In-laws may need my money - how to cope?

[justin]

This isn't a serious concern yet, but it is in the back of my mind. One day in the future my wife and I may have to financially support her parents.

A little background: My wife, my wife's parents, and her four siblings arrived in the U.S. as refugees from Cambodia about 20 years ago. None spoke English at the time and they had zero when they arrived here. Over the years, my wife and her siblings all learned English and have become gainfully employed. Today, her mother and father (my parents-in-law) know very basic English and her father is still employed in the construction industry (age ~55). They are still 7-10 years away from some social security.

My FIL's job is physically demanding, and as a result, he may not be able to physically handle the job for many more years. Other less strenuous job prospects making a similar amount of money aren't too good for him due to limited English proficiency. MIL stays home and makes a small amount of money from a home-based agricultural business. She also babysits her multiple grandchildren and receives below-market payments (essentially "donations") for this service from the grandchildren's parents (including me). Savings are minimal, perhaps 1 year's expenses. Small mortgage on a modest house is about half paid off, with 10-11 years left.

My wife's 4 siblings have jobs and/or spouses with jobs such that they all make a decent living. To my knowledge, my wife and I have a higher household income than all the other siblings, but not by too much in some cases. It appears to me that the 4 siblings spend everything they make for the most part. One or two might save a very small amount, but that usually ends up getting spent on something. Plenty of debt to go around too. We have tried to get some siblings interested in saving and investing with limited to no success. In contrast, me and DW save the majority of what we earn and intend to be FI/RE (or at least FI) in 7-10 years. We have our own children to take care of too.

My parents-in-law are fairly simple folks and don't need a lot of money, but they'll probably need more than what SS has to offer given their abbreviated earnings history in the U.S. At some point in the next 5, 10 or 15 years, my parents-in-law's expenses will be greater than their income from all sources. The "retirement plan" for them is to have my wife and her siblings help out with their expenses. This is how things were done "in the old country" and at this point in time, there aren't too many other options for them besides this type of retirement plan. I am ambivalent leaning towards accepting of this idea. However, in my planner's and spreadsheeter's mind, the uncertainty with respect to the timing and amount of the support obligation really bugs me (not the idea of the payment itself). The equitable sharing of this burden among siblings is also of concern to me. DW and me don't mind helping, but it should be a family effort with the other siblings.

I'm having a hard time dealing with what steps I should be taking now. While DW and I sacrifice and save up our proverbial millions for FIRE, I have a sneaking suspicion none of the other siblings are doing this. How do I prevent the problem, say, in 2016, of DW and me being the "rich daughter" and son-in-law expected to be the sole supporters of my parents-in-law? Upon FIRE, we'll probably do a good bit of international globetrotting and spend a couple weeks a year lounging on cruise ships in the caribbean or other locale (at first at least). In any event, we won't be doing the 9-5 thing while all the other siblings probably will be. They are all great, honest people. But how do you tell them that your 4% safe withdrawal rate doesn't allow for you to pay their share of the support burden? The general attitude of the siblings is to "not worry about it", "it'll be ok", and "why do you worry about that stuff?". Very fatalistic attitudes and quite the opposite of my view on life.

DW's siblings don't really know about our FIRE plans, other than that we "save a lot and are cheap" and "we always have money". All her family lives within 5-10 minutes of each other and they all have close relationships, so our FIRE lifestyle (before and after FIRE) can't be hidden or watered down.

My plans are to discuss this at length with DW and see where it leads. Her family isn't really the planning type though. Not sure how this is going to end. It would be nice if I knew the date and amount of annual payments required. I could at least save that much extra to support a little bit higher SWR.

Not sure if I'm venting, asking for advice, or just putting thoughts into writing and getting this off my chest. I don't want to create animosity or resentment among the family. But I may feel resentful myself if DW and I are the ones left on the hook after all of our hard work.

Anybody been through a similar experience? Thoughts? Advice?

[maddythebeagle]

If they have a simply life, I wouldn’t worry about it much. I think we have noted that a lot of older folks live on just social security. There are a lot of other assistance programs out there, also. I would be more concerned if they suddenly wanted you to fund a higher lifestyle. In that case, you could always move away.

[Ginger]

I posed the same question to my friend the other day concerning my sister. Her reply was exactly the same: "many government assistance programs out there." Just can't imagine the 'government' will be taking care of everyone in their old age,

[Arif]

If it's not too much of a burden the parents could move in with one of their kids. You probably wouldn't want to volunteer for this duty but it is an option. They could sell thier house and live off the proceeds while drawing ss and any other assistance they can get their hands on.

[FlowGirl]

Quote:

Originally Posted by justin I'm having a hard time dealing with what steps I should be taking now.* While DW and I sacrifice and save up our proverbial millions for FIRE, I have a sneaking suspicion none of the other siblings are doing this.* How do I prevent the problem, say, in 2016, of DW and me being the "rich daughter" and son-in-law expected to be the sole supporters of my parents-in-law?* Upon FIRE, we'll probably do a good bit of international globetrotting and spend a couple weeks a year lounging on cruise ships in the caribbean or other locale (at first at least).* In any event, we won't be doing the 9-5 thing while all the other siblings probably will be.* They are all great, honest people.* But how do you tell them that your 4% safe withdrawal rate doesn't allow for you to pay their share of the support burden?* The general attitude of the siblings is to "not worry about it", "it'll be ok", and "why do you worry about that stuff?".* Very fatalistic attitudes and quite the opposite of my view on life.*

Great topic - husband and I have been discussing the exact same thing since all of our parents may need help later. We have the added burden of no siblings - I'm an only child and husband's brother may need help too. No easy solutions, but we may look for a win-win situation like buying investment real estate and letting them live-in/manage it. We would not be opposed to taking in one parent to live with us, but the whole family would be tough. Calling our ER "unemployment" or "disability" will probably go along way towards preventing them from asking for easy handouts (not that I think they are the type, except maybe BIL).

[Nords]

Ouch-- great post.

Around here it's called "ohana housing"-- three or four generations under one roof. *Land is way too expensive to be wasted on eldercare facilities and many kupuna have property taxes that are higher than the original purchase price of their 1940s homes.

Barring chronic health problems & prescription expenses, you would be amazed by how frugally some live on their Social Security checks. *Given their accomplishments your parents-in-law sound unlikely to abuse your largesse, and I bet they'd amaze everyone with their ability to find some sort of employment income no matter how menial.

Siblings-in-law are another matter. *I guess you'd all have to insist on equal shares of donated time, assets (living with you) or money. *I think it helps in these situations to present the impression that you're barely able to afford to live on your savings because you don't have the impressive salary cashflow of all your (employed) relatives. *No one could possibly expect you to return to the workplace to care for your spouse's parents, could they?

When I watch my FIL grumbling about the high price of (_____) or proposing to repair gutters with duct tape & roof tar, I sometimes wonder how long their 100% bond/CD portfolio is going to last. *But when I watch them playing with their only grandkid I stop worrying about it.

Hopefully our kid moves out before anyone else turns OUR home into ohana housing. *I suddenly understand why spouse is so interested in finding a nice local 2BR investment condo in the next 5-10 years.

My father lives alone in a small Colorado town where he can hike the Rockies to the tune of 30-40 miles a week (every week, winter & summer, for the last decade). *I'd be astounded if his expenses are more than shelter, heat, groceries, shoes, and gas to the nearest national park trailhead. *(Or maybe he's whooping it up playing Sugar Daddy to a bunch of hot stripper babes in a swingin' singles apartment complex and he just wants me to think that he spends all his time scaling the, er, Rockies.) *I suspect that when he senses that his independence is nearing its end, he's just going to hike in until he can't make it out and let the coyotes make the decision for him...

[mikew]

Justin
What does your wife think? My wife is Japanese. Her whole family has a different way of thinking. Things that are problems to my eyes just seem to work out without anyone even talking about them. Basically I have given up. I just follow DW's lead. She knows what is appropriate and instinctively ducks when necesary.

Being traditional everyone may expect the parents to move in with one of the kids.

Are there any sons? They may step up when the time comes. In Japan, the first son has all of the responsibility and gets the whole inheritance. In my in-laws’ eyes, my wife has joined my family and left hers.

[lazygood4nothinbum]

with longevity increasing and healthcare & housing costs rising, with more diseases emerging as life spans increase and diagnosis becomes more accurate and early, seems this society might be due for some fundamental change as to how we think about the care of our elderly.

the mother of a very good friend of mine aged underfunded. she's in assisted living now. the seven siblings all kick in, some with cash, others with time. so whether it is flowgirl's idea of investment property providing housing, maybe some income and a sense of accomplishment or nords' ohana, seems, at least, the problem is not insurmountable.

maybe we will simply move from mini & mc mansions and designate setbacks for saltbox houses instead.

[Jane_Doe]

Justin-

I feel your pain! When I was younger and our kids were little, two things that "preyed" on my mind were what if my husband died - what would I do? (Came to the conclusion I would move closer to my parents and other extended family since they live over 1500 miles away) and the second was what to do with my in-laws when they were no longer able to take care of themselves. Never came up with a good "plan" for the second issue.

However, time was on our side. My husband is still kicking and we are in a better position now to help his folks. With our second child about to go off to college, we have more free time and also financially are in a better position to help. Over the years DH's parents have - first sold their home and used that money to live, then moved into subsidized senior housing which has low rent and utilites included. We live a few hours from them and one older brother is 10 minutes away from parents, another lives in a state halfway across the country. We are the ones who have taken care of the bulk of things when needed.

Anyway, for years now we have sent a monthly "supplement" to them to help out with expenses - their only income is SS. I send it to them around the 15th or 20th to help them thru the end of the month. Recently, my MIL has had to go into a nursing home. She has dementia, so this is the best place for her - hard for FIL to care for her any longer - I couldn't have done it as long as he did! She is in an EXCELLENT facility so that is truly a blessing. FIL is able to visit as often as he wants - still driving at 82 ..... ANYway, back to my (long-winded) point! We are asking the brothers to kick in to supplement since MIL's SS goes to the nursing home now - it is like pulling teeth, but they do send the extra money. It is my job to keep track and make sure the money gets into (step) FIL's hands - he doesn't want to ask for it, but needs it to make ends meet. It IS working out. Medicaid is kicking in to cover almost everything for MIL, so that is REALLY a huge help. My husband gets really frustrated with his brothers as they don't even visit Mom, don't ask how she is doing, etc. Can't believe it. We drive up every week or two, sometimes do it in a day, visit FIL and all go to see Mom who doesn't know us but likes the company. Wish we were the ones who live 10 minutes away - KEEP this in mind! It is easier if you live close by.

So, in the long run it all works out. We have even figured out that FIL can move into our older kid's un-used (off to college) bedroom once he can't live on his own any longer. He could even watch the cats for us while we travel once we ER!

Try to either formulate a "plan" or just leave it up to God, and trust that it will work out in the end. I hope your wife's other siblings at least CARE - that does make a huge difference! (Boy, am I glad I got the "good" brother!! )

Wishing you good luck (and a good night's sleep!

Jane

[Jay_Gatsby]

Justin,

I'm in the "equal share" camp, regardless of how anyone else in your family feels. You live in the US, not a foreign country. Everyone here is given the chance to make their fortune, but they're also expected to pull their own weight. I'm sure you would agree that your wife's siblings are extremely selfish in speding all their money on themselves, rather than saving some to cover their share of elder care for your wife's parents. Put differently, your wife's siblings have abandoned the elder care practices of your wife's home country in favor of the "spend it if you've got it" attitude of the US. Why is it fair for them to force you and your wife to shoulder the burden by yourselves?

I highly suggest having a discussion with your wife's siblings now, as well as your wife's parents, just to get an idea what's expected of you and your wife. Once you lay your cards on the table, and the siblings are forced to lay theirs down in front of your wife's parents, perhaps their attitudes will change. I'd like to think it would be very embarrasing (if not downright shameful) to insist that you don't have to pay your share of the costs associated with caring for your parents because you've spent it on yourself.

[OldAgePensioner]

Justin,
Likewise, I think the "equal-share" idea is a great way to go.

If for instance the amount needed is $15,000/year, then each sibling has an obligation to provide $3,000. It could become a tradition of presenting the money to the parents at their birthdays.

On FIL's b-day, each sibling (family) presents a check for $1,500 and everyone applauds their generosity.

On MIL's b-day, each sibling presents $1,500 and everyone applauds their generosity.

Imagine the peer pressure to show up with a check. It also allows everyone to be equal and therefor, no one-upsmanship.

[Martha]

If wages have been low, social security may very well not be enough. For example, if you make an average of $20,000 per year, you social security at full retirement age is only about $10,500 a year. This would be hard to live on needless to say.

Justin, it might help to run some of the social security calculators to get an idea of how much they may get in retirement. This might help somewhat with planning. http://www.socialsecurity.gov/planners/calculators.htm

I have gone through a similar exercise thinking about my relatives. I know what they make and roughly how much social security they will get. At least I can get a very rough idea of the potential shortfall.

I have a disabled brother on SSI. SSI is only a little more than $500 a month. He lives in subsidized housing and gets medical care. Without the medical care and subsidized housing, he would be homeless or would live with us. He has lived with us in the past. I budget a small amount to cover his excess needs. I get plenty of flack for this, but for the holidays one of the gifts I gave him was a carton of cigarettes.

[youbet]

I worried and fretted about the need to help support MIL in her old age. It was especially irritating to ponder DW's siblings not contributing their fair share. Well, MIL is now 81, living off of about $12k annual SS and a few $k we contribute. My forecast of stinginess on the part of DW's siblings has been all too accurate.

It turns out, it isn't the torment I anticipated. MIL is appreciative and relatively sensible about money so I never feel anything is wasted. And our closeness with her, our children and grandchildren yields a wonderful sense of family continuity we treasure. While I probably could have figured out some way to dodge the responsibility, now that it's happening it's not so bad. In fact, I feel pretty good about it.

[Nords]

Quote:

Originally Posted by Jane_Doe My husband gets really frustrated with his brothers as they don't even visit Mom, don't ask how she is doing, etc.

That's too bad, because they may be missing out. Some of my happiest times with my grandfather were during his dementia years. He had no idea who I was but his long-term memory was perfect. He also wasn't the grumpy old sourpuss I remember when I was younger, perhaps because he no longer had to have a care in the world. He was a lot more fun to be around.

One day the subject of grandkids came up and he started telling us about his grandkids (because by then he had no idea who we were). It felt weird listening to his stories about me when I was younger-- he was bragging about his grandkids to a complete stranger, and apparently we were more impressive than we ever realized. But the love & pride really showed in his face and his words.

[justin]

Thank you to those who have responded. I knew I would get high quality well thought out responses from those on this board.

I had a talk with my wife about this issue last night. She doesn't seem too concerned about it. She thinks her siblings will do their share of helping. How "share" is defined will be the issue in the future. DW and her siblings didn't all start the race from the same starting line. Her older siblings arrived in America with zero English communication ability at ages 11 and 12. Prior to that, educational opportunities were minimal. So they have had to work much harder to succeed in life than the typical American born folks who start school at age 5. They work hard and make a decent living today.

My nature makes me want to sit everyone down, get out pencil and paper, and look at expenses and income projections for the forseeable future. Then identify any deficiencies and allocate responsibility to cover these deficiencies among the siblings now. Set up a plan, get commitments from the stakeholders, and carry out the plan. Adjustments will be needed in the future, but the plan could guide everything in general. This plan of attack seems natural to me. Obviously I'm an optimist.

Most likely, it will be a piecemeal solution to my parents-in-law's needs. A thousand here, a thousand there. I guess if we end up contributing a large portion, we'll have the political clout to pressure other siblings into assisting too.

I may be worrying over this issue too much. The siblings are all honest folks. But when it comes down to spending a few hundred dollars a month on supporting parents or spending that same amount on a new car payment (knowing that the "rich daughter and son-in-law" are always there), I don't know which one will win out. Probably some compromise of the two.

I ran the SS calculator that Martha suggested. Looks like ~$16,000 per year at age 65 is what they can expect assuming FIL works until then which is likely to happen. That may even be a little low, as I was being conservative. They may be able to get additional earnings from odd jobs like MIL's agricultural business and childcare (DW will probably keep popping them out!) plus handyman stuff to provide $8000/year under the table. So we're looking at $24000 per year income. Mortgage should be paid off by then, so I'm guessing they might need another $12000/yr from their children or elsewhere for total expenses of $36,000/yr (ballpark guestimate).

That would amount to $1000 per month total assistance. Some of that might come from community programs or "welfare". Bottom line - if each of their children contribute an average of $200 a month, they should be fine. DW and I could meet that obligation by adding $60k to the nest egg and taking 4% SWR each year. Not too bad. If DW and I end up with a double share, we pay $400/month by adding $120k to our nest egg. That is hopefully the "worst case".

DW's older brother currently lives with them and helps with the mortgage, utilities and other household responsibilities. Other siblings (including DW) also help out frequently with cash and other necessary household items.

For now, I'll just wait and see what happens. The worst case doesn't seem too bad. If we have to, DW and I can consult/do odd jobs a couple hours a month to get the required funds.

In the end, my parents-in-law will be much better off here in America than they would be were they still peasants in the hills of Cambodia. They seem pretty resourceful. And I know they are appreciative of our assistance.

[Martha]

Justin, they also may be able to get a reverse mortgage too, which would help considerably.

[justin]

Quote:

Originally Posted by Nords He also wasn't the grumpy old sourpuss I remember when I was younger, perhaps because he no longer had to have a care in the world. He was a lot more fun to be around.

That is how my grandfather got before he passed away. Much nicer. Not senile yet, but you could tell he was starting to go. Much nicer and friendlier. Not as ornery and hateful.

[justin]

Quote:

Originally Posted by Martha Justin, they also may be able to get a reverse mortgage too, which would help considerably.

There is currently about $60k equity in the house with about the same amount still owed on the mortgage. The reverse mortgage would help some. We (and/or other siblings) might end up buying their house and doing a leaseback to provide them with liquidity and a reduced asset base for government handout calculation purposes. The son currently living with them might buy it if he plans on living there indefinitely.

[mickeyd]

Justin,

Your situation a ring of familarity to me. My situation had to do with my parents however they were not recent* imigrents like your in-laws are.

I have 4 sisters who are all married as am I.* As we 5 kids all live in different parts of the country, my oldest sister sent us all a letter in the 70's laying out a simple plan asking for us to contribute a small amount each month (I think it was about $20/month) to a fund for the folks who were in their late fifties at the time and had only SS to retitre on.* We all agreed that this was a good idea and easily affordable ($20/m X 5=$100/month total).* We did not advise our parents of this "fund".* After a few years we all agreed to increase our contributions to $50/month.

We each had the responsibility to send in the money each month to a MMF that we set up using my SS#. I sent them all an accounting of the funds annually. Some of us contributed annually rather than monthly but we all did our job and it provided a back-up for my folks when they finally decided to retire when my Dad was in his late 60's.

It worked well and when they retired we sent them an auotmatic check each month* from the MMF and they new that if they needed more for anything that all they had to do was give us the word. We made sure that they knew that we expected them to spend every cent of what was in the account. When they were both finally buried several years ago (Dad was 98 Mom was 92), there was still a small balance left in the acount that we cut 5 ways.

Perhaps something simular would work for your inlaws. After all, their parents hauled a huge load for them and it is because of their actions (getting to the USA) that these adults (once children) now can raise their family in the USA rather than Cambodia.

[laurence]

It sounds like you have a good family there, I'm betting things will work out.

The equal share idea sounds nice, and on this board everyone would agree to it because we all have a common mindset. But I doubt you will get consensus on that issue in the family. Everybody sees, "fair" differently. IMHO, figure out what their total need will be per month, figure out some amount that is 50-100% greater than "your fair share" and send it to them monthly, and let them know if there is a real emergency you will try to help them with it, and let your siblings be guided by their own feelings. A potential confrontation isn't worth it. The non-monetary dividends you get from this arrangement will be well worth it.