Elderly Relative Short on Money

[JoeRetire]

The "she should get a job mantra" -- I agree with the sentiment, but getting a job even in your 60s when you have very few skills is not automatic or even easy.

There are plenty of minimum wage no-skill job openings in Massachusetts these days.
Just a walk down the street should turn up dozens of Help Wanted signs.

[JoeRetire]

She spends a lot of time with my 3 children, and is very selfless and helpful with them. I think when her other job goes away, we will start paying her around $500 a month for help with child care. I don't think it makes sense for her to work for minimum wage in an unfulfilling job when she loves spending time with her grand kids, and lets us go food shopping, take a nap, etc. She wouldn't want to take "charity" but having a retired grandparent is hugely helpful to us and worth way more to us than $500.

Maybe she should be living with you.

[mouses]

I haven't had time to read all the posts, but here are my two cents:

I think her living that close to you is a good thing. Twenty minutes doesn't sound like much of a commute, but it is a big item if she gets ill and needs your help, commuting to care for your kids, etc.

I think you and your BIL should get insurance policies in case you are not there when she runs out of money.

I also think the $500 a month for child care is a good thing. Does that leave her time for a very part time job as well? She might be able to find something she likes like a paid position in a historic house group, an animal shelter, etc. although those are often not paid. I saw an ad for an office lady in my old high school the other day.

The bottom line is, she is going to run out of money but her family is there for her, as long as you take measures to deal with the situation of the younger generation dying first.

[mouses]

She spends a lot of time with my 3 children, and is very selfless and helpful with them. I think when her other job goes away, we will start paying her around $500 a month for help with child care. I don't think it makes sense for her to work for minimum wage in an unfulfilling job when she loves spending time with her grand kids, and lets us go food shopping, take a nap, etc. She wouldn't want to take "charity" but having a retired grandparent is hugely helpful to us and worth way more to us than $500.

Maybe she should be living with you.

I didn't suggest this, because I assumed there was not room, but if there is room, it would be a big win. My grandparents and my family lived in a duplex and it was great for us kids having them around. That way they also had privacy. With just one person, separate units would not be necessary.

[MnD]

Social Security $12,000 inflation-adjusted
Annuity (from $290,000) $18,600 not inflation-adjusted
Annual income $30,600 partially inflation-adjusted.

You said the 290K included proceeds from home sale and some in traditional retirement accounts so it doesn't seem possible all/most of the annuity would be taxable. So maybe $10K is taxable. Does a single 65+ year old owe taxes on $12K in SS and maybe 10K in IRA distributions? I'd guess not but I'm too lazy to calculate it.

So she needs $28,800K in income and has $30,600 in income which is partially inflation-adjusted and has two kids with combined household income of $400K a year. I'm just not seeing the crisis here. Sounds typical older American with the difference being the 2 kids both having 200K incomes. I don't think they are going to force Mom to get a job down at the 7-11 and/or need to have her move in with kids. The kids may opt to gamble on the stock market putting a rosier shine on this situation but its the kids gambling, not the Mom. Figure on pitching in on expenses from time to time like car repairs. Maybe the annuity income will cause problems with Medicaid eligibility if needing LTC so I'd check into that.

[Thegame14]

take the 290K and buy an annuity. Grandma moves in with you and your wife. Helps out with house chores and if there are grandkids, some babysitting and maybe she does some cooking. Also bonus, grandkids and grandma get to have lots of memories together.

[FIREchief]

With just one person, separate units would not be necessary.

That my friend would depend entirely on the persons involved. In some situations, that duplex might be "too far away." In others, 1000 miles might not be quite enough.

[Jags4186]

Two options I would consider:

Invest age appropriately, have her withdraw 4%, your family and your brother in laws family make up the difference every month.

Invest age appropriately. Let MIL withdraw what she needs every month, when the money runs out make up the difference.

I think option 1 is the best, but make it be known that’s the plan. You’ll all get your money back when she passes. Don’t buy a SPIA, you’ll still end up subsidizing her anyway and they’ll be nothing to show for it at the end.

If she wants to get a little job at the local library, women’s club, or something that’s fine too, but I wouldn’t make a no skill parent of mine work at 7/11 or McDonalds to avoid me and my sister each coughing up a couple $100 each a month...

[randomguy]

Heck, I'm over 65 and manage assets for some elderly relatives. (80s and 90s is elderly to me.)

I would never think of charging them a fee as that would make them run out of assets sooner. As POA, I would then have a new problem to solve.

You also are (probably) not a professional advisor. If you were a dentist, would you be providing them free dental work? If your a contractor would you work on their roof for free? I get the hate for a professional advisor but to some extent I think expecting them to work for free is pretty unrealistic. The advisor taking 20 mins and going this vanguard AOI fund meets your needs so stick your money it in, is one thing. Expecting FA services (as worthless as you might think they are) is another. I am willing to help set up my parents computer. I am not willing to spend 100 hours developing a custom website:)

[aspirit]

Min. wage in Ma. for many national chains (Advanced auto, Stop & Shop cashiers & lot boys, McDonalds, etc. ) follows federal guidelines. 7.25. AFAIK.

Good luck!

[chmcnm]

You didn't say what the ex-husband did for a living but he always managed the finances. Maybe I'm cynical but I had a family friend go through a similar situations at that age. She's still unraveling his finances. I would keep an eye on the ex-husband and see his standard of living. If he's living well or even comfortably maybe he tucked away some assets that didn't make it to the divorce settlement.

[ColoRetiredGirl]

She has been working part time helping one of her friends plan parties and decorate for the last few years. I didn't include this in the initial post because her friend will be moving in a year or so and the job will go away. I think she makes $800 a month or so, so it will definitely help for the next year.

OP

Can she take over this business when her friend moves? Maybe she can learn the ropes now, including paperwork, how to get a book of business, etc. Just a thought and thank you for rethinking the threads title. I like it!

[celia]

I think expecting them to work for free is pretty unrealistic.

It depends on your interests and skills, I guess. There are a lot of things we fix around the house for free. We often cook our own food. I do my own gardening, taxes, and woodworking. Why pay someone for something I WANT to do?

[Dottie57]

Buy a SPIA if she cannot handle money. It will give close to 18k + 12k SS = 30k/yr.

290k is not going to produce 18k/yr adjusted for inflation. $800/month will be a safe withdrawal.

Without SPIA ,she has to live on 1.8k/month if she cannot work or be a dependant.

Is your SPIA producing 18k/year inflation adjusted also or are you doing an apples to oranges comparison? The nominal SWR (i.e. no inflation adjusted) for a 50/50 allocation is somewhere in around 6% or pretty much what that SPIA she can buy today will offer. Obviously a portfolio gives the chance of an upside and a downside

Not inflation adjusted but she can save some money from the fixed income(30k) then. If she is unable to manage large sum of money its entirely possible that someone will take advantage of that and the portfolio may cease to exist in a few years.
Better to have fixed income and work whatever she can.

The point is that SPIA isn't magically giving her more money. You are choosing to take more money now and less later. And you could do the same with investing yourself. It is all about how much risk she wants to take on.. A SPIA has the rough risk profile of a bond portfolio. A market portfolio is a lot riskier. Does she want to take that risk or not in exchange for potentially having more money? Remember the average SWR of a 50/50 portfolio is about 5.5% which is a lot higher than what the SPIA is putting out (~4-4.5% for a 30 year term. but with variable payouts the exact number is a bit iffy). Could result in her having more money to spend from 75-95. Depending on the kid backstop in case of portfolio failure (i.e. what happens in year 25 if she goes broke), she might have the ability to take risk. I am sort of counting on kids not ripping off their mom:)

If she was 75 or 80, I would feel a lot more comfortable about buying that nominal SPIA. That is 10+ less years of your income being reduced by 2%/year. And the mortality credits really start making a difference (both in winners and losers cases) as you age. But obviously she has to make to those ages.

Single Premium immediate Annuities are an insurance product that lasts for the Life time of the insured. A 65 year old woman would receive a 6% payout if bought now. An 86 year old would receive a 14% payout of the purchase price. The payout is determined by actuarial tables. Multiple annuities can be purchased in order to generate bigger payouts at different ages.

Try using immediateannuities.com .

[InMyDreams]

1. She's 65, so she signed up for Medicare this year, right? It would be really bad if being in the midst of the divorce caused that to slip her mind. (Medicare Pt B premiums go up permanently if you forget to sign up on time.)


Yes, I know she is on Medicare. She said it's deducted from her SS and she writes a check every month or something (Part D?).

So, I wonder if the SS amount that you've quoted previously already has the Medicare deductions taken from it?

Sorry, but you are getting a crash course in the details of retirement living expenses/money management. You might want to find a Medicare for Dummies type book.

Another cash-flow, money conserving step might be to enroll her in a MedAdvantage program, if that isn't what she's already enrolled in. Personally, I plan to use a MediGap (more freedom in the medical system), but a MedAdvantage program may offer lower up front costs. Choosing an insurer wisely may provide satisfaction regardless of state of health.

BTW - If she has a MediGap policy, then she would/could have three premiums - Medicare part B, Medicare part D, and the Medigap. Alternatively, she may have a MedAdvantage policy. But please, make sure she's in either a Medigap policy with the other two parts (B and D) -or- she's in a MedAdvantage. Otherwise - I think you said she turned 65 this year? She has a specific time period for open enrollment with age 65. Act fast.

Someone has already alluded to the idea that she may be happy with the help now, but if things go south, she may lay it on your shoulders. The more she actively is involved in decision making, the more ownership she'll feel.

Another poster mentioned community support programs. Saving dollars now may allow her to preserve her capital for the long run.

Bless you for stepping up to the plate to help.

[DC3509]

Two options I would consider:

Invest age appropriately, have her withdraw 4%, your family and your brother in laws family make up the difference every month.

Invest age appropriately. Let MIL withdraw what she needs every month, when the money runs out make up the difference.

I think option 1 is the best, but make it be known that’s the plan. You’ll all get your money back when she passes. Don’t buy a SPIA, you’ll still end up subsidizing her anyway and they’ll be nothing to show for it at the end.

If she wants to get a little job at the local library, women’s club, or something that’s fine too, but I wouldn’t make a no skill parent of mine work at 7/11 or McDonalds to avoid me and my sister each coughing up a couple $100 each a month...

+1000

I am actually very surprised at the number of responses that suggested she take some minimum wage job at McDonalds or a supermarket -- even though she can be a very good babysitter for the OP's family, and apparently does have some small decorating side gig. News flash: not everyone is cut out for working at McDonald's in their 60s, especially when that person has not otherwise worked most of their lives. It would be such a significant disruption to their lives that the idea is borderline insane. And my family has found ourselves in a similar situation -- my grandfather passed away very suddenly in his mid 60s when I was younger. My grandmother was in her early 60s and was now suddenly faced with less income, etc. She was technically able to work, but had spent her entire life as a housewife/mother/grandmother. It wasn't like we told grandma to go fill out an application at McDonald's or eat cat food -- or lecture her about personal responsibility. She was our grandmother. We helped her in every way that we could, and the moments I had with her growing up were some of the best times in my life. She adapted as well. She ended up passing away about 15 years later with money left in the bank through careful management. And our love and support.

[Northern Flicker]

One strategy to evaluate is that she can suspend social security until she 70, increasing the benefit, and funding her living expenses in the meantime from the assets she has. This is may be more cost effective than buying an annuity but may achieve the equivalent effect. The remaining funds could be used to purchase an annuity. This might get her the point of covering her expenses, or at least close.

Example:

1. Suspend SS until age 70
2. Purchase a SPIA with $200K of assets: with 6% payout that provides $1000/mo.
3. Invest $90K in a 5-year TIPS or CD ladder, $18K/yr. year 1 would just be cash as it will start being spent now.

Until age 70 she gets $1000/mo. nominal from the SPIA and $1500/month real plus yield from the TIPS or some nominal return from CDs.

When she turns 70 she will get her increased SS benefit and the continued SPIA payout. You will have to evaluate what that SS payment would be, but I think it might be around $1500, and SS has COLAs (cost of living adjustments).

Because the SPIA is nominal, her spending power is likely to erode over time and family members may have to supplement for some expenses, or she would have to reduce expenses.

If she was married 10+ years and her ex-spouse has not filed for SS then the above plan might not be appropriate if she would get a higher spousal benefit when her extra-spouse files for SS. In that scenario she might just annuitize about $250K of her assets now and keep receiving SS, keeping $40K as an emergency fund to cover untargeted expenses. This plan could also be done even if she will not get an SS bump from a spousal SS benefit, but it might not have as much COLA builtin as the first plan of delaying SS.

Both plans should be analyzed and compared. Withdrawal from a stock and bond portfolio is the 3rd option, but she has no margin of error for any unfavorable sequences of returns.

[dodecahedron]

I will just throw this out there.

It might make sense for her to suspend SS now to earn delayed retirement credits until 70.

OP indicates that she is collecting spousal benefits, so delayed retirement credits would not be applicable.

[Lynette]

Sorry to hear about this situation. I can understand you not wanting to have her work at a minimum-wage job. But if she provides you with great housekeeping and child care services, I think you should pay her the market value for her services. Otherwise I would start to fund a separate account for the difference in your name for her use if required. I know this is mental accounting but it might provide her some comfort to know the money is there if required.

I know people age differently but if the relative is in good health, 65 is not elderly. I am nearly 75 and doing some really strenuous garden renovation. I am considering taking a course as a master gardener next fall and I restart Spanish classes at a local community college next week.

[BL]

Sorry to hear about this situation. I can understand you not wanting to have her work at a minimum-wage job. But if she provides you with great housekeeping and child care services, I think you should pay her the market value for her services. Otherwise I would start to fund a separate account for the difference in your name for her use if required. I know this is mental accounting but it might provide her some comfort to know the money is there if required.

I know people age differently but if the relative is in good health, 65 is not elderly. I am nearly 75 and doing some really strenuous garden renovation. I am considering taking a course as a master gardener next fall and I restart Spanish classes at a local community college next week.

+1

[randomguy]

Buy a SPIA if she cannot handle money. It will give close to 18k + 12k SS = 30k/yr.

290k is not going to produce 18k/yr adjusted for inflation. $800/month will be a safe withdrawal.

Without SPIA ,she has to live on 1.8k/month if she cannot work or be a dependant.

Is your SPIA producing 18k/year inflation adjusted also or are you doing an apples to oranges comparison? The nominal SWR (i.e. no inflation adjusted) for a 50/50 allocation is somewhere in around 6% or pretty much what that SPIA she can buy today will offer. Obviously a portfolio gives the chance of an upside and a downside

Not inflation adjusted but she can save some money from the fixed income(30k) then. If she is unable to manage large sum of money its entirely possible that someone will take advantage of that and the portfolio may cease to exist in a few years.
Better to have fixed income and work whatever she can.

The point is that SPIA isn't magically giving her more money. You are choosing to take more money now and less later. And you could do the same with investing yourself. It is all about how much risk she wants to take on.. A SPIA has the rough risk profile of a bond portfolio. A market portfolio is a lot riskier. Does she want to take that risk or not in exchange for potentially having more money? Remember the average SWR of a 50/50 portfolio is about 5.5% which is a lot higher than what the SPIA is putting out (~4-4.5% for a 30 year term. but with variable payouts the exact number is a bit iffy). Could result in her having more money to spend from 75-95. Depending on the kid backstop in case of portfolio failure (i.e. what happens in year 25 if she goes broke), she might have the ability to take risk. I am sort of counting on kids not ripping off their mom:)

If she was 75 or 80, I would feel a lot more comfortable about buying that nominal SPIA. That is 10+ less years of your income being reduced by 2%/year. And the mortality credits really start making a difference (both in winners and losers cases) as you age. But obviously she has to make to those ages.

Single Premium immediate Annuities are an insurance product that lasts for the Life time of the insured. A 65 year old woman would receive a 6% payout if bought now. An 86 year old would receive a 14% payout of the purchase price. The payout is determined by actuarial tables. Multiple annuities can be purchased in order to generate bigger payouts at different ages.

Try using immediateannuities.com .

yes I have spent plenty of time on that site. What are you trying to say?

[Dottie57]

Is your SPIA producing 18k/year inflation adjusted also or are you doing an apples to oranges comparison? The nominal SWR (i.e. no inflation adjusted) for a 50/50 allocation is somewhere in around 6% or pretty much what that SPIA she can buy today will offer. Obviously a portfolio gives the chance of an upside and a downside

Not inflation adjusted but she can save some money from the fixed income(30k) then. If she is unable to manage large sum of money its entirely possible that someone will take advantage of that and the portfolio may cease to exist in a few years.
Better to have fixed income and work whatever she can.

The point is that SPIA isn't magically giving her more money. You are choosing to take more money now and less later. And you could do the same with investing yourself. It is all about how much risk she wants to take on.. A SPIA has the rough risk profile of a bond portfolio. A market portfolio is a lot riskier. Does she want to take that risk or not in exchange for potentially having more money? Remember the average SWR of a 50/50 portfolio is about 5.5% which is a lot higher than what the SPIA is putting out (~4-4.5% for a 30 year term. but with variable payouts the exact number is a bit iffy). Could result in her having more money to spend from 75-95. Depending on the kid backstop in case of portfolio failure (i.e. what happens in year 25 if she goes broke), she might have the ability to take risk. I am sort of counting on kids not ripping off their mom:)

If she was 75 or 80, I would feel a lot more comfortable about buying that nominal SPIA. That is 10+ less years of your income being reduced by 2%/year. And the mortality credits really start making a difference (both in winners and losers cases) as you age. But obviously she has to make to those ages.

Single Premium immediate Annuities are an insurance product that lasts for the Life time of the insured. A 65 year old woman would receive a 6% payout if bought now. An 86 year old would receive a 14% payout of the purchase price. The payout is determined by actuarial tables. Multiple annuities can be purchased in order to generate bigger payouts at different ages.

Try using immediateannuities.com .

yes I have spent plenty of time on that site. What are you trying to say?

You said annuities don’t magically give more money.

My point is that SPIA can enhance income as ne ages. And multiple annuities purchased across time can really boost income from a given amount of income. Sufficient?

[Sandi_k]

A couple of random thoughts...

- Is she willing to rent with a flat-mate? Half of a two bedroom apartment or house is typically cheaper than a 1-bedroom dwelling. Maybe she knows someone from church, or among her decorating circle? The big advantage is cost savings, but many older folks also get lonely - so it builds in a little social interaction, which is a good thing. My grandmother did this, and it was great.

- Why are you looking at an "elder apartment complex?" They are typically more expensive than just a generic apartment complex, so perhaps she needs to compromise on something that is still close and in a good neighborhood. but which has fewer amenities.

- IMO, it's a bad idea to plan on helping her out in 15 years, at the same time the kids will be in college. I would annuitize the $200k, and build a CD ladder as noted; and your family plus the other child's family should each be putting aside ~ $250 per month each into a brokerage account in a 60/40 split for her future needs; in 15 years, that would be nearly another $100k. The compounding over the next 15 years could really help her out when she needs it most.

- Maybe she doesn't need to work at McDonald's, but I agree that she should do something to bring in a little bit of income. My MIL does Avon; others I know do pet-sitting or house-sitting, to pick up a little extra cash. She could easily pick up another $2k per year doing something on the side like that.

[gotester2000]

randomguy,

An annuity is useful when -

1. The elderly person may not be able to manage portfolio on her own.
2. Becoming dependent on kids financially is not a good idea as the kids may pre-decease the parent.
3. The kids may use the parent corpus due to a change in their own circumstances.

[JoeRetire]

Min. wage in Ma. for many national chains (Advanced auto, Stop & Shop cashiers & lot boys, McDonalds, etc. ) follows federal guidelines. 7.25. AFAIK.

Minimum wage is $11.00 /hr in Massachusetts these days. Heading to $15.00 over time.

[michaeljc70]

I'm sorry that you are in this situation.

I think that ensuring she is not paying a 1% management fee for her money is crucial. She definitely can't afford that.

I like your plan of paying her $500 a month for babysitting.

In terms of asset allocation, here's an outside-the-box way of thinking about it: consider her money your wife's and her brother's from an asset allocation perspective. Let me explain.

When she dies, I presume that most/all of her money will go to your wife and her brother, with maybe some going to the grandkids. And you stated that if she runs out of money, she'll be taken care of with money from your wife and her brother. So one way or another, either your family and your wife's brother gets what is left over when she dies or you guys are on the hook for any shortfall if she outlives her money.

So why not agree with a reasonable standard of living with your MIL and just tell her that money will be available every month. Then invest her money at an asset allocation that makes sense for your wife and her brother. If the markets do well, great! If they do poorly, you'll make up the shortfall. It's basically you guys selling an SPIA to her but without the insurance company's profit margin.

There are of course some shortfalls of this plan:

1) If the stock market does well, she would reasonably want to spend more money. So you may not really receive the full upside of a more aggressive asset allocation.

2) If the stock market does poorly and she runs out of money, you have to step in and help when YOUR investments haven't done well either.

But I think this isn't far off from what you're proposing when you say invest the money in 2/3 stocks with a fairly hefty withdrawal rate.

My thoughts exactly. She isn't really taking the risk. The risk is really borne by the kids. They will pay more (of her expenses) if the portfolio underperforms and benefit if it doesn't (lower expenses paid/ higher inheritance).

[Shallowpockets]

Example:

1. Suspend SS until age 70
2. Purchase a SPIA with $200K of assets: with 6% payout that provides $1000/mo.
3. Invest $90K in a 5-year TIPS or CD ladder, $18K/yr. year 1 would just be cash as it will start being spent now.

Until age 70 she gets $1000/mo. nominal from the SPIA and $1500/month real plus yield from the TIPS or some nominal return from CDs.

>>>>>>>>>>>>€
I could use more of an explanation on the above.
$1500 a month on 90k 5 year TIPs or CD ladder?
If I could get $1500/month on a 90k investment I would jump on it. Every BH would.
???

[Niemanterry]

Suggest a “Golden Girls” room mate, and a part time job.

[NoHeat]

If she still runs out of money, the "kids paying her" plan is still on the table.

Maybe you could avoid this with a deferred annuity, i.e., longevity insurance. For a single premium of about $60k now at age 65, she can buy $1k per month lifetime income starting at age 80.

https://annuities.blueprintincome.com/l ... ent-rates/

[aspirit]

Min. wage in Ma. for many national chains (Advanced auto, Stop & Shop cashiers & lot boys, McDonalds, etc. ) follows federal guidelines. 7.25. AFAIK.

Minimum wage is $11.00 /hr in Massachusetts these days. Heading to $15.00 over time.

Again, if you believe the media I guess it does Joeretire.
Everyone in MA. makes 11.00 hr.!

I've asked employees I've known in the last few months w/their wage at both Stop & Shop(It pays less to "disabled'' workers in their PT disabled workers programs too! Just like Walmart does! Yes, less than 7.25! ) O'Reiley's Auto parts is another, all said 7.25. PartTime!

I suspect a store or dept. mgr. might be 11.00, 1 person. But cashiers? Lot boys? Delivery drivers, non union evening shelf stockers? etc. Ocean state job lot pays all starting employees 7.25 PT
Its part time, BBusiness keeps workers PT to avoid FT employees downside costs. There is a difference, and hiring PT is what is the standard practice these days by big business.

FT, i'm clueless.
Whats that saying? Its not what you know that hurts you, its what you think you know that just aint so?

AFAIK- Good luck!

[prairieman]

My two cents: She should get a part time job and try to make $1k / month and look to work 5-10 years + Option A on the 290k

I second this opinion. It is what my elderly divorced sister is doing. Her situation is similar but not identical. She works at minimum wage but has come to enjoy that job.

[MnD]

As i showed upthread, Social Security plus income from buying an annuity exceeds her expenses even at the "high" desired level of housing.
Only partially inflation-adjusted, but spending has been shown to decline as people age, even when adjusting for increased health care costs.
Having a very firm and clear fixed income will help her live within her means. If she wants more she can choose to do something like get a roommate or work part-time but its not something the kids has to impose on her. Lots of the "she must do this" actions seems like overreactions and overanalysis. Bogleheads are used to thinking people can't retire without $3M but in fact her situation is very typical if not above average. More typical is Social Security and very little in the way of other savings. Having the kicker of kids that together make $400K a year makes this a very non-concerning situation.

[JoeRetire]

Again, if you believe the media I guess it does Joeretire. Everyone in MA. makes 11.00 hr.
I've asked employees I've known in the last few months w/their wage at both Stop & Shop(It pays less to "disabled'' workers in their PT disabled workers programs too! Just like Walmart does! Yes, less than 7.25! ) O'Reiley's Auto parts is another, all said 7.25. PartTime!

I suspect a store or dept. mgr. might be 11.00, 1 person. But cashiers? Lot boys? Delivery drivers, non union evening shelf stockers? etc. Ocean state job lot pays all starting employees 7.25 PT
Its part time, BBusiness keeps workers PT to avoid FT employees downside costs. There is a difference, and hiring PT is what is the standard practice these days by big business.

Sorry, you are simply confused. Perhaps you re thinking about the Federal minimum wage?

In Massachusetts, there is no "full time minimum wage" versus "part time minimum wage". It's $11.00/hour for either. There are very, very few exceptions to the minimum wage laws in MA. Being part-time isn't one of them.

Stop & Shop employees in MA are represented by a union. If you think they would allow sub-minimum wage for cashiers you are mistaken.

If your friends actually believe they are being paid less than $11/hour in MA (and they aren't a tipped worker such as a waiter or waitress), they should immediately contact the Department of Labor.

[dodecahedron]

Example:

1. Suspend SS until age 70
2. Purchase a SPIA with $200K of assets: with 6% payout that provides $1000/mo.
3. Invest $90K in a 5-year TIPS or CD ladder, $18K/yr. year 1 would just be cash as it will start being spent now.

Until age 70 she gets $1000/mo. nominal from the SPIA and $1500/month real plus yield from the TIPS or some nominal return from CDs.

>>>>>>>>>>>>€
I could use more of an explanation on the above.
$1500 a month on 90k 5 year TIPs or CD ladder?
If I could get $1500/month on a 90k investment I would jump on it. Every BH would.
???

No, every BH would not necessarily jump on it, because other BHs would see the "until age 70" clause and realize that the 1500 per month only runs for five years, at which point the $90K investment has been fully exhausted. (Do the math: $18K x 5 = $90K.)

This MIGHT still be a sensible idea for some folks to consider if ONLY the OP's relative were collecting benefits on her own earnings record. It doesn't make much sense for the OP's relative, however, because she is collecting (ex-)spousal SS. Spousal, ex-spousal, and surviving spouse benefits do not grow past FRA. No point in deferring until age 70 for those. There is some smaller benefit to waiting until at least her FRA but at this point it may be too late for that.

[Dottie57]

Again, if you believe the media I guess it does Joeretire. Everyone in MA. makes 11.00 hr.
I've asked employees I've known in the last few months w/their wage at both Stop & Shop(It pays less to "disabled'' workers in their PT disabled workers programs too! Just like Walmart does! Yes, less than 7.25! ) O'Reiley's Auto parts is another, all said 7.25. PartTime!

I suspect a store or dept. mgr. might be 11.00, 1 person. But cashiers? Lot boys? Delivery drivers, non union evening shelf stockers? etc. Ocean state job lot pays all starting employees 7.25 PT
Its part time, BBusiness keeps workers PT to avoid FT employees downside costs. There is a difference, and hiring PT is what is the standard practice these days by big business.

Sorry, you are simply confused. Perhaps you re thinking about the Federal minimum wage?

In Massachusetts, there is no "full time minimum wage" versus "part time minimum wage". It's $11.00/hour for either. There are very, very few exceptions to the minimum wage laws in MA. Being part-time isn't one of them.

Stop & Shop employees in MA are represented by a union. If you think they would allow sub-minimum wage for cashiers you are mistaken.

If your friends actually believe they are being paid less than $11/hour in MA, they should immediately contact the Department of Labor.

Perhaps the 7.25 amount is after all taxes.

[JoeRetire]

Again, if you believe the media I guess it does Joeretire. Everyone in MA. makes 11.00 hr.
I've asked employees I've known in the last few months w/their wage at both Stop & Shop(It pays less to "disabled'' workers in their PT disabled workers programs too! Just like Walmart does! Yes, less than 7.25! ) O'Reiley's Auto parts is another, all said 7.25. PartTime!

I suspect a store or dept. mgr. might be 11.00, 1 person. But cashiers? Lot boys? Delivery drivers, non union evening shelf stockers? etc. Ocean state job lot pays all starting employees 7.25 PT
Its part time, BBusiness keeps workers PT to avoid FT employees downside costs. There is a difference, and hiring PT is what is the standard practice these days by big business.

Sorry, you are simply confused. Perhaps you re thinking about the Federal minimum wage?

In Massachusetts, there is no "full time minimum wage" versus "part time minimum wage". It's $11.00/hour for either. There are very, very few exceptions to the minimum wage laws in MA. Being part-time isn't one of them.

Stop & Shop employees in MA are represented by a union. If you think they would allow sub-minimum wage for cashiers you are mistaken.

If your friends actually believe they are being paid less than $11/hour in MA, they should immediately contact the Department of Labor.

Perhaps the 7.25 amount is after all taxes.

No.

If you ask someone how much they make per hour, nobody would toss out an "after all taxes" amount.
And even if they did, since everyone pays different amounts of taxes, there's no chance they would all magically land on $7.25.

Either these folks didn't actually work in MA, someone(s) got confused about MA versus Federal minimum wage, or someone is just making uninformed guesses.

[cockersx3]

If she's in central or eastern Massachusetts (where I am), I challenge you to walk into any retail business and either not find a "help wanted" sign or if you ask the owner, they're not looking for people. Businesses all over this end of the state are looking for people and this is prime time to look. College students start in the next couple weeks as do high school students. There's going to be openings everywhere. There is absolutely no reason why she can't work at Stop & Shop. I see the store manager where I shop and she's in her 70's. "She doesn't want to go back to work" doesn't cut it. I'd like to stop working and have someone provide me with a Pagani Huayra BC, but that ain't gonna happen.

As others say, managing her money in this way or that is not going to magically provide some treasure trove of money to do all the things she'd like to do.

And by the way......65 is far from elderly.

+1000.

I mean, kudos to the OP who is clearly (and admirably) trying to make the best of a bad situation, but...yeah. This 1000%. Unfortunately I expect posts like these to become more common as baby boomers retire and their retirement expectations hit reality.

[aspirit]

Again, if you believe the media I guess it does Joeretire. Everyone in MA. makes 11.00 hr.
I've asked employees I've known in the last few months w/their wage at both Stop & Shop(It pays less to "disabled'' workers in their PT disabled workers programs too! Just like Walmart does! Yes, less than 7.25! ) O'Reiley's Auto parts is another, all said 7.25. PartTime!

I suspect a store or dept. mgr. might be 11.00, 1 person. But cashiers? Lot boys? Delivery drivers, non union evening shelf stockers? etc. Ocean state job lot pays all starting employees 7.25 PT
Its part time, BBusiness keeps workers PT to avoid FT employees downside costs. There is a difference, and hiring PT is what is the standard practice these days by big business.

Sorry, you are simply confused. Perhaps you re thinking about the Federal minimum wage?

In Massachusetts, there is no "full time minimum wage" versus "part time minimum wage". It's $11.00/hour for either. There are very, very few exceptions to the minimum wage laws in MA. Being part-time isn't one of them.

Again, your mistaken, not I. The vast majority of S&S store workers are PT,.. non-union.

Stop & Shop employees in MA are represented by a union. If you think they would allow sub-minimum wage for cashiers you are mistaken.

A good friend has been there 30+ yrs. He is whatever store they assign him to's produce mgr., Brookline to New Bedford, it must be w/in 50 mi. He makes 19.50hr in the union. These union jobs are few and far between in retail.

Many new employees get hired striving for the unions 90 day trial, virtually always its known in S&S that unless they have an "edge", its 87-88 days and their replaced with other newbies on the same path making entry level wages. Again,& again, like clockwork. Thats union and mgt. working hand in hand, it harbors union positions, & it also covers the busy 3 month summer season inexpensively w/extra help if becoming union is their goal.

This has happened decade after decade JoeRetire
I serviced a S&S contract for about 15yrs. I'm not speaking out of ignorance.

If your friends actually believe they are being paid less than $11/hour in MA (and they aren't a tipped worker such as a waiter or waitress), they should immediately contact the Department of Labor.

Whats that going to do get them Fired?

Many national parts delivery drivers, parts counter help, and cashiers, etc. get below 11hr. Do you think the automatic car washes helpers are paid 11hr? I do not, but I do not know.
You believe what you like or what the state reg's tell you, I'll believe what the people I know, the workers tell me.

(1) Staples copy store employee told me he makes 11.20hr., he's part-time.
He told me the floor personal make about the same.

I guess we disagree JoeRetire, maybe more feel good state legislation would help.
Good Luck!

[pennywise]

I am actually very surprised at the number of responses that suggested she take some minimum wage job at McDonalds or a supermarket -- even though she can be a very good babysitter for the OP's family, and apparently does have some small decorating side gig. News flash: not everyone is cut out for working at McDonald's in their 60s, especially when that person has not otherwise worked most of their lives. It would be such a significant disruption to their lives that the idea is borderline insane. And my family has found ourselves in a similar situation -- my grandfather passed away very suddenly in his mid 60s when I was younger. My grandmother was in her early 60s and was now suddenly faced with less income, etc. She was technically able to work, but had spent her entire life as a housewife/mother/grandmother.

Just because someone has been financially dependent all her adult life and has had the *privilege* of having someone else shoulder the entire burden of providing for all her financial needs, if the provider isn't around and the money spigot dries up, then that person should absolutely expect (and be expected to) take on the responsibility of providing for her own financial needs. Speaking as a 60 year old woman who has earned a paycheck since the age of 16 YO including the years I was in prime mother/homemaker stage while I raised 2 children, I don't have a lot of sympathy for a woman my age who has been happily enjoying a life of leisure until it ends and who then expects that somebody is going to step up and continue providing a personal social welfare net so she doesn't have to go to work.

In this particular situation it seems there are some very useful options for the OP's relative to help the family in a way that actually would provide 'income'. However if that were not the case I vehemently disagree it's borderline insane to expect a healthy capable woman to get a job to support herself.

[bajdygba1]

Thanks for the replies guys. We'll figure it out and will be fine. I definitely have some good starting points for research here.

[DC3509]

I am actually very surprised at the number of responses that suggested she take some minimum wage job at McDonalds or a supermarket -- even though she can be a very good babysitter for the OP's family, and apparently does have some small decorating side gig. News flash: not everyone is cut out for working at McDonald's in their 60s, especially when that person has not otherwise worked most of their lives. It would be such a significant disruption to their lives that the idea is borderline insane. And my family has found ourselves in a similar situation -- my grandfather passed away very suddenly in his mid 60s when I was younger. My grandmother was in her early 60s and was now suddenly faced with less income, etc. She was technically able to work, but had spent her entire life as a housewife/mother/grandmother.

Just because someone has been financially dependent all her adult life and has had the *privilege* of having someone else shoulder the entire burden of providing for all her financial needs, if the provider isn't around and the money spigot dries up, then that person should absolutely expect (and be expected to) take on the responsibility of providing for her own financial needs. Speaking as a 60 year old woman who has earned a paycheck since the age of 16 YO including the years I was in prime mother/homemaker stage while I raised 2 children, I don't have a lot of sympathy for a woman my age who has been happily enjoying a life of leisure until it ends and who then expects that somebody is going to step up and continue providing a personal social welfare net so she doesn't have to go to work.

In this particular situation it seems there are some very useful options for the OP's relative to help the family in a way that actually would provide 'income'. However if that were not the case I vehemently disagree it's borderline insane to expect a healthy capable woman to get a job to support herself.

You've been working since the age of 16, by your own admission in your post. For various reasons -- some societal/culture, some family, etc. -- not all people do that, especially people of a different generation. It is much harder to be thrust into the workforce in yours 60s when you have never really worked at all.

But in any event -- this is a straw-man argument. As you point out, the OPs relative can help the family in a way that actually would provide income. My own grandmother also did a lot of useful stuff for our family when I was growing up and after she was unexpectedly widowed. She also lived very much within her means. If you really have no financial resources and you want to live a certain lifestyle -- then yes, I agree you would go to work -- though even then I am not sure that McDonald's is the best option. But that wasn't the OP's situation or the one I was describing anyway.

[AlphaLess]

I agree with the general theme that some additional income might be helpful.
How about working at a store, like Home Depot or Sams Club?

[JoeRetire]

A good friend has been there 30+ yrs. He is whatever store they assign him to's produce mgr., Brookline to New Bedford, it must be w/in 50 mi. He makes 19.50hr in the union.

So more than $11.00? Okay.

Many national parts delivery drivers, parts counter help, and cashiers, etc. get below 11hr.

Not if they are employed in Massachusetts.

Do you think the automatic car washes helpers are paid 11hr? I do not, but I do not know.

Apparently you don't know. People employed in MA get at least the minimum wage.

(1) Staples copy store employee told me he makes 11.20hr., he's part-time.
He told me the floor personal make about the same.

So more than $11.00? Okay.

[aspirit]

Many national parts delivery drivers, parts counter help, and cashiers, etc. get below 11hr.

Not if they are employed in Massachusetts.

Not theoretically, actually:
Today:
The Advanced Auto parts delivery driver told me today, my job pays 8.50hr.
The car wash guy next to the Advanced auto national parts store told me 7.25hr.
The mobil gas station attendant said they get 7.25, but they get 8.25 12mid-7am for night shifts. Average O'Reilly Auto Parts hourly pay ranges from approximately $9.00 per hour for Training Coordinator to $14.25 per hour for Stock Supervisor. The average O'Reilly Auto Parts salary ranges from approximately $17,408 per year for Cashier/Sales to $63,290 per year for Operations Manager. Thats the upside, you do the math.
Their all in mass, not even near its borders, 15mi outside BOS-
I guess there is a reality between enforced laws and life below the ivory tower.

OP: Hopfully your issues w/60 yr old novice earner works out. I’d suggest exploring your friends options coloring both inside/outside the lines.

Your clearly a blue blooded heavily biased Masachussettsonian. I refuse to further update those unwilling to listen facts. I'm over&out.

[JoeRetire]

Many national parts delivery drivers, parts counter help, and cashiers, etc. get below 11hr.

Not if they are employed in Massachusetts.

Not theoretically, actually:
Today:
The Advanced Auto parts delivery driver told me today, my job pays 8.50hr.
The car wash guy next to the Advanced auto national parts store told me 7.25hr.
The mobil gas station attendant said they get 7.25, but they get 8.25 12mid-7am for night shifts.
Their all in mass, not even near its borders, 15mi outside BOS-
I guess there is a reality between enforced laws and life below the ivory tower.

OP: Hopfully your issues w/60 yr old novice earner works out. I’d suggest exploring your friends options coloring both inside/outside the lines.

Your clearly a blue blooded heavily biased Masachussettsonian. I refuse to further update those unwilling to listen facts. I'm over&out.

Sure. You just happened to ask a lot of folks being paid below minimum wage illegally. Okay.
I'm sure that happens all the time. Everyone knows that laws mean nothing these days.

[Jack FFR1846]

Min. wage in Ma. for many national chains (Advanced auto, Stop & Shop cashiers & lot boys, McDonalds, etc. ) follows federal guidelines. 7.25. AFAIK.

Good luck!

No, there's too few people who will work for that. My younger son worked last summer at Stop & Shop for $11 per hour (his first job at 16). I expect it's higher now. I drive by one of the turnpike access roads every day. There are sandwich boards out there with help wanted for Dunkin Donuts at $12. My older son worked there several years ago (he could ride his bicycle there from our house) and he knew that other local Dunkin Donuts were paying more, but he didn't have a way to easily get to them. We're at the intersection of 90 and 495. If your mother is closer to Boston, chances are that wages are higher.

[naha66]

Many national parts delivery drivers, parts counter help, and cashiers, etc. get below 11hr.

Not if they are employed in Massachusetts.

Not theoretically, actually:
Today:
The Advanced Auto parts delivery driver told me today, my job pays 8.50hr.
The car wash guy next to the Advanced auto national parts store told me 7.25hr.
The mobil gas station attendant said they get 7.25, but they get 8.25 12mid-7am for night shifts.
Their all in mass, not even near its borders, 15mi outside BOS-
I guess there is a reality between enforced laws and life below the ivory tower.

OP: Hopfully your issues w/60 yr old novice earner works out. I’d suggest exploring your friends options coloring both inside/outside the lines.

Your clearly a blue blooded heavily biased Masachussettsonian. I refuse to further update those unwilling to listen facts. I'm over&out.

Okay i'm tired of this back and forth Here is the Massachusetts website. https://www.mass.gov/minimum-wage-program
It's $11.00 and if anybody's making less its under the table and I wouldn't want to be the employer if caught.

aspirit wrote: ↑Fri Aug 17, 2018 6:00 pm
Min. wage in Ma. for many national chains (Advanced auto, Stop & Shop cashiers & lot boys, McDonalds, etc. ) follows federal guidelines. 7.25. AFAIK.

Sorry state wage rules over ride federal wages and it doesn't matter if it a national chain.

[WanderingDoc]

...The money is currently held by her nephew, who is a CFP, and I think the firm charges about 1% for a management fee. Given her tight situation, this $2900 seems like it could be put to better use, and she has asked me for my help and opinion....

I agree, and so sorry about your relative.

Might this beloved nephew assist your MIL for (wait for it) free and not be a total parasite? It's one thing if you're "helping" a well-off family member with your unearned 1% AUM but to take advantage of someone in financial trouble -- that's bad, imo. Then again, I think that's what these folks are taught -- prey on friends and family first.

Agree 100%. The audacity for him to charge a 1% AUM fee to a family member in financial trouble.

That said, $1400 per month in rent is too rich for her blood. I pay less than that in a moderate to high COL area (less than 10% of income) and it's too big for me.

[NewMDinvestor]

1. Point taken about "elderly." I should have titled it "retired relative..."

2. She has been working part time helping one of her friends plan parties and decorate for the last few years. I didn't include this in the initial post because her friend will be moving in a year or so and the job will go away. I think she makes $800 a month or so, so it will definitely help for the next year.

3. She spends a lot of time with my 3 children, and is very selfless and helpful with them. I think when her other job goes away, we will start paying her around $500 a month for help with child care. I don't think it makes sense for her to work for minimum wage in an unfulfilling job when she loves spending time with her grand kids, and lets us go food shopping, take a nap, etc. She wouldn't want to take "charity" but having a retired grandparent is hugely helpful to us and worth way more to us than $500.

4. If she runs out of money in 10-15 years, my brother-in-law and I should be in a position to replace the lost retirement income. This will be around the time my kids start going to college, so it won't be the best timing, but we can make it work. Hopefully she makes it 20-25 years.

5. If i had to choose today, I think I would go with 66% stocks and 33% bonds/cash.

Could you build an in-law suite or a small addition to your house for her? What do condos run in the area?

The chances that she will ever run out of money go down significantly if she has less expensive home arrangements. I think that is the key.

+1. Something along these lines should definitely be explored, especially if she already spends most of her time at your house. Maybe use the 290k and buy a rental property that can provide passive income in addition to the $500/month you’re willing to pay in childcare?