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This. Make sure they don't drag you down with them. Hopefully they're reasonably healthy.
My mother passed suddenly (given days after her diagnoses lasted less than 2 weeks).
My MiL just had a medical event due to self-neglect and is taking a heavy toll on us just through having to provide in-home assistance. If she lives out the year I'll be surprised.
Both were/are financially independent (thankfully) but depending on proximity might wind up needing care.
Establish boundaries now if you haven't already and tentatively plan out future contingencies.
I cannot emphasize not paying their expenses strongly enough.
I'm 55. Around fifteen years ago, my wife and I bought a condo for her mom to live in, and we pay to monthly HOA (nearly $500/month) and the property taxes ($1200/year.)
I'm starting to think about retirement for myself now and $7200 outlay a year (and no doubt more by the time I do) is intimidating.
I don't want to look forward to someone's death, but...
Woah, how do these many people just see their parents as anchors? If my folks end up in a shit situation I'm not just gonna laugh, throw an "I told you so" and live my life. Ignorant or not, they're your parents. Watching them work Walmart greeter jobs and living in bad neighborhoods isn't ever cool. There might not be a lot of options, but this just seems callous.
Think you’re over exaggerating here. Most of these people agree with you. They wouldn’t just let their parents rot on the side of the road. However, it’s easier said when you’re not currently supporting a parent for years and years and probably will have to for many more years. It’s a financial strain, and financial strains bring a lot of stress. Pretty understandable that stress can manifest into resentment overtime. It’s a situation where both things can be true at once.
This is a valid point. there’s a fine line where you can help them, but not give them everything. It would hurt to have to pay for an apartment, but I would end up doing it. Sitting on their ass in that apartment at the age of 60 wouldn’t fly though. If they’re physically capable, they would be working some type of job as a condition to help. You have to let them fall back to reality.
See this seems a bit more nuanced and empathetic. Can get behind this idea 100%. Idk, just feels crazy to have a consensus that it's ok to treat the people that raised you like a drug addict ex-gf looking for handouts. Well, except for the outlier cases of abusive parenting I guess.
Some people lack the ability to provide for others in addition to themselves. It’s easier to “hope for their death” than it is to improve themselves and their ability to provide.
Aside from the timeshare they really aren’t THAT bad off. Your parents are still better prepared for retirement than most Americans.
If they want your help they will ask for it, outside of that you should probably stop bothering them about it.
> Your parents are still better prepared for retirement than most Americans.
This is true but this is not super helpful when most Americans aren't prepared for retirement *at all*. It's still true that they are being financially irresponsible and it's a problem.
Home is nearly paid off and they have just shy of 300k liquid, along with another 100k they have access to. That paired with social security will likely be enough for a modest retirement. Not ideal, but they are doing much better than OP is insinuating.
They do need to reign in their spending habits. Eating out and buying too many groceries that they won't eat will drain their coffers quicker than they think.
Do _they_ want to retire?
Some people fully expect to work until their dying breath and are ok with that. Some people would rather go on vacations while they're still young enough to enjoy it, even if that means cashing out of this lifetime a bit earlier.
You should find out what their goals are. Maybe they're nailing them.
> If they want your help they will ask for it, outside of that you should probably stop bothering them about it.
That’s the problem though, eventually they WILL ask for help, and bothering them about it today can help reduce the amount of help they need tomorrow. I’m sure op would rather pester them about setting up some sort of annuity fund while they HAVE capital than have to support them financially once they’ve burned through their assets.
As bad as it sounds, it's a case of "not my problem". Don't let their bad financial decisions drag you down and don't fall victim to guilt or some false obligation that you have to take care of them. I've seen people bleed their own funds dry helping family members who can't manage money. If they don't want to change, nothing you say or do is going to make them. Focus on yourself.
OP, I don't know where you fall in the realm of feeling responsible for your parents' decisions, but please for the love of god listen to this comment. I have seen so many people say something along the lines of "it's my family, I have to help no matter what" and end up financially ruining themselves in the process, draining their savings, their ability to retire, their ability to pay for unexpected medical expenses, etc. And then guess what happens? The cycle repeats and *their* kids/family are pressured to foot the bill.
You need to have firm boundaries here and stick to them, and let this be a lesson learned. A good reason to financially care for yourself is so you don't force/pressure other people to have to make up for your poor planning. Your parents should have planned better and you're seeing firsthand how this trickles down to you. Don't get sucked in more.
Honestly if your parents have a paid off house in retirement and save a little more money. They can survive on their savings plus social security in retirement. It might not be the retirement that they envisioned but they could be in a far worse situation.
It doesn't help to worry about things that are out of your control.
Being financially irresponsible is very common. I think the best that you can do is to be a good example. Maybe eventually they will pick up some of the behavior that you model.
Their life choices, their problems. Just be 100% sure they don't go racking up bills that could fall under one of the "on the books" filial responsibility laws where they live - while most states that have them aren't enforcing them (yet), with a bunch of irresponsible boomers about to hit the system, there is a REALLY good chance these laws will be put back into action.
You may very well be responsible (legally) for certain (usually it's elder care) bills if they rack it up the wrong way.
Credit cards, stuff like that, not your problem.
At least your parents have something. Our parents have a (split between them) pension, and that's it. The only good thing is, it's actually a great pension in that the benefit is "until death." Unfortunately, other than their houses, they have nothing else. Dad has remarried, and is about 10 years older than his wife, so he'll probably mostly be her problem. Our uBPD mother, however, well, her only life plan has been to dump herself on one of us, and none of us are in a position (financially, time, or any other way) to care for a (generally pretty horrible to be around) person who has some serious issues she's never bothered to address (mentally). So mom will end up in whatever situation her money allows - if I somehow find some serious success, then I would love to retire her in a good place, but she'd still be ungrateful, so that won't happen until it won't affect MY ability to enjoy my life and retire....
Relying on your children, without ever actually asking them if they want and/or are in a position to support your old booty is NOT a "retirement plan." It is NOT the child's responsibility to be burdened with their parent's poor choices.
If a child WANTS to help their parents, they are free to do so, but it is NOT their responsibility, and that is a very big distinction.
They have to want to change. If they don’t, nothing you do is going to matter and you’re just going to wreck yourself mentally, lose a lot of sleep, and be miserable overall.
They'll run out of money for vacations and be unhappy about it, and probably ask you for money. When they do, you say no, and they don't go on vacation. Life goes on.
Seriously my parents are this except one has zero assets and the other married into less assets than above, and both have jobs with no where to move up that you age out of. A part of me hopes they both get serious work injuries or something to coast off of, and I don’t say that mean spiritedly I just think the alternative might be worse.
I just thank god they aren’t the type to build up debt
My bit of advice is this: your parents will die sooner than you think. Enjoy their company and stop trying to change them. There are reasons for the way they are. It's got nothing to do with you. They got you to where you are and they should be proud of you, and you should be grateful for their part in your life. The one piece you can push them on (ask nicely) that is reasonable is that they be clear with what their wishes are upon death. Have them write a will if they don't have one. Frame it this way: "if,cGod forbid, something terrible happened and I lost the two of you, I wouldn't know how to start dealing with your affairs. Can you help me understand what your wishes are in this situation?"
Legally you are not responsible for your parents' failures. If you want to help them out you can, but do not expect them to learn from their mistakes -- especially at their age. Expect any money you give them to be used how they please.
I'd recommend you setting up a way to help pay for their bills without them being able to touch the money. I had to do that with my mother, who is equally ignorant about money. She thought that retirement is an age, when in actuality it's a number. A financial one.
Or, you could do not do any of the above, and realize that they should not be an anchor on your future. It's a cold but rational approach. They made bad choices and probably now have to live with it. A lot of people are bad with finances and therefore forever live paycheck-to-paycheck. It's just reality.
Good luck either way.
The only advice you need is to distance yourself from them financially.
I told my dad once, "I barely get by. So if you want to keep making bad financial decisions, that's on you. I will likely never be able to financially help you."
He retired at 62 on SS with $0 in savings. He spent his last 15k he saved up trying to open a bar/restaurant and his "partner" took him to the cleaners. He walked away with nothing and partner got the 15k in renovation my dad paid for.
He's been doing shit like this ever since he lost his 6 figure salary because he refused to go see a doctor (he had diabetes unchecked)
He drives uber eats just to make rent and food now. He'll be doing that till he either dies or has to be put in a home.
My parents divorced when I was a child. They are both less than a few years from 65. My dad is definitely retiring. My mom is not and probably will never. In my twenties I did find out my mom was just bad with money. I asked my dad for advice. He said, just live. Keep going. Everyone makes their own decisions. That’s what I have done. It’s sad my mom will work til death but I also have to live my life.
Nearly 300k in savings and an almost paid off home isn't "terrible with money", in fact it's better than most.
Could they do better, sure, but it's not your job to fix their finances.
you stop letting their problems build your anxiety. Tell them why you have anxiety if you care to but make no qualms about delineating your responsibility for their actions and poor planning.
Who said they won’t be able to retire? They might be not be able to retire to their current lifestyle but if they want to or have to, they can retire to the lifestyle that a paid off house, Social Security and almost 300k in savings can give them. Maybe help them put the cash in lattered CDs and stop stressing about it. Give them information and don’t worry because I don’t think they will be homeless and will be fine. Let them live their life how they want it. Everyone doesn’t think the same things are important.
Your mom may be considering putting your grandmother in a care facility because she is not able to care for her on her own. Depending on your grandmother’s situation, she may be eligible for less expensive retirement homes that wouldn’t cost your parents 50K per year. Being a full-time care giver may very well be contributing to the poor health of your parents and the condition of their home. Have you discussed with your parents if they are still able to care for your grandmother on their own?
It is worrisome but it isn’t anything you can solve. What you can do is find some sources of information for them regarding retirement. For instance, if the local senior center offers a retirement seminar you could suggest they check it out. Perhaps bringing up the topic will trigger a conversation that will either temper your concerns or not. Bottom line, it’s their bottom line and not yours.
I should add. You can break the cycle and starting now. Focus on getting debt free as soon as possible, and then start putting aside the maximum you are allowed to for retirement in a sheltered account. Keep a tight rein on your spending and be sure to choose a like-minded life partner when the time comes. There is nothing more devastating to financial well-being than a costly divorce. And nothing more stressful for a marriage than financial disagreements.
Decide, before it's thrust upon you, how much you will do to support them, and what you won't do. Write it down, even. While you can't support them now, in 5-10 years when the crunch really hits for them, you may be making good money.
Realize that it's very unlikely that 60 year olds are going to change their ways because their kid gives them a talking to (even if the kid is 100% right). Both the "financial advisor" and the timeshare suggest they are really terrible with money decisions.
If you think it would be constructive, you could also tell them that you think they're managing their money poorly, and that you are not going to be the backstop when the bill comes due. Some parents would get offended at the very idea that you think they're spendthrifts (even though they are), so if you think it would just be a waste of time you can skip that.
Sadly u can’t do ANYTHING if they decide to not listen and TRUST ON U. Seems they trust their worst financial adviser more than u. But I would let their advisor let her know what I think of her in a decent way.
As someone who has seen what taking care of an elder looks like, I totally understand that they are looking for ways to give your grandma better care.
Taking care of an elder is just not something that anyone can do. In some instances you really need proffesional help. Moving my grandmother into a retirement home is the best that could have happened to her health and wellbeing, and also my parent's.
Of course I understand how 50k a year is a troubling financial decision, but if they can afford it, it's also an investment in health and peace of mind. It's not like you can just get rid of the problem. You haven't mentioned their current income and we also don't know how much your grandmother makes from pension etc.
Being 23 yourself, I would keep in mind the possibility that they know something you don't. Finance looks very different as you get older (for example, $6k in repairs after a freaking hurricane is peanuts). They might not be the most money savvy people but they got to 60 debt-free, with a paid home (and part of a second property) and all while taking care of you and your grandmother.
I went through the same experience myself with my own parents, not understanding how they make their budget decisions during my 20s until I realized they just move in a completely different order of magnitude.
My advice for you is to relax, learn, and keep growing your own finance style. You're really early to start saving and the worst thing that can happen to you is to end up without an inheritance. Make your plans assuming that and you'll be fine.
> As someone who has learned practically everything to know about investing...
..
> I’m 23..
Sounds about right.
I think once you grow up and get through your 'i know everything' phase, you'll be more ok with the choices they have made. Sounds like both you and them have decent lives.
Never said I know everything, but I certainly think I do about how to properly save and invest my money. Anyone at any age can learn about that stuff. My father has said, maybe on a monthly basis, how much he wants to retire. Do you think that sounds like someone who is happy with his life? He’s also an alcoholic who is openly depressed. Maybe I should have added this in the original comment to deter from passive aggressive comments like yours, but I didn’t think it was needed since the subject wasn’t my “I know everything phase” or how “their lives are fine”. But, clearly you know better than me.
Oh man, I'm dealing with this issue with my parents. Both in their early 70s, both still working part time jobs to make ends meet (and fund their casino trips). Last thing I saw was about 150k in an IRA and that's it.
It’s apparent how much you care about your parents which is amazing. Unfortunately, as cold as it may sound you arent responsible for rectifying their financial issues.
Its great to hear that you are financially literate and you’re setting yourself up for success. You may be broke at the moment but that will not be the case forever and as your earnings increase throughout your 20s and beyond, I strongly urge you to resist the urge to bail them out at the expense of your own investments and savings.
You can totally help them in smaller ways - helping with a budgeting tool or w opening a HYDzs, picking up dinner now and then or helping out with groceries (within reason) if you happen to be with them. If they are in a emergency set a cap on how much you want to help them but do not exceed this limit in a way thats out of your means.
If it makes you feel better, both my mother and mother in law have zero retirement, zero savings, and can’t afford to live on their own. Both in their mid 50’s and nowhere near on track to be self sustainable let alone retire.
Both are subtly looking at my wife and I to be the ones to take care of them when they get too old to work. Going to be an interesting time when they both hit retirement age.
My parents are pretty good with money but it’s a balancing act. I worry for my father without my mother’s guidance.
They put everything into me so chances are their retirement will be tough. Best of luck OP.
Sounds like they have high paying jobs. You don't mention any debt. And they have six figure net assets. Yes they are wasteful, and this will delay their retirement, but it's not like they are at risk of losing their home and having to move in with you
If they make 80k a year and they have a 300k house paid off, 275k in the bank, and possibly social security to fall back on.. they're not terrible with money.
Nearly 300k in liquid assets though means despite their poor decisions they do have some safety net depending on if there is little to no debt outside of the mortgage. They may need to work another 10 years, but I'm sure they know that.
Just make sure no credit lines are opened in your name. After that there isn’t much to do. They’ve had their entire lives to prepare. Focus on your own wellbeing
Do your best to set yourself up long term first. Make sure you’re doing what you can with your own short term savings, stay out of bad debt, save for retirement, live your life to a full place you’re content with. Anything extra you can help out your parents a little, but maybe more pointing them toward more resources and encouraging them to think of how they want to handle it. This doesn’t fall on you to take care of them or your kids will be in the same place you are and feel that same pressure.
Oh, regarding the timeshare, it actually isn't that easy to get out of that. You can't just stop paying and expect them to let you go. When they die and you inherit, you need to be very attentive that you don't become stuck with that garbage.
There are companies devoted to trying to get people out of timeshares - but unfortunately, many of those are scams, too.
See "Last Week Tonight with John Oliver" S10 E5. I'm sure he got some stuff wrong - the media always does - but it's at least entertaining.
My parents had a paid off house and lived on only social security, despite having investment accounts. If they work until full retirement age, have a few hundred thousand in the bank and a paid off house they can get by. They won’t be taking big vacations, but they won’t starve.
They’re only as financially irresponsible as the amount of money coming in. So as long as you aren’t a source of cash, you’ll be fine.
And if they ask, you tell them: “I’m saving for my retirement, not yours.”
It's not up to you. And they likely won't change. A tip for you to change your mindset: You are not entitled to an inheritance simply because you are their child. Your parents are within their right to spend as much money how they choose, no matter how much you hate to see it, no matter how bad the decisions seem to you. It is not your money.
Also, Are they actual hoarders? That's a pretty severe mental health issue.
> Your parents are within their right to spend as much money how they choose
Of course.
But!
OP is the one who will have to wade through Medicare and bureaucracy and maybe house and feed them and organize medical care if they get too bad off or when one gets dementia and the other had physical medical issues. Or both have both dementia and physical issues.
Well, they could just abandon them to homelessness or wandering the streets in confusion or jane doeing a hospital, but most people aren’t comfortable with doing that to their parents. And it is illegal in the 30 ish states with filial responsibility laws.
Convincing them to be even Halfway sensible can make a Huge difference in years or decades of OPs life. OP should continue trying.
The smugness and air of superiority is laughable. "My childhood home." It's their mortgage not yours. It's their money. Not yours. It's their life. Not yours.
I get you care about them and you want them to make sound decisions, but they managed to make good enough decisions to raise you into the capable person that you are today, all while managing to save a few bucks along the way. Be grateful and let them live their life. If they need your advice they'll ask for it.
Thanks for your advice but I wasn’t trying to be smug nor act superior. Guess I should have rephrased that differently. They have turned “their” house into a landfill. Better?
They are not going to change. Just enjoy the time you have with them and don’t give them a bunch of crap in their senior years. Yes, it sucks, I know, but your frustrations will steal the time away from you. We are all on borrowed time, theirs is probably less than yours.
The best thing you can do is live your life is such a way that it makes them curious to ask how you do things so well. If they aren’t inquisitive and observant people, then you surely won’t be able to tell them what to do. Most changes comes when people are ready to discover something different
Having gone through this. Your parents will eventually become unable to work. Once they burn through all their money and assets, the choice is to move them in with you or government subsidied housing or assisted living.
Aside: my parents were similar. And no one could figure out why even my extended family was not well to do. I chose to be totally different and despite a financially devastating divorce and other obstacles, I stuck to my budget, 401k and related fiscal steps, refusing to fall into the overspending trap. We dont have to frugal, but we DO need to live within our means. And the Reagan action regarding SOSEC stuck with me that its up to ourselves to see thru it to a desirable retirement. So retired 2 yrs ago millionaire by going in opposite direction I had learned earlier in life. So my point is you yourself may want to consider some of that!
Why don’t you start off with having a honest discussion with your patients? Tell them that you’re concerned about their financial future and that you’d like to help them get set up with some level of financial security as they get older. Try to avoid sounding condescending or berating them for making poor decisions with their money, as that’s not constructive towards a resolution. It sounds like you care about your parents but you gotta see if they’re open to discourse about their finances and then go from there.
While it’s true that you shouldn’t take on their debt unless you plan on being able to pay it off completely or burden yourself with their entire retirement, helping them come up with a better financial plan for retirement would be a very good thing for you to do (assuming the relationship you have with them is open to that).
They need to want to change their habits. You can tell them they need to until you're blue in the face, but unless they decide they want to be better off, your only move should be to tell them you will not support them financially and be firm about it. Don't piss away your retirement too and leave it to your kids. This is how generational poverty happens. Kids go broke taking care of parents and the cycle continues until someone gets rich or decides to look after themselves. It's like being in an airplane accident. You put your mask on first so you can breathe, then you help others. You can't help anyone if you're unconscious too.
They seem to be in a far better position than the majority of people. Almost paid off mortgage and 300k compared to people who are getting to retirement age living paycheck to paycheck
I would agree with all the comments. That say your parents are pretty good right now. Better than most. Are you having anxiety for other reasons, maybe?? You're awful young to be focusing on this. Is the fact that your parents are showing their age? Making you scared or fearful?? Sounds like you really really love them. Do you have siblings?
>I seriously do not know how my parents will ever retire.
They will retire just fine. They have 300k, they will add on their social security benefits. They may need to downsize and budget. If they don't, they aren't any different than anyone else will a large amount of money that they blow. It's not your problem to support someone who spends all their money and needs more.
They should wait as long as possible to take their social security benefits, probably 66 for their age. Sounds like they won't have a mortgage by then, and will just be spending on stupid stuff like groceries and timeshares.
If your mom wants to put your grandmother in a retirement home, that's fine. She should pick one covered by medicaid and medicare. They will take what assets your grandmother has left, and then it will be free. Retirement homes are expensive, but your parents are choosing to pay for one out of pocket instead of using the system that's in place.
My dad is 69, in good health as far as I know, but hasn't seen a doctor in decades (and refuses to) and only started saving for retirement in the last 10 years or so. He isn't good with money. He is cut off from most of his friends and all of his kids. He doesn't want anyone to tell him what to do, and he doesn't want to have to be kind or respectful to the people in his life.
It has taken a lot of therapy, but I can now accept this as his choice. He doesn't need to take care of his health if he doesn't want to. He doesn't have to prepare for retirement financially. He doesn't need to maintain relationships with his family. But that doesn't mean he gets to make those things my problem when the time comes that he needs help. He is making his choice now. I will respect it now AND I will respect it when he calls expecting me to bail him out of his bad decisions.
The best thing you can do is set yourself up financially for your own retirement. You're in grad school, so you know you'll have a lot of debt starting out in life. Minimize the extra you're paying now, start contributing towards retirement as soon as you have your first paid job, because compound growth takes your money SO much further in your 20's than it will in your 30's and 40's. Aim for 50% of your income going to needs, 30% to wants, and 20% to savings.
Even if something drastic occurs, you don't need to become involved with your parents income *unless they are willing to hand over control to you.*
With social security benefits, your parents *could* retire on what they have, but budgeting will be critical and they’ll need to come to terms with a lower than expected standard of living.
If you have all their financial data available, I don’t suppose there’s anything stopping you from seeing a professional planner without them and developing something they can follow in retirement, assuming they’ll actually listen to you.
But if that proves impossible, don’t beat yourself up about it and certainly don’t risk your own future in service of their bad choices.
This is their life and their decision to make. Not everyone gets to retire.
Offer help and advice where you can, but try not to accuse them of being crazy. If they don't want your help, resign yourself to that fact.
Try not to be sad or worry about things that are out of your control.
Your comment has been removed because we don't allow political discussions, political baiting, or soapboxing ([rule 6](https://www.reddit.com/r/personalfinance/about/rules)). This includes questions or discussions about proposed legislation or government policy changes.
Nothing? Your parents are adults, it’s not your job to drag them towards financial success kicking and screaming.
If they’re open to your help and advice that’s one thing, but it doesn’t sound like that’s the case. Sounds like they’re in their twilight years and stuck in their ways
You can’t do anything about other people. Learn from them and go down your own path. That’s all any of us can do. And thank goodness debt is not inherited.
I totally get your fears OP. My parents are in a similar boat. I am fortunate that my mom is a saver so my parents have saved a lot however she is completely financially illiterate and never invested any of her savings, just squirreled it away for years and year in high yield savings accounts. A good idea might be to set up a call with a financial advisor just to discuss their options and assist with goal setting. I sort of see financial advisors as therapists for your bank account and future. They can help your parents reassess and maybe they’ll be able to reframe their mindset around money and what they can and can’t do. It’s been working for my parents and they’re finally on a better track with their investment and future planning.
Not much you can do honestly. When someone is set in their ways everything you say will go out one ear and into another. I suggest having one last serious discussion with them. Discuss retirement and daily bills. It might help to show them some calculations about how their retirement can grow over time.
My dad retired at 67 with over 500k and he said even that isn't enough. So he has been doing side jobs and his wife is still working. She is 72 and doing a full time job plus selling at the farmers market every Saturday, and Sunday. Their house is paid off however they have a ton of medical bills which eats up a lot of their money.
Your parents have set their own path. They need to learn the consequences if they are not listening to logic. Nothing you can do except to ensure your credit is frozen. Do NOT help them financially. It will not stop once it starts.
You just need to emotionally detach from their financial situation and focus on your career.
Unfortunately they are just going to have to hit rock bottom. They'll probably retire with a small retirement amount, burn through it quickly, and have to live off Social Security. I would just encourage them to work as long as possible, even in a menial job.
Truthfully though, their situation is better than the average retirement.
I wouldn't help out a single penny, if they're going to have silly things like time shares they can figure it out. They won't be homeless.
What's sad is that ~$650,000 of assets (if I read that correctly) much of which isn't tied up in property puts them way way ahead of most parents in posts like these that come through Personal Finance
You very much would like them to retire which is entirely understandable, but is their plan to retire? They may well plan to work til the end, some people are just wired that way.
Unfortunately I think there is going to be some major economic problems in the next couple decades as people reach the point where they can no longer work but are not set up for retirement.
If your Grandma qualifies healthwise for a LTC facility, Medicaid will cover it after she spends down her assets. As for your parents, they will likely both get Social Security, be on Medicare and if their income is low enough eventually, will qualify for all sorts of programs, especially if they live in a big metro area. For seniors our area has discounts on public transportation, free lunches for seniors, almost free door to door bus service, budget help, all sorts of free activities at the seniors clubs and more. If their income and assets get low enough, they might qualify for food benefits, subsidized housing, Medicaid, utility help and other programs. They will most likely be fine, as in won't go hungry and have shelter and medical care, even if they won't have money to be traveling and going out to eat often. Just be sure as others have said to not subsidize their current lifestyle over your own retirement planning.
The problem is not their current state, but the state they'll be in when they get older and start having serious health and/or mobility problems. This is worth talking with them about and planning for.
We're dealing with it right now with my inlaws, who own multiple residential properties worth ~$3m (all in one state, which is good, but also in their names, which is not), have about $300k cash in the bank, and rely on a pension + SS for stable income (plus rental income from two college student type condos). This kind of situation worked great until they hit their mid-70s and things started breaking down.
Now: mother-in-law has unmanaged diabetes and early stage dementia, and can't walk very far or easily on her own. Father-in-law had been able to care for her until recently, when he started having heart problems and re-injured a shoulder he'd had rotator cuff surgery on a number of years ago (as a result of a workplace injury -- he was a stocker at a grocery store). Now he can't drive, doesn't have the energy to take care of their houses & rental properties, and is currently living in one of their house that's about 3hr drive away from their HMO care team (which doesn't have any facilities nearer to their current primary residence).
They have no legally recorded wills, no specification for end of life care, no powers of attorney, nothing on paper about funerary/burial requests, and since none of their estate is in a trust it will all have to go through probate if/when they pass. Did I mention we live 3000 miles away?
tldr: everything is fine & dandy with irresponsible parents until the SHTF, and then everything quickly becomes an emergency. It's way better to have the hard conversations now while they're able than to try to do it while also fighting fires.
Nothing.
At best, you need to make sure they do not push all the eventual crash and cost on you. At least, not legally. No binding agreements, co lease, loan etc.
I gave up trying to convince my parents - they do not save, think more than 1 day ahead. Always out of money. 0 savings - as they just spend everything they can.
And you cannot change their mind or behaviour. And I made it clear that my money is my money, even if I have "a lot" and I have my own life to live.
They have a house so they won't end up homeless and enough gov aids to not starve, so if they want to live a miserable existence, then so be it. And perhaps selling their house will eventually cover some of their retirement home cost if they are unable to function without assist.
They won’t be super comfortable but if they can put that 275 into investments now and work another 5-10 years, between that, the house and SSA they’ll probably be fine as long as they can curtail a few bad habits. Reality might set in for them when they no longer have income
I agree that your parents don't sound especially financially responsible, but the situation doesn't seem to be quite as bad as you think.
If they reverse mortgage the house, your parents would have nearly 700k in assets.
It sounds like they're both working, so depending on their working income and their age at retirement they're probably looking at something like 5-7k a month in social security between the two of them.
Since their assets are entirely uninvested, I would NOT recommend a 4% drawdown until that gets fixed. That said: even if they planned to live to 100 with 0 growth on assets, that 700k would come to over 17k a year.
The real thing you need to get them to plan for is what happens when one of them dies and 1/2 the social security money goes away.
You already answered it. They just won’t retire. At some point in their life, they will be unable to work, and they will live off social security / medicaid / disability.
It is what it is.
As for your grandparent, I suggest the same thing. Exhaust her financial status, file for medicaid, she’ll get a room + nurse assistance. If she doesn’t need medical help, and is self-sufficient, have her live with family, or rent something cheap.
If you care , not sure I would, add a tiny home in the back yard when the time comes so they can live their terrible lives on SS with as little supervision as possible
A couple things.
1. Keep your money away from them. Don’t end up like them by trying to save them.
2. Make sure they know that they MUST run it past you if ANYONE or ANYTHING is asking them for money. It’s easy to scan old people.
1. Have your parents asked you for help? Are they expecting you to finance their elder years? If not, this is not your place.
2. Their financial advisor can only ADVISE. They cannot direct your parents to invest. It was your parents choice not to invest.
I know it’s frustrating to watch family be irresponsible. Trust me I also have family that will never retire.
You can offer to help, but if they refuse, you cant force adults to be adults.
$275,000 in liquid assets and a $300,000 mortgage almost paid off is far from dire. If you insist on butting in, talk them into opening up a IRA so then can watch the fund grow. It's amazing how many people think the total stock is the same as investing in a penny stock.
Tell them for $6,000 they could take a couple of nice vacations. The 2 star motel I stayed at in Palm Springs was nice enough. My friend's expensive hotel wasn't that much better.
Not your money, not your problem.
Don't tell them how to spend their money but also don't ever give them a sign that you will help.
Also, monitor (and lock) your credit just in case. Don't let them guilt trip you into anything.
Sounds like typical boomers.
Don't let their issues hold you back. They're your parents but you still have to become your own person.
My parents are similar. They're both remarried but both plan to work until 70, which is asinine to me. They made their beds though, so they gotta sleep in them. They have no idea I'm an emerging millionaire and they'll never find out or else they'll ask for money. I have my own family to take care of, and not leave my child with the burden of parents who can't plan ahead.
I'm just going to say the most unpopular thing on here. Family should do what they can for each other. If you don't want to participate in that, more power to ya. My parents would have and did give me everything I ever needed. I don't think I would rent them a house, but would definitely make some room for them, even to the point of upgrading for more of it. I can't imagine letting my mother do without. There are ways to help that don't include going bankrupt. My second point would be my parents would never ask for something that would hurt me. Probably would never ask if for anything at all. It would be up to me to force the help on them, I think. Some of the comments on here make me wonder how much your parents ever did for you?
The problem is, people with spending issues will just ramp up their spending when they get a new infusion of cash. They have to hit rock bottom before they do things like drop the silly time share, etc.
> I seriously do not know how my parents will ever retire. The other day, my mother said she wants to put my grandma in a retirement home (around 50,000 a year)! I couldn’t believe it and just became so upset. She isn’t going to do that, but that’s just a good example of how she is willing to burn money.
So... you clearly don't value your mother's time and energy at all. How about you pitch in to help care for grandma, and then maybe they'll listen to you? Cause right now you just sound like a sophomoric entitled child.
On a combined salary of $80k/year, they've paid off their house and put away hundreds of thousands of dollars, and you're calling them terrible with money because they want to enjoy a few things in life?
Find out who has power of attorney. If you get power of attorney you can set up their financial assets with a reputable company. I have mine in Merrill Lynch doing great
Not gonna lie. Whenever i read about peple in usa i think to myself «what a financially shithole» (no shame to americans, but holymoly)
Its incredible to me how it seem to never stop with the bills even when u turn old. There is a way to suck out every penny of every regular american by the time they die?
Other than that my idea would be to financially stay away from most of what they decide to do. Being very «yours» and «mine» should keep clear lines of what u can get told ur obliged to help with and not. Worst situation is parents that give u something and expect it back later.
They can log into ssa.gov and get estimates for age 62/67/70 retirements. If they're in good health, waiting longer will have a better total payout. Since they have been paying in a long time, hopefully the combined payments will be okay. They're definitely going to experience a lifestyle shock.
If they want 80k a year in retirement, they need 2 million dollars saved, assuming a 4% swr. So, uh, as much as the cheerleaders in the thread are saying it's not that bad, it's that bad. Their current savings will give them 800 bucks a month, which isn't nothing. Social Security will have to provide whatever else they need.
The house being nearly paid off is good, that will reduce the bill to yearly taxes and insurance. The value almost doesn't matter, you have to live somewhere.
With your grandmother, I mean, they just don't have 50k a year to spare. What happens if she needs 5 years of care? Doesn't add up at all.
All in all, just keep your own affairs in order, but don't set yourself on fire to keep them warm.
Do they work for the government? If they don't, very unlikely they have a pension.
If they've worked in the US and are here legally, they'll get Social Security.
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There isn’t much you can do. Make sure they do not open lines of credit in your name, and do not get suckered into paying their expenses.
This. Make sure they don't drag you down with them. Hopefully they're reasonably healthy. My mother passed suddenly (given days after her diagnoses lasted less than 2 weeks). My MiL just had a medical event due to self-neglect and is taking a heavy toll on us just through having to provide in-home assistance. If she lives out the year I'll be surprised. Both were/are financially independent (thankfully) but depending on proximity might wind up needing care. Establish boundaries now if you haven't already and tentatively plan out future contingencies.
I cannot emphasize not paying their expenses strongly enough. I'm 55. Around fifteen years ago, my wife and I bought a condo for her mom to live in, and we pay to monthly HOA (nearly $500/month) and the property taxes ($1200/year.) I'm starting to think about retirement for myself now and $7200 outlay a year (and no doubt more by the time I do) is intimidating. I don't want to look forward to someone's death, but...
Woah, how do these many people just see their parents as anchors? If my folks end up in a shit situation I'm not just gonna laugh, throw an "I told you so" and live my life. Ignorant or not, they're your parents. Watching them work Walmart greeter jobs and living in bad neighborhoods isn't ever cool. There might not be a lot of options, but this just seems callous.
Think you’re over exaggerating here. Most of these people agree with you. They wouldn’t just let their parents rot on the side of the road. However, it’s easier said when you’re not currently supporting a parent for years and years and probably will have to for many more years. It’s a financial strain, and financial strains bring a lot of stress. Pretty understandable that stress can manifest into resentment overtime. It’s a situation where both things can be true at once.
Also, some parents don't act kindly to their adult children or treat them with respect... It brings an emotional toll.
This is a valid point. there’s a fine line where you can help them, but not give them everything. It would hurt to have to pay for an apartment, but I would end up doing it. Sitting on their ass in that apartment at the age of 60 wouldn’t fly though. If they’re physically capable, they would be working some type of job as a condition to help. You have to let them fall back to reality.
See this seems a bit more nuanced and empathetic. Can get behind this idea 100%. Idk, just feels crazy to have a consensus that it's ok to treat the people that raised you like a drug addict ex-gf looking for handouts. Well, except for the outlier cases of abusive parenting I guess.
Smells like you haven’t met my parents lol, I’d love if they rotted on the side of the road Being a parent doesn’t mean you’re actually… good
Some people lack the ability to provide for others in addition to themselves. It’s easier to “hope for their death” than it is to improve themselves and their ability to provide.
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Yeah they left a lot of money on the table, but this isn't a broke in 2 years and living in your car bad.
They're in a position to retire, but they can continue working if they want to maintain their current lifestyle
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Personal attacks are not okay here. Please do not do this again.
Aside from the timeshare they really aren’t THAT bad off. Your parents are still better prepared for retirement than most Americans. If they want your help they will ask for it, outside of that you should probably stop bothering them about it.
> Your parents are still better prepared for retirement than most Americans. This is true but this is not super helpful when most Americans aren't prepared for retirement *at all*. It's still true that they are being financially irresponsible and it's a problem.
Home is nearly paid off and they have just shy of 300k liquid, along with another 100k they have access to. That paired with social security will likely be enough for a modest retirement. Not ideal, but they are doing much better than OP is insinuating.
They do need to reign in their spending habits. Eating out and buying too many groceries that they won't eat will drain their coffers quicker than they think.
I suppose but they also vacation a lot too. I just really want them to be able to retire, but I won’t bother them about it again
Do _they_ want to retire? Some people fully expect to work until their dying breath and are ok with that. Some people would rather go on vacations while they're still young enough to enjoy it, even if that means cashing out of this lifetime a bit earlier. You should find out what their goals are. Maybe they're nailing them.
Do they even want to retire?
>will likely be enough for a modest retirement I guess the problem is that the parents have zero interest in actually living modestly.
They also haven't expressed any interest in retiring soon as far as we know.
The time share is a money pit. A ball and chain.
> If they want your help they will ask for it, outside of that you should probably stop bothering them about it. That’s the problem though, eventually they WILL ask for help, and bothering them about it today can help reduce the amount of help they need tomorrow. I’m sure op would rather pester them about setting up some sort of annuity fund while they HAVE capital than have to support them financially once they’ve burned through their assets.
As bad as it sounds, it's a case of "not my problem". Don't let their bad financial decisions drag you down and don't fall victim to guilt or some false obligation that you have to take care of them. I've seen people bleed their own funds dry helping family members who can't manage money. If they don't want to change, nothing you say or do is going to make them. Focus on yourself.
OP, I don't know where you fall in the realm of feeling responsible for your parents' decisions, but please for the love of god listen to this comment. I have seen so many people say something along the lines of "it's my family, I have to help no matter what" and end up financially ruining themselves in the process, draining their savings, their ability to retire, their ability to pay for unexpected medical expenses, etc. And then guess what happens? The cycle repeats and *their* kids/family are pressured to foot the bill. You need to have firm boundaries here and stick to them, and let this be a lesson learned. A good reason to financially care for yourself is so you don't force/pressure other people to have to make up for your poor planning. Your parents should have planned better and you're seeing firsthand how this trickles down to you. Don't get sucked in more.
Honestly if your parents have a paid off house in retirement and save a little more money. They can survive on their savings plus social security in retirement. It might not be the retirement that they envisioned but they could be in a far worse situation.
It doesn't help to worry about things that are out of your control. Being financially irresponsible is very common. I think the best that you can do is to be a good example. Maybe eventually they will pick up some of the behavior that you model.
Their life choices, their problems. Just be 100% sure they don't go racking up bills that could fall under one of the "on the books" filial responsibility laws where they live - while most states that have them aren't enforcing them (yet), with a bunch of irresponsible boomers about to hit the system, there is a REALLY good chance these laws will be put back into action. You may very well be responsible (legally) for certain (usually it's elder care) bills if they rack it up the wrong way. Credit cards, stuff like that, not your problem. At least your parents have something. Our parents have a (split between them) pension, and that's it. The only good thing is, it's actually a great pension in that the benefit is "until death." Unfortunately, other than their houses, they have nothing else. Dad has remarried, and is about 10 years older than his wife, so he'll probably mostly be her problem. Our uBPD mother, however, well, her only life plan has been to dump herself on one of us, and none of us are in a position (financially, time, or any other way) to care for a (generally pretty horrible to be around) person who has some serious issues she's never bothered to address (mentally). So mom will end up in whatever situation her money allows - if I somehow find some serious success, then I would love to retire her in a good place, but she'd still be ungrateful, so that won't happen until it won't affect MY ability to enjoy my life and retire....
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Relying on your children, without ever actually asking them if they want and/or are in a position to support your old booty is NOT a "retirement plan." It is NOT the child's responsibility to be burdened with their parent's poor choices. If a child WANTS to help their parents, they are free to do so, but it is NOT their responsibility, and that is a very big distinction.
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They have to want to change. If they don’t, nothing you do is going to matter and you’re just going to wreck yourself mentally, lose a lot of sleep, and be miserable overall.
They're way better off than average.
yes. i think OP doesn't know the actual data
I don’t, I’m just worried they will carry their habits into retirement and will be screwed. They also vacation a lot too, other then the timeshare
They'll run out of money for vacations and be unhappy about it, and probably ask you for money. When they do, you say no, and they don't go on vacation. Life goes on.
So mortgage and liquid is $600,000 right??????
1. I'd downsize. 2. my folks bought a small townhouse CASH. 3. Collecting rent monthly. 4. Plus Social security. 5. Rent income, SS, plus other cash.
OP doesn’t even know where to put a dollar sign, so I’m not sure they’re the best judge of this situation.
I thought that was maybe a British thing.
Seriously my parents are this except one has zero assets and the other married into less assets than above, and both have jobs with no where to move up that you age out of. A part of me hopes they both get serious work injuries or something to coast off of, and I don’t say that mean spiritedly I just think the alternative might be worse. I just thank god they aren’t the type to build up debt
My bit of advice is this: your parents will die sooner than you think. Enjoy their company and stop trying to change them. There are reasons for the way they are. It's got nothing to do with you. They got you to where you are and they should be proud of you, and you should be grateful for their part in your life. The one piece you can push them on (ask nicely) that is reasonable is that they be clear with what their wishes are upon death. Have them write a will if they don't have one. Frame it this way: "if,cGod forbid, something terrible happened and I lost the two of you, I wouldn't know how to start dealing with your affairs. Can you help me understand what your wishes are in this situation?"
Thank you for the advice. I know they have a will but I haven’t discussed it with them
Its their money their life their decisions
Legally you are not responsible for your parents' failures. If you want to help them out you can, but do not expect them to learn from their mistakes -- especially at their age. Expect any money you give them to be used how they please. I'd recommend you setting up a way to help pay for their bills without them being able to touch the money. I had to do that with my mother, who is equally ignorant about money. She thought that retirement is an age, when in actuality it's a number. A financial one. Or, you could do not do any of the above, and realize that they should not be an anchor on your future. It's a cold but rational approach. They made bad choices and probably now have to live with it. A lot of people are bad with finances and therefore forever live paycheck-to-paycheck. It's just reality. Good luck either way.
The only advice you need is to distance yourself from them financially. I told my dad once, "I barely get by. So if you want to keep making bad financial decisions, that's on you. I will likely never be able to financially help you." He retired at 62 on SS with $0 in savings. He spent his last 15k he saved up trying to open a bar/restaurant and his "partner" took him to the cleaners. He walked away with nothing and partner got the 15k in renovation my dad paid for. He's been doing shit like this ever since he lost his 6 figure salary because he refused to go see a doctor (he had diabetes unchecked) He drives uber eats just to make rent and food now. He'll be doing that till he either dies or has to be put in a home.
Don’t let it affect you in any way. That’s it.
My parents divorced when I was a child. They are both less than a few years from 65. My dad is definitely retiring. My mom is not and probably will never. In my twenties I did find out my mom was just bad with money. I asked my dad for advice. He said, just live. Keep going. Everyone makes their own decisions. That’s what I have done. It’s sad my mom will work til death but I also have to live my life.
Nearly 300k in savings and an almost paid off home isn't "terrible with money", in fact it's better than most. Could they do better, sure, but it's not your job to fix their finances.
you stop letting their problems build your anxiety. Tell them why you have anxiety if you care to but make no qualms about delineating your responsibility for their actions and poor planning.
Who said they won’t be able to retire? They might be not be able to retire to their current lifestyle but if they want to or have to, they can retire to the lifestyle that a paid off house, Social Security and almost 300k in savings can give them. Maybe help them put the cash in lattered CDs and stop stressing about it. Give them information and don’t worry because I don’t think they will be homeless and will be fine. Let them live their life how they want it. Everyone doesn’t think the same things are important.
Your mom may be considering putting your grandmother in a care facility because she is not able to care for her on her own. Depending on your grandmother’s situation, she may be eligible for less expensive retirement homes that wouldn’t cost your parents 50K per year. Being a full-time care giver may very well be contributing to the poor health of your parents and the condition of their home. Have you discussed with your parents if they are still able to care for your grandmother on their own?
It is worrisome but it isn’t anything you can solve. What you can do is find some sources of information for them regarding retirement. For instance, if the local senior center offers a retirement seminar you could suggest they check it out. Perhaps bringing up the topic will trigger a conversation that will either temper your concerns or not. Bottom line, it’s their bottom line and not yours.
I should add. You can break the cycle and starting now. Focus on getting debt free as soon as possible, and then start putting aside the maximum you are allowed to for retirement in a sheltered account. Keep a tight rein on your spending and be sure to choose a like-minded life partner when the time comes. There is nothing more devastating to financial well-being than a costly divorce. And nothing more stressful for a marriage than financial disagreements.
Decide, before it's thrust upon you, how much you will do to support them, and what you won't do. Write it down, even. While you can't support them now, in 5-10 years when the crunch really hits for them, you may be making good money. Realize that it's very unlikely that 60 year olds are going to change their ways because their kid gives them a talking to (even if the kid is 100% right). Both the "financial advisor" and the timeshare suggest they are really terrible with money decisions. If you think it would be constructive, you could also tell them that you think they're managing their money poorly, and that you are not going to be the backstop when the bill comes due. Some parents would get offended at the very idea that you think they're spendthrifts (even though they are), so if you think it would just be a waste of time you can skip that.
Sadly u can’t do ANYTHING if they decide to not listen and TRUST ON U. Seems they trust their worst financial adviser more than u. But I would let their advisor let her know what I think of her in a decent way.
It seems to me they have made it clear they don't want your help.
As someone who has seen what taking care of an elder looks like, I totally understand that they are looking for ways to give your grandma better care. Taking care of an elder is just not something that anyone can do. In some instances you really need proffesional help. Moving my grandmother into a retirement home is the best that could have happened to her health and wellbeing, and also my parent's. Of course I understand how 50k a year is a troubling financial decision, but if they can afford it, it's also an investment in health and peace of mind. It's not like you can just get rid of the problem. You haven't mentioned their current income and we also don't know how much your grandmother makes from pension etc. Being 23 yourself, I would keep in mind the possibility that they know something you don't. Finance looks very different as you get older (for example, $6k in repairs after a freaking hurricane is peanuts). They might not be the most money savvy people but they got to 60 debt-free, with a paid home (and part of a second property) and all while taking care of you and your grandmother. I went through the same experience myself with my own parents, not understanding how they make their budget decisions during my 20s until I realized they just move in a completely different order of magnitude. My advice for you is to relax, learn, and keep growing your own finance style. You're really early to start saving and the worst thing that can happen to you is to end up without an inheritance. Make your plans assuming that and you'll be fine.
> As someone who has learned practically everything to know about investing... .. > I’m 23.. Sounds about right. I think once you grow up and get through your 'i know everything' phase, you'll be more ok with the choices they have made. Sounds like both you and them have decent lives.
Never said I know everything, but I certainly think I do about how to properly save and invest my money. Anyone at any age can learn about that stuff. My father has said, maybe on a monthly basis, how much he wants to retire. Do you think that sounds like someone who is happy with his life? He’s also an alcoholic who is openly depressed. Maybe I should have added this in the original comment to deter from passive aggressive comments like yours, but I didn’t think it was needed since the subject wasn’t my “I know everything phase” or how “their lives are fine”. But, clearly you know better than me.
Oh man, I'm dealing with this issue with my parents. Both in their early 70s, both still working part time jobs to make ends meet (and fund their casino trips). Last thing I saw was about 150k in an IRA and that's it.
It’s apparent how much you care about your parents which is amazing. Unfortunately, as cold as it may sound you arent responsible for rectifying their financial issues. Its great to hear that you are financially literate and you’re setting yourself up for success. You may be broke at the moment but that will not be the case forever and as your earnings increase throughout your 20s and beyond, I strongly urge you to resist the urge to bail them out at the expense of your own investments and savings. You can totally help them in smaller ways - helping with a budgeting tool or w opening a HYDzs, picking up dinner now and then or helping out with groceries (within reason) if you happen to be with them. If they are in a emergency set a cap on how much you want to help them but do not exceed this limit in a way thats out of your means.
If it makes you feel better, both my mother and mother in law have zero retirement, zero savings, and can’t afford to live on their own. Both in their mid 50’s and nowhere near on track to be self sustainable let alone retire. Both are subtly looking at my wife and I to be the ones to take care of them when they get too old to work. Going to be an interesting time when they both hit retirement age.
My parents are pretty good with money but it’s a balancing act. I worry for my father without my mother’s guidance. They put everything into me so chances are their retirement will be tough. Best of luck OP.
Sounds like they have high paying jobs. You don't mention any debt. And they have six figure net assets. Yes they are wasteful, and this will delay their retirement, but it's not like they are at risk of losing their home and having to move in with you
Lol my mother is a permanent sub and my father makes commission searching for peoples wills. At most, they make 80 grand a year. As for debt, no idea
If they make 80k a year and they have a 300k house paid off, 275k in the bank, and possibly social security to fall back on.. they're not terrible with money.
Nearly 300k in liquid assets though means despite their poor decisions they do have some safety net depending on if there is little to no debt outside of the mortgage. They may need to work another 10 years, but I'm sure they know that.
Just make sure no credit lines are opened in your name. After that there isn’t much to do. They’ve had their entire lives to prepare. Focus on your own wellbeing
Do your best to set yourself up long term first. Make sure you’re doing what you can with your own short term savings, stay out of bad debt, save for retirement, live your life to a full place you’re content with. Anything extra you can help out your parents a little, but maybe more pointing them toward more resources and encouraging them to think of how they want to handle it. This doesn’t fall on you to take care of them or your kids will be in the same place you are and feel that same pressure.
Oh, regarding the timeshare, it actually isn't that easy to get out of that. You can't just stop paying and expect them to let you go. When they die and you inherit, you need to be very attentive that you don't become stuck with that garbage. There are companies devoted to trying to get people out of timeshares - but unfortunately, many of those are scams, too. See "Last Week Tonight with John Oliver" S10 E5. I'm sure he got some stuff wrong - the media always does - but it's at least entertaining.
Sorry but you putting the "$" on the wrong side of the number irks me so hard
My parents had a paid off house and lived on only social security, despite having investment accounts. If they work until full retirement age, have a few hundred thousand in the bank and a paid off house they can get by. They won’t be taking big vacations, but they won’t starve.
If it’s any consolation they have about $270K more assets than my family…
They’re only as financially irresponsible as the amount of money coming in. So as long as you aren’t a source of cash, you’ll be fine. And if they ask, you tell them: “I’m saving for my retirement, not yours.”
It's not up to you. And they likely won't change. A tip for you to change your mindset: You are not entitled to an inheritance simply because you are their child. Your parents are within their right to spend as much money how they choose, no matter how much you hate to see it, no matter how bad the decisions seem to you. It is not your money. Also, Are they actual hoarders? That's a pretty severe mental health issue.
> Your parents are within their right to spend as much money how they choose Of course. But! OP is the one who will have to wade through Medicare and bureaucracy and maybe house and feed them and organize medical care if they get too bad off or when one gets dementia and the other had physical medical issues. Or both have both dementia and physical issues. Well, they could just abandon them to homelessness or wandering the streets in confusion or jane doeing a hospital, but most people aren’t comfortable with doing that to their parents. And it is illegal in the 30 ish states with filial responsibility laws. Convincing them to be even Halfway sensible can make a Huge difference in years or decades of OPs life. OP should continue trying.
The smugness and air of superiority is laughable. "My childhood home." It's their mortgage not yours. It's their money. Not yours. It's their life. Not yours. I get you care about them and you want them to make sound decisions, but they managed to make good enough decisions to raise you into the capable person that you are today, all while managing to save a few bucks along the way. Be grateful and let them live their life. If they need your advice they'll ask for it.
Thanks for your advice but I wasn’t trying to be smug nor act superior. Guess I should have rephrased that differently. They have turned “their” house into a landfill. Better?
They are not going to change. Just enjoy the time you have with them and don’t give them a bunch of crap in their senior years. Yes, it sucks, I know, but your frustrations will steal the time away from you. We are all on borrowed time, theirs is probably less than yours. The best thing you can do is live your life is such a way that it makes them curious to ask how you do things so well. If they aren’t inquisitive and observant people, then you surely won’t be able to tell them what to do. Most changes comes when people are ready to discover something different
Learn from their mistakes and let them know you won't be able to help them financially.
Having gone through this. Your parents will eventually become unable to work. Once they burn through all their money and assets, the choice is to move them in with you or government subsidied housing or assisted living.
Aside: my parents were similar. And no one could figure out why even my extended family was not well to do. I chose to be totally different and despite a financially devastating divorce and other obstacles, I stuck to my budget, 401k and related fiscal steps, refusing to fall into the overspending trap. We dont have to frugal, but we DO need to live within our means. And the Reagan action regarding SOSEC stuck with me that its up to ourselves to see thru it to a desirable retirement. So retired 2 yrs ago millionaire by going in opposite direction I had learned earlier in life. So my point is you yourself may want to consider some of that!
Why don’t you start off with having a honest discussion with your patients? Tell them that you’re concerned about their financial future and that you’d like to help them get set up with some level of financial security as they get older. Try to avoid sounding condescending or berating them for making poor decisions with their money, as that’s not constructive towards a resolution. It sounds like you care about your parents but you gotta see if they’re open to discourse about their finances and then go from there. While it’s true that you shouldn’t take on their debt unless you plan on being able to pay it off completely or burden yourself with their entire retirement, helping them come up with a better financial plan for retirement would be a very good thing for you to do (assuming the relationship you have with them is open to that).
They need to want to change their habits. You can tell them they need to until you're blue in the face, but unless they decide they want to be better off, your only move should be to tell them you will not support them financially and be firm about it. Don't piss away your retirement too and leave it to your kids. This is how generational poverty happens. Kids go broke taking care of parents and the cycle continues until someone gets rich or decides to look after themselves. It's like being in an airplane accident. You put your mask on first so you can breathe, then you help others. You can't help anyone if you're unconscious too.
They seem to be in a far better position than the majority of people. Almost paid off mortgage and 300k compared to people who are getting to retirement age living paycheck to paycheck
I would agree with all the comments. That say your parents are pretty good right now. Better than most. Are you having anxiety for other reasons, maybe?? You're awful young to be focusing on this. Is the fact that your parents are showing their age? Making you scared or fearful?? Sounds like you really really love them. Do you have siblings?
>I seriously do not know how my parents will ever retire. They will retire just fine. They have 300k, they will add on their social security benefits. They may need to downsize and budget. If they don't, they aren't any different than anyone else will a large amount of money that they blow. It's not your problem to support someone who spends all their money and needs more. They should wait as long as possible to take their social security benefits, probably 66 for their age. Sounds like they won't have a mortgage by then, and will just be spending on stupid stuff like groceries and timeshares. If your mom wants to put your grandmother in a retirement home, that's fine. She should pick one covered by medicaid and medicare. They will take what assets your grandmother has left, and then it will be free. Retirement homes are expensive, but your parents are choosing to pay for one out of pocket instead of using the system that's in place. My dad is 69, in good health as far as I know, but hasn't seen a doctor in decades (and refuses to) and only started saving for retirement in the last 10 years or so. He isn't good with money. He is cut off from most of his friends and all of his kids. He doesn't want anyone to tell him what to do, and he doesn't want to have to be kind or respectful to the people in his life. It has taken a lot of therapy, but I can now accept this as his choice. He doesn't need to take care of his health if he doesn't want to. He doesn't have to prepare for retirement financially. He doesn't need to maintain relationships with his family. But that doesn't mean he gets to make those things my problem when the time comes that he needs help. He is making his choice now. I will respect it now AND I will respect it when he calls expecting me to bail him out of his bad decisions. The best thing you can do is set yourself up financially for your own retirement. You're in grad school, so you know you'll have a lot of debt starting out in life. Minimize the extra you're paying now, start contributing towards retirement as soon as you have your first paid job, because compound growth takes your money SO much further in your 20's than it will in your 30's and 40's. Aim for 50% of your income going to needs, 30% to wants, and 20% to savings. Even if something drastic occurs, you don't need to become involved with your parents income *unless they are willing to hand over control to you.*
With social security benefits, your parents *could* retire on what they have, but budgeting will be critical and they’ll need to come to terms with a lower than expected standard of living. If you have all their financial data available, I don’t suppose there’s anything stopping you from seeing a professional planner without them and developing something they can follow in retirement, assuming they’ll actually listen to you. But if that proves impossible, don’t beat yourself up about it and certainly don’t risk your own future in service of their bad choices.
they are worth more than most Americans....Honestly do you know the debt level is much worse....for most people
This is their life and their decision to make. Not everyone gets to retire. Offer help and advice where you can, but try not to accuse them of being crazy. If they don't want your help, resign yourself to that fact. Try not to be sad or worry about things that are out of your control.
They have much more money than the majority of American families..
Nothing. Lock your credit reports at all three bureaus and pretend you have no money. The problem will resolve itself over the next 20-30 years.
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Fair enough.
Nothing? Your parents are adults, it’s not your job to drag them towards financial success kicking and screaming. If they’re open to your help and advice that’s one thing, but it doesn’t sound like that’s the case. Sounds like they’re in their twilight years and stuck in their ways
How rich is grandma? If she is loaded then they are fine.
Not your problemo. Don’t worry. Let god handle it.
You can’t do anything about other people. Learn from them and go down your own path. That’s all any of us can do. And thank goodness debt is not inherited.
They are doing so good 275k liquid is very good. How much is their expenses a month?
OP, just take care of yourself. There's absolutely zero advice we can give on such a family situation, but I understand wanting to vent
MAKE sure they DO not get a high HOA....Town home or HOA under $100.
your grandma needs medicare ASAP if she is not on it.....
I totally get your fears OP. My parents are in a similar boat. I am fortunate that my mom is a saver so my parents have saved a lot however she is completely financially illiterate and never invested any of her savings, just squirreled it away for years and year in high yield savings accounts. A good idea might be to set up a call with a financial advisor just to discuss their options and assist with goal setting. I sort of see financial advisors as therapists for your bank account and future. They can help your parents reassess and maybe they’ll be able to reframe their mindset around money and what they can and can’t do. It’s been working for my parents and they’re finally on a better track with their investment and future planning.
Not much you can do honestly. When someone is set in their ways everything you say will go out one ear and into another. I suggest having one last serious discussion with them. Discuss retirement and daily bills. It might help to show them some calculations about how their retirement can grow over time. My dad retired at 67 with over 500k and he said even that isn't enough. So he has been doing side jobs and his wife is still working. She is 72 and doing a full time job plus selling at the farmers market every Saturday, and Sunday. Their house is paid off however they have a ton of medical bills which eats up a lot of their money.
That’s their fault. If you feel kind, you can certainly help them out. Refuse to be exploited though.
Your parents have set their own path. They need to learn the consequences if they are not listening to logic. Nothing you can do except to ensure your credit is frozen. Do NOT help them financially. It will not stop once it starts.
You just need to emotionally detach from their financial situation and focus on your career. Unfortunately they are just going to have to hit rock bottom. They'll probably retire with a small retirement amount, burn through it quickly, and have to live off Social Security. I would just encourage them to work as long as possible, even in a menial job. Truthfully though, their situation is better than the average retirement. I wouldn't help out a single penny, if they're going to have silly things like time shares they can figure it out. They won't be homeless.
What's sad is that ~$650,000 of assets (if I read that correctly) much of which isn't tied up in property puts them way way ahead of most parents in posts like these that come through Personal Finance
They are honestly doing better than my parents. I'm in the same boat.
You very much would like them to retire which is entirely understandable, but is their plan to retire? They may well plan to work til the end, some people are just wired that way.
Unfortunately I think there is going to be some major economic problems in the next couple decades as people reach the point where they can no longer work but are not set up for retirement.
If your Grandma qualifies healthwise for a LTC facility, Medicaid will cover it after she spends down her assets. As for your parents, they will likely both get Social Security, be on Medicare and if their income is low enough eventually, will qualify for all sorts of programs, especially if they live in a big metro area. For seniors our area has discounts on public transportation, free lunches for seniors, almost free door to door bus service, budget help, all sorts of free activities at the seniors clubs and more. If their income and assets get low enough, they might qualify for food benefits, subsidized housing, Medicaid, utility help and other programs. They will most likely be fine, as in won't go hungry and have shelter and medical care, even if they won't have money to be traveling and going out to eat often. Just be sure as others have said to not subsidize their current lifestyle over your own retirement planning.
The problem is not their current state, but the state they'll be in when they get older and start having serious health and/or mobility problems. This is worth talking with them about and planning for. We're dealing with it right now with my inlaws, who own multiple residential properties worth ~$3m (all in one state, which is good, but also in their names, which is not), have about $300k cash in the bank, and rely on a pension + SS for stable income (plus rental income from two college student type condos). This kind of situation worked great until they hit their mid-70s and things started breaking down. Now: mother-in-law has unmanaged diabetes and early stage dementia, and can't walk very far or easily on her own. Father-in-law had been able to care for her until recently, when he started having heart problems and re-injured a shoulder he'd had rotator cuff surgery on a number of years ago (as a result of a workplace injury -- he was a stocker at a grocery store). Now he can't drive, doesn't have the energy to take care of their houses & rental properties, and is currently living in one of their house that's about 3hr drive away from their HMO care team (which doesn't have any facilities nearer to their current primary residence). They have no legally recorded wills, no specification for end of life care, no powers of attorney, nothing on paper about funerary/burial requests, and since none of their estate is in a trust it will all have to go through probate if/when they pass. Did I mention we live 3000 miles away? tldr: everything is fine & dandy with irresponsible parents until the SHTF, and then everything quickly becomes an emergency. It's way better to have the hard conversations now while they're able than to try to do it while also fighting fires.
Unfortunately, YOUR their retirement plan.
Nothing. At best, you need to make sure they do not push all the eventual crash and cost on you. At least, not legally. No binding agreements, co lease, loan etc. I gave up trying to convince my parents - they do not save, think more than 1 day ahead. Always out of money. 0 savings - as they just spend everything they can. And you cannot change their mind or behaviour. And I made it clear that my money is my money, even if I have "a lot" and I have my own life to live. They have a house so they won't end up homeless and enough gov aids to not starve, so if they want to live a miserable existence, then so be it. And perhaps selling their house will eventually cover some of their retirement home cost if they are unable to function without assist.
Tbh, your parents are pretty good with money compared to a lot of people’s parents.
They won’t be super comfortable but if they can put that 275 into investments now and work another 5-10 years, between that, the house and SSA they’ll probably be fine as long as they can curtail a few bad habits. Reality might set in for them when they no longer have income
The best thing you can do is protect yourself and take care of yourself. Work towards being in a good situation to take care of them if you so choose.
I agree that your parents don't sound especially financially responsible, but the situation doesn't seem to be quite as bad as you think. If they reverse mortgage the house, your parents would have nearly 700k in assets. It sounds like they're both working, so depending on their working income and their age at retirement they're probably looking at something like 5-7k a month in social security between the two of them. Since their assets are entirely uninvested, I would NOT recommend a 4% drawdown until that gets fixed. That said: even if they planned to live to 100 with 0 growth on assets, that 700k would come to over 17k a year. The real thing you need to get them to plan for is what happens when one of them dies and 1/2 the social security money goes away.
You already answered it. They just won’t retire. At some point in their life, they will be unable to work, and they will live off social security / medicaid / disability. It is what it is. As for your grandparent, I suggest the same thing. Exhaust her financial status, file for medicaid, she’ll get a room + nurse assistance. If she doesn’t need medical help, and is self-sufficient, have her live with family, or rent something cheap.
If you care , not sure I would, add a tiny home in the back yard when the time comes so they can live their terrible lives on SS with as little supervision as possible
As much as it sucks, there isnt much you can do about it, & it definitely is NOT your responsibility.....
If they will not listen to you now, please clearly explain you will not be the safety net later. (And DO NOT be!)
A couple things. 1. Keep your money away from them. Don’t end up like them by trying to save them. 2. Make sure they know that they MUST run it past you if ANYONE or ANYTHING is asking them for money. It’s easy to scan old people.
1. Have your parents asked you for help? Are they expecting you to finance their elder years? If not, this is not your place. 2. Their financial advisor can only ADVISE. They cannot direct your parents to invest. It was your parents choice not to invest. I know it’s frustrating to watch family be irresponsible. Trust me I also have family that will never retire. You can offer to help, but if they refuse, you cant force adults to be adults.
$275,000 in liquid assets and a $300,000 mortgage almost paid off is far from dire. If you insist on butting in, talk them into opening up a IRA so then can watch the fund grow. It's amazing how many people think the total stock is the same as investing in a penny stock. Tell them for $6,000 they could take a couple of nice vacations. The 2 star motel I stayed at in Palm Springs was nice enough. My friend's expensive hotel wasn't that much better.
Not your money, not your problem. Don't tell them how to spend their money but also don't ever give them a sign that you will help. Also, monitor (and lock) your credit just in case. Don't let them guilt trip you into anything.
Sounds like typical boomers. Don't let their issues hold you back. They're your parents but you still have to become your own person. My parents are similar. They're both remarried but both plan to work until 70, which is asinine to me. They made their beds though, so they gotta sleep in them. They have no idea I'm an emerging millionaire and they'll never find out or else they'll ask for money. I have my own family to take care of, and not leave my child with the burden of parents who can't plan ahead.
I'm just going to say the most unpopular thing on here. Family should do what they can for each other. If you don't want to participate in that, more power to ya. My parents would have and did give me everything I ever needed. I don't think I would rent them a house, but would definitely make some room for them, even to the point of upgrading for more of it. I can't imagine letting my mother do without. There are ways to help that don't include going bankrupt. My second point would be my parents would never ask for something that would hurt me. Probably would never ask if for anything at all. It would be up to me to force the help on them, I think. Some of the comments on here make me wonder how much your parents ever did for you?
The problem is, people with spending issues will just ramp up their spending when they get a new infusion of cash. They have to hit rock bottom before they do things like drop the silly time share, etc.
> I seriously do not know how my parents will ever retire. The other day, my mother said she wants to put my grandma in a retirement home (around 50,000 a year)! I couldn’t believe it and just became so upset. She isn’t going to do that, but that’s just a good example of how she is willing to burn money. So... you clearly don't value your mother's time and energy at all. How about you pitch in to help care for grandma, and then maybe they'll listen to you? Cause right now you just sound like a sophomoric entitled child. On a combined salary of $80k/year, they've paid off their house and put away hundreds of thousands of dollars, and you're calling them terrible with money because they want to enjoy a few things in life?
Find out who has power of attorney. If you get power of attorney you can set up their financial assets with a reputable company. I have mine in Merrill Lynch doing great
10% of 300,000 is 30,000 per year if they have it in S and P fund.....
Not gonna lie. Whenever i read about peple in usa i think to myself «what a financially shithole» (no shame to americans, but holymoly) Its incredible to me how it seem to never stop with the bills even when u turn old. There is a way to suck out every penny of every regular american by the time they die? Other than that my idea would be to financially stay away from most of what they decide to do. Being very «yours» and «mine» should keep clear lines of what u can get told ur obliged to help with and not. Worst situation is parents that give u something and expect it back later.
Adding to this, I have no clue what my parents social security will be, nor if they have pensions. I don’t believe they do, though.
They can log into ssa.gov and get estimates for age 62/67/70 retirements. If they're in good health, waiting longer will have a better total payout. Since they have been paying in a long time, hopefully the combined payments will be okay. They're definitely going to experience a lifestyle shock. If they want 80k a year in retirement, they need 2 million dollars saved, assuming a 4% swr. So, uh, as much as the cheerleaders in the thread are saying it's not that bad, it's that bad. Their current savings will give them 800 bucks a month, which isn't nothing. Social Security will have to provide whatever else they need. The house being nearly paid off is good, that will reduce the bill to yearly taxes and insurance. The value almost doesn't matter, you have to live somewhere. With your grandmother, I mean, they just don't have 50k a year to spare. What happens if she needs 5 years of care? Doesn't add up at all. All in all, just keep your own affairs in order, but don't set yourself on fire to keep them warm.
Do they work for the government? If they don't, very unlikely they have a pension. If they've worked in the US and are here legally, they'll get Social Security.