Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 05-31-2009, 07:39 AM   #121
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 291
The dog walker idea is a great suggestion. My lady charges $15 per visit, and if I'm traveling that 4 visits per day. AFAIK, her only expense is some kind of insurance (don't know the premiums) and gas to/from the client's house. She spends 30 minutes here at each visit.

I've really enjoyed this thread. Her initial budget didn't look too bad to me except for the pet budget and the cleaning lady. It stinks to have to cut the budget so deeply that the important stuff must go. Glad to see that she is making progress.
__________________

__________________
bubba is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-31-2009, 10:04 AM   #122
Recycles dryer sheets
Scrapr's Avatar
 
Join Date: May 2005
Location: Bend
Posts: 267
FD

I just read through this entire thread. You are a saint. It sounds like your MIL is making progress. (but will it be fast enough?)

Besides the obvious that has been suggested (W2R's budget) how about if MIL sells her house. Doubles her nest egg. Eliminates repairs, insurance & taxes. Move in with her friends in dire straights. Now the pets may have to be downsized too. And another line item downsized.

As well as continuing the the other fronts of guilting FIL, etc. I highly doubt MIL will look for a job. She may say that but it is an amorphous, cloudy thing out there. Not real. Doesn't sound like she has ever worked. She is not serious about it. But the dog walking deal has possibilities. Heck, there are pooper scooper routes around here. Get both sides of the deal so to speak!
__________________

__________________
Scrapr is offline   Reply With Quote
Old 05-31-2009, 11:21 AM   #123
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2006
Posts: 11,018
Quote:
Originally Posted by Nords View Post
I'm thinking she has enough there for a Suze Orman special episode...
or one of these

Maxed Out - TV Shows - W Network

Til Debt Do Us Part - Gail Vaz-Oxlade
__________________
Meadbh is offline   Reply With Quote
Old 05-31-2009, 05:45 PM   #124
Full time employment: Posting here.
 
Join Date: Sep 2007
Posts: 514
Quote:
Originally Posted by FIREdreamer View Post
Pets: $6000 (she has quite a few of them)
Maid: $800
Newspaper: $200
Charity: $1500
Alarm system: $400
I just found $9k in easily-cut spending in her budget without even trying. How on earth does she spend $500/month on pets? That's ridiculous. Why does a retired person need a maid? I'm sure she can find time in her busy day to do her own laundry. Newspaper? Sure, it's cheap, but you can read the news on the web for free. Charity? I don't want to start a flame war here, but poor people can't afford to give money away. If she's retired, she should volunteer her time instead. Why does she need an alarm system if she's home all the time?

And that's without cutting questionable things like vacation, gifts, and the termites/pest control.

Don't let this woman drag you down with her.
__________________
kombat is offline   Reply With Quote
Old 05-31-2009, 11:09 PM   #125
Full time employment: Posting here.
Darryl's Avatar
 
Join Date: Mar 2007
Posts: 577
W2R edited the budget beautifully.

As previously mentioned your wife needs a role here. SIL is in a very weak position to tell MIL what to do.

Printout a firecalc run at her current spend rate and one using W2R budget probably a 25 year difference in survival rate. You MUST have this conversation while there is still something to talk about as 5 years from now it will be beyond rescuing. If you're willing to support her every want god bless you. If you intend to support your children and yourselves the sooner you tell her the better her ability to plan correctly. It appears that quiet and polite may be the worst course of action.
__________________
I highjacked a rainbow and crashed into a pot of gold - Bon Jovi
Darryl is offline   Reply With Quote
Old 06-01-2009, 09:05 AM   #126
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Quote:
Originally Posted by REWahoo View Post
This another expense I think should be cut. It is unrealistic for someone with her very small nest egg be paying 8% of her annual $20k income for this type of insurance.
I absolutely agree. There is no real reason for her to have this, what is she protecting? A nest egg for her heirs? No need.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 06-01-2009, 09:44 AM   #127
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,527
Quote:
Originally Posted by kombat View Post
Why does a retired person need a maid? I'm sure she can find time in her busy day to do her own laundry.
She does have a 2500 sf house. That can take quite a while to clean...
__________________
FUEGO is offline   Reply With Quote
Old 06-01-2009, 10:24 AM   #128
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by Martha View Post
I absolutely agree. There is no real reason for her to have this, what is she protecting? A nest egg for her heirs? No need.
After talking to her about the need to keep her LTC policy, I found out that her biggest concern is ending up in a medicaid facility. A friend of hers had to go on medicaid after exhausting her own resources and the level of care dropped off a cliff apparently. So she does not want to protect her nest egg as much as she wants to protect her future quality of life.
__________________
FIREd is offline   Reply With Quote
Old 06-01-2009, 10:34 AM   #129
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by FIREdreamer View Post
After talking to her about the need to keep her LTC policy, I found out that her biggest concern is ending up in a medicaid facility.
OK, that clears things up -- at least she understands the issue. To me, that is the only rational justification for her to keep LTCI -- understanding the situation and knowing that she needs to pay this in order to stay out of a Medicaid facility.

But that desire to stay at a non-Medicaid facility of her choice comes at a steep cost, and she has some tough decisions to make about what she's willing to give up in order to fund her desire to choose her own facility.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 06-01-2009, 10:46 AM   #130
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,275
Quote:
Originally Posted by ziggy29 View Post
OK, that clears things up -- at least she understands the issue. To me, that is the only rational justification for her to keep LTCI -- understanding the situation and knowing that she needs to pay this in order to stay out of a Medicaid facility.

But that desire to stay at a non-Medicaid facility of her choice comes at a steep cost, and she has some tough decisions to make about what she's willing to give up in order to fund her desire to choose her own facility.

And since I know very very little on this kind of insurance.... but have heard some horror stories... I think some research on what the insurance will actually pay is important..

I don't think they pay for a facility just because your MIL wants to go to one... I think she has to be incapacitated or something like that to get the insurance... I have heard that they on average only pay 6 months of benefits as the insured will die by then...

SOOO, maybe a lot of money being paid for very little benefit...

Remember, some people live a long time... my mother is 89 and in good shape... if she was paying this insurance, it would have been a terrible waste of money...
__________________
Texas Proud is offline   Reply With Quote
Old 06-01-2009, 10:56 AM   #131
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
LTC insurance may not be a great product, and she may not have the best policy, but it's one of the few items in her budget that might eventually protect FireDreamer's interests. His DW is not gonna be able to stand by and watch her mom go to a substandard facility if the time comes, and this care can be expensive ($150-$250 per day).

Compared to the maid, this might be money well spent.

Also, Mom can't live in two places at once. If she moves into a nursing home, she doesn't need the house and it can be sold to pay for her care for a long time. This would be an alternative to the LTC policy, but for it to work she has to understand that she can't take a reverse mortgage on the house to pay for a lifestyle that she can't afford. The house IS her LTC plan.

Another thought--is this one of those rare cases where an annuity would come in handy? Yes, they are a terrible investment. But, every month Mom will get a check--that's it. That's what she gets to spend. Since she isn't worried about leaving an inheritance and she could use the few extra bucks an annuity might give her every month (compared to a 4% withdrawal rate) it might be a good fit. And then FIREDreamer isn't on the hook for decades of investment advice (and held to blame when the market goes down). Best of all, Mom has a set monthly budget. There's no potential of her impoverishing herself with crazy spending over the next four years and then she comes to visit FIREDreamer for three decades.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 06-01-2009, 11:15 AM   #132
Recycles dryer sheets
 
Join Date: Feb 2007
Posts: 310
I find this thread so interesting! This is the nuts and bolts kind of discussion that drew me to this forum.
__________________
shoe is offline   Reply With Quote
Old 06-01-2009, 11:21 AM   #133
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,035
Another thing that I would look into is life insurance on your FIL making her the beneficiary . I know it's creepy but statistically women outlive men.
__________________
Moemg is offline   Reply With Quote
Old 06-01-2009, 11:34 AM   #134
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by samclem View Post
LTC insurance may not be a great product, and she may not have the best policy, but it's one of the few items in her budget that might eventually protect FireDreamer's interests. His DW is not gonna be able to stand by and watch her mom go to a substandard facility if the time comes, and this care can be expensive ($150-$250 per day).

Compared to the maid, this might be money well spent.

Another thought--is this one of those rare cases where an annuity would come in handy? Yes, they are a terrible investment. But, every month Mom will get a check--that's it. That's what she gets to spend. Since she isn't worried about leaving an inheritance and she could use the few extra bucks an annuity might give her every month (compared to a 4% withdrawal rate) it might be a good fit. And, FIREDreamer isn't on the hook for decades of investment advice (and held to blame when the market goes down). Best of all, Mom has a set monthly budget. There's no potential of her impoverishing herself with crazy spending over the next four years and then she comes to visit FIREDreamer for three decades.
I have discussed annuities with her and she likes the idea of a guaranteed, steady stream of income coming in each month. But she would only consider the full COLA option, and that means a much lower initial payout. In other words, it doesn't really address the current income gap she is facing and she would still have to cut her expenses significantly. But it would help automate her finances which would be a plus for all parties involved.

Ideally, I would like her to live on SS + dividends from her portfolio + whatever she can pry out of FIL's hands for a few more years. Waiting a few years before annuitizing her portfolio could help increase the monthly pay out (she will be older + interest rates might be higher).
__________________
FIREd is offline   Reply With Quote
Old 06-01-2009, 11:39 AM   #135
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by Moemg View Post
Another thing that I would look into is life insurance on your FIL making her the beneficiary . I know it's creepy but statistically women outlive men.
When she got divorced, I actually suggested she took a life insurance policy on FIL. Her financial future was so dependent on him that I thought it was the right thing to do. But the cost was prohibitive then, and she certainly cannot afford it now.
__________________
FIREd is offline   Reply With Quote
Old 06-01-2009, 01:19 PM   #136
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,527
Have you considered having her repay her SS payments at age 70 and take a "do over"? Run the math on it and see if it might be worth dumping some of her nest egg into that to get a bigger COLA'd annuitized payment from SS.
__________________
FUEGO is offline   Reply With Quote
Old 06-01-2009, 01:23 PM   #137
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by FIREdreamer View Post
When she got divorced, I actually suggested she took a life insurance policy on FIL. Her financial future was so dependent on him that I thought it was the right thing to do.
I would have been more worried that if something happened to him and he found himself a victim of foul play, this might make her a prime suspect.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 06-01-2009, 01:47 PM   #138
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by ziggy29 View Post
I would have been more worried that if something happened to him and he found himself a victim of foul play, this might make her a prime suspect.
I thought about that too . But they live so far apart that she would have had no problem coming up with an alibi...
__________________
FIREd is offline   Reply With Quote
Old 06-01-2009, 01:57 PM   #139
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Quote:
Originally Posted by FUEGO View Post
Have you considered having her repay her SS payments at age 70 and take a "do over"? Run the math on it and see if it might be worth dumping some of her nest egg into that to get a bigger COLA'd annuitized payment from SS.

Thanks, I will look into that. My worry is that she will have to use IRA money to repay the SS at age 70 and such a large one-time withdrawal will push her into the 25% tax bracket for that year and she would have to pay significant taxes on the withdrawal (right now, because her income is so low, she would pay no income taxes on her IRA withdrawals). So I'll have to take that into account.
__________________
FIREd is offline   Reply With Quote
Old 06-01-2009, 02:32 PM   #140
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,275
Quote:
Originally Posted by FUEGO View Post
Have you considered having her repay her SS payments at age 70 and take a "do over"? Run the math on it and see if it might be worth dumping some of her nest egg into that to get a bigger COLA'd annuitized payment from SS.

I have an interesting question on this one that just popped into my head..

What are the income tax issues with this? As an example, you are taking SS and paying income tax on a lot of it since you have other income... now at age 70 you repay the whole amount and start to get a higher income... but you paid taxes on a lot of that income you just sent into the gvmt... since you can not go back more than 3 years to amend a return, do you just lose your taxes you paid on the prior years?
__________________

__________________
Texas Proud is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Trying to figure me out Pavo Young Dreamers 27 05-08-2009 06:26 PM
Trying to save MIL's financial life... should I bother? FIREd FIRE and Money 74 07-18-2007 08:37 PM
Reporter asks: Wives educating themselves about retirement/family finance Christine2007 Hi, I am... 8 06-11-2007 10:38 AM
How do I figure the tax question for retirement? kaudrey FIRE and Money 12 02-23-2006 12:49 PM
How to figure military retirement into plan? SonnyJim Young Dreamers 19 06-29-2004 07:42 PM

 

 
All times are GMT -6. The time now is 04:40 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.