Parents in a tough situation for retirement

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
mouses
Posts: 4217
Joined: Sat Oct 24, 2015 12:24 am

Re: Parents in a tough situation for retirement

Post by mouses »

birdy wrote: Thu Jun 18, 2020 4:58 pm Quirkz and JackFFR1846 have given you sound advice in my opinion.

1) My mother got an inheritance about 20 years ago and I suggested a Bogleheads solution. My Dad took her money and ran down to the bank and gave it all to some "investment consultant" who promptly put her money into front load funds and proceeded to churn the account for the next 20+ years.
2) My father ask my advice about what payout he should choose for his company pension. Of course he decided to pick the payout that stops when he dies. This means my mom will have NOTHING but her social security to live on. She will have to sell the house because she will not be able to afford to continue to live there.
3) After trying to get my sister on track for retirement (without success) my sister ask me to give her son money when family services took their two kids due to them residing in a home with drug sellers/users (other family members). I decided to give them (GIVE) them a sum and hope for the best (I could afford it).

Some how now I am the "bad guy" in our family. NONE of them took my suggestions but yet since I have done well for myself it is MY fault they did not make sound financial decisions. You can only make suggestions. Don't let it hurt your feelings (like it did mine) to see them continue to struggle and make bad choices. I would give them your suggestions but step away and not let them hurt your own future. I gave my parents some tough love. My Dad and brother-in-law do not talk to me now. I can not live worried about their finances any more.....only my own.

birdy
I'm sorry for your mother. This is one of the type of things I noticed as a young woman, and why I have my and only my hands on my money.
tibbitts
Posts: 11947
Joined: Tue Feb 27, 2007 6:50 pm

Re: Parents in a tough situation for retirement

Post by tibbitts »

renue74 wrote: Tue Jun 16, 2020 8:11 pm 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.
During those 18 years parents are completely in charge: they get to say where kids are allowed to go and when, and have complete control over what money they spend and don't. And there's no back-talk: the kids do what they're told and are punished if they don't. Maybe that's slightly overstated, but to clarify, you agree that you run every aspect of a parent's life when you're supplying the same things to them that they did to you for those 18 years? Eventually of course that may happen, right down to changing diapers, but that's usually not the case with someone at 50/60 as we're dealing with here.
WillRetire
Posts: 259
Joined: Mon Jun 05, 2017 10:01 am

Re: Parents in a tough situation for retirement

Post by WillRetire »

OP:

You could send (email) your suggestions to your parents & brother in advance of the meeting, and decline to attend. Given the history of your family taking advantage of you (manipulation as you say), you cannot help them further with this matter.

They are not disabled, and both are gainfully employed (to some degree), so the current situation is not dire. They're not out on the streets. They're not impoverished or sick. Just living hand-to-mouth and incapable of planning ahead. They are not alone; many seniors are in the same boat. Social programs will be there for them.
Cruise
Posts: 1001
Joined: Mon Nov 21, 2016 7:17 pm

Re: Parents in a tough situation for retirement

Post by Cruise »

pennywise wrote: Fri Jun 19, 2020 7:33 am Seems this topic has 'run its course' at least for the OP who has not responded in any way.

I think we are talking to ourselves at this point.
You may be right. But why come here to make such a statement, rather than just no longer look at this thread if that is the way you feel? Others, including OP, may still value the contributions.
User avatar
SmileyFace
Posts: 5724
Joined: Wed Feb 19, 2014 10:11 am

Re: Parents in a tough situation for retirement

Post by SmileyFace »

toofache32 wrote: Thu Jun 18, 2020 9:49 pm
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.
I've never understood this sentiment. I didn't know my dad at all, he dad died last year and I miss him sorely. But mom is the most manipulative and deceptive person I know. I don't return her calls.
The people that have this sentiment typically have not yet learned the hard way like many of us have (give thousands to relative thinking they "need it" - watch them blow it frivolously, after a few rinse and repeats and many thousands blown you realize you have you own kids to raise and you stop being so generous (or rather foolish)). I am good with helping someone but only if they are also willing to help themself.
bltn
Posts: 882
Joined: Mon Feb 20, 2017 9:32 pm

Re: Parents in a tough situation for retirement

Post by bltn »

In the interest in taking care of my parents, I would attend the family meeting and do my absolute best to persuade them to save 25%of their take home pay and not think of taking Social Security until age 70. And convince them that private real estate investment is far too risky for them at this point in their life. I wouldn't t participate any further in their finances. If I can t convince them to to proceed as I think they should, I can distance myself. And I would sell the house to my brother or back to my parents. Even if I had to make a small down payment to obtain the mortgage.
Perkunas
Posts: 232
Joined: Tue May 10, 2016 7:24 pm

Re: Parents in a tough situation for retirement

Post by Perkunas »

OP,

I did not read the whole thread so perhaps this has been mentioned. Why not have both of your parents setup an account at the Social Security website and login to view their earnings records / anticipated benefit? That gives you an idea of how much income they'll prior to any help from you, and also gives you an idea of how much money they've earned (and/or wasted) throughout their lives.

Someone mentioned buying an SPIA; not a bad idea if you are compelled to try to help them.

Mainly I think they need to keep working. For a while. If your mother can make $60-100k from her existing business, then she should not sell it. She should keep doing it. Eventually, she can cut back.

Good luck. Tough decisions, for sure.
User avatar
FelixTheCat
Posts: 1876
Joined: Sat Sep 24, 2011 12:39 am

Re: Parents in a tough situation for retirement

Post by FelixTheCat »

I'll take a different route. Research all of the government programs that provide assistance. Find all of the local charities in your parents area: Food Banks, Meals on Wheels, Churches, Free Clinics, etc. Lastly, look at all of the utilities that offer assistance to low income individuals.

Maybe you can point them to Vanguard's digital advisor. https://investor.vanguard.com/financial ... al-advisor
Felix is a wonderful, wonderful cat.
User avatar
galawdawg
Posts: 1274
Joined: Thu Dec 14, 2017 12:59 pm
Location: Georgia

Re: Parents in a tough situation for retirement

Post by galawdawg »

pennywise wrote: Fri Jun 19, 2020 7:33 am Seems this topic has 'run its course' at least for the OP who has not responded in any way.

I think we are talking to ourselves at this point.
Seems like we are seeing more of these "hit and run" threads here lately. Perhaps when the OP doesn't return to respond to questions or even acknowledge the comments, it should be like Mission Impossible....this thread will self-destruct in....
User avatar
JoeRetire
Posts: 5782
Joined: Tue Jan 16, 2018 2:44 pm

Re: Parents in a tough situation for retirement

Post by JoeRetire »

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.

At the end of this meeting I'll most likely be deemed the selfish one who doesn't support family..
So refuse to be part of it. You cannot be forced to attend a family meeting, just as you cannot be forced to support your parents financially.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
sorethumb
Posts: 15
Joined: Mon Mar 20, 2017 9:47 pm

Re: Parents in a tough situation for retirement

Post by sorethumb »

So, OP, what did you do? It’s common courtesy ‘round here to follow up, especially after receiving a mountain of support and advice. No one is out to judge or attack you, it’s actually quite the opposite.
jharkin
Posts: 2596
Joined: Mon Mar 28, 2016 7:14 am
Location: Boston suburbs

Re: Parents in a tough situation for retirement

Post by jharkin »

I’d tread cautiously. The downsides of intervening are significant, and really it’s their business, not yours.

Your parents are barely 60? Mine are into their late 70s, working full time, zero savings. They get by, yours will too. A majority of retirees in this country live on social security alone.
McJammer
Posts: 35
Joined: Mon Apr 22, 2019 4:05 pm

Re: Parents in a tough situation for retirement

Post by McJammer »

jharkin wrote: Thu Jun 25, 2020 4:39 pm I’d tread cautiously. The downsides of intervening are significant, and really it’s their business, not yours.

Your parents are barely 60? Mine are into their late 70s, working full time, zero savings. They get by, yours will too. A majority of retirees in this country live on social security alone.
A majority of retirees live on SS alone? Can that be true?

Adding that there is an entire book series called Boundaries. It's excellent. Boundaries, Boundaries in Marriage, etc. Boundaries on Money isn't written yet but should be!

I agree with most responses that you should accept your family as they are and not get involved in this meeting, but if you do, no money should be given - past behavior is a good indication of future behavior.
Ependytis
Posts: 92
Joined: Mon Oct 17, 2016 11:10 am

Re: Parents in a tough situation for retirement

Post by Ependytis »

Just because your parents chose to go into the fires of hell doesn’t mean you need to follow them. With that in mind, If it were me, I would do four things.
1) For the past, I would disentangle myself from their house and, as others have said, sell it to your brother for a good price.
2) Emotionally I would be available to them in four ways either a) just listen to them, or b) listen and try to understand them, or c) listen, try to understand, and question them or d) listen, try to understand, question, and challenge them. Let them pick what level they want.
3) Financially I would help them in anyway I could where I didn’t feel resentful and it didn’t affect my retirement. However there would be conditions. One of the conditions would be they would have to take a financial planning class like with Dave Ramsey. Financially helping them may be as simple as adding them to your cell phone service or paying for utilities.
4) In the future, if they asked for more. I would just reiterate what I was going to do for them and leave it at that. If they continued on, again I would just reiterate what I was willing to do for them.
User avatar
22twain
Posts: 2559
Joined: Thu May 10, 2012 5:42 pm

Re: Parents in a tough situation for retirement

Post by 22twain »

McJammer wrote: Fri Jun 26, 2020 9:28 pm A majority of retirees live on SS alone? Can that be true?
DW and I are retired (71 and 66), living in a paid-off house in a small town in "flyover country." Our total expenses last year, excluding income taxes, were about $45K. This includes a one-off lump expense of about $7K, but different years will have other lump expenses, so let's leave it in the total.

We both worked in similar careers and salaries, and would each collect $27K-$28K of SS if we had started at age 66. If this were our only source of income, taxes would be low and SS would easily cover our expenses and taxes. In a crunch, we could eliminate charitable and other donations, and one car, and thereby save about $8K.

We actually also have significant savings in tax-deferred and taxable accounts, which increases our taxes, especially after we both need to take RMDs. But we're also both delaying SS until age 70, which will cover the extra taxes too, at the cost of drawing down some of our savings.
Help save endangered words! When you write "princiPLE", make sure you don't really mean "princiPAL"!
JackoC
Posts: 1738
Joined: Sun Aug 12, 2018 11:14 am

Re: Parents in a tough situation for retirement

Post by JackoC »

McJammer wrote: Fri Jun 26, 2020 9:28 pm
jharkin wrote: Thu Jun 25, 2020 4:39 pm I’d tread cautiously. The downsides of intervening are significant, and really it’s their business, not yours.

Your parents are barely 60? Mine are into their late 70s, working full time, zero savings. They get by, yours will too. A majority of retirees in this country live on social security alone.
1. A majority of retirees live on SS alone? Can that be true?

2. I agree with most responses that you should accept your family as they are and not get involved in this meeting, but if you do, no money should be given - past behavior is a good indication of future behavior.
1. I think a precise statistic would get hung up on stuff like a paid off house, other public subsidies (like subsidized senior housing), family help, etc. would figure in. But, a simple stat is that US median household NW 65-74 and 75+ are $224k and $265k. That's not a huge supplement to SS at the median at a 4% assumed withdrawal though it's something. Again also depending how you factor in owned homes which probably represent most of that NW at the median. And half, obviously, are below the median. Although some have pensions the PV of which might not be counted in net worth. Anyway a large number of retirees live just on SS or virtually so, I've no doubt. Maybe it's not literally a majority.

2. I agree with the consensus. Like a lot of such situations it seems driven by perceived pressure on OP other people might not feel. Others might feel, 'family decides to pursue a new business with me not there, good luck to them'. And it is different than parents already retired on just SS who can't make it, in terms of true necessities. Then, IMO, 'you can't turn your back on family' would kick in. Not with parents still of working age entertaining dodgy investment/business ideas. I think all you have to do there is tell them your opinion of the venture, honestly though also nicely if possible.

https://www.nerdwallet.com/article/fina ... rth-by-age
brandy
Posts: 386
Joined: Thu Mar 15, 2018 9:45 pm

Re: Parents in a tough situation for retirement

Post by brandy »

JoeRetire wrote: Fri Jun 19, 2020 3:36 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. At the end of this meeting I'll most likely be deemed the selfish one who doesn't support family..
So refuse to be part of it. You cannot be forced to attend a family meeting, just as you cannot be forced to support your parents financially.
Actually...https://en.wikipedia.org/wiki/Filial_re ... ility_laws

"...Filial responsibility laws (filial support laws, filial piety laws) are laws in the United States that impose a duty, usually upon adult children, for the support of their impoverished parents or other relatives.[1] In some cases the duty is extended to other relatives. Such laws may be enforced by governmental or private entities and may be at the state or national level..."

I live in a state that has no such law. The ex lives in one that does, and it is enforced, unless that parent abandoned those kids. There is indisputable proof of that abandonment. Good, because the ex would probably try to have it enforced...
cotidiae
Posts: 3
Joined: Sat Jun 27, 2020 6:28 pm

Re: Parents in a tough situation for retirement

Post by cotidiae »

I think your plan is about the only solution short of a steady investment in lottery tickets. Flipping houses is a ridiculous proposition with their skills (or lack thereof). A slight variation on your approach would be to put whatever assets they can pull together from the sale of the house into an 'in-law' apartment addition to your brothers residence. This would likely reduce their living costs and partly compensate your brother for shouldering all of the burden for your parents.
Post Reply