My mother recently was given the option of cashing out an old pension plan with a lump sum (about 48k) option. I told her to let me look at it and see what would be the best option for her. I came to the conclusion that it was better to keep the pension (360 a month at retirement which would be ~4 years away) and not take the lump sum.
She started freaking out saying she needs to take it to pay all her bills. long story short and much arguing later, this led to a huge revelation which is that my parents currently have about 40k in credit card debt, with minimum payments of ~1250 a month, and all averaging about 25% with some up to 29% interest rates!
This was a huge shock for me and I am not entirely sure what they should even do. They own their small home outright (~200k according to zillow), and bring in about 2700 a month takehome.
My parents have no other retirement saved up besides social security.
They have living expenses that total about 1450 a month. This includes the following; car lease 337, internet/cable 191, car ins 150, phone 138, gas 120, grocery 120, home insurance 118, gas for house 100, electric 85, water 80, separate health insurance 37.
I am fairly well off (relative to this) and just getting my family set up on our own financial footing so I don't know much about how to solve this particular issue. I have heard of options like consolidating debt or taking out a mortgage on the house, but I don't know much beyond that. Is there anything I am missing or something that could help them?
Thanks!
Submitted November 08, 2019 at 04:47PM by Smearwashere https://ift.tt/2p04A7Y
