My mom is 66 years old. She makes $60k/yr, and has about $21k in credit card debt. She claims the credit card debt was all accrued when she was unemployed and needed it to live. That's probably partly true, but she also buys a lot of clothes and I'm sure that's part of it, too.
I recently started asking her questions about retirement, and it was clear that she not only had not even thought about it, but wasn't doing any active financial planning of any kind.
She has also been carrying a lot of credit card debt for I don't even know how long. And because she can only afford the minimal repayment (~$500/mo), she's not making any progress on the principle, just keeping her head above water with the interest.
My wife and I spoke with a planner, and we worked out that if we pay off all her debt for her, and we start putting $500/mo into a Roth, and also have her put the $500/mo she's currently paying to the credit card companies into the same account, that plus social security will give her a retirement income of about $35k in her early 70s. Not a king's ransom, but at least better than she's off now.
I brought up this plan to my brother hoping for some additional financial contributions, and he's not willing to pay anything to help.
However, he did ask if we'd looked into declaring bankruptcy, and honestly it's not something I'd thought about much, or know the details of very well.
Is this something we should be seriously considering? She's pretty close to owning her car outright, which is in good shape, so she won't need credit for that. And she rents her apt and won't be buying a house so she won't need credit for that. So maybe taking away all her credit cards will be a good thing, and we can take those same funds we would have given to the credit card companies and put that in a retirement account for her instead.
Any thoughts or opinions would be appreciated, and thanks in advance.
Submitted April 10, 2017 at 08:38AM by skepticaljesus http://ift.tt/2nZSaYa
