Helping parents retire

[free4now]

The role confusion can be a bigger issue than the actual finances. Ever since my net worth exceeded that of my parents, I've had this feeling that I should be helping them financially to pay back some of what they gave me in raising me. But they have always lived larger than myself. It feels like their spending as a couple is almost 4 times greater than what I spend individually.

For a while I had the idea that I wasn't really ready to retire until I could do so and also save my parents. I'd nudge them towards spending less, and they would resent that, and it just felt awkward all around.

It didn't set right for me to save and live on a low budget when they are living higher on the hog. So my resolution is that I'm just not going to worry about it unless they ask for help. Maybe they have more resources than they are letting on and they will magically be fine. Or they may go back to work. Or I may eventually have to bail them out and I go back to work. But nothing will change the fact that they are my parents and deserving of respect. At least until they blow it

 

[Urchina]

Landonew,

Sounds like you all have it pretty well dialed in. That's fantastic! Sorry if my previous post came across as patronizing or preachy -- that wasn't my intent at all.

Good luck with your goals, and with the bar. If the rest of your life is as pulled-together as your posts indicate, you'll do great!

 

[kombat]

I would say the idea above should definitely be your first priority. If you can provide them with a roof over their head at no cost (and the three of you can peacefully co-exist) then that will go a long way towards improving their retirement prospects.

Although it isn't the way things are done in the US today, having parents and grandparents living under one roof has thousands of years of history behind it. Assuming they never save another cent towards retirement, they should be able to eventually support themselves on SS alone if they can continue to live with you.

I could be wrong here, but I didn't get the impression he planned to live with them. Read it again. He just said he wanted to buy them a house. He never said he planned to live in it with them.

Personally, I think that's being outrageously too generous, but to each his own. I just though that point might warrant some clarification.

 

[kombat]

I agree, once I have a family of my own, they will take priority.

This is the part that concerns me. If you establish this pattern of dependency, and your parents are used to the income, then 5 years down the road you have your own family to worry about, will you be able to cut them off? Will they be able to adjust their lifestyle once they must live off the lower income?

 

[NW-Bound]

Landonew,

Nowadays, it is rare to find someone who is willing to help his/her parents the way you do. Looking through your posts, I have a feeling that despite your father's terrible financial mistake, he is a good father. Apparently, you love your parents and your love is reciprocated.

I have a 23-yr old daughter and a 19-yr old son still living with me; they are still in college. The fact that they live at home and not in a dorm is not common, but we do not have any problem. I'd rather myself or themselves not go into debt for college. I learn to gradually treat them as adults, though they are still dependent on me. Of course, when they graduate, I expect them to move out, for their own sake, so they can really live their life.

I have no advice to give you, as many others have already made many good points. I only want to add that your concern about your parents, particularly your mother, is commendable. With love and understanding, you will find the right thing to do.

Best wishes,

NW-Bound

 

[landonew]

I could be wrong here, but I didn't get the impression he planned to live with them. Read it again. He just said he wanted to buy them a house. He never said he planned to live in it with them.

Personally, I think that's being outrageously too generous, but to each his own. I just though that point might warrant some clarification.

This is true. I don't plan to live with my parents for too long, maybe 2-3 years.

I respect your opinion, but "Outrageously too generous" is a little bit of an overstatment IMO. My folks sent me to a private high-school (30K/year) and paid for my undergraduate degree.

Moreover, I have seen so many of my friends waste their late-teens/early-20s away and now have nothing to show for it. My father, on the other hand, gave me the guidence and helped me choose a career that should serve me well throughout my adult life. When I was 17 years old and about to graduate highschool, he sat me down and discussed career options. Intially, I wanted to pursue a business degree. He pulled out salary surveys and showed me what I could expect with respect to compensation with various degrees (ranging from education to medicine). Over the next several months we discussed my strengths (math and science) and reviewed other options. Eventually (took a while), he convinced me to pursue an electrical engineering degree w/ the plan to attend law school immediately following graduation. It wasn't until years later that I found that he worked with several patent attorneys while working for Texas Instruments and had intended for some time to steer me in that direction.

I don't feel that I "owe" my parents anything for this (although I am very grateful). I do, however, feel that some reciprocation (now that I am in position to do so) is not uncalled for. At the end of the day, you only get one set of parents, and I want to see mine happy.

This is the part that concerns me. If you establish this pattern of dependency, and your parents are used to the income, then 5 years down the road you have your own family to worry about, will you be able to cut them off? Will they be able to adjust their lifestyle once they must live off the lower income?

Excellent point. That is why I am hestitent to undertake "structuralized expenses" such as bills or monthly stipens. I fear that a monthly "parent Bill" could cause some animosity between myself and my future spouse (whomever she may be).

However, if my "gifts" are limited to one time lump sums (i.e. buying them a modest house) occuring prior starting a family of my own, then they could adjust their living style accordingly without the expectation of continued support.

To address your concern, I believe that decreasing my own children's SOL, in any significant respect, in order to support my parents would be a disservice to my them as well as to my spouse. Consequently, I don't believe that I will be able to offer them much once I start a family of my own. However, I don't see that happening till I am in my early-mid 30s.

I appreciate your post. Your points are excellent. I will certainly be careful to watchout for long-term financial entanglements concerning my parents.

 

[FUEGO]

I respect your opinion, but "Outrageously too generous" is a little bit of an overstatment IMO. My folks sent me to a private high-school (30K/year) and paid for my undergraduate degree.

No wonder your parents are broke!

Seriously, I have to ask. Are you of asian descent, by chance? Emphasis on taking care of parents seems to be a cultural thing among many of asian descent. Inquiring minds want to know.

 

[spncity]

A couple of thoughts.

If you rescue too soon, (even with the provision of a house) it negates some of the "natural consequences" and some of the "make-up work" that your dad needs to do with your mother. They need to revisit expectations concerning open communication and money management (and hopefully come out the other side of a tough situation being more connected in their relationship).

Of course you should pay a fair rent if you're living with them in their living quarters, but not so much that it hurts too bad when you move out.

Paying for them to have some marriage counseling might be a good investment, however. But then, I don't know your folks. It's just my general opinion that just about everyone could benefit from (good) marriage counseling. Even people with really good marriages probably have areas where things could be improved.

And pre-marital counseling is an exceptionally good buy for those "in contemplation of" marriage.

Just my opinion.

 

[OAG]

I have read this thread but have not commented. I purchased two homes for my parent. One was a Condo in the city she had lived in all of her life. Then, when she got to the point it was not safe there, I moved her to another part of the country where we were living and purchased her a home down the street from my home. I think even tho you may want to do this now IMO you should wait a several years to embark on this. After you are secure (i.e., have started your own family) and have a spouse that is comfortable with "doing something for YOUR parents" then go ahead. Of course your spouse may have a need to "do something for HER parents". Hopefully, at that point in your life you will be able to do both. Remember children, assuming you want them, are VERY expensive. I think your FATHER has the responsibility to provide for himself and your Mother and he probably knows it. Your Mother is a very strong person to take on a responsibility that should not be hers. IMHO, at this point you should back off a bit and see how the next several years develop.

BTW I am German, Scotch and English by descent.

 

[landonew]

No wonder your parents are broke!

Seriously, I have to ask. Are you of asian descent, by chance? Emphasis on taking care of parents seems to be a cultural thing among many of asian descent. Inquiring minds want to know.

Nope, about as white as they come.

 

[Martha]

So you are going to be a patent lawyer?

Odds are you will do quite well.

One possibility to help your parents is to provide money each year to fund their retirement plans. Then there won't be the issue of them becoming dependent upon you for day to day needs.

 

[FUEGO]

Nope, about as white as they come.

Defying stereotypes! Wow!

 

[NW-Bound]

As a side observation, I saw that landonew's father is a thoughtful and caring man. Yet, you can be doing many things right your life, and never be a gambling man, and in just a year or two of bad investment endeavors, wipe out your life savings. Who knows how many cases like this in the real world?

I will think of this often as I manage my portfolio in the future.


PS. I'd like to add here that the solution for landonew to buy a home for his parents may not be a bad idea. As long as it is a modest place, the timing is not bad, given the current housing market. As landonew keeps the title in his name, he can look at it as a real-estate investment. With the mortgage taken care of, his parents only need a modest income to live on, until they qualify for SS. Remember that he will get the house back eventually. It is money he will get back.

 

[landonew]

So you are going to be a patent lawyer?

Odds are you will do quite well.

One possibility to help your parents is to provide money each year to fund their retirement plans. Then there won't be the issue of them becoming dependent upon you for day to day needs.

Yes, I will be a full fledged patent Attorney once I pass the Texas State bar next month (knock on wood). I am currently a patent agent, I passed the USPTO registration exam (aka federal "patent bar") last November.

Good idea about funding their retirements. I will give that some consideration. Only problem is that it does not have the tax benits of property ownership.

Thanks for your post

 

[landonew]

As a side observation, I saw that landonew's father is a thoughtful and caring man. Yet, you can be doing many things right your life, and never be a gambling man, and in just a year or two of bad investment endeavors, wipe out your life savings. Who knows how many cases like this in the real world?

I will think of this often as I manage my portfolio in the future.


PS. I'd like to add here that the solution for landonew to buy a home for his parents may not be a bad idea. As long as it is a modest place, the timing is not bad, given the current housing market. As landonew keeps the title in his name, he can look at it as a real-estate investment. With the mortgage taken care of, his parents only need a modest income to live on, until they qualify for SS. Remember that he will get the house back eventually. It is money he will get back.

This is a good point. Although it is not a great investment (i.e. pure property ownership w/o rent has a relatively low return), it is not a complete wash.

Thanks for the kind words about my father. He is a good man that made a costly mistake. Through time I believe my mother and I will forgive him. However, regaining our trust is unlikely at this point. Nonetheless, our family is a loving one.

If nothing else, it certainly tought me a valuable life lesson. Life is about alot more than having nice things (we have few of those now, lol). However, financial security, or lack thereof, can put alot of stress on relationships. I didn't speak to my father for 6 months, and my parents seperated for a short period of time. All is better now, however. My father's skills as a salesman are improving, and if the next 12 months are as good as the last six, my father will make $48,000 this year. That puts the folks Gross income at about $90,000. Of course, they have a pretty signficant tax debt (IRS charges a pretty penny to withdraw $$ out of 401k). Nonetheless, there is light at the end of the tunnel. With a little help, I think my mother can retire comforatably and enjoy a happy (yet modest) SOL during her golden years.

 

[NW-Bound]

Good deal. As I said, your father is a good man, and he is willing to go back to work to earn a living. I really think all will be well.

 

[haha]

You do not owe them anything

Americans are the only people who believe this. Perhaps that is why so many young Americans refuse to reproduce. It just looks like a bad deal all around.

Another symptom of a dying civilization.

Ha

 

[shiny]

Americans are the only people who believe this.

"Only" is a little over-reaching. I know a lot of English and Australians who feel the same.

I've had conversations with some Japanese people who resent having to be responsible for their parents. Especially wives of first born sons.

I don't have kids (yes, ha, I have "refused"! ) but I would hate to think of them resenting me for having to take care of me.

 

[Bestwifeever]

I didn't say no one owes their parents anything--I don't think this particular young man owes his parents anything right now as he looks to begin his life. His parents are working and supporting themselves at 54 and 56, making $90K a year, rebuilding their savings, and apparently in good health. OP hopes to start his first professional job for a great salary and should be okay but he has not yet passed the bar, and he will be the first hired if the company needs to cut corners, and he has $150K in student loans to pay back.

Why does he owe his 54 and 56 year old parents at this point? To me, it would be better for all for him to establish himself and when the time is appropriate to help them out when they need his help. He sounds like a good young man who for some reason is carrying some guilt for his parents not being more financially secure.

 

[haha]

"Only" is a little over-reaching. I know a lot of English and Australians who feel the same.

I've had conversations with some Japanese people who resent having to be responsible for their parents. Especially wives of first born sons.

I don't have kids (yes, ha, I have "refused"! ) but I would hate to think of them resenting me for having to take care of me.

Oh-oh! I appear to be stepping on people's feet. People that I really like and respect.

Agree, only is often a dangerous word. As regards the word "refuse", I didn't intend it as being a criticism. But if people describe themselves (sometimes with some feeling) as "childfree", and they have the physical and financial ability to have children, I thought refuse was really the most accurate and respectful verb. (And Shiny, again this does not apply to you. It is taken from other discussions on this board, over the years.) As you see, I didn't imply or say these childfree couples are selfish, only that they may have accurately sniffed out the way things have come to be and want no part of it.

Also there is no implication that your parents or any other parents should resent their care of their children based on whether or not those children have children. The social obligation to which I referred is not to reproduce-(Go forth and multiply is a little strong for my mandate ), but really was a comment on the posted phrase "do not owe them anything." Now I see that what was meant was that in this particular situation the OP doesn't owe his parents anything. I can't coment on that. It does seem that Daddy was a little rash and perhaps needs some tough love, and Momma perhaps a little young to be rescued from the workforce, but one thing I know is that unless we personally know a poster we may be getting a very edited version of what's happenin'. ( I just read Bestwife's post. She is right; OP is not being judicious.)

However I do believe that a lack of reciprocal obligations is one reason for falling birth rates and generally loosening social ties in "advanced countries", and I also believe it is a reasonable response. After all, when you get away from these mores what is left? Children as chips in the welfare or marriage power games; mistakes; and children as toys.

Ha

 

[Frugality_of_Apathy]

Children as chips in the welfare or marriage power games; mistakes; and children as toys.

Ha

Don't forget children as a narcissistic need to have a copy of yourself who will continue your legacy and tell the future how great you were.

 

[Zoocat]

Hi Landonew,
Yours is becoming a common situation and I think you are handling it with great kindness and respect for your parents. Unfortunately, our economy is in a severe downturn and will probably not treat real estate investors very well for several years. Please do not encumber yourself and jeopardize your financial future by purchasing duplexes, strip malls, houses, etc. at this point.

I agree with others who have urged you to pay down your school loans and simultaneously build a one year emergency fund. Continuing to live with your parents and pay rent would help them save for retirement. This is a situation that occurred in my own family (but not with me personally). But how do you know that you will stay in the same geographic area?

The fact that your mom is now working two jobs is likely a source of shame for your father. Be gentle how you approach them about any of your plans.

 

[landonew]

Hi Landonew,
Yours is becoming a common situation and I think you are handling it with great kindness and respect for your parents. Unfortunately, our economy is in a severe downturn and will probably not treat real estate investors very well for several years. Please do not encumber yourself and jeopardize your financial future by purchasing duplexes, strip malls, houses, etc. at this point.

I agree with others who have urged you to pay down your school loans and simultaneously build a one year emergency fund. Continuing to live with your parents and pay rent would help them save for retirement. This is a situation that occurred in my own family (but not with me personally). But how do you know that you will stay in the same geographic area?

The fact that your mom is now working two jobs is likely a source of shame for your father. Be gentle how you approach them about any of your plans.

I have signed an employment contract with a firm in the DFW area.

Thanks for the advice. Yall have convinced me to focus on my own financial situation. I think I will use this time to focus on my career as well as chip away at those students loans/build my EF. I would like to set them up in a modest house eventually. Perhaps concerning myself with that at this juncture is the proverbial equivalent of "putting the cart before the horse."

 

[shiny]

Oh-oh! I appear to be stepping on people's feet.

No offense taken, Ha my dear. I was just pointing out that even though many other cultures DO feel they owe their parents, it is not always something that they WANT to do.

Personally, my dad and I made a deal. He'll do his best not to need any money from me and I'll not count on any money from him. I do, though, feel the obligation to keep in touch and visit.

 

[NW-Bound]

Thinking about this, I have a general observation.

Same as many others, I have provided for my children. I did not indulge them, but did not leave them wanting either. I have always loved them, and as fas as materialistic things, give them what I think is reasonable within my income and econo-social class. I do not plan for them to return anything. It is my duty as a parent to provide for them, having brought them into this world. I am making plan for my retirement without their help, although when I become weak and invalid, will appreciate their calling or visit when it is possible. I don't think I differ much from people in this forum with children.

Though I do not plan for nor want their help in my old age, just the thought that they would not care about me, should I need help, hurts.

Now, why is it that it is common and OK for adult children to expect inheritance from their well-to-do parents? Do most of them come to the funeral only to hear the lawyer read the will?

They say s**t rolls downhill. I submit to you that in parent/child relationship, the reverse is generally true. But then, it is nothing any of us does not know already, I don't think.