[USER]

Hello All! Here’s a summary of my situation and questions to follow:
– 45 year old single mom, diligently trying to raise 2 daughters on my own in this crazy world, ages 13 & 16 – debt free

– Owned my own insurance agency at age 23, left to stay home to raise my girls. Homeschooled for 5 years, then went through a divorce. Went back into insurance industry and left 2.5 years ago when my boss retired.

Took a mini retirement to figure out what I want to be when I grow up and would love to find a part time, remote position. Completed an Ironman in the meantime.

I have two part time job offers I’m contemplating presently but both are insurance, in office jobs, which I’m not crazy about. I just want to love and enjoy what I’m doing and I’m capable of a lot!

– $425,000 Traditional IRA in 1/2 American Funds, 1/2 money market – expense ratio is .67% on this money. New deposits are NAV.

– $6300 in Roth IRA – all in money market per advisors recommendation

– $180,000 in a CD yielding 4.35%, renews July 2025

– $11,000 in savings
– $8,000 cash
– Home is valued at $400,000 – no mortgage
– 2 SUVs, paid for and no credit card debt
– Receiving child support of $42,000/year

– Annual expenses approximately $35,000/year (currently not investing any money because of being unemployed) but this does not include travel budget. We go on 3 trips a year.

Questions:
1. I’m working with an advisor through State Farm Insurance. Is there a better option through Fidelity or Vanguard with no/lower fees that I can manage myself?

2. Recommendations for the $180,000 CD when it comes due?

3. Options for a Roth IRA for my 16 yr old daughter who is working now?

4. Best travel rewards cc?

5. Suggestions for part time remote careers?

Thank you in advance for your guidance. I feel I’m doing okay on this FI journey but still have a long way to go.

[Rise]

Absolutely, you can handle investing yourself. There are many more parts to good financial planning than investing. It’s kind of shocking that an FA does not bring them up.

Your Roth IRA could have been fully funded each year as long as your MAGi was less than $146,000 for 2024 and $150,000 for 2025.

I believe that child support is not included in your MAGI, just as it is not calculated into your income tax. Please check on the IRS website and with your CPA on this.

Anyway, your income is lower this year. What about taking the time to roll over some of your IRA to your Roth IRA? You can send in 12 or 20% for income tax.

I would not do a great deal, but $20,000 may not have any income tax at all with your dependent deductions. Of course, you’ll be working soon at least part time.

There are many advantages to Roth accounts but one is to have cash to draw on that won’t affect your income. The IRA will always affect your income.

Your C.D. and cash will not. It’s always good to have access to $50k without being taxed on it. A car, a year or two of college.

Speaking of, is your ex husband taking care of college? If not, that should be part of your plan.

Your child support will drastically reduce in 2 years and stop in 7 years. Though your house and car situation is awesome (!), you’ll want a plan that takes you all the way to retirement.

I’ve known others who did not realize how much of a difference the child support made in the family’s lifestyle, especially considering it’s tax free. You’d have to earn another $55 to replace it.

Numbers here are just guestimates, though I did look up the IRS Roth limits. It was for singles, though not head of household.

[Rick]

Congrats on your very solid foundation.
I would start working towards a plan. It can start simple and grow as your knowledge and comfort grows.

An early goal for your plan to address is likely to greatly reduce the amount of cash and cash equivalents (cds).

Move this money into asset classes better positioned to grow in value and to deal with inflation over the long run.

But…..most importantly….and it cannot be stressed enough….an asset mix that you will stick with through market ups and downs.

Cash is not a plan. Repeat that as you start building a plan. And here is a graphic to help drive it home.

And big time congrats on your foundation now go crush the next phase of your journey.

[Amanda]

Why are you getting a part time job? Your income exceeds your expenses and you have a huge retirement and paid off house?

What about not working until the kids are out and then getting something part time?

But if you must- remote bookeeping seems to be a good one.

[Rachael]

Welcome! Looks like you’re off to a very good start. I love Vanguard. Great for low expense ratios for all of your accounts. You could also get a Roth set up for your kiddo if she has earned income.

Another plug for JL Collins, but looks like you just picked up the book. Awesome. The audiobook is really good as well; I love his voice.

I love my short-term rental business. Have you thought about doing this? You could put that 180 K down on a short term rental and manage everything yourself.

Cheers!

[Ernest]

1. Yes; DIY w/ Fidelity.

2. If there are state taxes – treasuries.

3. See my answer to no.1.

[Ernest]

Diya
Congratulations! From one single mom to another, you are in a very good position.

I would recommend reducing your cash reserves ASAP. If needed, you can work with an hourly planner to get you started. Hello Nectarine is one that has been recommended on here.

You are going to do great!

[Sitara]

$6300 in Roth IRA in money market? this is tax free growth I would do VTI or VT here Be aware of the expense ratio or what the agents cut is.

this will eat into your profit Check out hellonectarine service … (Fee only financial service)

[Kimberly]

No need for an advisor. Read The Simple Path to Wealth by JL Collins.

[Author]

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