I am looking for financial advice to give my mother. She has recently completed divorce proceedings after being a stay-at-home mom for about 35 years. I am concerned about her, as her financial prospects are very limited and she is 55 years old.
Here are the financial details:
For the last 4 years or so she has worked a menial job making around $18k/year (no benefits). This is not expected to increase significantly.
In the divorce settlement she is receiving $100k in an IRA, and $90k in cash
She currently has a private health insurance plan that costs around $600/mo. This plan covers her and some of her younger children. She can't really afford this now, so we need to look at options for health insurance (she does have some moderate preexisting conditions).
She has no other assets or debts.
I want to advise her on what she should do with her current savings. I was thinking to perhaps fully-fund a ROTH and maybe a normal IRA, since she'll be able to access that money in 4 years if she needs it. Also, what should she do for housing now and in retirement? Should she try to purchase a small, cheap house? (real estate in our area is very, very cheap) Or should she plan to rent for the rest of her life?
Any suggestions would be much appreciated!
**Edits to address questions:
Her husband (yes, my father) made roughly $70k-$100k per year over the last 15 years or so. He works as an independent contractor doing software development. He has had trouble finding work recently, so his income for 2012 was down significantly, though I'm not sure what it was.
Their only known assets were an IRA (containing $100,000) and some land.
The original divorce decree included a small alimony, half of the land, half of the IRA, and some other considerations. The proceedings lasted 1.5 years, during and after which the husband refused to pay what was ordered, even after contempt of court proceedings were initiated. He then appealed to the state court, which ordered mediation. During mediation the settlement that was worked out was half of the IRA (the $50,000 mentioned above) and a $90,000 cash lump sum, which I assume he will pay for by taking a HELOC on the land, which he will be keeping.
Wages here for menial jobs are low (minimum wage is the federal $7.25, and most unskilled jobs are minimum wage). As I mentioned my mother has not had job for over 30 years and has virtually no marketable skills, which is making it difficult for her to find a job with a reasonable salary.
My mother currently lives with my family in our spare bedroom. We are in no hurry for her to leave, but she would like to have her own place someday.
The "younger" children currently covered under her insurance are the three that are still in college. They are all over the age of 18 and we are looking into health insurance options for them. My mother had a bad car accident back in October, and she is receiving ongoing treatment for injuries, which complicates the insurance problem. She was hit by a driver who ran a red light, so eventually she should receive some kind of settlement related to that, but we do not anticipate it to be very large (after lawyer and doctor bills we expect her to get $5,000-$10,000). That may not be over with for a year or two though.
Luckily, my mother is very frugal and responsible. She is also very open to advice from me. Thank you all for your comments