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My mother is 56 years old and does not work. She watches her grandkids and other children on a daily basis for a
nominal fee. She lives rent free with my brother for the time being. She has no retirement savings to speak of. She
recently sold a condo she owned which was her only asset. After paying off the balance of condo she's left with about
$50,000. My mother is very active and in great health. She actually has been taking Child Development classes at the
local JC for a year or so. She intends to become certified after one more class so she can then work at a day care
center. She has no medical insurance and my brother intends to move out of the area by the end of the year which leaves
mom w/o a place to live. She hopes to move in to a senior housing apt which her day care income should cover. Finally,
my question is what's the best way to allocate the 50G's and to what type of accounts(IRA's, Money Market, Blue
Chips Stocks, Index Funds, Bonds, etc). She says she can do just fine w/o the money but my concern is med insurance
and putting her money to work for her in the meantime. Thanks in advance for your help.


An IRA is a place to put investments with special tax rules. Her 50,000 can not go into an IRA. However, she can put 2000 a year into an IRA if she has earnings of 2000. Since she has earnings from child care she can contribute in 2000 to an IRA equal to her earnings but not to exceed 2000. The actual source of the 2000 is not important. Therefore she can take the money from the sale of the Condo.

Since your mother is moving put into cash the money she will need for the move and furniture etc. Use CD's or a money market.

Consider an emergency fund equal to six months of her living expenses (use after the move exp). Use money market or CD's.

I would put the balance in equities, probably index funds. Say Dow or S&P 500. Pick 4 different investments. I am thinking of this money being needed after 65.

You can buy health insurance so might want to search the net for a policy.

Something my family has used in the past is to make Christmas, birthday etc gifts of paid electric bills, water, cable TV etc. for a year. Might want to consider buying health insurace each year as a present from the children.
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