Help me prepare to help mother-in-law

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Topic Author
FoolMeOnce
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Help me prepare to help mother-in-law

Post by FoolMeOnce »

Hello,

My mother-in-law is 67 and had indicated a desire to retire next year. She is almost certainly not financially able to do so on her own and seems like she has pretty much spent what she earned her whole life. We are willing and able to help support her and have expected this, but did not expect it before at least age 70.

My wife and I are going to talk things over with her in the near future at her request, and I could use advice and suggestions on what to be aware of to help her plan.

We know we need to know her expenses and assets to be able to give the advice she is looking for. And any debts. She is single and gets spousal SS while delaying hers until 70 (at least that was the plan), so we need to know that amount, too (I think in the 900-1000 range). We'll need to see her expected SS at 70. We will probably still encourage her to delay her own SS until 70, even if it requires more support from us the first couple of years. I think that's a sound idea (?). I believe she owns her home outright, but am not certain.

We may need to discuss part-time work. What are some good ideas for a 67yo early childhood educator with moderate physical limitations (e.g. can't stock low shelves in retail all day long)?

We may discuss downsizing her home (~$300-325k value, could probably get something comfortable in the same city for ~$200k). We might also consider buying a condo for her to live in, essentially gifting her the rent.

I know nothing about Medicare and the various supplemental plans, so might need to brush up, but maybe she's on top of it already.

I'll do a new post with specific information once I have it for more detailed suggestions, but I also want to make these discussions as productive as possible, so what other information should we be looking for? What needs to be part of the discussion? What are my unknown unknowns?

Thanks for your help!
Herekittykitty
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Re: Help me prepare to help mother-in-law

Post by Herekittykitty »

This meeting needs to be information gathering, and is unlikely to contain all the information you are going to want as she may not have it all together yet. Is she wanting to talk to you in order to get your advice? Or in order to get your commitment to support her in part or in whole financially? Or both? You and your wife can keep this meeting information gathering in nature and let her know you need to think over and discuss with her the best advice to give her. This meeting should not involve you and your wife making any offer of financial support. Keep the meeting information gathering (information from her to you and your wife) only. There will be time later to decide what if anything you and your wife are willing and able to contribute.

Keep in mind that at age 67 she could live another 30 years. Not likely but certainly possible. You and your wife could be her age and still supporting her 97 year old self. So as you and your wife consider the situation together after you and your wife have talked to your MIL and gathered relevant information, consider sustainability over the years of whatever, if anything, financial you and your wife contribute.

ETA: Advising her well can be very valuable to her even if you and your wife do not contribute financially now and/or in the future.
Last edited by Herekittykitty on Sat Sep 21, 2019 5:20 pm, edited 2 times in total.
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Silk McCue
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Re: Help me prepare to help mother-in-law

Post by Silk McCue »

It’s all about the numbers. Not just next year, but in 25 years. Her desire is secondary to that. It’s great that you are able and willing to help when needed, but that shouldn’t be brought into play prematurely without good reason.

Cheers
BarbBrooklyn
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Re: Help me prepare to help mother-in-law

Post by BarbBrooklyn »

She's an educator and doesn't have a pension, a 403b or a 457?
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
Katietsu
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Re: Help me prepare to help mother-in-law

Post by Katietsu »

Is her plan to retire based on the expectation that you will provide some support? Or is your impression that she is ready to retire first and then figure out how to pay? If you start giving support now, what happens later when the house needs a new roof or she needs housekeeping help.

I would think that childcare would perfectly lend itself to a part time position. In her situation, providing daycare for a couple elementary school age kids after school and summers, for instance, could make a huge difference to her budget.
renue74
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Re: Help me prepare to help mother-in-law

Post by renue74 »

My mother is in a similar situation. 67, single, and basically has zero assets other than about $15k in a money market account.

She draws $900/month from SS.

She lives on her own and takes care if older folks. I think she cooks, cleans and basically has conversations with her folks. I think she makes about $15/hour doing that.

We will eventually have the conversation about what to do next. It’s sobering time think she may need help for the next 30 years. I didn’t think of that.

We have several rental properties and my wife has suggested she live in one of those. She’s certainly able to live alone, but I do see some mental acuteness dwindling.

My mother has never shared her finances with me other than the MM info.

I don’t have a magic answer for you, as it’s hard for me to answer for myself. I will say that the rental property idea was my wife’s and she shopped that to my mom...and now that seems to be the “answer” any time my mother hits a financial road bump, such as losing a care client, which happens quite often.

I have thought about her living with us, but I’m not so sure she wants to do that and the longevity of that may become an issue later on. Everybody’s family has it’s own quirks.

I will be following this thread.

I will say the taking care of older folks does work well for my mom. She gets out of the house and she enjoys the company of others.
BarbBrooklyn
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Re: Help me prepare to help mother-in-law

Post by BarbBrooklyn »

https://www.agingcare.com/questions/wha ... rby=recent

Read this post as a cautionary tale. Make sure you have all the information necessary before taking on the support of your MIL.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
BuddyJet
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Re: Help me prepare to help mother-in-law

Post by BuddyJet »

I am not an expert but if you go the home sale and condo use route, you might consider a trust for part of the home sale proceeds to protect the proceeds from medicaid clawback.

https://www.elderlawanswers.com/medicai ... usts-12004

We did the condo use approach for my wife’s sister. Her health is marginal and with the condo in our name, we can sell the condo and use the funds to supplement care without medicaid playback.
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HomeStretch
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Re: Help me prepare to help mother-in-law

Post by HomeStretch »

Suggest you update your post after your/spouse’s meeting with MIL in order to get suggestions once the facts are known.

If MIL does not have sufficient assets and retirement income from SS and a part-time job to cover a modest lifestyle, I would want her to drawdown on her home equity before providing any financial support. Also, check into what financial assistance may be available to her - housing, food, medical, property tax, etc.
delamer
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Re: Help me prepare to help mother-in-law

Post by delamer »

HomeStretch wrote: Sat Sep 21, 2019 6:08 pm Suggest you update your post after your/spouse’s meeting with MIL in order to get suggestions once the facts are known.

If MIL does not have sufficient assets and retirement income from SS and a part-time job to cover a modest lifestyle, I would want her to drawdown on her home equity before providing any financial support. Also, check into what financial assistance may be available to her - housing, food, medical, property tax, etc.
I agree regarding the home equity. If she has a history of spending all that she makes, why give her access to a pot of money — from her own home sale — by buying her a condo with your money?

My only other suggestion is to give her a list of the details that you need before you meet in person. Otherwise, you could end up just spinning your wheels.
Topic Author
FoolMeOnce
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Re: Help me prepare to help mother-in-law

Post by FoolMeOnce »

Herekittykitty wrote: Sat Sep 21, 2019 5:15 pm Is she wanting to talk to you in order to get your advice? Or in order to get your commitment to support her in part or in whole financially? Or both? . . . Keep the meeting information gathering (information from her to you and your wife) only. There will be time later to decide what if anything you and your wife are willing and able to contribute.
She wants to get advice, and is talking to some other people she trusts as well. I would be shocked if she asks for support straight out. She has never hinted at that in the past. Though she might assume we have the ability to provide some support, she will probably be too proud to ask even if she hopes we offer, and might even be too proud to hope for that.

BarbBrooklyn wrote: Sat Sep 21, 2019 5:24 pm She's an educator and doesn't have a pension, a 403b or a 457?
Not sure what she has had access to at a private school, but even with access, I doubt there is much there. No pension. Probably never topped 50k/yr if I had to guess.

Katietsu wrote: Sat Sep 21, 2019 5:27 pm Is her plan to retire based on the expectation that you will provide some support? Or is your impression that she is ready to retire first and then figure out how to pay?
I do not know if she expects any support. She has never asked, suggested, or hinted at it in any way. We recently helped out with a lumpy purchase she could not easily cover (we happened to be there at the time of the emergency and volunteered it instead of the retailer's ridiculous rate on a payment plan), and she has insisted on paying us back, and has been doing so, even though we don't really care. So it is not quite "retire first and then figure out how to pay," since she is trying to figure it out now with the hope of retiring at the end of the school year. One thing I do not know yet is if she wants to completely stop working or find something less demanding that can help make ends meet; I just know she feels ready to leave her role and school. She had hoped to last a few more years but appears to be wearing out.

BuddyJet wrote: Sat Sep 21, 2019 6:02 pm I am not an expert but if you go the home sale and condo use route, you might consider a trust for part of the home sale proceeds to protect the proceeds from medicaid clawback.
Thanks. Something to look into if it comes to that.

delamer wrote: Sat Sep 21, 2019 6:27 pm
HomeStretch wrote: Sat Sep 21, 2019 6:08 pm Suggest you update your post after your/spouse’s meeting with MIL in order to get suggestions once the facts are known.

If MIL does not have sufficient assets and retirement income from SS and a part-time job to cover a modest lifestyle, I would want her to drawdown on her home equity before providing any financial support. Also, check into what financial assistance may be available to her - housing, food, medical, property tax, etc.
I agree regarding the home equity. If she has a history of spending all that she makes, why give her access to a pot of money — from her own home sale — by buying her a condo with your money?

My only other suggestion is to give her a list of the details that you need before you meet in person. Otherwise, you could end up just spinning your wheels.
Thanks for the suggestion about asking some questions to prepare for the discussion. I don't quite follow the draw-down of home equity. Like a reverse mortgage or HELOC? Wouldn't she just have access to the cash right away like a sale? I need this explained a bit more to me, thanks. I do believe, though, that once reality confronts her, she will not spend as wastefully (though not perfectly). Honestly, as noted above, I don't think she's ever made more than $50k. So while she has a spending and saving problem, we're not talking about gaudy numbers and obscene spending.

Thanks everyone. I'm sure I'll have more detailed questions after what I hope is a productive discussion.
illumination
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Re: Help me prepare to help mother-in-law

Post by illumination »

I would do everything possible to not start off supporting her even if you expect that to eventually happen.

And without being insulting or knowing all the facts, the concept of someone just sort of announcing their retirement because they are tired of working (without the means to pay for it and expecting her kids to float her) is pretty selfish.

If she is able bodied, she needs work longer if she has nothing but SS and home equity.

Probably a good idea to get her to delay SS, but if you start "subsidizing" her to get there, that's going to set a bad precedence.
HomeStretch
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Re: Help me prepare to help mother-in-law

Post by HomeStretch »

FoolMeOnce wrote: Sat Sep 21, 2019 8:21 pm
delamer wrote: Sat Sep 21, 2019 6:27 pm
HomeStretch wrote: Sat Sep 21, 2019 6:08 pm If MIL does not have sufficient assets and retirement income from SS and a part-time job to cover a modest lifestyle, I would want her to drawdown on her home equity before providing any financial support. Also, check into what financial assistance may be available to her - housing, food, medical, property tax, etc.
I agree regarding the home equity. If she has a history of spending all that she makes, why give her access to a pot of money — from her own home sale — by buying her a condo with your money?
I don't quite follow the draw-down of home equity. Like a reverse mortgage or HELOC? Wouldn't she just have access to the cash right away like a sale? I need this explained a bit more to me, thanks.
Financial assistance often has income and/or means test(s). The person applying for assistance (i.e., subsidized housing, food stamps, Medicaid, property tax relief, etc.) cannot have income above $xxx and/or assets above $yyy to qualify for assistance of $zzz.

My suggestion is for your MIL to draw down (use up) her home equity first so she may qualify for assistance before you provide support, if any. The drawdown of home equity could take several forms, such as proceeds from sale of home or reverse or conventional mortgage.
Silk McCue
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Re: Help me prepare to help mother-in-law

Post by Silk McCue »

illumination wrote: Sat Sep 21, 2019 8:28 pm ...

And without being insulting or knowing all the facts, the concept of someone just sort of announcing their retirement because they are tired of working (without the means to pay for it and expecting her kids to float her) is pretty selfish.

...
The OP never said this. In fact in the post just prior to yours they made it clear that that was not the case. Better to peruse the thread before posting to help know all the facts available.

Cheers
Topic Author
FoolMeOnce
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Re: Help me prepare to help mother-in-law

Post by FoolMeOnce »

HomeStretch wrote: Sat Sep 21, 2019 8:41 pm
FoolMeOnce wrote: Sat Sep 21, 2019 8:21 pm
delamer wrote: Sat Sep 21, 2019 6:27 pm
HomeStretch wrote: Sat Sep 21, 2019 6:08 pm If MIL does not have sufficient assets and retirement income from SS and a part-time job to cover a modest lifestyle, I would want her to drawdown on her home equity before providing any financial support. Also, check into what financial assistance may be available to her - housing, food, medical, property tax, etc.
I agree regarding the home equity. If she has a history of spending all that she makes, why give her access to a pot of money — from her own home sale — by buying her a condo with your money?
I don't quite follow the draw-down of home equity. Like a reverse mortgage or HELOC? Wouldn't she just have access to the cash right away like a sale? I need this explained a bit more to me, thanks.
Financial assistance often has income and/or means test(s). The person applying for assistance (i.e., subsidized housing, food stamps, Medicaid, property tax relief, etc.) cannot have income above $xxx and/or assets above $yyy to qualify for assistance of $zzz.

My suggestion is for your MIL to draw down (use up) her home equity first so she may qualify for assistance before you provide support, if any. The drawdown of home equity could take several forms, such as proceeds from sale of home or reverse or conventional mortgage.
Makes sense, thanks for the added clarification.
billfromct
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Re: Help me prepare to help mother-in-law

Post by billfromct »

Since she is over 65, she should apply for Medicare Part A, which covers hospitalization. There is no cost & it is best to get it out of the way.

When the time comes, she can apply for Part B (doctor visits, etc) which will be about $135/month) & Part D (medication) which I believe is about $35/month. She would want to apply for Part B & Part D, 3 or 4 months before she retired.

Since Part B covers 80% of the cost, she would have to get some supplemental (not sure if this the proper terminology) plan from a private insurer which could cost $150-$200/month?

The above cost is only a guess as I have retirement health insurance that covers the 20% that Medicare Part B doesn't cover.

It would be good to get the Medicare facts now even if she works until age turns 70.

There are state agencies that help explain Medicare options. SHIP (State Health Insurance Assistance Program) is very helpful & my understanding is that they do have seminars & provide phone help.

bill
Herekittykitty
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Re: Help me prepare to help mother-in-law

Post by Herekittykitty »

Another poster suggested the OP not subsidize his MIL to make it possible or even easier to wait until age 70 to claim Social Security benefits on her own record. I don't agree with that. If she needs help to wait until age 70 in order to maximize her monthly benefits for the rest of her life, it is likely a good investment both financially for her and for the OP (since OP may help her financially in the future it would reduce the amount she needed by increasing her income), plus it would be kind and I think responsible.

OP, from your answers to questions, it looks like one challenge with your MIL is getting her to let you know her full situation and not to hide any financial or other challenges from you and your wife. Since she is an independent minded and proud person (in a good way, it looks like), she may not want to let you in on the full picture of her challenges but hopefully she will so you can advise her best.

It may be that the best way to help your MIL financially is to get her to put all her information together in an organized way, and to get her to track her financial information including income and spending, and to share both with you on a regular, perhaps monthly, basis, allowing you and your wife to give her good advice and maybe even financial education on an ongoing basis. I would compliment her on what she has done well and educate her on what could use changing/improving.

For financial help if you and your wife choose to do it, I would favor one time gifts that improve quality of life and reduce expenses for her. One example if you can afford it and want to could be the gift of a nice looking well running car. People with tight finances tend to delay maintenance on their cars. If she has done that, bringing it up to good order or even getting her a new to her car could help.

You may want to have a look through her house including a look at her maintenance records. If anything needs doing, for example replacing the water heater, fixing windows, and so on if needed, helping get it done (financially as well as organizing it)

One hopes she is getting recommended medical care including routine screenings and check ups, dental cleaning and checkups and recommended dental work, and regular eye exams and up to date and nice looking glasses. It can happen that people living on a tight budget delay or even don't get those things done. That might be an area you and your wife could help - I might formulate it as getting her up to date, and not an ongoing expense (that way you can help with it regularly but it isn't an expectation.)

If she would enjoy and use a gym membership such as the YMCA, that could help her stay healthy as well as socialize. She may have access to the membership through Silver Sneakers if her insurance covers it, or you could just pay year in advance for her.

The Senior Center is great for resources and socializing too. Where I live an annual membership is $20.

From your description of her, your MIL seems like quite the lady. And she seems to have raised a fine daughter who married a fine man.
Last edited by Herekittykitty on Sun Sep 22, 2019 9:24 am, edited 2 times in total.
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MikeG62
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Re: Help me prepare to help mother-in-law

Post by MikeG62 »

Silk McCue wrote: Sat Sep 21, 2019 5:16 pm It’s all about the numbers. Not just next year, but in 25 years. Her desire is secondary to that. It’s great that you are able and willing to help when needed, but that shouldn’t be brought into play prematurely without good reason.

Cheers
I agree with this.

Your MIL’s retirement plan should not be to have her daughter and SIL help her finance her retirement simply because she is tired of working. I know the OP did not say she is expecting this, but if the OP is correct in saying “she is almost certainly not financially able to do so on her own”, then isn’t that the likely outcome eventually (even if she works part time for a while)?

I had a conversation with the sister of my BIL at a party two years ago. This person was ~63 and was talking to me about my being early retired. In that conversation she said something along the lines of “well, I think I am going to retire in two years when I turn 65 - after all, that’s when people typically retire”. No thought of how she was going to finance her retirement, just that it was “time”. I think there are a lot of people out there who just assume it will all work out fine as their parents and grandparents all retired and they did OK. They forget that in most cases their parents/grandparents lived well within their means (unlike a large portion of the population today - although this does not seem to be the case with the OP’s MIL) and in many cases their parents/grandparents had pensions. Neither of these things is likely going to be the case for many people who will be retiring in the future (other than the relatively smaller % of the population who are Boogleheads-like and live within their means).
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catalina355
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Re: Help me prepare to help mother-in-law

Post by catalina355 »

billfromct wrote: Sat Sep 21, 2019 11:45 pm Since she is over 65, she should apply for Medicare Part A, which covers hospitalization. There is no cost & it is best to get it out of the way.

When the time comes, she can apply for Part B (doctor visits, etc) which will be about $135/month) & Part D (medication) which I believe is about $35/month. She would want to apply for Part B & Part D, 3 or 4 months before she retired.

Since Part B covers 80% of the cost, she would have to get some supplemental (not sure if this the proper terminology) plan from a private insurer which could cost $150-$200/month?

The above cost is only a guess as I have retirement health insurance that covers the 20% that Medicare Part B doesn't cover.

It would be good to get the Medicare facts now even if she works until age turns 70.

There are state agencies that help explain Medicare options. SHIP (State Health Insurance Assistance Program) is very helpful & my understanding is that they do have seminars & provide phone help.

bill
I found the SHIP program was very helpful. I would definitely recommend it.
Topic Author
FoolMeOnce
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Re: Help me prepare to help mother-in-law

Post by FoolMeOnce »

Herekittykitty wrote: Sun Sep 22, 2019 7:02 am Another poster suggested the OP not subsidize his mother to make it possible or even easier to wait until age 70 to claim Social Security benefits on her own record. I don't agree with that. If she needs help to wait until age 70 in order to maximize her monthly benefits for the rest of her life, it is likely a good investment both financially for her and for the OP (since OP may help her financially in the future it would reduce the amount she needed by increasing her income), plus it would be kind and I think responsible.

OP, from your answers to questions, it looks like one challenge with your mother is getting her to let you know her full situation and not to hide any financial or other challenges from you and your wife. Since she is an independent minded and proud person (in a good way, it looks like), she may not want to let you in on the full picture of her challenges but hopefully she will so you can advise her best.

It may be that the best way to help your mother financially is to get her to put all her information together in an organized way, and to get her to track her financial information including income and spending, and to share both with you on a regular, perhaps monthly, basis, allowing you and your wife to give her good advice and maybe even financial education on an ongoing basis. I would compliment her on what she has done well and educate her on what could use changing/improving.

For financial help if you and your wife choose to do it, I would favor one time gifts that improve quality of life and reduce expenses for her. One example if you can afford it and want to could be the gift of a nice looking well running car. People with tight finances tend to delay maintenance on their cars. If she has done that, bringing it up to good order or even getting her a new to her car could help.

You may want to have a look through her house including a look at her maintenance records. If anything needs doing, for example replacing the water heater, fixing windows, and so on if needed, helping get it done (financially as well as organizing it)

One hopes she is getting recommended medical care including routine screenings and check ups, dental cleaning and checkups and recommended dental work, and regular eye exams and up to date and nice looking glasses. It can happen that people living on a tight budget delay or even don't get those things done. That might be an area you and your wife could help - I might formulate it as getting her up to date, and not an ongoing expense (that way you can help with it regularly but it isn't an expectation.)

If she would enjoy and use a gym membership such as the YMCA, that could help her stay healthy as well as socialize. She may have access to the membership through Silver Sneakers if her insurance covers it, or you could just pay year in advance for her.

The Senior Center is great for resources and socializing too. Where I live an annual membership is $20.

From your description of her, your mother seems like quite the lady. And she seems to have raised a fine son.
Thanks for helping me think about things I hadn't considered. And for the kind words, though she's my MIL, not mother (but she did raise a fine daughter!).
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Re: Help me prepare to help mother-in-law

Post by Jack FFR1846 »

I would see a meeting as a math documentation problem. Her expenses will be $ what? Her sources or income will be $ what?

You indicate that it's quite possible that her spending will exceed her income and that perhaps she can sell her expensive house and you buy a condo and rent it to her. My question: Are there no rentals where she would want to live? Why do you have to buy something?

If the math shows that she won't meet spending with predicted income, then I would suggest that she not retire yet. I get that people get to an age and just want to stop getting up for work and do what they want to do. But that's not some given where they are funded by some magical fund when they reach a certain age. If she hasn't properly saved to retire, then she simply isn't ready to retire.

Sure, the house can be sold and that money could fund a rental for quite a long time. This can be included as an option in the math problem. Expected spending minus expected ongoing income equals something. How long will the money from the house pay for that something. If it's 50 years, then perhaps she's in good shape. If it's 6 years, not so much.

I see the whole thing as doing the math.
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Herekittykitty
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Re: Help me prepare to help mother-in-law

Post by Herekittykitty »

FoolMeOnce wrote: Sun Sep 22, 2019 8:40 am........Thanks for helping me think about things I hadn't considered. And for the kind words, though she's my MIL, not mother (but she did raise a fine daughter!).......
Woops! :oops: Thanks for the correction. I went back into my post and fixed it, I think.

Maybe I should take Sunday morning off from posting.

:happy
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Herekittykitty
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Re: Help me prepare to help mother-in-law

Post by Herekittykitty »

woops - double post
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2pedals
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Re: Help me prepare to help mother-in-law

Post by 2pedals »

Although it doesn't hurt planning for these things, I think you are probably a little premature in helping her. It is hard to know what her needs will be and what form they may be. Does your MIL have other relatives that might be able and willing to help as well? I do like the idea of down sizing and having her move into a condo in the future (but not necessarily buying one for her). Home maintenance items tend to be more problematic for not so handy seniors.
GrowthSeeker
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Re: Help me prepare to help mother-in-law

Post by GrowthSeeker »

Jack FFR1846 wrote: Sun Sep 22, 2019 9:09 am I would see a meeting as a math documentation problem. Her expenses will be $ what? Her sources or income will be $ what?
... ...
I see the whole thing as doing the math.
Exactly what I was thinking.

So along the lines of a list of questions, a list of information for her to gather such as:
* last tax return;
* something that will show one year of spending (12 months of checking account statements and any other account she pays bills from or pays off credit cards from);
* recent statement from any other accounts she has;
* latest Social security statement (I think these come in the mail once a year), or she can go online to find it.
* ditto for pension info (if she has no idea about pension, she could take a close look at a few paystubs which may reveal a payroll deduction for a pension). But her HR should be able to tell her.
* terms of any debt she has: mortgage, credit cards, vehicles

Basically, build the equivalent of a net worth statement and a cash flow statement.
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GrowthSeeker
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Re: Help me prepare to help mother-in-law

Post by GrowthSeeker »

btw, beware the Part D Medicare "gotcha":
I assume that if she has healthcare insurance through her employer and not Medicare. Note that for people who are not working when they turn 65, there is some number of months by which you have to start getting Part D (prescription med) coverage, and if you don't then there is a penalty which is something like +1% of the premium for each month of delay beyond the deadline. Then that % penalty is applied to the Part D premium you pay every month for the rest of your life. I'm not sure what the rules are for those still covered by employer-paid healthcare insurance past age 65, but I would assume the clock starts ticking when that coverage stops.

There might (not sure) also be a similar Medicare "gotcha" related to when you sign up for and start getting Medicare coverage.
Just because you're paranoid doesn't mean they're NOT out to get you.
inbox788
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Re: Help me prepare to help mother-in-law

Post by inbox788 »

FoolMeOnce wrote: Sat Sep 21, 2019 4:43 pmMy mother-in-law is 67 and had indicated a desire to retire next year. She is almost certainly not financially able to do so on her own and seems like she has pretty much spent what she earned her whole life. We are willing and able to help support her and have expected this, but did not expect it before at least age 70.
...
We know we need to know her expenses and assets to be able to give the advice she is looking for. And any debts. She is single and gets spousal SS while delaying hers until 70 (at least that was the plan), so we need to know that amount, too (I think in the 900-1000 range). We'll need to see her expected SS at 70. We will probably still encourage her to delay her own SS until 70, even if it requires more support from us the first couple of years. I think that's a sound idea (?). I believe she owns her home outright, but am not certain.
...
We may discuss downsizing her home (~$300-325k value, could probably get something comfortable in the same city for ~$200k). We might also consider buying a condo for her to live in, essentially gifting her the rent.
What is her plan? Is she counting on your help? How will she feel about your involvement in her finances now and forever? It's a sensitive subject and will get more difficult, especially as people age and and sometimes become less rational. There's optimal financial planning and then there's the more difficult matter of emotional planning. The more support to delay SS to 70 makes financial sense, but I'd steer away from it for emotional and psychological reasons. Taking away support will be difficult, and expect the support to require increasing amounts. Single/separate lump sums for specific items (broken car, refrigerator, etc.) might be simpler to deal with than even increasing monthly needs. You're going to be in the unenviable situation of balancing support vs control.

If she has extra space, renting out a room or two provides 2 benefits. The obvious one is financial. The other is companionship. Finding a good housemate who can help around a bit is ideal, but the risk is the opposite. Anyway, at some point, it may be worth it to subsidize rent for help and down the road, she may need to pay for home nursing. A reverse mortgage may be something to consider vs. covering the expenses yourself and inheriting the home with step up basis. What is the current titling of the home and who stands to inherit it (i.e. other children/heirs)?
Herekittykitty wrote: Sun Sep 22, 2019 7:02 amAnother poster suggested the OP not subsidize his MIL to make it possible or even easier to wait until age 70 to claim Social Security benefits on her own record. I don't agree with that. If she needs help to wait until age 70 in order to maximize her monthly benefits for the rest of her life, it is likely a good investment both financially for her and for the OP (since OP may help her financially in the future it would reduce the amount she needed by increasing her income), plus it would be kind and I think responsible.
It would make sense to run some numbers, but intuitively, I'm for NOT subsidizing, even if it makes financial sense. It takes a decade or two for the "investment" to break even, and there's a good chance OP will be in a much better financial position at that time to subsidize later, even if it costs more.
Last edited by inbox788 on Sun Sep 22, 2019 2:47 pm, edited 1 time in total.
Point
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Re: Help me prepare to help mother-in-law

Post by Point »

Do you have siblings? If so, how will they engage? Comments from the sidelines? Borrowing money that doesn’t get paid back? Helping out with errands, shopping, pills and bills?

How does she give her money away, formally and informally? Where is the leakage?

What assets does she have? Which does she need, which are nice to have?

How long did her parents live? Did they have a shortened life? Expect her to live st least 5 years beyond her parents lifetime.

Track expenses for 3 months at a minimum. All ins and outs. Watch for bank runs for cash via debit cards or checks. How were these funds spent?

Look at all her sources and determine longevity: SS, 401, 403, etc.

Identify all programmed repeating charges and build a list. All necessary?

Identify all credit cards and statements- what sticks out?

Look at budget for ancillary items: booze, cigarettes, eating out,... etc.

Plug data into this: https://engaging-data.com/will-money-last-retire-early/
delamer
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Re: Help me prepare to help mother-in-law

Post by delamer »

FoolMeOnce wrote: Sat Sep 21, 2019 9:21 pm
HomeStretch wrote: Sat Sep 21, 2019 8:41 pm
FoolMeOnce wrote: Sat Sep 21, 2019 8:21 pm
delamer wrote: Sat Sep 21, 2019 6:27 pm
HomeStretch wrote: Sat Sep 21, 2019 6:08 pm If MIL does not have sufficient assets and retirement income from SS and a part-time job to cover a modest lifestyle, I would want her to drawdown on her home equity before providing any financial support. Also, check into what financial assistance may be available to her - housing, food, medical, property tax, etc.
I agree regarding the home equity. If she has a history of spending all that she makes, why give her access to a pot of money — from her own home sale — by buying her a condo with your money?
I don't quite follow the draw-down of home equity. Like a reverse mortgage or HELOC? Wouldn't she just have access to the cash right away like a sale? I need this explained a bit more to me, thanks.
Financial assistance often has income and/or means test(s). The person applying for assistance (i.e., subsidized housing, food stamps, Medicaid, property tax relief, etc.) cannot have income above $xxx and/or assets above $yyy to qualify for assistance of $zzz.

My suggestion is for your MIL to draw down (use up) her home equity first so she may qualify for assistance before you provide support, if any. The drawdown of home equity could take several forms, such as proceeds from sale of home or reverse or conventional mortgage.
Makes sense, thanks for the added clarification.
I agree with the points above too.

My broader point is that if you bought her a condo to live in, then she presumably would sell her current home and have access to the cash from that sale.

But why do that, particularly for someone who hasn’t been a good steward of her money the past? You could buy the condo and she could spend all the proceeds for her house on who-knows-what?

Let her buy the condo and use the remaining funds from the house sale to support the condo (HOA fees, property taxes, utilities).
gretah
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Re: Help me prepare to help mother-in-law

Post by gretah »

In my area, nursing homes that accept Medicaid are so full they are requiring 2 years of full private pay before you get put to the top of the list for a Medicare bed.

With nursing homes costing $5,000 - $12,000 a month, 2 years of funds for this in fairly liquid form (not real estate, for example) needs to be handy.

I suggest starting with a figure to fund 2 years of nursing home and work backward from there.

Financial Samurai suggests having no more than 20% of your net worth tied up in your home's equity if you are past age 60. And what I have seen my elderly family members and friends go through this past years causes me to agree.

Your MIL may live another 30 years and not need a nursing home. Or she could have a stroke or develop dementia, requiring a nursing home much sooner.

As others have mentioned, I suggest you learn all about Medicaid and nursing home / rehab facility financial rules and limits. There is an elder law firm that gives free seminars covering the basics on this a few times a year. Perhaps you can find something similar in your area.

I also suggest this book:
Long-term Care: How to Plan and Pay for it
by JL Matthews for Nolo Press
Herekittykitty
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Re: Help me prepare to help mother-in-law

Post by Herekittykitty »

I keep thinking about OP's MIL. Here are more random thoughts.

67 years old and still working. Divorced x 1, I assume, not widowed, ex-spouse still living? (Some of the thoughts/questions below apply to all ex or late spouses if there are more than one.)

Is she working as an early childhood educator currently or did she in the past? What is that exactly? I assume it takes some education and plenty of skill and patience. Her work limitations include she can't stock low shelves in retail all day long.

On one hand she may spend all she makes (salary/wage plus spousal Social Security maybe in the $900 - $1,000 range plus who knows, maybe that's it). We don't know if she is in debt, spending more than she makes. Or maybe she is saving something.

She owns a house with current value around $300,000 - $325,000. We don't know whether she owns it free and clear or if there is more owed on it. Did she get it in the divorce settlement? If so, whose name is the house in, and who is on the mortgage if any? If there is money still owed and if her ex husband is on the mortgage, she shouldn't sell until she gets advice, likely from a lawyer, regarding how if at all her selling the house could affect the ex still being required to make payments if that is happening. Or how if at all it could affect whether the proceeds will be split in some way with the ex.

Is she getting alimony?

Is she the owner of a life insurance policy on ex-husband's life? If so, who is paying the premiums?

Does the ex husband have a pension or will he be entitled to one, and if so, is she entitled to part of the pension?

I would ask for a copy of the divorce decree. Who knows what might be found there regarding anything to which she may be entitled and not getting/not getting yet. Maybe nothing. Maybe something. Who knows at this point.

Was the ex-husband military and qualify for benefits of any kind? If so, she may also qualify for some kinds of benefits and maybe part of the pension unless she signed it away in the divorce (I am not an expert in this, just speculating.)

Going back to Social Security: I don't know if she is able to get a statement in the mail or online with the amount she would receive on her own record since she is receiving benefits on her ex-spouse's record. She may have to go to the Social Security office and get them to give her a print out of what she would get (ask for what she would get now, what she would get at age 68, 69, and age 70.) (I'm basing my guess on her having to go in to the office to get the information on my experience as a widow - I have to go in to the Social Security office to get information as to what benefits I will get on my own record at age 70; apparently if a person is getting benefits on another record they don't get estimates on their own record any more unless they go in and ask.) Maybe they can tell her over the phone. I don't know. Depending on what her benefits would be on her own record, she may be better off claiming spousal benefits even if she waits to claim her own. It will be good to have that information.
I don't know anything.
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FoolMeOnce
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Re: Help me prepare to help mother-in-law

Post by FoolMeOnce »

delamer wrote: Sun Sep 22, 2019 3:57 pm
[...snip...]

My broader point is that if you bought her a condo to live in, then she presumably would sell her current home and have access to the cash from that sale.

But why do that, particularly for someone who hasn’t been a good steward of her money the past? You could buy the condo and she could spend all the proceeds for her house on who-knows-what?

Let her buy the condo and use the remaining funds from the house sale to support the condo (HOA fees, property taxes, utilities).
Makes sense, for sure. My only counterpoint is that buying a condo in our names may make for a cleaner line to end our support and might be more emotionally agreeable (can just tell her we consider it an investment, to alleviate guilt. She won't know buying a condo to not live in and not collect rent is a bad investment). But we'd have to know she isn't spending her home proceeds carelessly, which gets thorny.

To everyone: thanks for all your responses. You've given us a lot to think about. I'll come back when we know more in the next week or so.
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Re: Help me prepare to help mother-in-law

Post by Golf maniac »

Don’t be so sure that her spending habits will change when she retires. Our spending is based off of life long experiences and is difficult to change once we get older. My parents for example, my Dad was the one who kept the budget and watched what was being spent. After he died my a Mom was much more of a spender and really didn’t have a good handle on finances. She ended up with credit card bills which she rolled into a mortgage on a paid off home then ran the cards up again and repeated the process several times. By the time we found out she had a $50,000 mortgage and about $5,000 in credit card debt. No one could convince her credit cards should be paid off monthly and she needed to stick to a budget. Her mindset was I will buy what I want and put it on the credit card, if I can’t pay it off at the end of the month then I will just pay what I can. It was hard to watch but there is not much you can do.

My point is many people live above their means and giving someone extra money just means they can spend more. Just be prepared, you may be in for a shock when you see her finances. Best of luck.
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celia
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Re: Help me prepare to help mother-in-law

Post by celia »

This looks to me like a budget projection is needed. You will need to help her nail down her current budget and her retirement budget, while accounting for every dollar she received in the last year.

Then you need to look at her sources of income to see if there is a shortfall. That is the most direct approach and easiest for her to understand.

Then she will need to understand how much she needs to cut from her budget or get more income (or continue working). Don't forget that moving to a less expensive place or getting a roommate is one way to cut your expenses.
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FoolMeOnce
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Re: Help me prepare to help mother-in-law

Post by FoolMeOnce »

UPDATE: She easily realized she has to keep working at least until max SS at 70. She has about $200k in home equity and a remaining $110k mortgage at 5%, $135k personal loan debt at 5%, $28k car loan, $12k medical debt accruing no interest for a year. Only debt besides the home (and car, I suppose) is a variable (I think) annuity paying about $7-8k/yr, surrender value around $64k, though the details are not clear to me.

SS at 70 will be around $25k/yr. With that plus the annuity, she should be able to get by, just needs to control her spending. Downsizing the home will be part of the plan, which won't reduce monthly housing costs much, but will let her pay off the personal loan, freeing up cash flow making it possible to get her spending within her SS + annuity. It will also reduce property taxes from almost 8k to ~2500k (currently in a desirable school district, which she does not need).
Last edited by FoolMeOnce on Tue Oct 01, 2019 8:39 am, edited 1 time in total.
BarbBrooklyn
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Re: Help me prepare to help mother-in-law

Post by BarbBrooklyn »

28K car loan? What kind of car does she have?

A Honda Fit costs about 20k, fully loaded. She is way, WAY overspending. How is that going to stop?
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FoolMeOnce
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Re: Help me prepare to help mother-in-law

Post by FoolMeOnce »

BarbBrooklyn wrote: Sun Sep 29, 2019 2:18 pm 28K car loan? What kind of car does she have?

A Honda Fit costs about 20k, fully loaded. She is way, WAY overspending. How is that going to stop?
I know, it's crazy. RAV4.
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MrBobcat
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Re: Help me prepare to help mother-in-law

Post by MrBobcat »

FoolMeOnce wrote: Sun Sep 29, 2019 2:05 pm UPDATE: She easily realized she has to keep working at least until max SS at 70. She has about $200k in home equity and a remaining $110k mortgage at 5%, $135k personal loan debt at 5%, $28k car loan, $12k medical debt acting no interest for a year. Only set besides the home (and car, I suppose) is a variable (I think) annuity paying about $7-8k/yr, surrender value around $64k, though the details are not clear to me.

SS at 70 will be around $25k/yr. With that plus the annuity, she should be able to get by, just needs to control her spending. Downsizing the home will be part of the plan, which won't reduce monthly housing costs much, but will let her pay off the personal loan, freeing up cash flow making it possible to get her spending within her SS + annuity. It will also reduce property taxes from almost 8k to ~2500k (currently in a desirable school district, which she does not need).
So, if I'm reading this correctly, net worth of $53K assuming net car loan = to value of car ($200k-135K-12K). No other sources of savings/retirement other than Annuity? So at age 70 she'll have about $33K/year to live on. I don't see how that will be sustainable given her current debts. Can she sell her home, pay off her personal and home loans and get by with paying rent and car payment on $2,750/month? That would leave her with a small emergency fund left over.
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FoolMeOnce
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Re: Help me prepare to help mother-in-law

Post by FoolMeOnce »

MrBobcat wrote: Sun Sep 29, 2019 3:05 pm
FoolMeOnce wrote: Sun Sep 29, 2019 2:05 pm UPDATE: She easily realized she has to keep working at least until max SS at 70. She has about $200k in home equity and a remaining $110k mortgage at 5%, $135k personal loan debt at 5%, $28k car loan, $12k medical debt acting no interest for a year. Only set besides the home (and car, I suppose) is a variable (I think) annuity paying about $7-8k/yr, surrender value around $64k, though the details are not clear to me.

SS at 70 will be around $25k/yr. With that plus the annuity, she should be able to get by, just needs to control her spending. Downsizing the home will be part of the plan, which won't reduce monthly housing costs much, but will let her pay off the personal loan, freeing up cash flow making it possible to get her spending within her SS + annuity. It will also reduce property taxes from almost 8k to ~2500k (currently in a desirable school district, which she does not need).
So, if I'm reading this correctly, net worth of $53K assuming net car loan = to value of car ($200k-135K-12K). No other sources of savings/retirement other than Annuity? So at age 70 she'll have about $33K/year to live on. I don't see how that will be sustainable given her current debts. Can she sell her home, pay off her personal and home loans and get by with paying rent and car payment on $2,750/month? That would leave her with a small emergency fund left over.
That about sums it up. :? She only recently started her $1,300/mo divorced spousal SS, so should direct that toward one of the debts. Personal loan, I presume, instead of house. Any thoughts on that?

Could also trade in her car for something less expensive. Currently paying 440/month.
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MrBobcat
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Re: Help me prepare to help mother-in-law

Post by MrBobcat »

FoolMeOnce wrote: Sun Sep 29, 2019 4:45 pm
MrBobcat wrote: Sun Sep 29, 2019 3:05 pm
FoolMeOnce wrote: Sun Sep 29, 2019 2:05 pm UPDATE: She easily realized she has to keep working at least until max SS at 70. She has about $200k in home equity and a remaining $110k mortgage at 5%, $135k personal loan debt at 5%, $28k car loan, $12k medical debt acting no interest for a year. Only set besides the home (and car, I suppose) is a variable (I think) annuity paying about $7-8k/yr, surrender value around $64k, though the details are not clear to me.

SS at 70 will be around $25k/yr. With that plus the annuity, she should be able to get by, just needs to control her spending. Downsizing the home will be part of the plan, which won't reduce monthly housing costs much, but will let her pay off the personal loan, freeing up cash flow making it possible to get her spending within her SS + annuity. It will also reduce property taxes from almost 8k to ~2500k (currently in a desirable school district, which she does not need).
So, if I'm reading this correctly, net worth of $53K assuming net car loan = to value of car ($200k-135K-12K). No other sources of savings/retirement other than Annuity? So at age 70 she'll have about $33K/year to live on. I don't see how that will be sustainable given her current debts. Can she sell her home, pay off her personal and home loans and get by with paying rent and car payment on $2,750/month? That would leave her with a small emergency fund left over.
That about sums it up. :? She only recently started her $1,300/mo divorced spousal SS, so should direct that toward one of the debts. Personal loan, I presume, instead of house. Any thoughts on that?

Could also trade in her car for something less expensive. Currently paying 440/month.
Can she get her personal loan discharged in bankruptcy at some point (or does the lender have a lien on her home)? May be worth looking into though I know absolutely nothing about bankruptcy. As far as the car, if she can dump it/trade at a wash (debt = trade in value) I'd recommend doing that and getting something cheaper otherwise bite the bullet and work towards paying it off and have her consider this her last new car and keep it for a long, long time.
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FoolMeOnce
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Re: Help me prepare to help mother-in-law

Post by FoolMeOnce »

MrBobcat wrote: Sun Sep 29, 2019 6:26 pm
FoolMeOnce wrote: Sun Sep 29, 2019 4:45 pm
MrBobcat wrote: Sun Sep 29, 2019 3:05 pm
FoolMeOnce wrote: Sun Sep 29, 2019 2:05 pm UPDATE: She easily realized she has to keep working at least until max SS at 70. She has about $200k in home equity and a remaining $110k mortgage at 5%, $135k personal loan debt at 5%, $28k car loan, $12k medical debt acting no interest for a year. Only set besides the home (and car, I suppose) is a variable (I think) annuity paying about $7-8k/yr, surrender value around $64k, though the details are not clear to me.

SS at 70 will be around $25k/yr. With that plus the annuity, she should be able to get by, just needs to control her spending. Downsizing the home will be part of the plan, which won't reduce monthly housing costs much, but will let her pay off the personal loan, freeing up cash flow making it possible to get her spending within her SS + annuity. It will also reduce property taxes from almost 8k to ~2500k (currently in a desirable school district, which she does not need).
So, if I'm reading this correctly, net worth of $53K assuming net car loan = to value of car ($200k-135K-12K). No other sources of savings/retirement other than Annuity? So at age 70 she'll have about $33K/year to live on. I don't see how that will be sustainable given her current debts. Can she sell her home, pay off her personal and home loans and get by with paying rent and car payment on $2,750/month? That would leave her with a small emergency fund left over.
That about sums it up. :? She only recently started her $1,300/mo divorced spousal SS, so should direct that toward one of the debts. Personal loan, I presume, instead of house. Any thoughts on that?

Could also trade in her car for something less expensive. Currently paying 440/month.
Can she get her personal loan discharged in bankruptcy at some point (or does the lender have a lien on her home)? May be worth looking into though I know absolutely nothing about bankruptcy. As far as the car, if she can dump it/trade at a wash (debt = trade in value) I'd recommend doing that and getting something cheaper otherwise bite the bullet and work towards paying it off and have her consider this her last new car and keep it for a long, long time.
Her home equity exceeds her state's homestead bankruptcy exemption, so I believe it would be used to satisfy the personal debt in bankruptcy proceedings.
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JoeRetire
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Re: Help me prepare to help mother-in-law

Post by JoeRetire »

FoolMeOnce wrote: Sat Sep 21, 2019 4:43 pmWe may need to discuss part-time work. What are some good ideas for a 67yo early childhood educator with moderate physical limitations (e.g. can't stock low shelves in retail all day long)?
Many school systems hire lots of part-time help. That seems like an obvious place to start. Daycares, too.
so what other information should we be looking for?
Does she have a pension?
What needs to be part of the discussion?
What she wants to do needs to be the primary part of the discussion.

And, make sure your wife does the talking, rather than you.
What are my unknown unknowns?
They are unknown.
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BarbBrooklyn
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Re: Help me prepare to help mother-in-law

Post by BarbBrooklyn »

I'm stuck on the car.

Because it what universe does a $440 per month car payment (and whatever the attendant insurance? 300 per month?) make any sense to her?

Is she intellectually limited in some way, or developing some cognitive issues?

Has she always spent more than she earns or is this recent?
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FoolMeOnce
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Re: Help me prepare to help mother-in-law

Post by FoolMeOnce »

BarbBrooklyn wrote: Sun Sep 29, 2019 8:22 pm I'm stuck on the car.

Because it what universe does a $440 per month car payment (and whatever the attendant insurance? 300 per month?) make any sense to her?

Is she intellectually limited in some way, or developing some cognitive issues?

Has she always spent more than she earns or is this recent?
Me too. I don't know how she thought she could afford that car. It's nuts. No cognitive issues, just completely clueless about money. It seems she has always spent what she earned or more.
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gr7070
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Re: Help me prepare to help mother-in-law

Post by gr7070 »

JoeRetire wrote: Sun Sep 29, 2019 7:37 pm
FoolMeOnce wrote: Sat Sep 21, 2019 4:43 pmWe may need to discuss part-time work. What are some good ideas for a 67yo early childhood educator with moderate physical limitations (e.g. can't stock low shelves in retail all day long)?
Many school systems hire lots of part-time help. That seems like an obvious place to start. Daycares, too.
It's been a bit since I've read the entire thread, but isn't she a full-time employee?

While I'm all for personal accountability I am also practical and a realist. A 67 year old working 40 hours a week, especially in early childhood education probably won't have the stamina to get a second job.

She needs a budget more than she needs added income - she might just spend the added income. Spenders, especially those who have been doing it this long, have a lot of change they need to make. She probably needs some Dave Ramsey-type help. Fortunately the things I dislike most about Dave Ramsey's program won't impact her nearly as much.
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JoeRetire
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Re: Help me prepare to help mother-in-law

Post by JoeRetire »

gr7070 wrote: Sun Sep 29, 2019 8:51 pm
JoeRetire wrote: Sun Sep 29, 2019 7:37 pm
FoolMeOnce wrote: Sat Sep 21, 2019 4:43 pmWe may need to discuss part-time work. What are some good ideas for a 67yo early childhood educator with moderate physical limitations (e.g. can't stock low shelves in retail all day long)?
Many school systems hire lots of part-time help. That seems like an obvious place to start. Daycares, too.
It's been a bit since I've read the entire thread, but isn't she a full-time employee?

While I'm all for personal accountability I am also practical and a realist. A 67 year old working 40 hours a week, especially in early childhood education probably won't have the stamina to get a second job.
:confused Huh?

We aren't talking about a second job. We are talking about working part-time rather than retiring and not working at all.

At least read the initial question.
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gr7070
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Re: Help me prepare to help mother-in-law

Post by gr7070 »

JoeRetire wrote: Mon Sep 30, 2019 6:13 pm
gr7070 wrote: Sun Sep 29, 2019 8:51 pm
JoeRetire wrote: Sun Sep 29, 2019 7:37 pm
FoolMeOnce wrote: Sat Sep 21, 2019 4:43 pmWe may need to discuss part-time work. What are some good ideas for a 67yo early childhood educator with moderate physical limitations (e.g. can't stock low shelves in retail all day long)?
Many school systems hire lots of part-time help. That seems like an obvious place to start. Daycares, too.
It's been a bit since I've read the entire thread, but isn't she a full-time employee?

While I'm all for personal accountability I am also practical and a realist. A 67 year old working 40 hours a week, especially in early childhood education probably won't have the stamina to get a second job.
:confused Huh?

We aren't talking about a second job. We are talking about working part-time rather than retiring and not working at all.

At least read the initial question.
Huh?

They can't afford to stop working full-time, shoot it sounds like they can barely afford the lifestyle working full-time, why in the world would that kind of part-time be in discussion?
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JoeRetire
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Re: Help me prepare to help mother-in-law

Post by JoeRetire »

gr7070 wrote: Mon Sep 30, 2019 6:52 pm
JoeRetire wrote: Mon Sep 30, 2019 6:13 pm
gr7070 wrote: Sun Sep 29, 2019 8:51 pm
JoeRetire wrote: Sun Sep 29, 2019 7:37 pm
FoolMeOnce wrote: Sat Sep 21, 2019 4:43 pmWe may need to discuss part-time work. What are some good ideas for a 67yo early childhood educator with moderate physical limitations (e.g. can't stock low shelves in retail all day long)?
Many school systems hire lots of part-time help. That seems like an obvious place to start. Daycares, too.
It's been a bit since I've read the entire thread, but isn't she a full-time employee?

While I'm all for personal accountability I am also practical and a realist. A 67 year old working 40 hours a week, especially in early childhood education probably won't have the stamina to get a second job.
:confused Huh?

We aren't talking about a second job. We are talking about working part-time rather than retiring and not working at all.

At least read the initial question.
Huh?

They can't afford to stop working full-time, shoot it sounds like they can barely afford the lifestyle working full-time, why in the world would that kind of part-time be in discussion?
It's contained right within the original question. You may wish to re-read it.

"My mother-in-law is 67 and had indicated a desire to retire next year.

We may need to discuss part-time work."
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KingRiggs
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Re: Help me prepare to help mother-in-law

Post by KingRiggs »

FoolMeOnce wrote: Sun Sep 29, 2019 2:05 pm UPDATE: She easily realized she has to keep working at least until max SS at 70. She has about $200k in home equity and a remaining $110k mortgage at 5%, $135k personal loan debt at 5%, $28k car loan, $12k medical debt accruing no interest for a year. Only debt besides the home (and car, I suppose) is a variable (I think) annuity paying about $7-8k/yr, surrender value around $64k, though the details are not clear to me.

SS at 70 will be around $25k/yr. With that plus the annuity, she should be able to get by, just needs to control her spending. Downsizing the home will be part of the plan, which won't reduce monthly housing costs much, but will let her pay off the personal loan, freeing up cash flow making it possible to get her spending within her SS + annuity. It will also reduce property taxes from almost 8k to ~2500k (currently in a desirable school district, which she does not need).
Not his hugest fan, but your MIL needs a dose of Dave Ramsey...
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FoolMeOnce
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Re: Help me prepare to help mother-in-law

Post by FoolMeOnce »

The plan is to sell the house, pay off the $135k personal loan. Leaves about $60k.

$30k down on a $150k home, keep home payments under $650/mo. $30k e-fund (maybe 25k after moving costs). Property taxes will drop about $5.5k

Use recently started $15k/yr divorced spousal SS to pay down medical and other debt.

Keep working until 70, at least. Car payments should be done (I was mistaken about the 28k car debt; that was the original loan size nearly two years ago).

Calculated SS at 70 more definitively at around $27,300/yr.

Live on SS plus annuity. Consider part time work at that point if she wants more income.

We looked at easy ways to cut spending, like cable and mobile bills. Utilities should go down a bit in a smaller house, too. And, as noted, taxes. Medicare and medigap premiums will be a bit larger than her current premiums, though.
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