How do I help my parents who didn't plan for retirement

[Anonymous]

Anonymous wrote:Sorry to sidetrack, but how does one accumulate $7 M by age 35? Just curious. That fact kind of jumped out at me.

Two ideas. Company you own or work for goes public. Marry into money.

[Anonymous]

Anonymous wrote:You can't save them from themselves. If you are that well off, I imagine they will hit you up for money. I wouldn't expect that $500k to last very long. The best thing to do is to talk to them NOW. They need to talk to a financial planner. They need to manage their expectations, and it is unlikely they will be able to retire in 5 years as planned.

Op here. I did finally get them to start seeing one. Unfortunately their idea of budgeting is struggling to live on $100k per year

[Anonymous]

Anonymous wrote:You could look into long-term care insurance for them, but if you are willing to "insure" them anyway that might be cheaper.

Do they own? Maybe figure out what is a reasonable living situation and help with the mortgage?

Frankly 500k plus social security is significantly more than the average American has.

I own a number of properties so I can ensure they will always have a roof over their head. But my thought is safe area 600 square feet. Their idea is luxury building, at least 1100 square feet.

[Anonymous]

Anonymous wrote:Maybe sit them down and have a heart-to-heart discussion with them about how their lack of financial planning really worries you....and see if you can get them to come up with a plan for making the $500,000 last...i.e. a fixed annuity so they don't blow it all in a few years.

They have $650k total. They won't buy an annuity, which normally I don't like, but in their case I like it's restriction on preventing them from spending too much up front.

[Anonymous]

Anonymous wrote:Agree with PP that you should get LTC insurance for them and pay the premiums and put aside money to help them in their later years since they will surely need your assistance.

My mother has LTC. I could definitely pay the premiums. My father doesn't qualify. I know for us we should not get it because we self insure. Does the same logic apply here.

[Anonymous]

Anonymous wrote:Would it be a big deal to take care of your parents in their old age, since you are so fortunate?

The issue is my parent's concept of support and mine differ. I recall a conversation 5 years ago where my mother could imagine spending less than $25k per month.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sorry to sidetrack, but how does one accumulate $7 M by age 35? Just curious. That fact kind of jumped out at me.

Two ideas. Company you own or work for goes public. Marry into money.

Op here. Neither. I am just very good with money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Would it be a big deal to take care of your parents in their old age, since you are so fortunate?

The issue is my parent's concept of support and mine differ. I recall a conversation 5 years ago where my mother could imagine spending less than $25k per month.

Yikes!

[Anonymous]

Anonymous wrote:Sorry to sidetrack, but how does one accumulate $7 M by age 35? Just curious. That fact kind of jumped out at me.

They earned it by mooching off of dh's parents

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sorry to sidetrack, but how does one accumulate $7 M by age 35? Just curious. That fact kind of jumped out at me.

Two ideas. Company you own or work for goes public. Marry into money.

Op here. Neither. I am just very good with money.

Congratulations! Use some of that money to pay for professional elder care/financial advice.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Maybe sit them down and have a heart-to-heart discussion with them about how their lack of financial planning really worries you....and see if you can get them to come up with a plan for making the $500,000 last...i.e. a fixed annuity so they don't blow it all in a few years.

They have $650k total. They won't buy an annuity, which normally I don't like, but in their case I like it's restriction on preventing them from spending too much up front.

OP, what was their response to the obvious fact that their money would last less than a decade if spent at a rate of $100,000 per year?

[Anonymous]

I have different advice than PPs... Just to give you my perspective, DH and I are well off, but on a much smaller scale than you. We have well paying jobs and two houses, one of which we rent out. We are perceived as wealthy, whereas I would argue we are just very very frugal.

My in-laws are horrible with money. Spent all their 401k in one lump sum, refi'd their home and now have no equity but plenty of junk purchases and trips to show for it, and are now facing the future of living off just social security and a small pension.

We are not going to do anything at the moment. They don't respond to advice or make prudent decisions, so we will not give advice. We have a responsibility (I think) to ensure they have food and shelter, but there will be strings attached to our assistance if it comes to that. I agree with you- 600 square feet is reasonable.

So, my advice is don't engage them in a conversation on the details. Let them figure it out for now. You can step in if it becomes a problem, but you don't need to pre-empt things. It might exacerbate instead of alleviate the problem.

[Anonymous]

Anonymous wrote:I have different advice than PPs... Just to give you my perspective, DH and I are well off, but on a much smaller scale than you. We have well paying jobs and two houses, one of which we rent out. We are perceived as wealthy, whereas I would argue we are just very very frugal.

My in-laws are horrible with money. Spent all their 401k in one lump sum, refi'd their home and now have no equity but plenty of junk purchases and trips to show for it, and are now facing the future of living off just social security and a small pension.

We are not going to do anything at the moment. They don't respond to advice or make prudent decisions, so we will not give advice. We have a responsibility (I think) to ensure they have food and shelter, but there will be strings attached to our assistance if it comes to that. I agree with you- 600 square feet is reasonable.

So, my advice is don't engage them in a conversation on the details. Let them figure it out for now. You can step in if it becomes a problem, but you don't need to pre-empt things. It might exacerbate instead of alleviate the problem.

Op here. You are probably right. It just kills me to watch. I could live comfortably on what they have, but know that they will squander it and then come to me for help.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have different advice than PPs... Just to give you my perspective, DH and I are well off, but on a much smaller scale than you. We have well paying jobs and two houses, one of which we rent out. We are perceived as wealthy, whereas I would argue we are just very very frugal.

My in-laws are horrible with money. Spent all their 401k in one lump sum, refi'd their home and now have no equity but plenty of junk purchases and trips to show for it, and are now facing the future of living off just social security and a small pension.

We are not going to do anything at the moment. They don't respond to advice or make prudent decisions, so we will not give advice. We have a responsibility (I think) to ensure they have food and shelter, but there will be strings attached to our assistance if it comes to that. I agree with you- 600 square feet is reasonable.

So, my advice is don't engage them in a conversation on the details. Let them figure it out for now. You can step in if it becomes a problem, but you don't need to pre-empt things. It might exacerbate instead of alleviate the problem.

Op here. You are probably right. It just kills me to watch. I could live comfortably on what they have, but know that they will squander it and then come to me for help.

PP back - and maybe the help you will give them will have to have some reasonable limits. My MIL told my BIL that she couldn't possibly downsize to a condo b/c she can't share walls. My BIL said, Mom, hate to tell you but you should have made some very different choices 10 years ago if that is your thing. I really think just try not to own their problem. It is frustrating. Drives me nuts that I don't even have an iPad and they are crying poor with every electronic gadget known to man.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sorry to sidetrack, but how does one accumulate $7 M by age 35? Just curious. That fact kind of jumped out at me.

Two ideas. Company you own or work for goes public. Marry into money.

Op here. Neither. I am just very good with money.

In other words, pyramid scheme.