Mom is 62. She has no retirement plan. She's self employed and working hard.
She never learned to invest money. She thought that social security would take care of her, maybe she is a product of her generation...
I want to help! to make a plan and to explain it so it's not intimidating.
I'm just learning about investing myself. I thought we could open a SEPIRA, and a Roth IRA. Can one open a SEP after retirement age of 59 1/2?

Any advice would be so appreciated! thanks.

Greetings, Alvigirl, and welcome. You wrote:

<<Mom is 62. She has no retirement plan. She's self employed and working hard.
She never learned to invest money. She thought that social security would take care of her, maybe she is a product of her generation...
I want to help! to make a plan and to explain it so it's not intimidating.
I'm just learning about investing myself. I thought we could open a SEPIRA, and a Roth IRA. Can one open a SEP after retirement age of 59 1/2?>>

Yes, she sure can. And she can have a Roth IRA at the same time, too. For information on the SEP, see my Retirement Plan Primer at http://www.fool.com/Retirement/Retirement.htm and IRS Publication 560 (Retirement Plans for Small Business) available at http://www.irs.ustreas.gov/prod/forms_pubs/index.html.

Regards..Pixy

Dear aligirl,

You mom probably not alone. You have heard of the old saying "better to start late never." Depending on your Mom's income, and you stated that she is self employed, you should investigate a SEP or simple IRA. A SEP (simplified employer pension) allows her to put up to 15% of her net income away in this qualified tax deferred account. A simple IRA allows her to place up to $6,000.00 away each year. Thre is a little more to each type of account. Personally, you should get busy to determine the best options available to you mom, . . .do it NOW as you can still make a contribution for 1999 and start making contributions for tax year 2000 ASAP. Does your mom have an accountant? He can give you preliminary information to consider for her taxable income. Also, how many years does you mom plan on working? Good Luck!

Hi TMFPixy, HessDK,

Thanks for your replies. I'm going to recommend the SEPIRA, which allows a self-employed can put in 13.04% of net income, and do a 2,000 contribution per year to a Roth. I've done the math longhand so that she can see what she'll get each year, to age 70.5, through compounded interest at a rate of 10%, which I hope to get through a no-load Index mutual fund. I think she'll live a long and healthy life, and be working after age 70. I don't want her to blindly accept my direction, but to understand it and be empowered.

In her frustration over money, she would say things like I'll just have to keep working till I die. She's been relying on a lawyer friend to do her taxes, but I hope to convince her to get an accountant.

Next step is to find out her Social security information.

Thanks!