Helping sibling with limited income

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
Dinosaur Dad
Posts: 173
Joined: Wed Feb 22, 2017 6:05 pm
Location: Connecticut

Helping sibling with limited income

Post by Dinosaur Dad » Sun Feb 24, 2019 8:38 pm

Folks

I've read a number of posts about helping family members who may, for a variety of reasons, be in in financial distress.

My story: Long time reader of the forum, have learned so much and applied it to my own finances...I'm a true Boglehead believer, and I've been able to take care of my own family beyond what I once thought was possible.

I have a younger sister, age 59, single, never married. While she was able to work work much of the time up to about age 45, she then was able to work only part time due to various health issues. From age 45-56, she had a lead role in helping our aging mother with care, actually moved into her house while we had 24/7 live-in aids for 6 years until Mom spent her last year and a half in a nursing home.

During the time she was helping my Mom, I managed Mom's money and took care of all financial matters, including bill payments, investments, taxes, insurance, everything. Together with my other three siblings (5 of us in total), we agreed to pay her both directly (cash payments) and indirectly (gave her mom's car, paid all insurance, cellphone, incidentals, allowed her to live in Mom's house for 2 years rent-free after Mom's death). Upon mom's death in 2015 we all agreed to give her extra money our of each of our inheritance shares in return for her many sacrifices. She now has a total of about $550,000, but for a variety of reasons (partially health-related, but partially her own inertia), she does not work and to my dismay is already drawing this down. Based on her Social Security estimates, I'm thinking she might qualify for maybe $10,000/year at full retirement age of 66 and 10 months.

She has zero financial saavy and always lived hand-to-mouth. I want to map out a plan for her. How do I advise her? My first and simplest thought:

Try to get her to find at least a part time job - anything to bring some money in.
Invest 30% stocks/70% bonds in index funds.
Try to hold out on social security until age 66 and 10 months (full retirement age)

My ask: what are the factors I should consider here? Seems to me that the best we can do right now is to keep her expenses as low as possible, invest conservatively, try to stretch the money as far as possible. But I can see this money being used up quickly. And I truly don't know what I should consider relative to strategies for a low income person: seems like she has options for healthcare in her home state (New York), but what about possible sources of financial assistance, medicaid trust, annuity option. I recognize that while her income from investments may be small, this much in assets changes the picture compared to many...even thought it's all the money she may ever be able to save.

Quite frankly, it's all more than a little scary. So any experience and/or tips you can share are appreciated.

Thank you
"Take calculated risks - that is quite different from being rash." | General George S. Patton

Kennedy
Posts: 369
Joined: Mon Nov 10, 2014 2:47 pm

Re: Helping sibling with limited income

Post by Kennedy » Sun Feb 24, 2019 8:53 pm

I'm having a little trouble following the story. So, the sister cared for your mom even there were around-the-clock caregivers for six years followed by 18 months in a nursing home? If you took care of mom's finances and there were 24/7 personal caregivers, what kinds of things did your sister do for her? I feel like I'm missing something.

Leemiller
Posts: 1271
Joined: Sat Jun 01, 2013 12:42 pm

Re: Helping sibling with limited income

Post by Leemiller » Sun Feb 24, 2019 8:56 pm

I would consider paying cash for a place to live and suggesting a lifetime annuity in this instance. I don’t think your sister will handle market turbulence very well and doesn’t have heirs to consider.

Dottie57
Posts: 7491
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Helping sibling with limited income

Post by Dottie57 » Sun Feb 24, 2019 9:05 pm

Leemiller wrote:
Sun Feb 24, 2019 8:56 pm
I would consider paying cash for a place to live and suggesting a lifetime annuity in this instance. I don’t think your sister will handle market turbulence very well and doesn’t have heirs to consider.
This is my suggestion too. A small no frills condo would be a good inexpensive choice. No frills condo = no party roo, no pool, no exercise room etc. more ammenities = higher HOA fees

Topic Author
Dinosaur Dad
Posts: 173
Joined: Wed Feb 22, 2017 6:05 pm
Location: Connecticut

Re: Helping sibling with limited income

Post by Dinosaur Dad » Sun Feb 24, 2019 9:07 pm

Kennedy wrote:
Sun Feb 24, 2019 8:53 pm
I'm having a little trouble following the story. So, the sister cared for your mom even there were around-the-clock caregivers for six years followed by 18 months in a nursing home? If you took care of mom's finances and there were 24/7 personal caregivers, what kinds of things did your sister do for her? I feel like I'm missing something.


We did not have 24/7 caregivers right away...for about 2-3 years we had day help come in, and my sister, who was local, coordinated everything, hired/supervised, took her shopping, to many doctor appointments, helped her through multiple hospitalizations, and watched over everything to ensure quality. Then for the 6 years of 24/7, she again supervised all of the caregivers (hiring and firing when necessary), took Mom to all doctor appointments, supervised medications, managed through mutliple additional hospitalizations, arranged house maintenance. What I learned: even with 24/7 care there's a huge amount of work to ensure quality care...she was Mom's wingman on all of this.
"Take calculated risks - that is quite different from being rash." | General George S. Patton

delamer
Posts: 9479
Joined: Tue Feb 08, 2011 6:13 pm

Re: Helping sibling with limited income

Post by delamer » Sun Feb 24, 2019 9:10 pm

Leemiller wrote:
Sun Feb 24, 2019 8:56 pm
I would consider paying cash for a place to live and suggesting a lifetime annuity in this instance. I don’t think your sister will handle market turbulence very well and doesn’t have heirs to consider.
Good ideas. Is she still living in your mother’s house but paying rent?

delamer
Posts: 9479
Joined: Tue Feb 08, 2011 6:13 pm

Re: Helping sibling with limited income

Post by delamer » Sun Feb 24, 2019 9:12 pm

Kennedy wrote:
Sun Feb 24, 2019 8:53 pm
I'm having a little trouble following the story. So, the sister cared for your mom even there were around-the-clock caregivers for six years followed by 18 months in a nursing home? If you took care of mom's finances and there were 24/7 personal caregivers, what kinds of things did your sister do for her? I feel like I'm missing something.
What difference does this make?

User avatar
ram
Posts: 1367
Joined: Tue Jan 01, 2008 10:47 pm
Location: Midwest

Re: Helping sibling with limited income

Post by ram » Sun Feb 24, 2019 10:43 pm

1. Annuity would make sense under the situation and will annually pay more than the return on a conservative mix of stocks and bonds. She will no longer have the ability to spend away the principal.
2. With her experience related to coordinating the healthcare of on older person other families with a loved one in a similar healthcare situation as your mom in her last 5 to 10 years may be willing to pay her something to do the same.
Ram

Topic Author
Dinosaur Dad
Posts: 173
Joined: Wed Feb 22, 2017 6:05 pm
Location: Connecticut

Re: Helping sibling with limited income

Post by Dinosaur Dad » Sun Feb 24, 2019 11:02 pm

ram wrote:
Sun Feb 24, 2019 10:43 pm
1. Annuity would make sense under the situation and will annually pay more than the return on a conservative mix of stocks and bonds. She will no longer have the ability to spend away the principal.
2. With her experience related to coordinating the healthcare of on older person other families with a loved one in a similar healthcare situation as your mom in her last 5 to 10 years may be willing to pay her something to do the same.
thanks for your thoughts...I do think my sister has a lot of experience that could help others.
"Take calculated risks - that is quite different from being rash." | General George S. Patton

rjbraun
Posts: 1486
Joined: Sun Sep 09, 2012 8:22 pm

Re: Helping sibling with limited income

Post by rjbraun » Sun Feb 24, 2019 11:22 pm

Dinosaur Dad wrote:
Sun Feb 24, 2019 11:02 pm
ram wrote:
Sun Feb 24, 2019 10:43 pm
1. Annuity would make sense under the situation and will annually pay more than the return on a conservative mix of stocks and bonds. She will no longer have the ability to spend away the principal.
2. With her experience related to coordinating the healthcare of on older person other families with a loved one in a similar healthcare situation as your mom in her last 5 to 10 years may be willing to pay her something to do the same.
thanks for your thoughts...I do think my sister has a lot of experience that could help others.
Yes, speaking from experience it is amazing how much time and effort is required in situations like the one you described. I agree with ram and think it's an excellent suggestion that other families could be interested and willing to pay your sister to provide similar services.

Post Reply