I am going to start by saying that although my aunt hasn't always been too great with her money, she is an awesome aunt and mom. She always put her kids first (sometimes to her own detriment), and has just begun to realize that if she doesn't look to her own future, she might be in big trouble. She has literally NO clue where to begin, so has recently been asking for advice from me, and I really want to steer her in the right direction. She is not so much looking to retire by a certain magic age, but trying to get herself in a position so that if her body is no longer able to do the job, she will be able to retire/get a lower paying job with fewer physical demands. So here are the details as far as I know them:
-About $8k in CC debt. This is at 0% for the next two years (through the end of 2016). My inclination here is to tell her to continue paying the minimum but no more until she actually faces paying interest, and then obliterate it entirely.
-401K with her employer, which she is putting 16% into. As a waitress, she is pretty low income, and this percentage usually results in her entire check (not including tips), going straight to the 401k. Within that, I have invested her in a low cost index fund that basically follows the S&P, which was the best I could find.
-House: The house is too big now that the kids are grown, and she plans to sell and move to a small condo (with low HOA fees), within the next few years. She was paying double mortgage payments on it, but I recommended quitting this (as her income only stretches so far and she plans to ultimately sell), in favor of an IRA. She has about $140k equity in it, and owes about $80k. We haven't had it appraised recently, but are working on doing this.
-IRA - I think she should open an IRA and fully fund it, along with catch up money. I think traditional is the way to go here, but I am unsure of what funds to use. I personally have no issue with risk and go with VTSMX per Jcollinsnh, but am not sure that is the right strategy for someone so close to retirement. She will probably have to start with Target Funds, as her cash reserves are low, but she plans to be as aggressive as possible (as far as saving/investing amount, not referring to risk tolerance) in the coming years. Would like some detailed advice here if anyone has any suggestions.
That's about all I can think of, I will be glad to add more details if they are needed, and if I have them. Thanks all.