Parents in a tough situation for retirement

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achen9291
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Parents in a tough situation for retirement

Post by achen9291 »

I got a text from my brother saying we needed a family meeting to discuss my parents retirement coming up in a few years. He mentioned they were in a tough spot for retirement and wanted us to all agree on a plan. I don't really want to be a part of any of it let alone dragged into it financially. I had set up a retirement account for my father years ago but he withdrew it all and wiped out all of the retirement assets over starting a failing business in 2018 against my advice that it would impact his retirement... and now the time is nearing. I'd never want that responsibility for me to fund my parents retirement so I'm trying to avoid that conversation with my family. It tends to be my family vs me (father, mother, brother) when it comes to these conversations as my brother is the one who tends to whatever my parents want and help them no matter what. I on the other hand want to safeguard myself so I don't end up funding poor decisions and constantly bailing family out from poor financial decisions.

Here is the current situation. I've had my parents house under my name for quite some time due to them needing to sell it in order to pull the funds to put into that business in 2018. That money is pretty much all gone so they've been paying the mortgage while the title is still under my name. I've wanted to get it off my name for quite some time and sell the house but I can't with my parents living in it.

My father works as a mechanic for Lexus and my mother owns her own hair salon her business is probably worth 20k if she were to sell it. Dad practically doesn't have a 401k or any retirement savings, neither does my mother.

I'll eventually have to be involved in this family meeting to discuss their options... off the top of my head these are the only things I can think of. Are there any other ones that would be good to suggest without me financially being involved?

1. Parents are in their upper 50s-low 60s. I will suggest they work until 70 to delay SS.
2. I can work with them to sell the house and sell moms business, and use whatever little money is in equity to use for retirement and they can move to apartment
3. Work a part time job until they can't anymore.

My brother is trying to get them into real estate, buying/selling houses or doing some rental stuff. For "cash flow". I disagree with that and don't want to be involved as well. At the end of this meeting I'll most likely be deemed the selfish one who doesn't support family..
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climber2020
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Re: Parents in a tough situation for retirement

Post by climber2020 »

achen9291 wrote: Tue Jun 16, 2020 4:38 pm 1. Parents are in their upper 50s-low 60s. I will suggest they work until 70 to delay SS.
2. I can work with them to sell the house and sell moms business, and use whatever little money is in equity to use for retirement and they can move to apartment
3. Work a part time job until they can't anymore.
Sounds like a good plan. I see plenty of people well above age 70 who work at Walmart, so it can be done.
achen9291 wrote: Tue Jun 16, 2020 4:38 pm At the end of this meeting I'll most likely be deemed the selfish one who doesn't support family..
Who cares how they see you? Own it and go enjoy your life. I've completely cut off a few family members for financial reasons, and there's been no downside to it at all.
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ResearchMed
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Re: Parents in a tough situation for retirement

Post by ResearchMed »

How would they purchase any property (even one), without cash for a down payment?

Also, assuming you want to sell that house soon (which makes sense if you don't want to be entangled financially anymore), how will you get them to move out, especially if they are living there at no or below-market rent?

Difficult situation, with tricky financial issues.
And given the history, try *really* hard NOT to let them talk/coerce you into getting involved financially again.

Good luck.

RM
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Quirkz
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Re: Parents in a tough situation for retirement

Post by Quirkz »

You have my sympathies, Achen. It sounds like it's going to be a tough conversation.

I think your plan is in the right place. I'm sure your parents are looking forward to retirement, but if unless their health is so bad they *can't* work, they don't get to just quit unless they actually have something to live off of. Based on their ages, working for another decade, trying to save a little, and just doing everything they can to boost Social Security seems prudent. I don't have a sense of their current income. Is it close enough to what SocSec would pay that they could live off it entirely? Or do they also need to take a hard look at budgeting?

Without any money, I don't see how they're going to get into real estate in the first place.

Family dynamics can be very tough. It sounds like your stance is, "You guys are adults, you're responsible for yourselves. I've tried to help in the past, and it hasn't led to anything good. All I can do now is give you advice. You can take it or leave it, but that's what I have to offer." If so, make that clear, stick to your guns (doesn't have to be combative, just matter-of-fact), and, unfortunately, be prepared to get some grief for it, or excuse yourself from the conversation if they're not going to listen anyway.
sd323232
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Re: Parents in a tough situation for retirement

Post by sd323232 »

STAY AWAY STAY AWAY STAY AWAY.

you are heading into a disaster full speed, this will damage your relationship with your family members.

The only thing you can control is your own life.

I understand they are your parents, but they made their life choice.

Please stay away and do you own thing, this is the best you can do for your parents, live your own successful life.

Stay from all this drama.
NotWhoYouThink
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Re: Parents in a tough situation for retirement

Post by NotWhoYouThink »

Here is the current situation. I've had my parents house under my name for quite some time due to them needing to sell it in order to pull the funds to put into that business in 2018. That money is pretty much all gone so they've been paying the mortgage while the title is still under my name. I've wanted to get it off my name for quite some time and sell the house but I can't with my parents living in it.
They sold you the house at market value? And the mortgage is being paid to you?

Or what?
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MrBobcat
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Re: Parents in a tough situation for retirement

Post by MrBobcat »

Sell the house to your brother. Give him a good deal and walk away.
fyre4ce
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Re: Parents in a tough situation for retirement

Post by fyre4ce »

I think you're on the right track. Key elements of their financial plan should be:

1) Working as much as possible and earning as much income as possible while they still can. Your dad should pick up as many shifts as he can, and your mom should either work a lot at her salon, or sell it and find another job. Maximize contributions to retirement accounts.

I don't think they should become real estate investors at that age - flipping distressed properties and such. They have no capital or experience, and could easily lose a lot of money if they buy houses that are hard to sell, have foundation problems, etc. There's no need to add that level of risk. Now, if your mom wanted to become a real estate agent or something, maybe that could work out.

2) Delaying SS until age 70.
3) Downsizing housing, and either renting or buying a smaller place, and putting as much extracted equity into retirement accounts.

If I were you I'd probably go to the "family meeting" and be calm, reasonable, and insistent on the right course of action. There's not a high chance they'll take your advice, but it also sounds like your relationship isn't great right now, so how much do you have to lose? If you are solicited for money, just say you can't afford it, you need it for kids, mortgage, whatever.

You could also recommend Dave Ramsey's program to them.
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Ged
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Re: Parents in a tough situation for retirement

Post by Ged »

Your brother's plan sounds like it is full of risk, which is exactly what people like your parents do not need.

They need to find regular employment using whatever skills they have and work as long as they can to maximize their finances including Social Security.
KlangFool
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Re: Parents in a tough situation for retirement

Post by KlangFool »

MrBobcat wrote: Tue Jun 16, 2020 4:59 pm Sell the house to your brother. Give him a good deal and walk away.
+1,000.

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Re: Parents in a tough situation for retirement

Post by Jack FFR1846 »

MrBobcat wrote: Tue Jun 16, 2020 4:59 pm Sell the house to your brother. Give him a good deal and walk away.
That's actually a great idea.

But overall, your parents and brother are more interested in "get rich" schemes than they are in reality. Here's reality: They will never retire in a traditional sense. You are right that they should work to at least 70 (both of them) and I would say that they should plan to continue to work until they die. Retirement is not for people who didn't act responsibly and save money towards that end. It sounds very much like they are NOT business people. They are people who should be working for others. I don't know what your mom's business brings in, but I'd sense it's less than a Wal Mart type retail job. Has your mom paid social security all these years?

Feel free to tell your brother to have the meeting without you and then give you the highlights, which I'd imagine would be along the lines of "We have this great idea to buy and flip houses. We just need a few hundred grand to buy some houses", to which you can respond "great plan....when you get that couple hundred grand, this should certainly keep you all busy".
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Watty
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Re: Parents in a tough situation for retirement

Post by Watty »

achen9291 wrote: Tue Jun 16, 2020 4:38 pm Here is the current situation. I've had my parents house under my name for quite some time due to them needing to sell it in order to pull the funds to put into that business in 2018. That money is pretty much all gone so they've been paying the mortgage while the title is still under my name. I've wanted to get it off my name for quite some time and sell the house but I can't with my parents living in it.
Most likely no matter what the details of the finances are they can't afford the house or the mortgage.

One of the first things for them to look at would be to move to a much less expensive apartment or maybe a condo if they have enough home equity to make that a viable option.

It was a big mistake to get tied up in the house like that so just leaving them on their own likely is not possible since at some point they may stop making the mortgage payments.

Selling the house to your brother will not really help them if they cannot afford it.
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achen9291
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Re: Parents in a tough situation for retirement

Post by achen9291 »

My brother has his own house close by the woodlands near houston, texas. Parents live in Katy, TX near Houston as well. I'm in Dallas living in an apartment. But I heard he is currently about to move to a cheaper house or place to pay off mortgage quick at the next place and he seems pretty interested in doing this real estate stuff to "retire" early. He got this house when he was like 25 but now he's almost 30. My mother called me asking if I wanted to be a part of it, and of course my answer was no.

It was a bad decision on my part to help them although there was emotional manipulation involved and 3v1 it was difficult to put my foot down then. That was my fault. I had to seek alot of counseling over boundaries. My parents pay for the full mortgage for the house I don't have to pay anything regarding it but it is a liability to me with it on my name so I want it off asap. They spoke about wanting to sell it after my brothers house sells which I'm not sure how soon that would be given the recent events with covid/economy, etc.

The thing I"m worried about is my dad wouldn't keep his hands off his retirement accounts several times before. I could help him set up a vanguard account again, it'll definitely be an uphill battle this late into saving for retirement.. They've always lived paycheck to paycheck.

Mothers business does well sometimes, I don't know on the numbers exactly but sometimes she can bring in probably 60-100k in a year. Not sure on this year since she had to shut it down for awhile due to covid.

Edit: I also don't know if my mother has been paying for SS all these years, but I'm hoping she has. I'll probably find out when this meeting happens.
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Re: Parents in a tough situation for retirement

Post by Trader Joe »

achen9291 wrote: Tue Jun 16, 2020 4:38 pm I got a text from my brother saying we needed a family meeting to discuss my parents retirement coming up in a few years. He mentioned they were in a tough spot for retirement and wanted us to all agree on a plan. I don't really want to be a part of any of it let alone dragged into it financially. I had set up a retirement account for my father years ago but he withdrew it all and wiped out all of the retirement assets over starting a failing business in 2018 against my advice that it would impact his retirement... and now the time is nearing. I'd never want that responsibility for me to fund my parents retirement so I'm trying to avoid that conversation with my family. It tends to be my family vs me (father, mother, brother) when it comes to these conversations as my brother is the one who tends to whatever my parents want and help them no matter what. I on the other hand want to safeguard myself so I don't end up funding poor decisions and constantly bailing family out from poor financial decisions.

Here is the current situation. I've had my parents house under my name for quite some time due to them needing to sell it in order to pull the funds to put into that business in 2018. That money is pretty much all gone so they've been paying the mortgage while the title is still under my name. I've wanted to get it off my name for quite some time and sell the house but I can't with my parents living in it.

My father works as a mechanic for Lexus and my mother owns her own hair salon her business is probably worth 20k if she were to sell it. Dad practically doesn't have a 401k or any retirement savings, neither does my mother.

I'll eventually have to be involved in this family meeting to discuss their options... off the top of my head these are the only things I can think of. Are there any other ones that would be good to suggest without me financially being involved?

1. Parents are in their upper 50s-low 60s. I will suggest they work until 70 to delay SS.
2. I can work with them to sell the house and sell moms business, and use whatever little money is in equity to use for retirement and they can move to apartment
3. Work a part time job until they can't anymore.

My brother is trying to get them into real estate, buying/selling houses or doing some rental stuff. For "cash flow". I disagree with that and don't want to be involved as well. At the end of this meeting I'll most likely be deemed the selfish one who doesn't support family..
For myself, I will never turn away family in need of help.
MathIsMyWayr
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Re: Parents in a tough situation for retirement

Post by MathIsMyWayr »

Trader Joe wrote: Tue Jun 16, 2020 6:24 pm
achen9291 wrote: Tue Jun 16, 2020 4:38 pm I got a text from my brother saying we needed a family meeting to discuss my parents retirement coming up in a few years. He mentioned they were in a tough spot for retirement and wanted us to all agree on a plan. I don't really want to be a part of any of it let alone dragged into it financially. I had set up a retirement account for my father years ago but he withdrew it all and wiped out all of the retirement assets over starting a failing business in 2018 against my advice that it would impact his retirement... and now the time is nearing. I'd never want that responsibility for me to fund my parents retirement so I'm trying to avoid that conversation with my family. It tends to be my family vs me (father, mother, brother) when it comes to these conversations as my brother is the one who tends to whatever my parents want and help them no matter what. I on the other hand want to safeguard myself so I don't end up funding poor decisions and constantly bailing family out from poor financial decisions.

Here is the current situation. I've had my parents house under my name for quite some time due to them needing to sell it in order to pull the funds to put into that business in 2018. That money is pretty much all gone so they've been paying the mortgage while the title is still under my name. I've wanted to get it off my name for quite some time and sell the house but I can't with my parents living in it.

My father works as a mechanic for Lexus and my mother owns her own hair salon her business is probably worth 20k if she were to sell it. Dad practically doesn't have a 401k or any retirement savings, neither does my mother.

I'll eventually have to be involved in this family meeting to discuss their options... off the top of my head these are the only things I can think of. Are there any other ones that would be good to suggest without me financially being involved?

1. Parents are in their upper 50s-low 60s. I will suggest they work until 70 to delay SS.
2. I can work with them to sell the house and sell moms business, and use whatever little money is in equity to use for retirement and they can move to apartment
3. Work a part time job until they can't anymore.

My brother is trying to get them into real estate, buying/selling houses or doing some rental stuff. For "cash flow". I disagree with that and don't want to be involved as well. At the end of this meeting I'll most likely be deemed the selfish one who doesn't support family..
For myself, I will never turn away family in need of help.
+1. Blood is thicker than water. Winning or losing, a soldier fights for his country.
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ram
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Re: Parents in a tough situation for retirement

Post by ram »

achen9291 wrote: Tue Jun 16, 2020 6:18 pm The thing I"m worried about is my dad wouldn't keep his hands off his retirement accounts several times before. I could help him set up a vanguard account again, it'll definitely be an uphill battle this late into saving for retirement.. They've always lived paycheck to paycheck.
If you were to contribute any money at all any time in the future it could perhaps be buying a SPIA for them.
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TxAg
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Re: Parents in a tough situation for retirement

Post by TxAg »

Don't put your retirement at risk for theirs. At their ages they can work for another decade.
Streptococcus
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Re: Parents in a tough situation for retirement

Post by Streptococcus »

This is one of those situations were you won’t win either way. You have to pick the least painful poison.

Option 1: If you avoid the meeting altogether and decide to ignore your parents descend to the abyss, can you live with the ensuing repercussions? If that is the best poison, then drink it.

Option 2: Attend the meeting, give your best advice, but shield yourself from descending with them. Do not put your name on anything. Take your name off their house. Act like a financial adviser who has terrible clients. Advise without arguing or compromising yourself.

Option 3: That’s what I would do with my parents because I have that kind of relationship with them: take over and make all the decisions for them. But that only works if you guys are close enough.
TimeTheMarket
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Re: Parents in a tough situation for retirement

Post by TimeTheMarket »

Trader Joe wrote: Tue Jun 16, 2020 6:24 pm
achen9291 wrote: Tue Jun 16, 2020 4:38 pm I got a text from my brother saying we needed a family meeting to discuss my parents retirement coming up in a few years. He mentioned they were in a tough spot for retirement and wanted us to all agree on a plan. I don't really want to be a part of any of it let alone dragged into it financially. I had set up a retirement account for my father years ago but he withdrew it all and wiped out all of the retirement assets over starting a failing business in 2018 against my advice that it would impact his retirement... and now the time is nearing. I'd never want that responsibility for me to fund my parents retirement so I'm trying to avoid that conversation with my family. It tends to be my family vs me (father, mother, brother) when it comes to these conversations as my brother is the one who tends to whatever my parents want and help them no matter what. I on the other hand want to safeguard myself so I don't end up funding poor decisions and constantly bailing family out from poor financial decisions.

Here is the current situation. I've had my parents house under my name for quite some time due to them needing to sell it in order to pull the funds to put into that business in 2018. That money is pretty much all gone so they've been paying the mortgage while the title is still under my name. I've wanted to get it off my name for quite some time and sell the house but I can't with my parents living in it.

My father works as a mechanic for Lexus and my mother owns her own hair salon her business is probably worth 20k if she were to sell it. Dad practically doesn't have a 401k or any retirement savings, neither does my mother.

I'll eventually have to be involved in this family meeting to discuss their options... off the top of my head these are the only things I can think of. Are there any other ones that would be good to suggest without me financially being involved?

1. Parents are in their upper 50s-low 60s. I will suggest they work until 70 to delay SS.
2. I can work with them to sell the house and sell moms business, and use whatever little money is in equity to use for retirement and they can move to apartment
3. Work a part time job until they can't anymore.

My brother is trying to get them into real estate, buying/selling houses or doing some rental stuff. For "cash flow". I disagree with that and don't want to be involved as well. At the end of this meeting I'll most likely be deemed the selfish one who doesn't support family..
For myself, I will never turn away family in need of help.
So he has to abide by that but not them?

OP in dangerous waters. Sounds like his parents want to abuse their relationship and take advantage of him even though it compromises his life and his family.

I’ve seen many many stories like this.

Prediction: when he tells his parents to work another 10-12 years they will cry a river over the very nerve of him to mention it, and his sycophant brother will try and guilt him into “helping mom and dad”. Funny they want his money now but ignored his advice about it two years ago.
Last edited by TimeTheMarket on Tue Jun 16, 2020 8:05 pm, edited 1 time in total.
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Regattamom
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Re: Parents in a tough situation for retirement

Post by Regattamom »

MathIsMyWayr wrote: Tue Jun 16, 2020 6:31 pm
Trader Joe wrote: Tue Jun 16, 2020 6:24 pm
achen9291 wrote: Tue Jun 16, 2020 4:38 pm I got a text from my brother saying we needed a family meeting to discuss my parents retirement coming up in a few years. He mentioned they were in a tough spot for retirement and wanted us to all agree on a plan. I don't really want to be a part of any of it let alone dragged into it financially. I had set up a retirement account for my father years ago but he withdrew it all and wiped out all of the retirement assets over starting a failing business in 2018 against my advice that it would impact his retirement... and now the time is nearing. I'd never want that responsibility for me to fund my parents retirement so I'm trying to avoid that conversation with my family. It tends to be my family vs me (father, mother, brother) when it comes to these conversations as my brother is the one who tends to whatever my parents want and help them no matter what. I on the other hand want to safeguard myself so I don't end up funding poor decisions and constantly bailing family out from poor financial decisions.

Here is the current situation. I've had my parents house under my name for quite some time due to them needing to sell it in order to pull the funds to put into that business in 2018. That money is pretty much all gone so they've been paying the mortgage while the title is still under my name. I've wanted to get it off my name for quite some time and sell the house but I can't with my parents living in it.

My father works as a mechanic for Lexus and my mother owns her own hair salon her business is probably worth 20k if she were to sell it. Dad practically doesn't have a 401k or any retirement savings, neither does my mother.

I'll eventually have to be involved in this family meeting to discuss their options... off the top of my head these are the only things I can think of. Are there any other ones that would be good to suggest without me financially being involved?

1. Parents are in their upper 50s-low 60s. I will suggest they work until 70 to delay SS.
2. I can work with them to sell the house and sell moms business, and use whatever little money is in equity to use for retirement and they can move to apartment
3. Work a part time job until they can't anymore.

My brother is trying to get them into real estate, buying/selling houses or doing some rental stuff. For "cash flow". I disagree with that and don't want to be involved as well. At the end of this meeting I'll most likely be deemed the selfish one who doesn't support family..
For myself, I will never turn away family in need of help.
+1. Blood is thicker than water. Winning or losing, a soldier fights for his country.
Nice thoughts, but I don't think it's as easy as that. If the parents had made the right financial choices along the way and tried hard to not become a burden, that is one thing. But that's not the case here.

And what about if the OP has children and a spouse to support? Does OP give to his parents and put himself in a situation where he cannot fund his own retirement and is dependent on his own children as he ages?
TimeTheMarket
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Re: Parents in a tough situation for retirement

Post by TimeTheMarket »

Streptococcus wrote: Tue Jun 16, 2020 8:01 pm This is one of those situations were you won’t win either way. You have to pick the least painful poison.

Option 1: If you avoid the meeting altogether and decide to ignore your parents descend to the abyss, can you live with the ensuing repercussions? If that is the best poison, then drink it.

Option 2: Attend the meeting, give your best advice, but shield yourself from descending with them. Do not put your name on anything. Take your name off their house. Act like a financial adviser who has terrible clients. Advise without arguing or compromising yourself.

Option 3: That’s what I would do with my parents because I have that kind of relationship with them: take over and make all the decisions for them. But that only works if you guys are close enough.
99% of parents will tell a kid in option 3 to pound sand. And his father already did in 2018, ignoring advice given. Option 2 is sound. Divest fully.

Give advice when asked but no financial handouts at all. It is merely enabling bad behavior at this point.
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renue74
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Re: Parents in a tough situation for retirement

Post by renue74 »

I have a new Colombian friend. He does a lot with his family and his mother helps him so much in his daily business dealings.

He told me that when she is too old to work, they will take her in and take care of her. No strings attached.

My mother is 68 and she works as a person who "stays" with older folks in a support role. My mother has about $15K in cash assets and rents. She was divorced about 8 years ago from her 2nd husband.

When the time comes, I will take care of my mom. She took care of me for 18 years. You remember that? Right? Your parents took care of you.

I'm not going to write a blank check to my mom or help her with any strange money ideas. I will give you a roof over her head, food, and love.

I agree with the others...don't get sucked into any business dealings. But, I would make it clear I'm going to help my parent live the rest of her life.
Mudpuppy
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Re: Parents in a tough situation for retirement

Post by Mudpuppy »

Much as one comes up with an investment policy statement to guard against emotions putting one's retirement planning off-track, you need to come up with a statement that details the support you are willing to provide to your parents (if any) and the conditions on that support. Think beyond the schemes suggested by your brother and parents into the broader realm of support over time. The immediate schemes can distract you into an emotional whack-a-mole game, and you need to come up with a support statement that can provide you the emotional and rational backup you need to get through a variety of future support scenarios, regardless of the current scheme your parents and/or brother have devised. You then need to verbalize that statement to your parents in some manner, and be prepared for any emotional fallout that may occur.

For example, most of my family is also very poor with their finances (prime example: my parents spent 250k in inheritance in less than half a decade and are now up to their proverbial eyeballs in debt). I have decided that my policy is I will provide support for my family's basic needs (food, shelter, health care) directly to the appropriate provider of that basic need, but I will not give cash other than as gifts. That support extends to providing shelter from my own roof, so I have one elderly, wheelchair-bound relative living with me, rather than having her in institutionalized care, which was a poor match for her due to a variety of personal reasons.

In simple terms, you have to define your boundaries and then be prepared to protect and reinforce those boundaries, even if there is emotional fallout from your parents and brother. This is a very personal decision that you have to make. An Internet forum can provide anecdotes and warnings, but ultimately you need to decide what is best for you. You mentioned seeking counseling in the past for boundaries, and that might be a good avenue to explore now as well.
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Stinky
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Re: Parents in a tough situation for retirement

Post by Stinky »

Achen9291, I feel for you. It sounds like you’re the only person in your family with a bit of common sense.

Figure out some way to get out of your parents house. Sell it to brother or someone else.

Refuse to participate in the hare brained scheme to flip houses. Advise brother and parents that it’s crazy. But if they want to be crazy, you can’t stop them.

Strongly advise parents to delay SS to age 70. And work for as long as they physically can. I see people in certain retail establishments near me that appear to be approaching age 80. I’m afraid that’s your parents’ future.

You’ve got to do the right thing for you and your family. That’s your priority.
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Mlm
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Re: Parents in a tough situation for retirement

Post by Mlm »

Don't let your brother run this show. I would text him back and say that you are not interested in doing any financial business with family. Period. If you have a hard time standing up for yourself please seek some support. Best wishes.
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Re: Parents in a tough situation for retirement

Post by Starfish »

renue74 wrote: Tue Jun 16, 2020 8:11 pm I have a new Colombian friend. He does a lot with his family and his mother helps him so much in his daily business dealings.

He told me that when she is too old to work, they will take her in and take care of her. No strings attached.

My mother is 68 and she works as a person who "stays" with older folks in a support role. My mother has about $15K in cash assets and rents. She was divorced about 8 years ago from her 2nd husband.

When the time comes, I will take care of my mom. She took care of me for 18 years. You remember that? Right? Your parents took care of you.

I'm not going to write a blank check to my mom or help her with any strange money ideas. I will give you a roof over her head, food, and love.

I agree with the others...don't get sucked into any business dealings. But, I would make it clear I'm going to help my parent live the rest of her life.
I am happy to read normal thoughts here.
OP:
It's a tough situation. But between the extremes of destroying your life for your parents and not caring for them at all there are a lor of middle paths.
I assume your parents are the normal kind, the type who will give you a kidney or die for you any day.
Lalamimi
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Re: Parents in a tough situation for retirement

Post by Lalamimi »

Why should they retire so young, if health is good. My hairdresser is 70. She sold her larger salon (3 person but only had 1 employee) and rents in a Salon Park. My parents had no retirement, my dad died at 68, mom 2 yrs ago at 90. Luckily, both had been in military in the 50s and mom was able to get Aid & Attendance to help me cover last 3 years in Assisted Living. My brother did help when he could, but he stupidly had retired from fire department with 30 years at age 50 and draws his pension. Its all he has at age 64. They should keep working as long as possible, and you should somehow put the house back in their names, or even your brother's. My kids have never asked us for anything, and we are not asking them. Maybe when we are in late 80s, but not in our 60s. Your brother is welcome to do what he wants. Hang tough.
rustymutt
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Re: Parents in a tough situation for retirement

Post by rustymutt »

sd323232 wrote: Tue Jun 16, 2020 4:53 pm STAY AWAY STAY AWAY STAY AWAY.

you are heading into a disaster full speed, this will damage your relationship with your family members.

The only thing you can control is your own life.

I understand they are your parents, but they made their life choice.

Please stay away and do you own thing, this is the best you can do for your parents, live your own successful life.

Stay from all this drama.

I get your point here. I feel much the same, only I'd use the words run, run and keep running. I'd run like the coward I am.
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cchrissyy
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Re: Parents in a tough situation for retirement

Post by cchrissyy »

I agree you need to stay out of it for your own protection. But. You are already entangled with them because of the house. So I think a good use of your energy would be to figure out how you will disentangle yourself
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anon_investor
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Re: Parents in a tough situation for retirement

Post by anon_investor »

Stinky wrote: Tue Jun 16, 2020 8:20 pm Achen9291, I feel for you. It sounds like you’re the only person in your family with a bit of common sense.

Figure out some way to get out of your parents house. Sell it to brother or someone else.

Refuse to participate in the hare brained scheme to flip houses. Advise brother and parents that it’s crazy. But if they want to be crazy, you can’t stop them.

Strongly advise parents to delay SS to age 70. And work for as long as they physically can. I see people in certain retail establishments near me that appear to be approaching age 80. I’m afraid that’s your parents’ future.

You’ve got to do the right thing for you and your family. That’s your priority.
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whodidntante
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Re: Parents in a tough situation for retirement

Post by whodidntante »

I don't think being a broke real estate investor with no job is going to work out well. That's one reason why real estate investors tend to keep their jobs.

Probably your parents end up working longer than they planned. Plenty of people have jobs when they are 70. It sucks, but it's possible for those with decent health. If they also want to buy investment properties while working, fine. Done well and with a backstop of income or assets, that can be a wealth builder. Paying too much and overextending yourself can make it much worse, however.

Retirement will eventually be forced by health issues, whether they are ready or not. You might decide to step in at that point with bags of money. That's up to you. If not, the taxpayers will help some, but it's brutal for broke people in America.
RadAudit
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Re: Parents in a tough situation for retirement

Post by RadAudit »

achen9291 wrote: Tue Jun 16, 2020 4:38 pm I got a text from my brother saying we needed a family meeting to discuss my parents retirement coming up in a few years. He mentioned they were in a tough spot for retirement and wanted us to all agree on a plan. I don't really want to be a part of any of it let alone dragged into it financially. I had set up a retirement account for my father years ago but he withdrew it all and wiped out all of the retirement assets over starting a failing business in 2018 against my advice that it would impact his retirement.[/u].. and now the time is nearing.


How much money are you already into this situation? Specifically, how much money was in the retirement fund that he blew through? How much from the home has been blown through? Did your brother contribute money to any of this? Does he know what you've done already?

I believe your approach seems better than your brother's. I don't believe you are under any obligation to support a plan you don't agree too. It sounds you've done a lot so far.

PS: I send an update of our financial situation to our kids every year. The only thing I ask is that they save a spot in their back yard where I can pitch a tent when I show up old and broke.
Last edited by RadAudit on Tue Jun 16, 2020 9:02 pm, edited 2 times in total.
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Re: Parents in a tough situation for retirement

Post by cs412a »

OP, it doesn't seem like you have much control over what your parents do. Naturally, you'd like things to be better for them, but I don't think that's in your power.

(1) Since it seems your parents both currently work, they should eventually receive SS and Medicare. You don't mention any debt, just that they've spent all their savings (and any money you gave them). Some people are simply incapable of saving money. My own mom is that way. She is one of the many seniors who are able to live on what she receives from SS. Your parents might take SS early, they might not - you can advise them to work until 70, but you can't control whether they do or not. In any case, they should receive SS and if they don't have any other savings they will have to live on that money. They might well be able to do that. If not, one or both of them can work part-time. As they become older and less able to work, they would probably qualify for social services.

(2) You don't want to own the house they live in, and I'm guessing you are the person carrying the mortgage, but from what you've said your parents are making the mortgage payments and covering their housing costs. If they aren't able to do that in the future, then I think you would have to sell the house, pay off the mortgage and give them any remaining equity (if there is any). But that's something that you'll have to deal with when the time comes. You don't really need to make any changes now.

What I am seeing is that, regardless of what your brother or parents want to do, you don't need to do anything financially. As another poster suggested, skip the family meeting and wish them well with whatever they decide.
orhkaf
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Re: Parents in a tough situation for retirement

Post by orhkaf »

I would support my parents until the end. However I would do it independent of my siblings.
socaldude
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Re: Parents in a tough situation for retirement

Post by socaldude »

I AGREE.... STAY AWAY. Sell the house or put into their names and run away. They need to do it themselves ...stop helping!! Your brother is an idiot. I have been there done that annnnd,THEY WILL TAKE YOU DOWN WITH THEM. Tough love is our only job in life sometimes.
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Re: Parents in a tough situation for retirement

Post by Cruise »

What a difficult situation for anyone in your situation: Concern for parents' well being vs. your own financial concerns. All this is complicated by your parents making poor financial decisions.

With the history you describe, I'm not sure I would attend this meeting unless I had a written agenda. In that agenda, I would expect options about which would be deliberated. Once the agenda is published, you can either add to the agenda or reject it (and the meeting). Structuring your participation in this fashion will help prevent the meeting from derailing. You are setting limits early on, and making it known that you will not partake in unwanted agenda items.

Do your parents have estate planning documents such as advance directives, etc.? If so, who is listed as the responsible party--you or your brother? If not, this would be on the top of my agenda.

As someone who was the trustee for my parents' estate, and one who needed to marshal the efforts of sometimes wayward sibs, I feel for you...
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boomer
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Re: Parents in a tough situation for retirement

Post by boomer »

The real estate business idea is not a good one for your parents. Your brother can give it a go if he wants to, but your parents, especially your mom, should stay with the business she knows and is successful at. I would express that to your brother. I fear your Dad is getting too old to be getting into flipping real estate. I'm saying that as an over 60 myself that has still has rentals--the stamina is running out. But your Dad may not think that. Does your Dad have options to work another job that will help support him and your mother right now?

As far as the house, that is a tough one. As some others have suggested, perhaps your brother could purchase it...but not if he quits his job to be a real estate investor. Maybe I'm reading between the lines too much, but it kind of sounds like your brother may not be too wise on the financial side himself. But if he qualifies to purchase it, perhaps that would be a solution for you to get off the loan. Or, if both of your parents have jobs now, maybe your parents could buy it back now? If that is not possible, I can totally see myself feeling obliged to keep it on my name until they couldn't make the payments anymore. Which would not be good either. It would really be best if you could truthfully explain that you don't want to have the loan anymore and that it is weighing you down. And perhaps they could come up with a solution.

Your parents may need to move in with you one day, if all of this goes south. I would rather be prepared for that in the future than join a bad business plan now.
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Re: Parents in a tough situation for retirement

Post by psy1 »

I would sell the house to your brother as a bargain. Worth a loss to escape. You should feel no guilt or obligation at this point.

I have a friend with a different, but similar, situation. He is getting divorced at 66 and knows absolutely nothing about money. All he knows is that he wants a house and a dog. Despite knowing nothing, he is impervious to advice so my challenge is to limit the advice. I gave him a few spreadsheets illustrating his current path vs alternatives. I might as well have given him an ancient Chinese scroll but I at least assuaged my sense of duty as a friend to forewarn him about his fate. You might do the same for your brother and parents.

I would avoid family meetings which you know to be pitched battles.

Brace yourself for upset. Your family is habituated to carrying on in a certain way and you have participated. Changing the script will result in wailing and gnashing of teeth.
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Re: Parents in a tough situation for retirement

Post by FoolStreet »

Right now, you are on the hook for the mortgage payments and any/all upkeep on the house. Get prepared for making those payments for the rest of their lives, because if they decide to retire and stop paying the mortgage, its on your shoulders. And you can't move them into your apartment.

It sounds like they and your brother want to sell the house to get access to the equity for use in buying new properties or whatever scheme they have concocted.

You have 2 options:

1. Sell the house, then give the equity to the brother or parents, write it off mentally and don't engage financially ever again. Expect them to run the $ in the ground, then eventually have to live in a small apartment while they work until their later years, then live off whatever Social Security they can.

2. Keep the house, tell them to continue to make payments. Be prepared for them to stop paying the mortgage and other bills household bills as their situation escalates. You will increasingly have to pay for the house bills, but at least you know they have a home. They *should* continue to work to pay their share of the bills, and they probably will. At some point, they stop paying the mortgage, but you are mentally and financially prepared for that.

#1 is the harder, clearer break. But ultimately, in either option, your family will always ask you for money. #2 is the worst financially, but you stay in control and you control the equity in the home.

If you are a Boglehead who earns a big salary, oversaving every month and can easily afford #2, go with that. If you were recently married and about to start a family and needed every penny to move out of your apartment and buy your own home and pay for extra expenses of the family, you might have no other option than #1.
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Re: Parents in a tough situation for retirement

Post by Katietsu »

Your parents are not old.There are apparently no problems physically or mentally that keep them from jobs that require both good physical and mental aptitude. So, I think it is quite odd that your brother is talking about a family meeting to discuss their retirement. I can not think of any 60 year old I know, that did not have extenuating circumstances, who would want at this type of meeting.

As to the people who are posting about supporting their parents, the time to consider that might come. But nothing described so far would indicate that time is now.
neverpanic
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Re: Parents in a tough situation for retirement

Post by neverpanic »

achen9291 wrote: Tue Jun 16, 2020 4:38 pm wiped out all of the retirement assets over starting a failing business in 2018 against my advice
Dad practically doesn't have a 401k or any retirement savings, neither does my mother.
1. Parents are in their upper 50s-low 60s. I will suggest they work until 70 to delay SS.
I don't know on the numbers exactly but sometimes she can bring in probably 60-100k in a year.
3. Work a part time job until they can't anymore.
Not everyone can afford to retire. Why are they even contemplating such?? Your mother has a viable business.

They took a bad risk at a bad time and it didn't work out. I'm sorry that happened to them. That comes at a very significant cost, which is having to delay being able to retire. They will need to be in hypersave mode for the next 10 years.
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
life in slices
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Re: Parents in a tough situation for retirement

Post by life in slices »

Mlm wrote: Tue Jun 16, 2020 8:20 pm Don't let your brother run this show. I would text him back and say that you are not interested in doing any financial business with family. Period. If you have a hard time standing up for yourself please seek some support. Best wishes.
To second that, I would not meet with the whole family until you have met beforehand with your brother alone to see if you can align in your discussions with you parents. I would only meet with your parents if you and your brother can come up with a solution you both agree upon, although It may be difficult.
sd323232
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Re: Parents in a tough situation for retirement

Post by sd323232 »

rustymutt wrote: Tue Jun 16, 2020 8:32 pm
sd323232 wrote: Tue Jun 16, 2020 4:53 pm STAY AWAY STAY AWAY STAY AWAY.

you are heading into a disaster full speed, this will damage your relationship with your family members.

The only thing you can control is your own life.

I understand they are your parents, but they made their life choice.

Please stay away and do you own thing, this is the best you can do for your parents, live your own successful life.

Stay from all this drama.

I get your point here. I feel much the same, only I'd use the words run, run and keep running. I'd run like the coward I am.
Please no personal attacks. Keep it professional.

OP asked for advice and I gave one. Sorry if my opinion if different from yours. You are a much better human being than me.
johnz1001
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Re: Parents in a tough situation for retirement

Post by johnz1001 »

I think I'd go to the meeting but I'd ask first for your parents to get a print out from the SS retirement estimator that says what their social security payments will be at 62, full retirement, and 70. I'd also ask them to have written down a sense of what their monthly expenses are. I'd asked for this written information as a condition to have the meeting so that you have something solid to look at.

At that point, everyone can look at what the monthly shortfall is and how best to close the gap. The most straightforward way is a job working for someone else that brings in a few thousand a month. Other than that, no funds should come from you or your brother, unless he simply wants to contribute voluntarily. I don't know see how you can be expected to cover the shortfall. It makes no sense, and no right thinking parent would expect it. I hope it works out for you. These things are tough.
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Re: Parents in a tough situation for retirement

Post by vested1 »

Various opinions offered seem to be based on the commenter's relationship with their own parents. Only the OP can determine how their own relationship plays into his decision, but I would caution him to not use this opportunity as "payback" for real or imagined failures or abuse by his parents which may or may not have occurred. Easy to say, hard to do.

My own parents were always poor and my siblings and I bailed them out repeatedly due to their bad financial decisions, having lifted ourselves out of childhood poverty. My mom worked physical jobs into her mid 80's and my dad retired healthy at age 55. They were both unusually strong. Their finances were secret from each other and us until they were repeatedly on the brink of bankruptcy, and then we would step in. Eventually, in his 80's, my dad received a disability payment from the government for an injury in WW2 of over 3k a month, above and beyond his SS and pensions, all of which he refused to share with my mom. Most of their income was spent at the casino several times a week at the slots, so they were at least partners in that respect. They died in their early 90's in quick succession, with a big mortgage and a pile of credit card bills.

You can't change people, especially old people. Do what you can achen, but resist any impulse to take the low road. With that said, I would personally not sacrifice my own retirement plans for a bad one that was cooked up by my parents and my brother, one which is destined to fail.

It sounds like you took out the mortgage because you had good credit while your parents didn't. Don't allow this situation to destroy your credit rating, which can take years to recover from.
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Re: Parents in a tough situation for retirement

Post by Dottie57 »

ram wrote: Tue Jun 16, 2020 7:30 pm
achen9291 wrote: Tue Jun 16, 2020 6:18 pm The thing I"m worried about is my dad wouldn't keep his hands off his retirement accounts several times before. I could help him set up a vanguard account again, it'll definitely be an uphill battle this late into saving for retirement.. They've always lived paycheck to paycheck.
If you were to contribute any money at all any time in the future it could perhaps be buying a SPIA for them.
This is my thought too. With a big “IF”.

ETA. If I were OP, I would start a savings account or similar for future spending needs. I am lucky in that my parents were financially prudent. Yet I still worried about late in life needs. So mentally knowing what I could do to help them if needed help. Having a plan helped.
Last edited by Dottie57 on Wed Jun 17, 2020 7:40 am, edited 1 time in total.
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greg24
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Re: Parents in a tough situation for retirement

Post by greg24 »

The focus of their financial future should be Social Security.

Working as long as possible, delaying their SS benefits as long as possible, increasing their 35 years of contributions as much as possible.

They're always going to live paycheck to paycheck. They can't be trusted with savings. SS is a SPIA they can't spend.

Flipping real estate is a great idea to take them from zero savings to negative savings.

And get out of the house situation.
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Re: Parents in a tough situation for retirement

Post by Jack FFR1846 »

I've thought about this situation and have a solid proposal if you can't stay away from this family meeting. Your brother's hare brained idea, from what I understand is to buy houses to flip. He plans to sell his own house to help raise money to do this. Well, here's the first house to buy.....the house you have the mortgage on that your parents live in. In this scenario, your brother sells his house and buys your/parent's house. That gets you out of this financial nightmare. Whatever stupid plans they all follow after that is out of your view. Once the house is out of your name....and you have the equity....exit completely.
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smitcat
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Re: Parents in a tough situation for retirement

Post by smitcat »

Jack FFR1846 wrote: Wed Jun 17, 2020 7:36 am I've thought about this situation and have a solid proposal if you can't stay away from this family meeting. Your brother's hare brained idea, from what I understand is to buy houses to flip. He plans to sell his own house to help raise money to do this. Well, here's the first house to buy.....the house you have the mortgage on that your parents live in. In this scenario, your brother sells his house and buys your/parent's house. That gets you out of this financial nightmare. Whatever stupid plans they all follow after that is out of your view. Once the house is out of your name....and you have the equity....exit completely.
This is really a great idea.
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Re: Parents in a tough situation for retirement

Post by Dottie57 »

smitcat wrote: Wed Jun 17, 2020 7:39 am
Jack FFR1846 wrote: Wed Jun 17, 2020 7:36 am I've thought about this situation and have a solid proposal if you can't stay away from this family meeting. Your brother's hare brained idea, from what I understand is to buy houses to flip. He plans to sell his own house to help raise money to do this. Well, here's the first house to buy.....the house you have the mortgage on that your parents live in. In this scenario, your brother sells his house and buys your/parent's house. That gets you out of this financial nightmare. Whatever stupid plans they all follow after that is out of your view. Once the house is out of your name....and you have the equity....exit completely.
This is really a great idea.
Agreed.
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