Survivers benefits, what do I do with it?

[coffeelover]

Myself and my 'newer' husband have worked our mustaches off the past 16 months paying off our debt. We only have 1500 left on a car and then the mortgage and we are debt free. Mortgage is fine for us though, it's something we can handle no problem.

My husband and I have both come a long way since we first met and we are very proud of our accomplishments.

So up until this point the SS money I got was used to pay bills, buy food etc.

I get this money for my daughter who's father passed away years ago.
If my daughter needs anything I pay for it out of this money. Clothes,  makeup, etc.
She still works and goes to high school and college at only 17.

I've raised her right and I'm proud. :)

So in reality this money isn't necessarily needed anymore but it's nice to have. The money will only last maybe another 9 months or so. When she completes high school.

What would you fellow MM people do with it?
I was thinking about stashing it in a roth IRA, but I don't work, I"m a SAHM.
I've already got a CD for her that matures in 2015.

I was thinking about paying for her to go through an immersion program next summer. She is really into languages and she wants to be a translator. So that type of program could run me about 2000 to 6000. I would feel more comfortable if it stayed under 3000 and then I would cover airfare and spending money etc. Daughter doesn't want to not work though yet she really wants to experience other cultures to learn the language. This would still leave me excess money  even if I paid for all the expenses above.

We are still building our emergency fund. We could put the money in there but my husband doesn't really want me to. He wants to fund this with his own earnings, not from the death of my daughters father.

So a little background, my daughters father died owing me 50,000 in back child support. He never paid for her, was never a good part of her life. In fact he only had supervised visits with her. So when he died it was a good thing for me because I got money to help support her while I continued to work and went to school full time.
I stopped having to sell my plasma to buy our food. Yes I really did do that for about 2 years.

So I feel like this money is owed to me and daughter and I want to do right by it but I don't want to waste it frivolously either.

So help..?
edit: my words and typos

[Sprocketbite]

You brought up the Roth IRA, but I don't know if you meant for you or for your daughter.

I believe you can contribute up to the maximum contribution limits even as the non working part of the spousal unit.  Not sure if tax filing status figures into this or not.  Google "roth ira contribution limits non working spouse"

Since your daughter works, you can also put up to the total amount she worked or the $5500 limit (whichever is smaller) per year into a Roth in her name. 

I'm not sure what *I* would do, but I thought I should point out that you might have more options with the Roth than you thought.

[nordlead]

I've been under the impression that money received for child survivor benefits must be spent on the child (or saved for them). Of course, money is fungible so you can buy her food and clothing with the SS benefits and invest your own money in a Roth or emergency fund.

Personally I think that if you don't absolutely need the money it should be used for your daughter. It sounds to me like it should be given to her to use on the immersion program and travel. If it doesn't all get used for that, she can invest the rest in index funds and give her a kick-start on retirement.

[kyanamerinas]

The immersion programme sounds wonderful. I am a translator and there is just no better way to get to know a language than being immersed in it. Even if she does not end up being a translator, time spent in another country, particularly speaking another language, will be invaluable in future. my time abroad not only helped my german but also made me much more confident in myself (if i can do rent/shopping/computer issues in german, what's can't i do in english) and taught me lots of skills.

[Catbert]

I think the immersion program is a great use of the money.  It's something that you can give her "from" her dad.

[Gone Fishing]

Can she handle it appropriately? Will she respect a veto if you say "no" to a purchase?  If so, just give it to her. With some direction, 17 is a great age to begin handling her own finances, maybe even a bit late.   

[coffeelover]

Can she handle it appropriately? Will she respect a veto if you say "no" to a purchase?  If so, just give it to her. With some direction, 17 is a great age to begin handling her own finances, maybe even a bit late.

She may handle it well or she may not. If I tell her no to a purchase she won't do it.

But if she has all this extra money she will want to spend it. With her income she makes from her job I have asked her to try and save 200 a month to go towards a trip or college in the future. She is having trouble just saving this amount though and she's been working for quite a few months now and only has 100 in savings.

She bought a very expensive phone. I didn't tell her no and didn't authorize it either. She wanted to get a smart phone and I had her on a dumb phone plan. I told her I wasn't willing to get her a smart phone so if she wanted one she had to buy it. So she did. It is what it is I guess.
She spends a lot of money on junk. We've had talks to scale this down. I'm monitoring her checking account in the hopes that the talks have helped.

So to answer your question, I don't think she will  make the right decisions with the money at this time.

[coffeelover]

You brought up the Roth IRA, but I don't know if you meant for you or for your daughter.

I believe you can contribute up to the maximum contribution limits even as the non working part of the spousal unit.  Not sure if tax filing status figures into this or not.  Google "roth ira contribution limits non working spouse"

Since your daughter works, you can also put up to the total amount she worked or the $5500 limit (whichever is smaller) per year into a Roth in her name. 

I'm not sure what *I* would do, but I thought I should point out that you might have more options with the Roth than you thought.

I met for her and I. I would start one for her and then me eventually once her' is established. I feel a little wrong about this but at the same time I look back to all those years we struggled... So I don't know...

[coffeelover]

I've been under the impression that money received for child survivor benefits must be spent on the child (or saved for them). Of course, money is fungible so you can buy her food and clothing with the SS benefits and invest your own money in a Roth or emergency fund.

Personally I think that if you don't absolutely need the money it should be used for your daughter. It sounds to me like it should be given to her to use on the immersion program and travel. If it doesn't all get used for that, she can invest the rest in index funds and give her a kick-start on retirement.

That is the plan at this point, start a retirement account for her and hopefully she will agree to take next summer off to do the immersion program.
I have thought about starting a IRA for me out of it. I think though that I will just use the account with my husband to start that. It doesn't feel right to fund my retirement this way. But at the same time it's not considered illegal to do so.

[coffeelover]

The immersion programme sounds wonderful. I am a translator and there is just no better way to get to know a language than being immersed in it. Even if she does not end up being a translator, time spent in another country, particularly speaking another language, will be invaluable in future. my time abroad not only helped my german but also made me much more confident in myself (if i can do rent/shopping/computer issues in german, what's can't i do in english) and taught me lots of skills.

I like reading this from a first person perspective. It gives me hope that she can gain some knowledge, language skills, social skills and a million other things if she does this immersion program.
I know my daughter though, she will be torn and will not want to take next summer off from work to do this program. Essentially though it's a once in a lifetime opportunity so I will be trying to convince her to take the money and go on a great trip of a lifetime.

[TreeTired]

But at the same time it's not considered illegal to do so.

Are you sure?   I thought survivor benefits had to be used for the immediate benefit of the beneficiary.

[DecD]

Is her college or post-HS education paid for already? If not, I'd save it to help fund her education.

[Sasha]

She could be an au pair. It's a great a way to spend some time abroad to learn a foreign language and get paid for it (I was an au pair in my early 20s and it was an extremely rewarding experience that opened all of doors). If she wants to be an au pair, she should use an agency to make sure everything is done legally so that the host family doesn't exploit her.
 An experience abroad doesn't have to cost any or much money to young proactive mustachian.

[coffeelover]

She could be an au pair. It's a great a way to spend some time abroad to learn a foreign language and get paid for it (I was an au pair in my early 20s and it was an extremely rewarding experience that opened all of doors). If she wants to be an au pair, she should use an agency to make sure everything is done legally so that the host family doesn't exploit her.
 An experience abroad doesn't have to cost any or much money to young proactive mustachian.

This is brilliant!! I hadn't even thought of that, her current job, get this, is in a daycare center. She would love to do this!!!

Off to research.

[coffeelover]

But at the same time it's not considered illegal to do so.

Are you sure?   I thought survivor benefits had to be used for the immediate benefit of the beneficiary.

I'm not 100% sure. Her money is mixed in with all the other money that is coming into the household. So it's not like I can break down what exactly we paid for what. Other then looking at Mint.com

[coffeelover]

Is her college or post-HS education paid for already? If not, I'd save it to help fund her education.

Her associates degree is already paid for, she only needs the last 2 years of college paid for. She doesn't know if she is going to go for her bachelors degree yet though.
She wants to  learn languages, that is her ultimate goal and it's a goal that she is currently working on.
The type of degree she wants is not offered at many colleges and where it is offered it is very very expensive.
The SS money would only cover a fraction of the cost of her degree unfortunately.

[CubicleEscapee]

Unless SS has changed their rules, when she turns 18 the monthly benefit check will be deposited directly to her account.  A couple months  before her 18th birthday, you will receive a letter requesting direct deposit information for her bank account.  My twins were 17 when their father passed away (2006) and the checks were deposited into my account only until they turned 18.

[coffeelover]

Unless SS has changed their rules, when she turns 18 the monthly benefit check will be deposited directly to her account.  A couple months  before her 18th birthday, you will receive a letter requesting direct deposit information for her bank account.  My twins were 17 when their father passed away (2006) and the checks were deposited into my account only until they turned 18.

Ok thanks for this information. I did not know this.