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Old 08-23-2008, 08:07 AM   #41
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The fly in the ointment is her father, who we just recently learned has been living slightly above his means for about the last ten years and is now broke. We're fixing up his paid-for house for sale and to get him into an environment that he can afford to sustain.

Just curious... Is he retired and how did he fall into that trap?
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Old 08-23-2008, 09:08 AM   #42
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Several community colleges have adult education courses geared to women learning about finances . Maybe some of you that are concerned could steer your wives or SO's to them. I would also purchase the most basic book I could about finances and give them it . Maybe some of the resistance you are seeing is because of the way you are coming across ( teaching the little woman finances attitude ) . Would you want her to stand you at the washing machine while she explains seperating clothes ,hand washing , and stain removal ?
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Old 08-23-2008, 10:24 AM   #43
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Just curious... Is he retired and how did he fall into that trap?
He's 83 and retired at 62 when the company he worked for moved to NJ from MD. He drove a school bus for another 9 years until he couldn't do that. His wife apparently was the money manager although he worked as a bookkeeper, and she passed away in 1999. So he just keeps going through his daily routine apparently because that's "what he's always done". I've sat down with him and shown him that the numbers cannot continue but he keeps doing the same things. I hope I never get that way. Between his pension and SS he has just under $1,900/month income.

He's agreeable (at least on the surface) to selling his house and moving to a retirement community that he can afford and offers the continuum of care that he may need, but also said a few weeks ago to SIL that "I'm going to die in this house." When crunch time comes we'll see.

So for now the "project" is to repaint the entire house - not done for 25 years - and put it up for sale. Even in today's market it should bring ~$300k and that's enough to get him into the retirement community with about $150k left over. The advantage of that is that they do have single-family homes and the $265/month fee on a two bedroom one bath house with garage covers ALL maintenance, interior and exterior, plus one meal a day in the cafeteria. He'd pay utilities and the property tax, about $115/month, so with no other bills he can sustain that.
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Old 08-23-2008, 10:49 AM   #44
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He's agreeable (at least on the surface) to selling his house and moving to a retirement community that he can afford and offers the continuum of care that he may need, but also said a few weeks ago to SIL that "I'm going to die in this house." When crunch time comes we'll see.
Good luck. My in-laws didn't understand why they should worry about power of attorny's or wills. Fortunately, DW badgered them until they got all the paperwork in place before MIL fell and broke her hip.

Even though the doctor said she'd never be able to go back home, they both talked about it like it would happen "as soon as she got better." Even after my FIL was diagnosed with Alzheimer's and moved into assisted living, they still talked about moving home "when they both got better."

He fought going in for several months and made DW feel like crap during the whole time. He blew a gasket when he found out the house was sold. MIL was also upset because they didn't have a place to move to when they got better.

Staying in their home is a major fixation for many of the elderly even when it totally defies logic or rational decision making. At a certain point you just have to do what needs to be done for them whether they like it or not.

If your father is mentally competent it's harder to take control. At a certain point you just have to let it go and realize that his mistakes are his problem. If he financially destroys himself, he will get a much worse "final years" than if he made more rational decisions. The house as a major asset is somewhat of a backstop. Eventually, he won't be able to afford it and then the sale becomes a necessity even if he still fights it. Just keep him away from the reverse mortgage thieves.
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Old 08-23-2008, 11:31 AM   #45
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Several community colleges have adult education courses geared to women learning about finances . Maybe some of you that are concerned could steer your wives or SO's to them. I would also purchase the most basic book I could about finances and give them it . Maybe some of the resistance you are seeing is because of the way you are coming across ( teaching the little woman finances attitude ) . Would you want her to stand you at the washing machine while she explains seperating clothes ,hand washing , and stain removal ?
I had the same impression. Glad you spoke up, Moemg. As a former educator, I know that HOW you teach is as important as WHAT. And first you have to get the student's positive cooperation. One thing to keep in mind is that this issue could provoke a lot of fear (i.e. death). Fear can keep a person from learning.

It's best to encourage a person to undertake her own education. The community college course is great idea! Also, some communities have PF courses just for women, taught by women, usually through extended education or free university, etc.
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Old 08-23-2008, 11:39 AM   #46
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We lucked out. My pension option (100% survivors benefit) will ensure that that is intact for DW if I go first. I basically, paid for and got an insurance policy by taking this option. We are not yet collecting SS. DW wants to start doing so at 66 and my plan is to do it at 70. SS is gravy on top of the pension and portfolio. DW calls it her 'shoe money' and she is looking forward to giving Emelda a run for her money. Between pension and portfolio dividends and interest, we are living 'large'.

Having a pension and overkilling the portfolio certainly helped.
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Old 08-23-2008, 11:49 AM   #47
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I want to thank everyone who has participated in this thread. After reading through the whole thing and posting my response, I began to think about the investment choices my 86 yr old father is making for himself. He is a widower now. He has about 400K invested and my sister is the designated estate executor so she takes a look at his finances now and then. This money will have to be used for a nursing home, if necessary. I am uncomfortable with him being so invested in the stock market when he might need this money at any time.

So I just had a conversation about this issue with my sister and urged her to talk with Dad and get his investments into fixed income. I hope that she follows through, if not I will become very persistent on this issue.
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Old 08-23-2008, 12:07 PM   #48
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I want to thank everyone who has participated in this thread. After reading through the whole thing and posting my response, I began to think about the investment choices my 86 yr old father is making for himself. He is a widower now. He has about 400K invested and my sister is the designated estate executor so she takes a look at his finances now and then. This money will have to be used for a nursing home, if necessary. I am uncomfortable with him being so invested in the stock market when he might need this money at any time.

So I just had a conversation about this issue with my sister and urged her to talk with Dad and get his investments into fixed income. I hope that she follows through, if not I will become very persistent on this issue.
It would probably help to do a little financial planning since with $400K in assets (plus a house?) I suspect that much of this will eventually be inheritance to you and your sister (and others?).

Price a local nursing home. You can do this over the phone just for budgeting purposes. In the Houston area you can get a real good one (if any can be called good) for about $60K per year. Subtract out any SS and pensions because he won't have any expenses except his medications once he's in one. The same applies to assisted living but that's much cheaper -- about $40K per year in Houston.

You then have a rough estimate of what expenses he'll need from his assets. If he gets $24K in SS, that means for nursing care he'd need $36K from his assets if he lived in Houston. Depending on you estimated return, his assets are adequate for 12 to 20 years. The odds are highly against him lasting that length of time in a nursing facility.

What's my point? I don't think you want him to be too conservative because he still needs to protect himself financially if he does live almost forever. If he doesn't live 10+ more years, the assets will go to you and your sister who are still decades away from a similar situation as your father.

I'd suggest no more than 50 or 60% in fixed income. That by itself is enough to cover many years of care and probably more than he will need.
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Old 08-23-2008, 12:22 PM   #49
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Would you want her to stand you at the washing machine while she explains seperating clothes ,hand washing , and stain removal ?
I certainly have no problem asking women how to handle tasks that although I may have blundered through them I am far from really knowing how to do it. Actually, I think I can easily recognize where a person's interest and expertise lies, and feel no shame at asking for help.

As an example, the women of this board clearly know as much as the men about any of the topics we discuss except maybe cars, though they may be more polite in the ways that they help out.

I do agree with your thrust though- a lot of paternalism on this thread. I can see that it comes from love and a sense of responsibility toward one's wife or SO. But these topics and the corresponding attitudes can be tricky today.

I know a middle aged woman who has committed financial suicide over the past 10 years or so since her divorce. She has very poor job prospects and yet she has blown through >$1mm by a combination of overspending and being taken advantage of by promoters and FAs. I never could see a route to send her to helpful sources, as she is very defensive about her place in the world as a single female.

Men do the very same thing, probably more frequently. Pride goeth before a fall I guess.

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Old 08-23-2008, 01:03 PM   #50
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I certainly have no problem asking women how to handle tasks that although I may have blundered through them I am far from really knowing how to do it. Actually, I think I can easily recognize where a person's interest and expertise lies, and feel no shame at asking for help.

As an example, the women of this board clearly know as much as the men about any of the topics we discuss except maybe cars, though they may be more polite in the ways that they help out.

I do agree with your thrust though- a lot of paternalism on this thread. I can see that it comes from love and a sense of responsibility toward one's wife or SO. But these topics and the corresponding attitudes can be tricky today.

I know a middle aged woman who has committed financial suicide over the past 10 years or so since her divorce. She has very poor job prospects and yet she has blown through >$1mm by a combination of overspending and being taken advantage of by promoters and FAs. I never could see a route to send her to helpful sources, as she is very defensive about her place in the world as a single female.

Men do the very same thing, probably more frequently. Pride goeth before a fall I guess.


Ha
One thing I have figured out over the years (related to having to stomp your ego flat) is that the first step to learning is admitting that someone else knows more than you do.

This can be especially difficult if the person to learn from is of a group that is somehow traditionally considered lower in prestige.
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Old 08-23-2008, 01:28 PM   #51
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DW gets 50% of my pension plus we have life insurance on me. Don't need life insurance on her.
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Old 08-23-2008, 02:52 PM   #52
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Before pushing the RE button, did Firecalc (and a few other tools) runs for all three scenarios: Both live, I die early, she dies early. All had to pass before I forgot the meaning of w*ork and income.

Determing how much either of us would have given the death of the other was very easy. Determing what the expenses of one of us alone would be required a little more thought.
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Old 08-23-2008, 08:49 PM   #53
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It would probably help to do a little financial planning since with $400K in assets (plus a house?) I suspect that much of this will eventually be inheritance to you and your sister (and others?).

Price a local nursing home. You can do this over the phone just for budgeting purposes. In the Houston area you can get a real good one (if any can be called good) for about $60K per year. Subtract out any SS and pensions because he won't have any expenses except his medications once he's in one. The same applies to assisted living but that's much cheaper -- about $40K per year in Houston.

You then have a rough estimate of what expenses he'll need from his assets. If he gets $24K in SS, that means for nursing care he'd need $36K from his assets if he lived in Houston. Depending on you estimated return, his assets are adequate for 12 to 20 years. The odds are highly against him lasting that length of time in a nursing facility.

What's my point? I don't think you want him to be too conservative because he still needs to protect himself financially if he does live almost forever. If he doesn't live 10+ more years, the assets will go to you and your sister who are still decades away from a similar situation as your father.

I'd suggest no more than 50 or 60% in fixed income. That by itself is enough to cover many years of care and probably more than he will need.
Thanks again! He has already done the requisite financial planning and my sister is a FP although not a practicing one. I hadn't thought about the actual costs that would be paid including the SS and pension. That gives me more hope!
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Old 08-23-2008, 09:20 PM   #54
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I was widowed about 6 years ago at age 50 so my plan only includes myself. Fortunatly my late wife was an insurance agent and insured both of us to the Max. I am in decent shape to go it alone.

I now worry what will happen if I re-marry some day and my plans all have to change. This seems to be a big unknown for me.
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Old 08-23-2008, 10:03 PM   #55
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I now worry what will happen if I re-marry some day and my plans all have to change. This seems to be a big unknown for me.
But an unknown that is easy to avoid.

Ha
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Old 08-23-2008, 10:15 PM   #56
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It's more than just money when planning for the unspeakable. In 2000 our best friends were all set for retirement. She had retired from teaching several years earlier, he was 60. Christmas Eve he and I car pooled to work, then I was an vacation 'til the next year. Dec 31 was his last day at work. Dec 30 she called me from the Emergency room. He had collapsed in the kitchen. A few hours later he was dead. No existing health problems, but his brain just stopped sending signals to his heart - shortage of potassium I think did it.

They were multi millionaires, owned 37 properties, but he did all the finances. She was totally unprepared emotionally and reallly struggled to manage the finances.

Shortly afterwards DW signed up for night classes at the local uni where they were running classes on planning for retirement and we went together and we now share the financial planning burden together.
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Old 08-24-2008, 09:07 AM   #57
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We do everything together. At first I thought it might be more of a generation / age thing, but even the younger folks at Bogleheads thought it was weird that we were both there. Apparently it's usually one or the other that gets interested in investing and finances.

We also haven't ruled out an FA or RIA down the road. We'll see how it goes.
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Old 08-24-2008, 09:33 AM   #58
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Good luck. My in-laws didn't understand why they should worry about power of attorny's or wills. Fortunately, DW badgered them until they got all the paperwork in place before MIL fell and broke her hip.

Even though the doctor said she'd never be able to go back home, they both talked about it like it would happen "as soon as she got better." Even after my FIL was diagnosed with Alzheimer's and moved into assisted living, they still talked about moving home "when they both got better."

He fought going in for several months and made DW feel like crap during the whole time. He blew a gasket when he found out the house was sold. MIL was also upset because they didn't have a place to move to when they got better.

Staying in their home is a major fixation for many of the elderly even when it totally defies logic or rational decision making. At a certain point you just have to do what needs to be done for them whether they like it or not.

If your father is mentally competent it's harder to take control. At a certain point you just have to let it go and realize that his mistakes are his problem. If he financially destroys himself, he will get a much worse "final years" than if he made more rational decisions. The house as a major asset is somewhat of a backstop. Eventually, he won't be able to afford it and then the sale becomes a necessity even if he still fights it. Just keep him away from the reverse mortgage thieves.
He has done some planning - the house, his only asset, is in a revocable living trust with DW and the sane SIL as administrators. When we took out the small mortgage on the house to do the repairs on it the small-town banker was a guy right out of It's a Wonderful Life. He said they won't sell reverse mortgages (one SIL thought that might be a good idea and I talked her out of it) and the bank had no problems with underperforming loans as they didn't get caught up in the rush.

So for now all we can do is do what we can and if the house of cards collapses then in the end, as you say, it is his problem, as we don't have the resources to support him long term without putting our own future in jeopardy. He has visited the retirement community and said he could live with it. At the suggestion of SIL we're going to call the place and see if we can get him to visit more often, say go once a week for a meal in the cafeteria, to get him used to the idea of living there.
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Old 08-24-2008, 06:20 PM   #59
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Even though the doctor said she'd never be able to go back home, they both talked about it like it would happen "as soon as she got better." Even after my FIL was diagnosed with Alzheimer's and moved into assisted living, they still talked about moving home "when they both got better."
Human nature: hope springs eternal. Few of us are brave enough to admit that it's all over and that life is downhill from here on.

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Staying in their home is a major fixation for many of the elderly even when it totally defies logic or rational decision making. At a certain point you just have to do what needs to be done for them whether they like it or not.
As a general rule, I'd suggest that the "certain point" is when they become a danger to themselves (repeatedly forgetting to turn off the stove burners, etc.) and can no longer safely live alone. Otherwise, their wishes should generally be respected, rational or not.

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If your father is mentally competent it's harder to take control. At a certain point you just have to let it go and realize that his mistakes are his problem. If he financially destroys himself, he will get a much worse "final years" than if he made more rational decisions. The house as a major asset is somewhat of a backstop. Eventually, he won't be able to afford it and then the sale becomes a necessity even if he still fights it. Just keep him away from the reverse mortgage thieves.
Sensible advice.
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Old 08-25-2008, 04:46 AM   #60
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As a general rule, I'd suggest that the "certain point" is when they become a danger to themselves (repeatedly forgetting to turn off the stove burners, etc.) and can no longer safely live alone. Otherwise, their wishes should generally be respected, rational or not.
The "certain point" occurred when my FIL was diagnosed with Alzheimer's. With Alzheimer's, Texas says he is no longer a valid driver. There goes his transportation. He also had no way to visit his wife in the nursing home so DW became a permanent chauffer. DW tried to stock his fridge with food but he could not cook or even reheat things in a microwave. His mental capability had gone done so much.

He could still live there but he required help with the most basic living skills. He also wouldn't admit he couldn't do things even when he had just not been able to do it. At a certain point the parent-child relationship reverses and the longer someone delays doing what needs to be done the more damage occurs.
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