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

[Anonymous]

Anonymous wrote:

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.

Not OP but two people making high salaries and living frugally while timing the real estate market right can sock away a lot of money.

[Anonymous]

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

Exactly. Don't see the problem.

[Anonymous]

Anonymous wrote:
Not OP but two people making high salaries and living frugally while timing the real estate market right can sock away a lot of money.

$7 M by age 35? Assuming they started making a lot of money at age 25, and live very frugally, they still have to have extremely high salaries in order to save that much money.
And to time the real estate market correctly several times. It is very hard to make that much money in 10 years when you're young, unless the money comes from a one time event (e.g. selling your company).

[Anonymous]

Anonymous wrote:Disability and life insurance (if you can get it on them, you probably can't) and LTC insurance definitely I have an enormous life and LTC policy on my husband -- I've seen first hand what a lingering death can do to a family's finances. Fortunately, I bought the policies when my husband and I were much younger and in great shape. I don't think either of us would qualify now. The policies are expensive but worth it to protect me and still at home children should something happen to DH.

Check to see if you can purchase any group policies through AARP or the other more conservative sr. citizens group. I have been told their policies are reasonably-priced.

If they own a home and have equity in it and both are over 62, then a reverse mortgage will help. Be prepared for them to have to declare bankruptcy. Also be prepared to take them to an elder care lawyer (they exist) should one be hospitalized for a long period of time. Medicare drops out after 90 days. A friend of my parents consulted an elder care lawyer and the lawyer counseled the woman to divorce her husband if he passed the 90th day in a nursing home. He had stroked out and was unconscious in a nursing home. She had the paperwork ready to go because she would have lost her home and what little savings she had left if she had to start paying for her husband's care in full but her husband "fortunately with God's blessings" (her words, not mine) died before Medicare ran out. Awful situation. But she had prepared for her security and is still doing very well on her own - now in her 80s. i was shocked when she told me she was filing papers to divorce her husband but she was very matter-of-fact about it. She was going to lose everything she had left for her own security if she didn't.

This was under California law, BTW.

What? That is crazy

[Anonymous]

No 7 million dollar baby should be asking for financial advice unless he's only posting to brag. Most people would help their parents and keep the rest to themselves.

[Anonymous]

Anonymous wrote:No 7 million dollar baby should be asking for financial advice unless he's only posting to brag. Most people would help their parents and keep the rest to themselves.

Disagree. Apparently, one of the main reasons why OP is in a solid financial position is because she is "good with money." And trying to make a smart money move for her parents is preemptive.

It should not be her responsibility to provide financial rescue after she watches her parents squander their assets. She is trying to help them now and not just later.

[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.

I disagree, I would let them know up front what you are willing and NOT willing to do. Let them know that you are willing to help them budget and get their act together but will not pay for irresponsibility down the line. You can put it nicely, but make it clear. I dealt with a parent like that, you better be clear from the beginning. I would also get LTC insurance as has already been advised.

[Anonymous]

If they're five years from retirement, LTC premiums may be exorbitantly expensive.

How do you have all of this information about the amount of their retirement, when they plan to retire, how much they think is reasonable to spend each month? If they're involving you in their financial discussions, then you have an appropriate place to ask them what their financial plans for retirement are, and to offer to help them with their financial planning for retirement. If they're not receptive to that, though, you can't force them to be sensible with their money. I'm in the position with a parent right now, he was reckless with his spending and now can't meet his basic needs. We've drawn the line at covering rent on a small apartment (lost home to foreclosure), utilities, personal property tax on car, etc., which we pay directly. Parent has social security, which he is expected to use to pay for groceries, other variable expenses (e.g. new clothes, gas), entertainment, etc. It's not the lifestyle he wants to live, but that's the extent of the sacrifice we're willing to make for his irresponsibility. He will never need to eat ramen, but if that's what he chooses to do because he wants to spend his social security on something foolish, that's his choice.

[Anonymous]

You help everyone by first taking care of your own retirement. You learn to live well on 1/2 your salary. Then you take care of your retirement. Then you take care of your kids education, and then you figure out how to help your parents.

[Anonymous]

Don't enable them. They have clearly spent all of their money their entire life. If you give them money they will spend it. How will you feel when you give them money and they go and take a luxury vacation? Don't do it. Your money is better spent donating to a charity that really needs the money.

[Anonymous]

Don't enable them. They have clearly spent all of their money their entire life. If you give them money they will spend it. How will you feel when you give them money and they go and take a luxury vacation? Don't do it. Your money is better spent donating to a charity that really needs the money.

[Anonymous]

My grandparents squandered their multimillion dollar inheritance and my grandmother then sued her children for financial support. The insane thing was that they had neglected their children since their childhood - my grandfather had actually pulled my mother out of high school, where she was doing very well. So their children, who had started with nothing as young adults, and who had hoisted themselves to a middle-class lifestyle over years of hard work and economy, were sued by their own mother.

And they banded together and gave her a comfortable stipend to live on. A small apartment, a daily maid and cook (my grandmother had never entered a kitchen in her life and would have starved to death rather than touch the stove).

[Anonymous]

Anonymous wrote:
My grandparents squandered their multimillion dollar inheritance and my grandmother then sued her children for financial support. The insane thing was that they had neglected their children since their childhood - my grandfather had actually pulled my mother out of high school, where she was doing very well. So their children, who had started with nothing as young adults, and who had hoisted themselves to a middle-class lifestyle over years of hard work and economy, were sued by their own mother.

And they banded together and gave her a comfortable stipend to live on. A small apartment, a daily maid and cook (my grandmother had never entered a kitchen in her life and would have starved to death rather than touch the stove).

Is this the plot of a novel you're writing ?
No way this happened in America in the last 50 -100 years

[Anonymous]

Anonymous wrote:

Anonymous wrote:
My grandparents squandered their multimillion dollar inheritance and my grandmother then sued her children for financial support. The insane thing was that they had neglected their children since their childhood - my grandfather had actually pulled my mother out of high school, where she was doing very well. So their children, who had started with nothing as young adults, and who had hoisted themselves to a middle-class lifestyle over years of hard work and economy, were sued by their own mother.

And they banded together and gave her a comfortable stipend to live on. A small apartment, a daily maid and cook (my grandmother had never entered a kitchen in her life and would have starved to death rather than touch the stove).

Is this the plot of a novel you're writing ?
No way this happened in America in the last 50 -100 years

In France, where I'm from. I've considered writing a novel out of my family history, because there is so. much. more. insanity! But this was the financial side that pertained to OP's question.

[Anonymous]

Op, can you and DH set aside some money in a secret fund to help them in the future? I agree you should not have to, but realistically, you're going to, so set some aside now and do not say anything about it to your parents. When the time comes, you can tell them what you will and won't be able to do (yes to 600sq ft apt, no to luxury apt, yes to health insurance help, no to vacations) and pay for those things directly. Don't give them a cent. Discuss this with your financial planner. DH and I did this and my MIL knows nothing about it. I hope she never needs it but she probably will.