Added (3). For whatever reason, it took the age out of the question title. She is 57 now.
Added (4). Note that the said brother doesn't do jack, so I have determined to try to make this right as best as I can. So, his "helping" her is out of the question before anyone suggests it.
Added (5). I forgot to mention that in addition to her 401K she is contributing to, the company gives her about $5K per year in free stock. So that is combining with her contributions and mine each week… That will eventually come to an enormous amount over hopefully just several years. When the splits and rise in price come in, that's what I'm referring to for the growth.

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