Parents out of money at 75

[Anonymous]

My in-laws have just revealed to us that they have depleted their savings and are living 100% on social security. They have a paid for house and can manage their routine expenses with what they get from SS, but recently needed a $20k home repair which is how this situation came to light. We can provide them with the money they need for the repair, but I want to set it up as a loan against their home equity (roughly valued at $350k). Does that sound reasonable? How would you go about documenting such an arrangement?

Knowing that they're out of money, any recommendations on what we should be factoring into our own finances to help them navigate the next phase of life? Any financial burden will fall to us and I'm worried this is going to change our own retirement planning...

[Anonymous]

Just give them the money. Pay it directly to the company.

[Anonymous]

So you want their house eventually? It’s clear they won’t be able to pay you back. What’s your spouse thinking?

[Anonymous]

Anonymous wrote:Just give them the money. Pay it directly to the company.

+2 FFS

If you can afford it and they were/are good to you and your husband

[Anonymous]

Reverse mortgage for 25 years? But then you get nothing when they pass.

[Anonymous]

Can they get part time jobs? 75 is pretty young, considering they can live another 15 years. Is your DH an only child? If so, it makes no difference since the house will flow 100% to him.

What 20k repair? I likely wouldn't give money. Nearly all contractors can point people to financing

[Anonymous]

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.

[Anonymous]

Is your husband an only child? If not, can the siblings split any necessary extra expenses moving forward?

I, for one, would be encouraging to downsize to a place they can afford though.

[Anonymous]

Are you worried that they will leave their house to other siblings, or share it evenly and you will be out the money? If so, document it. If you're going to get the house anyway, why worry?

[Anonymous]

It might be time for them to sell their house and downsize to a small apartment without repair bills, depending on their spending habits.

[Anonymous]

It does not sound like you can afford to give them 20k. If you do it at the risk of your own retirement, you are passing the burden to your children who will have to dig you out.

They should sell their house and buy a 150k apartment. Then they should both find part time jobs. Even if it is working at the grocery store for 15 hours a week. Every bit adds up.

If you give the 20k for this repair, what happens with the next repair. Today will be the roof, tomorrow the HVAC system, next year the windows etc

[Anonymous]

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.

[Anonymous]

No you don’t ask for their house.

[Anonymous]

No advice but I can sympathize. My parents didn’t save and are fully expecting to retire solely on SS and somehow think they can keep up their 250K a year lifestyle on that. Can’t even be upset because it’s so moronic.

[Anonymous]

How open are they to moving and is there such thing as a $150k apartment (as someone suggested) near you? If so, I'd move them. So much less stress if they have that extra money available to them, and no unexpected home repairs to worry about.