So my stepdad is 63 years old and technically retired (currently working off the books) and collecting social security. He is the only source of income between him and my mom. He's worked at the same place for 25+ years but the job never had a retirement plan mechanism for him to invest into. The job paid him approximately 38k/year.
My mother has been a house wife and has never worked a real on the books job for more than a few months, mostly did off the books house cleaning and babysitting gigs. My stepdad mostly speaks Spanish and a little bit of English. Both are literal junior high school drop outs.
In 2006 my parents took their life savings of 125k and invested it into two rental properties in Pennsylvania. Shortly after the housing market crash of 2008 my parents struggled with non-paying tenants as well as their own trouble with maintaining work and paying their bills. After 3 long years of struggling to keep their investment properties they finally gave in and had to file for bankruptcy in 2011.
Shortly after their bankruptcy I advised my parents to open a ROTH IRA to start pumping in as much savings as possible so they can have something other than a social security check to rely on. I had a finance guy from the New York Life Company come to the house and explain how the ROTH IRA and compounding interest worked. With me as a translator to break things down for them as simple as possible for them to understand, my parents agreed to open an account that day.
Fast forward to last week at my daughter's birthday party, my brother-in-law and I got to talking about our retirement portfolio's as well as the current state of the market. I couldn't help to notice the change of mood in both of my parents as my brother-in-law and I discussed different stocks and what our estimated account value will be in the next 20 years based off of our current holdings.
So today, my mother visited me and confessed that they stopped contributing to their Roth IRA after 2013 and they're now wondering how they're going to get by once my stepdad can no longer physically work anymore. As it stands, the account value in the ROTH is at $10,700. She told me instead, that they've been putting cash into a safe deposit box at their local bank for the past 8 years and have saved approximately 50k. My heart sank to say the least.
They now regret not investing that cash into the account and are extremely worried, as well am I as to how they're going to get by. I may even have to take some extreme measures myself in order to take care of them/house them.
As it stands, their rent is $1,333/mo in Queens, NY. His social security just about covers the rent, but that's it. Other than that, they are receiving appx. $300/month in food stamps and they're on medicaid/medicare.
Is there still a way to invest the cash they stored away in that safe deposit box into the ROTH or any type of stock market account which can give them some type of extra interest on the money for the next couple of years without the IRS knocking on their door or are they pretty much screwed?
tl;dr: My parents life savings is 50k cash stored in a safe deposit box. They are technically already retired and want to invest the money into some type of investment mechanism to provide some sort of residual income.
Submitted February 14, 2021 at 09:07PM by EarlyBird21 https://ift.tt/37wGYuX
