Parents out of money at 75

[Anonymous]

We bought a condo for my dad in Florida. He could afford the HOA fees on his SS. He lived frugally and there were pools and golf and a coffee shop and shows on site.

When he died, we sold it for 3 times as much as we bought it for.

We are not rich. Make about 100,000 a year. But is was very doable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My concern would be that no matter how the 20k is paid, this is only the beginning of huge expenses coming your IL’s way.

Do they have any assets to sell like an extra car? Anything that would bring in some liquid?

This is a wake up call, OP - I really think they need to sell current home and downsize immediately- they can’t sustain their current lifestyle.

I think I’d list their house AS-IS and sell through a We Buy Any House type service. Get some cash and go from there.

Where in the world do people think they can live cheaper than in a paid off house?

Depending on the house, maintenance and utilities can be more expensive than a senior apartment. Additionally, moving to a condo with low maintenance expenses can be cheaper. Both of those options also free up the equity. Often, seniors let their house rot around them which isn't in their best interest, and then their house is worth far less when they finally do sell.

[Anonymous]

Anonymous wrote:WTF is wrong with people? You give the money and leave it alone. SS sounds like it's enough for them. They can also receive Meals on Wheels deliveries.

You don't give money. You pay the bills.

[Anonymous]

Anonymous wrote:Clarification. We can give them $20k, but I worry that this is the beginning of an ongoing, unexpected financial expense for us. We don't make a lot of money and have been diligently saving for our own retirement (we're both 50). I'm just worried about the setback. Does it start with a roof and end with $9k/month in assisted living? I surely can't be the only one going through this situation. There's one sibling with no money, hence the question about a loan against their equity. They are wonderful people, I'm not vying for their house, we're happy to help them. I'm just hoping it doesn't come at the expense of our own retirement.

You’re correct to be concerned.

If nothing else, this means they can’t afford their house. The best course of action would be for them to downsize. My neighbors just did this and it takes an enormous amount of effort and energy — most people wait until there’s an emergency and it makes a stressful situation so much worse.

The in-laws need to be open to downsizing to an apartment that they can afford. That’s really the only option.

It makes no sense for you to overextend yourselves financially to keep them in a house they can’t afford to maintain. Get ready for some difficult conversations with your husband and in-laws. Are there any siblings involved or is he an only child?

[Anonymous]

Anonymous wrote:

Anonymous wrote:My mom lives entirely on SS. I thought that was pretty much par for the course. She owns her townhome.

I'd pay for a new roof if she needed one. I don't have much money but she raised me entirely by herself. If I can't pay her back, what kind of child am I?

If you can't pay her back because you don't have the resources, it doesn't change who you are. If you are able and don't, that's a different story.

What if you’re like many people and you technically have the money but are financially insecure? Maybe you have a decent salary but you’re a FED and you’re worried about layoffs and unemployment. Sure, you have more than 20K in emergency savings, but what if your own house needs a new roof next year? And you have children whose college funds are nowhere near where they need to be?

Most people do not have unlimited discretionary funds. It’s not as easy, as saying if you love your mom you’ll pay whatever she needs. Those same people will criticize you for not having fully funded college and say that you shouldn’t have had children if you couldn’t provide for them.

[Anonymous]

My ILs also live in a large, paid off house that they aren't maintaining. They haven't asked for money but I know they've taken money out of their retirement savings for things like a broken stair rail.
Personally I just don't get it. You have too much space and not enough money to take care of the house. A condo seems obvious.

[Anonymous]

Anonymous wrote:I'm basically trying to offer them a reverse mortgage without fees. Instead of a bank, they use us as a line of credit. If there happens to be anything left from the house, we would recoup. I'm not expecting that to be the case and essentially consider the money a gift from us, but just trying to document appropriately for transparency among siblings.

I agree there's a bigger conversation to be had. Perhaps they should not be in a house they can no longer afford to maintain. But I have no idea where they could go that would make more financial sense.

We're committed to helping. I'm just feeling a bit overwhelmed by this turn of events.

I get where you're coming from, OP - I hate the idea of giving banks even more money. But in this case, I would say it's better for them to take out a reverse mortgage and deal with the bank than to mix family and money. It keeps you and your spouse out of the picture. If your in laws are covering daily expenses with SS and only need money for emergency things like a roof, then the reverse mortgage on 50% of the value of the house is probably all they need. When it is time for their senior care/AL, sell the house and use the remaining 50% for their care. When that's gone, it'll be Medicaid if it still exists.

[Anonymous]

Sell the house, get a modest condo for cash and make sure the HOA is covered by their social security. Review all condo docs and recent minutes to ensure the condo association is financially sound.

We've had two elderly neighbors die in their too-big homes in the past two years. In both instances, they fell down the stairs. Both times the homes had lots of deferred maintenance.

If your parents can't afford to maintain their house, then they likely are not physically able to maintain it either.

[Anonymous]

I would be worried about the next repair that is on the horizon. Have you or your DH been to the house recently to access what other repairs that have been neglected? Are they up-to-date with their taxes and credit cards? You need the whole picture, not just what they are telling you. When you lend or give people money, you have the right to ask questions. Good luck, this is hard.

[Anonymous]

I’d explore housing repair grants or insurance claim first. Don’t pay. With low income they qualify for state housing repair grants.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My concern would be that no matter how the 20k is paid, this is only the beginning of huge expenses coming your IL’s way.

Do they have any assets to sell like an extra car? Anything that would bring in some liquid?

This is a wake up call, OP - I really think they need to sell current home and downsize immediately- they can’t sustain their current lifestyle.

I think I’d list their house AS-IS and sell through a We Buy Any House type service. Get some cash and go from there.

Where in the world do people think they can live cheaper than in a paid off house?

Depending on the house, maintenance and utilities can be more expensive than a senior apartment. Additionally, moving to a condo with low maintenance expenses can be cheaper. Both of those options also free up the equity. Often, seniors let their house rot around them which isn't in their best interest, and then their house is worth far less when they finally do sell.

A senior apartment will be $5-10K a month. Why do people think others should move when they don't want to? Who cares what the house is worth? Its their home.

[Anonymous]

Anonymous wrote:My ILs also live in a large, paid off house that they aren't maintaining. They haven't asked for money but I know they've taken money out of their retirement savings for things like a broken stair rail.
Personally I just don't get it. You have too much space and not enough money to take care of the house. A condo seems obvious.

Because they cannot afford a condo and pay HOA fees if they have no money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would sell the house and get them into a continuous care community near you, take the left-over money and put it in the bank/whatever a financial planner recommends.

Use the extra money for fun trips and save some for care when they are too told to care for themselves.

We did this for my mom and it was the best thing we did. Friends, no house to care for, activities, easily affordable.

This is the answer. I know several friends that have done this and were able to afford their lives.

They are not qualifying for a CcRC, at least not once where "no price increases for advanced care".

CCRC's have a huge amuont of monthly fees.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm basically trying to offer them a reverse mortgage without fees. Instead of a bank, they use us as a line of credit. If there happens to be anything left from the house, we would recoup. I'm not expecting that to be the case and essentially consider the money a gift from us, but just trying to document appropriately for transparency among siblings.

I agree there's a bigger conversation to be had. Perhaps they should not be in a house they can no longer afford to maintain. But I have no idea where they could go that would make more financial sense.

We're committed to helping. I'm just feeling a bit overwhelmed by this turn of events.

I wouldn’t get into any kind of situation like this. Either you help them as a gift and accept that yes, it almost certainly will be ongoing. Or they accept that they are not able to afford their life in the house and they downsize to match their income. Or they don’t do that and they just stay in there while it falls apart around them. That happens a lot.

Yes, this unfortunately is the path my parents have chosen. I tried for a long time to encourage them sell and downsize, but I have finally accepted they will not. I know I will have to deal with the eventual health crisis, hoarding, and everything else.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would sell the house and get them into a continuous care community near you, take the left-over money and put it in the bank/whatever a financial planner recommends.

Use the extra money for fun trips and save some for care when they are too told to care for themselves.

We did this for my mom and it was the best thing we did. Friends, no house to care for, activities, easily affordable.

This is the answer. I know several friends that have done this and were able to afford their lives.

+100

Nobody's health gets better in old age. Prepare for their eventually needed more support (physically and with activities of daily living).