In Laws Retirement Nest Egg

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Bogle1981
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In Laws Retirement Nest Egg

Post by Bogle1981 » Mon Apr 15, 2019 2:48 pm

Bogleheads,

Need some advice about the financial situation of my in laws. I don't know much, but I do know the following:
- They are 62 years old. MIL has never worked, FIL just retired (much to my surprise)
- They have about $700k in Retirement savings, most of which is invested.
- Adding in their home equity, their full net worth is aprx. $1M (or slightly less).
- Due to health conditions, they are not eligible for Long Term Care insurance.
- They will have social security supplementation, although I'm not sure how much (they never broke $100k in annual income)
- They live a relatively frugal life (home paid off, eat out only twice per week, 1 vacation per year, etc.)

Here is my concern: I was surprised that they decided to retire at 62 with what I consider to be barely enough to scrape by. My spouse and I are personally very well off and so we would never let anything happen to them, but personally I am not comfortable spending our hard earned money to keep them afloat if they were to run out of money, especially if they are not working themselves. My spouse has encouraged them to find some part time work, but they do not take the advice. My side of the family gifts us the max amout each year. I woud never expect that from my in laws, but I draw the line in a situation where they would have to take from us due to not being able to support themselves.

Here are my questions:
1. Do you think $700k in retirement savings is enough to scrape by between the two of them? Assuming they will live 20-30 more years.
2. What are our options if they do run out?
3. How much should I push on this? As the breadwinner, am I justified in raising concerns?

NotWhoYouThink
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Re: In Laws Retirement Nest Egg

Post by NotWhoYouThink » Mon Apr 15, 2019 3:13 pm

You are mad because you think they might ask for money? Let it go. Most people don't have nearly $700K in retirement. Without knowing their pension income, if any, or their expenses we don't know if they will ever ask.

If they ask, then you can decide what to do. Until then, congratulate your FIL on his retirement and let it go.

Triple digit golfer
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Re: In Laws Retirement Nest Egg

Post by Triple digit golfer » Mon Apr 15, 2019 3:19 pm

They are 62 with a paid for house, $700k, and are eligible for Social Security.

I would guess that they are better off than 90%+ of people their age.

But none of that should be relevant to you.

How do you know so much about their financial situation? Why are you thinking about them running out of money? Have they ever asked you or your wife for money before?

There is nothing for you to push on. What exactly will you push? "Sorry Pops, but your daughter and I think you need to keep working."

I doubt this was your intention, but your post sounds like more of a brag than anything. Let it go. Your in laws want to retire. They never made more than $100k in their lives, yet were able to pay for a house, raise a kid (or more?), and accumulate $700k. Clearly they are frugal, smart, and capable.

If you say anything at all, it should be "Congratulations on your retirement!"

trustquestioner
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Re: In Laws Retirement Nest Egg

Post by trustquestioner » Mon Apr 15, 2019 3:20 pm

Imagine raising your family and saving 700k on a modest income, plus a paid off house, retiring to a modest lifestyle and promptly having your kid’s spouse raising a stink because of worries you might eventually ask for money.

Say congratulations and redirect the energy you’re spending thinking about this to gratitude your parents are giving you so much money.

jebmke
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Re: In Laws Retirement Nest Egg

Post by jebmke » Mon Apr 15, 2019 3:22 pm

Many people get by in retirement with much much less. I never get involved in anyone's financial life - even if they ask.
When you discover that you are riding a dead horse, the best strategy is to dismount.

123
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Re: In Laws Retirement Nest Egg

Post by 123 » Mon Apr 15, 2019 3:22 pm

Bogle1981 wrote:
Mon Apr 15, 2019 2:48 pm
2. What are our options if they do run out?
If they spend down their assets, besides their home, and their income is low they may qualify for Supplemental Security (SSI) Income which is operated by the Social Security Administration. This is a "needs" based program that guarantees a certain minimal income if their existing income is below that level. The level varies by state. You may want to research the qualification factors and income level provided for in your state. Some states are high and some states are very low.

The FIL may have retired in part due to heath concerns or other issues which you may not be aware of.

If they've got $700K of financial assets that would generally be regarded as significant.

I would recommend that you just let them enjoy their life.
The closest helping hand is at the end of your own arm.

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FlyAF
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Re: In Laws Retirement Nest Egg

Post by FlyAF » Mon Apr 15, 2019 3:27 pm

If you're so well off why are you still accepting money from your parents?

It's nice of you not to "expect" that same gift from your in-laws.

gmc4h232
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Re: In Laws Retirement Nest Egg

Post by gmc4h232 » Mon Apr 15, 2019 3:28 pm

Oh man I can relate. My observations in no particular order based on similar experience:

You can raise all the concerns you want, it wont make a difference. They dont want your advice and probably dont even like you.

If they are actively involved in their finances, then hopefully they will adjust their lifestyle to make that 700k last. If they run out of money, then you will support them or get divorced.

delamer
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Re: In Laws Retirement Nest Egg

Post by delamer » Mon Apr 15, 2019 3:36 pm

With $700,000 in assets, they can withdraw about $30,000 per year and not have to worry about running out of money. Familiarize yourself with the concept of Safe Withdrawal Rates.

Someone who earned $75,000 may receive about $21,000 a year in Social Security, plus a spousal benefit of $10,500 at age 62

That gives them $61,500 to cover all expenses, including minimal federal income taxes, assuming the Social Security is correct.

Sounds like they could do OK in retirement without you. What you consider “barely enough to scrape by” probably doesn’t accurately reflect their needs.

You don’t have standing to raise any concerns unless they ask for help. Being the “breadwinner” — whatever that means — has nothing to do with it.

JoeRetire
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Re: In Laws Retirement Nest Egg

Post by JoeRetire » Mon Apr 15, 2019 3:44 pm

Bogle1981 wrote:
Mon Apr 15, 2019 2:48 pm
They will have social security supplementation, although I'm not sure how much (they never broke $100k in annual income)
What does "supplementation" mean here?
They live a relatively frugal life (home paid off, eat out only twice per week, 1 vacation per year, etc.)
"Relatively frugal" can mean completely different things to different people. Without knowing how much they actually need, you can't tell if they are just fine or in dire trouble.
My spouse and I are personally very well off and so we would never let anything happen to them, but personally I am not comfortable spending our hard earned money to keep them afloat if they were to run out of money, especially if they are not working themselves.
Okay. So you would never let anything happen to them, but you aren't comfortable spending any of your money to do so...
My side of the family gifts us the max amout each year. I woud never expect that from my in laws
I would hope not.
I draw the line in a situation where they would have to take from us due to not being able to support themselves.
So you would never let anything happen to them, but draw the line at helping them...
Do you think $700k in retirement savings is enough to scrape by between the two of them? Assuming they will live 20-30 more years.
No way to know without a lot more details (actual expenses, social security benefits, etc). "Barely enough to scrape by" for a family that is well off is quite different from a family used to living frugally.

I do know that many (perhaps most) retirees scrape by on even less.

You may very well be worrying about nothing.
What are our options if they do run out?
Help. Or don't help. Most likely your spouse will make that decision.
How much should I push on this? As the breadwinner, am I justified in raising concerns?
Nope.

Being the breadwinner doesn't give you permission to get involved with your in-laws finances without their having specifically requested your help first.

About the only thing you can do is talk to your spouse. If your spouse shares your concerns you could propose paying for an hourly fee-only fiduciary financial planner's time. The planner could help your in-laws review their assets and goals, and help them come up with a plan, help them with their investments, come up with a social security claiming strategy, etc.

Make sure your spouse is completely on board with the idea first. And make sure it's your spouse who discusses the idea with the parents. It could be your retirement "gift" to them. And it gets you off the hook for any advice that may not work out well. Remember - you break it, you own it.

Don't put yourself in the middle of this. Being the breadwinner doesn't give you that privilege, and would be a great way to ruin your family situation.
Last edited by JoeRetire on Wed Apr 17, 2019 5:58 pm, edited 5 times in total.

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cheese_breath
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Re: In Laws Retirement Nest Egg

Post by cheese_breath » Mon Apr 15, 2019 3:48 pm

Bogle1981 wrote:
Mon Apr 15, 2019 2:48 pm
Here are my questions:
1. Do you think $700k in retirement savings is enough to scrape by between the two of them? Assuming they will live 20-30 more years.
Scrape by. No. I think it's enough to live comfortably so long as they don't go wild in retirement. But if they were that kind of people they wouldn't have accumulated $700K by now. I retired at age 56 with less than that, 3-4 years left to pay on the house, and a spouse who never worked either. I now have more than when I retired. (I'm 78 now) Are you judging them based on your living expenses? Remember, they're frugal not spendthrifts.

2. What are our options if they do run out?
Some else already said it. Help them or get divorced.

3. How much should I push on this? As the breadwinner, am I justified in raising concerns?
No. Keep your nose out of their business.
The surest way to know the future is when it becomes the past.

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tyrion
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Re: In Laws Retirement Nest Egg

Post by tyrion » Mon Apr 15, 2019 3:49 pm

Bogle1981 wrote:
Mon Apr 15, 2019 2:48 pm

- They are 62 years old. MIL has never worked, FIL just retired (much to my surprise)
- They have about $700k in Retirement savings, most of which is invested.
- Adding in their home equity, their full net worth is aprx. $1M (or slightly less).
- Due to health conditions, they are not eligible for Long Term Care insurance.
- They will have social security supplementation, although I'm not sure how much (they never broke $100k in annual income)
- They live a relatively frugal life (home paid off, eat out only twice per week, 1 vacation per year, etc.)


Here are my questions:
1. Do you think $700k in retirement savings is enough to scrape by between the two of them? Assuming they will live 20-30 more years.
2. What are our options if they do run out?
3. How much should I push on this? As the breadwinner, am I justified in raising concerns?
So they had modest means in terms of income, yet managed to pay off a house, fund retirement accounts of 700k, and retire at a reasonable age? I don't think you have any reason to worry. And you mention they live a relatively frugal life.

Their financial facts are likely very different from yours.

No, you as the 'breadwinner' you are not justified in raising concerns. Let them live their life and be happy for them.

ohai
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Re: In Laws Retirement Nest Egg

Post by ohai » Mon Apr 15, 2019 3:51 pm

If you're concerned about their finances, sit down and have a discussion about their financial plan.

I don't know what "very well off" means to you, but sounds like you can afford to bail out the people who spent all their money raising your wife if it comes down to it.

GoldenFinch
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Re: In Laws Retirement Nest Egg

Post by GoldenFinch » Mon Apr 15, 2019 4:11 pm

Your in-laws are fine. You are creating or anticipating a problem that doesn’t exist. It sounds like you come from a different economic background than your spouse. Many people retire at 62 with much less and do fine. Focus on your immediate family and don’t worry about this stuff.
Last edited by GoldenFinch on Thu Apr 18, 2019 9:40 am, edited 1 time in total.

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Johnsson
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Re: In Laws Retirement Nest Egg

Post by Johnsson » Mon Apr 15, 2019 4:57 pm

I agree with many others here... they seem to be in very good financial shape. $5,000 a month is a pretty big income when you've lived a frugal life.

I expect their nest egg will continue to increase (they may likely never touch that money) and you will be surprised when there's a hefty inheritance. Or not, if you offer your uninformed opinion.

It's none of your business unless they ask for your help... which is unlikely.

chessknt
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Re: In Laws Retirement Nest Egg

Post by chessknt » Mon Apr 15, 2019 5:13 pm

Gifted the Max every year? So 15kx4=60k annually tax free in money you don't need? You are worried about maybe having to spend your 'hard earned money' on them when you are getting the annual take home pay of more than half of the USA by virtue of your birth?

Sounds like you can easily supplement them without ever spending money you earn if it ever came to it as far as I can see.

TN_Boy
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Re: In Laws Retirement Nest Egg

Post by TN_Boy » Mon Apr 15, 2019 6:29 pm

Bogle1981 wrote:
Mon Apr 15, 2019 2:48 pm
Bogleheads,

Need some advice about the financial situation of my in laws. I don't know much, but I do know the following:
- They are 62 years old. MIL has never worked, FIL just retired (much to my surprise)
- They have about $700k in Retirement savings, most of which is invested.
- Adding in their home equity, their full net worth is aprx. $1M (or slightly less).
- Due to health conditions, they are not eligible for Long Term Care insurance.
- They will have social security supplementation, although I'm not sure how much (they never broke $100k in annual income)
- They live a relatively frugal life (home paid off, eat out only twice per week, 1 vacation per year, etc.)

Here is my concern: I was surprised that they decided to retire at 62 with what I consider to be barely enough to scrape by. My spouse and I are personally very well off and so we would never let anything happen to them, but personally I am not comfortable spending our hard earned money to keep them afloat if they were to run out of money, especially if they are not working themselves. My spouse has encouraged them to find some part time work, but they do not take the advice. My side of the family gifts us the max amout each year. I woud never expect that from my in laws, but I draw the line in a situation where they would have to take from us due to not being able to support themselves.

Here are my questions:
1. Do you think $700k in retirement savings is enough to scrape by between the two of them? Assuming they will live 20-30 more years.
2. What are our options if they do run out?
3. How much should I push on this? As the breadwinner, am I justified in raising concerns?
OP,

To be honest with you, I wondered if this post was just trolling. Mostly because of this comment: "barely enough to scrape by" for a couple with 700k in investments and a paid off house worth about 300k.

However, in the spirit of maybe your post wasn't quite worded the way you meant, I'll make the following comments:

1) Their net worth is probably top 20% to 25% for people their age. I.e. they are doing well. It is puzzling that you do not know this.
2) To estimate how well a couple is set for retirement, you have to understand their expenses and their sources of income.
a) They will have some SS income. How much? Is there any other income (maybe a pension, etc)
b) They can draw from their investment portfolio; a rough guide is maybe 4% a year, adjusted for inflation (so $28,000 the first year)
c) How much do they spend a year? This includes not just the monthly bills, but accounting for occasional big expenses (new car, etc).
d) How will they pay for healthcare? Do they have retiree healthcare? Medicare starts at 65.

The main concern I'd have is that as FIL retired at 62, it is quite possible he is taking SS early, which is generally not optimal. However, depending on their expenses, it may be absolutely okay. Suppose they spend 40 to 45k a year, and SS is 20k. They should be fine, IF they have a plan for medical insurance.

It seems like you not familiar with how people generally evaluate "readiness to retire." Even if there is a problem, you would need to do considerable studying on your own before you would be in a position to offer counsel (assuming there is a problem which cannot be ascertained from what you have said).

MathWizard
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Re: In Laws Retirement Nest Egg

Post by MathWizard » Mon Apr 15, 2019 7:01 pm

Using $ 1 Million net worth from $700K investments + $300K house value

From:

Code: Select all

https://dqydj.com/net-worth-by-age-calculator-united-states/
puts a 62 year old in the 79-th percentile of net worth among those of his/her age cohort.

Hardly a destitute couple.

A household led by a 60-64 year old with a net worth of $1,000,000.00 was in net worth centile 79% in 2016.
This centile ranged from $943,711.41 to $1,018,955.76.
Around 2,416,495 of the 11,507,120 households in this age range had $943,711.41 or more in net worth.

Ybsybs
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Re: In Laws Retirement Nest Egg

Post by Ybsybs » Mon Apr 15, 2019 7:09 pm

Bogle1981 wrote:
Mon Apr 15, 2019 2:48 pm
[cut]

Here are my questions:
1. Do you think $700k in retirement savings is enough to scrape by between the two of them? Assuming they will live 20-30 more years.
2. What are our options if they do run out?
3. How much should I push on this? As the breadwinner, am I justified in raising concerns?
Here are my answers (strongly influenced by my own inlaw situation):
1. Probably not, and that may not be the actual number that they have.
2. Help them or don't. If your wife is okay with not, there are government programs for destitute people over 65. But if she's not okay with not helping, you will probably be in a lot of arguments with her about this for many years to come.
3. You are absolutely justified in talking it over with your spouse. You will probably get absolutely no where talking it over with the inlaws, even if (maybe especially if) they consider you and your wife to be their backup plan if they use up their own resources.

dknightd
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Re: In Laws Retirement Nest Egg

Post by dknightd » Mon Apr 15, 2019 7:17 pm

Likely they will be fine. Don't worry about it until you need to

Tdubs
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Re: In Laws Retirement Nest Egg

Post by Tdubs » Mon Apr 15, 2019 7:18 pm

The day of reckoning you fear is 20 years and a reverse mortgage away, if ever. Do nothing. You will just make your family mad at you.

Listen to Calvin Coolidge on this one: "Four-fifths of all our troubles would disappear, if we would only sit down and keep still."

Sconie
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Re: In Laws Retirement Nest Egg

Post by Sconie » Mon Apr 15, 2019 8:17 pm

As I've gotten older, I've learned to pick my battles. I suggest that you consider doing the same. That said, the "battle" you are contemplating is not worth fighting and not worth harming your marriage over. Let it go.
I know that you think you understand what you thought I said, but I'm not sure you realize that what I said is necessarily what I meant......

michaeljc70
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Re: In Laws Retirement Nest Egg

Post by michaeljc70 » Mon Apr 15, 2019 8:20 pm

"They live a relatively frugal life". That can mean a lot of different things (especially depending on location). Without knowing their expenses, I am not sure how you can be alarmed. It seems like they will be having retirement income close to the national average income, have no mortgage and live frugally so they will probably be fine.

DonIce
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Re: In Laws Retirement Nest Egg

Post by DonIce » Mon Apr 15, 2019 8:31 pm

The expectations on this forum regarding the amounts needed to adequately retire are about an order of magnitude out of step with the general population. No, you don't need to be well into the mid 7 figures of net worth to retire safely. Having $1M net worth puts them at top 10% of the population, and top 20% at age 62. They are gonna be just fine unless something catastrophic happens to them (and if it does, 3 more years of savings won't have mattered). Besides, parents raise kids for ~20 years and put a TON of money into them, possibly getting a bit of financial help back in old age is hardly an undue burden.

HomeStretch
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Re: In Laws Retirement Nest Egg

Post by HomeStretch » Mon Apr 15, 2019 8:38 pm

Your in-laws will most likely be fine financially. My parents and in-laws retired with lower net worth and $50k in annual social security income. In their 80s now and still doing fine financially.

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Nestegg_User
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Re: In Laws Retirement Nest Egg

Post by Nestegg_User » Mon Apr 15, 2019 8:45 pm

OP

Actually, the best way to help them now is to take part of the gifts from your family ($60k ?, if it's maxed, as you alluded) and gift them, say $45 k for a few years so that they DELAY his SS and then they can have significantly more SS and better prospects (if needed) in the following years.
... but personally I'd do nothing.... and certainly wouldn't in the tone you give in your post.

aida2003
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Re: In Laws Retirement Nest Egg

Post by aida2003 » Mon Apr 15, 2019 9:00 pm

Bogle1981 wrote:
Mon Apr 15, 2019 2:48 pm
My side of the family gifts us the max amout each year. I woud never expect that from my in laws, but I draw the line in a situation where they would have to take from us due to not being able to support themselves.
If you're 'very well off' why are you taking handouts from your own family? Why can't that be donated for a better cause?
Not sure what you're exactly driving at, but perhaps not working will help the in-laws relax more and regain some of the health benefits. It sounds that you're a serious workaholic who feels contempt at people who are not at par with your your pot of money.

I don't know, but this OP sounds very strange: he's either living in unreal world or he's doing so well financially that has lost touch reality with people earning less than six figures, but despite living himself in the gravy he takes money from his side of the family...weird indeed....

tibbitts
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Re: In Laws Retirement Nest Egg

Post by tibbitts » Mon Apr 15, 2019 10:11 pm

This is one of those threads you hope someone new to Bogleheads doesn't read as their first exposure to the forum.

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friar1610
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Re: In Laws Retirement Nest Egg

Post by friar1610 » Mon Apr 15, 2019 10:12 pm

I agree with the tenor of most of the advice you've gotten. It struck me as strange that one one hand they're "frugal" but on the other hand they eat out "only" twice a week. And still, in their frugality, manage an annual vacation. To lotsa retired couples that would be a very welcomed step above frugality.
Friar1610

SoonerD
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Re: In Laws Retirement Nest Egg

Post by SoonerD » Mon Apr 15, 2019 10:15 pm

Bogle1981 wrote:
Mon Apr 15, 2019 2:48 pm
Here is my concern: I was surprised that they decided to retire at 62 with what I consider to be barely enough to scrape by. Are you a snob or a troll? Or is there another explanation for your statement about retired millionaire just scraping by?

My spouse and I are personally very well off and so we would never let anything happen to them, but personally I am not comfortable spending our hard earned money to keep them afloat You do realize that it is 100% you're wife's money while you're married and probably 50% hers when she divorces you?if they were to run out of money, especially if they are not working themselves.
Time to grow up and stop taking allowance from your parents!

fourwaystreet
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Re: In Laws Retirement Nest Egg

Post by fourwaystreet » Mon Apr 15, 2019 10:25 pm

Oh so your FIL should have discussed his retirement plans in advanced with you? You sound much more entitled then either of my SIL's but it either of my SIL's broached this topic or questioned my choices on this matter, I think I would be questioning my daughters about their choice of a husband.
When someone you love becomes a memory, the memory becomes a treasure.

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whodidntante
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Re: In Laws Retirement Nest Egg

Post by whodidntante » Mon Apr 15, 2019 10:25 pm

I hope your millionaire in laws somehow manage to abide. Perhaps they could take up bowling.

TN_Boy
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Re: In Laws Retirement Nest Egg

Post by TN_Boy » Mon Apr 15, 2019 10:37 pm

Ybsybs wrote:
Mon Apr 15, 2019 7:09 pm
Bogle1981 wrote:
Mon Apr 15, 2019 2:48 pm
[cut]

Here are my questions:
1. Do you think $700k in retirement savings is enough to scrape by between the two of them? Assuming they will live 20-30 more years.
2. What are our options if they do run out?
3. How much should I push on this? As the breadwinner, am I justified in raising concerns?
Here are my answers (strongly influenced by my own inlaw situation):
1. Probably not, and that may not be the actual number that they have.
2. Help them or don't. If your wife is okay with not, there are government programs for destitute people over 65. But if she's not okay with not helping, you will probably be in a lot of arguments with her about this for many years to come.
3. You are absolutely justified in talking it over with your spouse. You will probably get absolutely no where talking it over with the inlaws, even if (maybe especially if) they consider you and your wife to be their backup plan if they use up their own resources.
1 million in net worth and a paid off house*, age 62, and they probably cannot "scrape by." Sure, they won't be vacationing in Europe a lot, but .... "scrape by??" And "there are government programs for destitute people over 65." I don't think the government will help much after they find out about the 700k.

Amazing.

But we don't actually know their expenses, health care plans, or SS numbers. There are ways they could have problems retiring at 62, despite the fact they are, given the information we have, in better financial shape than most people in the country. The OP has not come back to answer any of the relevant questions.

It is true that if they don't really have 700k the situation might be worse, but is there a reason to think that?

I'm with tibbitts ... this is a strange thread. I have to keep the reading the OP to make sure I'm didn't imagine it.

* the 1 million networth puts them in the top 20% of people their age as noted, and given their house is paid off they are in better shape than some of those 20%

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tennisplyr
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Re: In Laws Retirement Nest Egg

Post by tennisplyr » Tue Apr 16, 2019 6:51 am

They will be fine assuming they follow standard guidelines for withdrawal. I retired at roughly their age with lower assets 8 years ago. Using lots of common sense and investment/withdrawal principles, things have been great. Like many have said, they have way more than most.
Those who move forward with a happy spirit will find that things always work out.

sjt
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Re: In Laws Retirement Nest Egg

Post by sjt » Tue Apr 16, 2019 7:13 am

DonIce wrote:
Mon Apr 15, 2019 8:31 pm
The expectations on this forum regarding the amounts needed to adequately retire are about an order of magnitude out of step with the general population.
x2 - it's incredible how out of touch some can be.

Looking at Firecalc, $700k with a $30k annual draw down has a 91% chance of lasting 30 years, but on average will grow to $1.1M during that timeframe. Likely it needs to last until social security kicks in, then portfolio spending will be reduced even more.

personally I am not comfortable spending our hard earned money to keep them afloat
The "hard earned" money you are gifted each year? Remember OP, "The love of money is the root of all evil". If you'd sooner hoard your pile of cash than help your in laws in the extremely unlikely case they will actually need any help, you need to reevaluate your priorities in life.

Best of luck.
"The one who covets is the poorer man, | For he would have that which he never can; | But he who doesn't have and doesn't crave | Is rich, though you may hold him but a knave." - Wife of Bath tale

trustquestioner
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Re: In Laws Retirement Nest Egg

Post by trustquestioner » Tue Apr 16, 2019 7:18 am

The only person involved who is receiving someone else’s “hard earned money” is the OP.

Get off the dole!

Retired2013
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Re: In Laws Retirement Nest Egg

Post by Retired2013 » Tue Apr 16, 2019 7:27 am

delamer wrote:
Mon Apr 15, 2019 3:36 pm
With $700,000 in assets, they can withdraw about $30,000 per year and not have to worry about running out of money. Familiarize yourself with the concept of Safe Withdrawal Rates.

Someone who earned $75,000 may receive about $21,000 a year in Social Security, plus a spousal benefit of $10,500 at age 62

That gives them $61,500 to cover all expenses, including minimal federal income taxes, assuming the Social Security is correct.

Sounds like they could do OK in retirement without you. What you consider “barely enough to scrape by” probably doesn’t accurately reflect their needs.

You don’t have standing to raise any concerns unless they ask for help. Being the “breadwinner” — whatever that means — has nothing to do with it.
+1 and Federal tax would be about $1,000. State could be $0. Net $60k.

What are their expenses?

We live in a LCOL area and live very nicely on less than $60k.

Flyer24
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Re: In Laws Retirement Nest Egg

Post by Flyer24 » Tue Apr 16, 2019 9:28 am

I think the OP should be asking the in-laws for advice. They have obviously done quite well without any family handouts.

bene1
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Re: In Laws Retirement Nest Egg

Post by bene1 » Tue Apr 16, 2019 9:34 am

Bogle1981 wrote:
Mon Apr 15, 2019 2:48 pm
... I am not comfortable spending our hard earned money to keep them afloat if they were to run out of money...

... My side of the family gifts us the max amout each year.
Rather than earned money, give the in-laws the gifted money?

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Bogle1981
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Re: In Laws Retirement Nest Egg

Post by Bogle1981 » Tue Apr 16, 2019 11:55 am

Thanks very much to all for your feedback and insight. I did not realize that this situation is quite standard, and after reading several of your responses, I agree that I might be a bit out of touch. This has been a good lesson learned for me.

Regarding the money gifted to us from my family - this isn't money that we spend, other than annual donations to a foundation set up by a family member. We plan to filter this money directly to our kids, as our parents have done for us. I do not think it is appropriate to spend these funds on my in laws. That being said, I realize I am being quite judgemental about my in-laws. In my family of origin, parents would never expect, much less accept, financial assistance from their children. Quite the opposite, as they had goals to grow wealth and preserve through generations. I realize not everyone holds these values, which I understand. I by no means at all expect my in laws to give us anything, but it makes me uncomfortable that they are OK with relying on us if they do run out of money. It is a difference in core values, but I am working very hard to change my perspective.

The main thing concerning me while writing the post was not so much helping them out here and there with minor expenses, but more so the risk of having to pay for nursing home care / assisted living, which often runs $8-10k a month, as it did with both of my grandparents. They were well equipped to pay for it, but I do not think my in laws would be able to afford that. So what do we do then? What are our options? Do we need to factor this into our financial plan?

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RickBoglehead
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Re: In Laws Retirement Nest Egg

Post by RickBoglehead » Tue Apr 16, 2019 12:02 pm

Here's the challenge as I see it. We are under no legal obligation to pay for care for our parents / in-laws. It's a personal choice. My in-laws didn't plan for anything. They were miserly spenders, and all of their investments up to age 60 were in company stock. Luckily for them, that company was bought for cash, and they got a small windfall. After several brokers had their way with them, I took over in 2000, and grew their funds into enough to support them until they died, with funds left over. Had they run out, and veteran's aid not been adequate, we would have jumped in at some point.

My mother also didn't plan. She chose to overspend for years, didn't work, and would have run out of money at some point. She counted on one family member bailing her out, and they did, and so she'll continue to overspend for her entire life. Before the bailout, all her children made clear that they would not bail her out. I suspect 1 or 2 of us would have kept to that promise, the other would have caved.

It's a personal decision. If it comes to that, you decide and live with your decision.
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Flyer24
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Re: In Laws Retirement Nest Egg

Post by Flyer24 » Tue Apr 16, 2019 12:05 pm

Quit worrying so much. The average couple retires with a fraction of that amount. Your in laws will be fine. Don’t let it concern you. It is their business. Most workers would be jealous to retire with a million dollar net worth. You need to do some research on the reality of retirements. Many folks have nothing but social security. Your in laws have done a remarkable job.

JoeRetire
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Re: In Laws Retirement Nest Egg

Post by JoeRetire » Tue Apr 16, 2019 12:07 pm

Bogle1981 wrote:
Tue Apr 16, 2019 11:55 am
I by no means at all expect my in laws to give us anything, but it makes me uncomfortable that they are OK with relying on us if they do run out of money.
Have they actually told you that they are OK with relying on you if they run out of money?
Or is this just something you are hearing in your head?
The main thing concerning me while writing the post was not so much helping them out here and there with minor expenses, but more so the risk of having to pay for nursing home care / assisted living, which often runs $8-10k a month, as it did with both of my grandparents. They were well equipped to pay for it, but I do not think my in laws would be able to afford that. So what do we do then? What are our options? Do we need to factor this into our financial plan?
Read up about Medicaid. That's what people with no means do when they need nursing home care. In the case of your in-laws, they would first spen down all their assets, potentially sell their house, then when they run out of funds, go on Medicaid.

So instead of you supporting them, they and you would rely on other taxpayers to support them. And if that is your desire, then you don't need to factor any support into your financial plan. Your wife may have a different opinion.

Thegame14
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Re: In Laws Retirement Nest Egg

Post by Thegame14 » Tue Apr 16, 2019 12:18 pm

so you gladly take money from your parents and think that is 100% ok even though you claim you are well off, but yet having to potentially, maybe, not likely but god forbid your in laws live a long life, your first concern is having to help them out. How about if they outlive the $700K, you are happy as heck to still have them with you, would you be happier if they passed away tomorrow and gave you a bigger inheritance..... Seems very selfish to me....

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Bogle1981
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Re: In Laws Retirement Nest Egg

Post by Bogle1981 » Tue Apr 16, 2019 12:38 pm

Thegame14 - That is a bit extreme. Of course we would help them if something happened. It would just me much easier to do so if 1. They were still working (they are still perfectly healthy), and 2. They didn't make comments here and there about relying on us if anything goes wrong. That doesn't necessarily mean they expect it, but I do sense a bit of seriousness in their comments. I'm just frustrated about it, but I sincerely appreciate everyone's perspectives and apologize to any I have offended.

[OT comment removed by moderator prudent]

fourwaystreet
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Re: In Laws Retirement Nest Egg

Post by fourwaystreet » Tue Apr 16, 2019 12:45 pm

In your original post you indicated that your in laws have health concerns, yet in your recent post you stated that they were perfectly healthy. Which one is it?
When someone you love becomes a memory, the memory becomes a treasure.

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greg24
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Re: In Laws Retirement Nest Egg

Post by greg24 » Tue Apr 16, 2019 12:49 pm

Bogle1981 wrote:
Tue Apr 16, 2019 11:55 am
it makes me uncomfortable that they are OK with relying on us if they do run out of money. It is a difference in core values, but I am working very hard to change my perspective.
This is made up entirely by you.

You come off very very poorly in this thread. I hope you don't in any way present these thoughts to your in-laws.

trustquestioner
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Re: In Laws Retirement Nest Egg

Post by trustquestioner » Tue Apr 16, 2019 1:06 pm

Being born to wealthy parents is not a “core value.” It’s winning the sperm lottery.

stats99
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Re: In Laws Retirement Nest Egg

Post by stats99 » Tue Apr 16, 2019 1:14 pm

RickBoglehead wrote:
Tue Apr 16, 2019 12:02 pm
Here's the challenge as I see it. We are under no legal obligation to pay for care for our parents / in-laws. It's a personal choice.
Some states do have so called filial responsibility laws where, in theory, the children can be responsible for parental care costs.

Topic Author
Bogle1981
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Re: In Laws Retirement Nest Egg

Post by Bogle1981 » Tue Apr 16, 2019 2:22 pm

Fourwaystreet - In terms of the health concerns, I meant that in the context of preventing them from getting a Long Term Care policy, not anything that would prevent them from working. I think the reason they denied him was because of a recent cortisone shot in his knee. No clue why that would prevent someone from getting an LTC policy, but I didn't push it.

Trustquestioner - The core value is not being born to wealthy parents. The core value I was referring to is that of hard work, saving, self sufficiency and not relying on children or the taxpayer to step in if you have not planned properly (that being said, I do think entitlement programs are absolutely needed for certain groups (veterans, the sick, etc.), but that is another conversation). From the responses on this thread, I seem to be overreacting quite a bit, and out of touch.

I do appreciate those who have provided constructive advice and those who have helped me understand that I'm coming across poorly, and that my perspective is offensive. It is good feedback for me. In a way I am impressed that so many of you would willingly support your in laws with no resentment if they were to run out of money. My father always HOUNDED me about being self sufficient and shamed those who did not pull their own weight. I realize now I have carried those (somewhat arrogant) values with me into adulthood, and would be wise to adopt a softer perspective.

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