Help for my sister

[scubamonkey]

My sister and brother -in-law have not prepared in any way, form, or fashion for retirement - much less early retirement. She is 55 and he is 61. They have a home (with a mortgage equal to its value) and two cars (with debts equal or more than their value). They have not saved anything and arent't planning to start. They both work, but she is a physical therapist tech and the physical part is starting to be too much for her.

I would like to try and help them with some kind of new plan or possible a book that would modify thier behavior.

Any advice or is it too late?

 

[macdaddy]

What kind of work does he do? Pensions?

 

[scubamonkey]

He works (part time) as a chimical salesman and (part time) as a satelite tv installer.

 

[MasterBlaster]

They have a plan...

and that plan is to call you up for money when they feel like they should stop working.

After all you have so much !

- good luck with this one.

 

[Sheryl]

Wow - My mind is boggled.

Have you ever asked them what they plan to live on? Or do they just plan on working until they die?

 

[samclem]

scubamonkey,

- What is their atttitude toward retirement/quitting work? (Do they love their present jobs and want to work as long as possible, or do they frequently talk about quittting work as soon as possible?)
- What is their present earning/spending situation? Do they earn just enough to get by, or do they spend a lot on what you (or they) consider luxuries?

If they aren't interested in looking ahead to a life without full-time work, then there may not be much you can (or should) do to "help" them. And, if you've managed to squirrel away some funds for your own retirement, you'll want to think carefully before discussing that fact with them.

 

[scubamonkey]

Sheryl, I think you nailed it. They plan to work until they die or when they get a small inheritance and their government check.

 

[sgeeeee]

There is no shortage of books to teach people how to live below their means or invest or . . . Do a search on the board and you will get lots of reccomendations and even book reviews.

But at this point, do you really think a book is likely to change their habits of several decades?

Good luck.

 

[Cut-Throat]

Have they asked you for help?

If not, I would not go there - they will only hate you for it!

If they have asked you for help, the first thing I would do is ask them if they are ready to do some serious downsizing to their lifestyle. If they're not, you're done.

 

[Sam]

Any advice or is it too late?

I think it's too late.  About the only thing they can do now is to begin living frugally to lessen the shock of a much smaller income that comes with the SS checks.

Zero networth at 55/61 is a little extreme.  May be they are not telling you everything.

 

[astromeria]

Lots of Americans retire on Social Security alone--they'll have plenty of company. But they should both call every past employer to see if they might have left behind any 401k accounts or profit-sharing, or if they qualify for any pension. Sounds like they would not have paid attention to such things.

It seems a little late to develop resourcefulness, but people do make a few hundred extra per month from things like selling on eBay and part-time jobs. It's too bad they sacrificed their future to keep a couple of unaffordable cars in an unaffordable garage.

 

[Nords]

I would like to try and help them with some kind of new plan or possible a book that would modify thier behavior.
Any advice or is it too late?

They don't care what you'd like.

What do they want to do? It would seem that they've been doing it...

About the only solace one can take from this situation is the hope that they'll ask for help when they're ready to change (and only when they're ready to change).

In the meantime they're doing their best to make Social Security more stable for the rest of us.

 

[maddythebeagle]

But they should both call every past employer to see if they might have left behind any 401k accounts or profit-sharing, or if they qualify for any pension.

If they find anything....I bet they will just spend it....

 

[TromboneAl]

I wrestled with this decision in 2004, and discussed it on this forum.  Here is an update:

Sister 1: Age 60, zero savings.  I got her into automatic investments with VG.  About 2 months later, she emailed me that she was going to stop the automatic investments and invest less.  I explained her situation with a little less sugar and showed her how she was wasting a lot of money.  At that point, and she got quite mad at me and didn't speak to me for months. 

But relations have normalized, she has continued to save, and plans to read YMOYL and Straight Talk on Investing. 

Bottom Line: It helped, and she has somewhat gotten the message.

Sister 2: Unknown savings, but all with high cost financial advisor and high load funds.  Bought her Brennan's Straight Talk on Investing and sent a few links showing the advantages of low cost investing.

Bottom Line: She says she read the book, but I don't think she made any changes. 

Sister 3: Has 89K of savings with a high-fee financial advisor.  Had a big talk with graphs and circles and arrows, and recommended Straight Talk.

Bottom Line: I think she got the message, but I don't think she's going to make any changes.

------------------

It's a risky thing to give this advice if it isn't asked for.  But if you're like me, you can't stand by and not try to expose them to something that may help them immensely.

 

[eridanus]

These people are the majority. When they realize the problem, they'll go to the polls and vote for a "raise."

 

[Texas Proud]

Trombone...

I have a sister that also is in a too high plan at work... AIG is taking 1.25% on ALL accounts no matter what they are invested... I have tried a couple of times for her to move the money...

Her response was... well, I would have zero if it wasn't for the guy who came around and pestered me into starting to put money in the system... so, I know it is high fee, but I would have nothing for him... she does plan on moving the money, but has been slow in doing so...

Most people who are not savers and investors do not want to be reminded by YOU that they are not doing what they need to do to be able to retire... so, shut up unless asked by them...

 

[scubamonkey]

Thanks for your help. I believe you are all right, there is nothing I can do without them wanting me to help. They would be insulted if I suggested anything.

They have always teased me about being frugal and saving money like it was a negative thing to do. I suppose they will just have to keep on working.

Thanks again.

 

[MasterBlaster]

They have always teased me about being frugal and saving money like it was a negative thing to do. I suppose they will just have to keep on working.

I have to agree advice is almost never well received. And rarely if ever acted upon. So why do it ?

When I get the line - Why don't you spend more/Buy an expensive car like mine nonsense, I just ask what they think is actually gonna' happen to them. I then suggest that they either haven't thought their lifeplan through or that their plan is flawed. I then usually have to listen to a bunch of nonsense about why they had to spend all that money.

If they give me enough grief I suggest that they'll end up in a teardrop trailer out in the desert. That visual usually stops the banter.

 

[Ibid]

...Brennan's Straight Talk on Investing...

I had a relative that doesn't want any advice just yet, but is interested in getting some info via books.  She's working her way through Investing for Dummies.  Do you (or anyone else) have recommendations for book in addition to Straight Talk?

Samantha

 

[TromboneAl]

I have to agree advice is almost never well received. And rarely if ever acted upon. So why do it ?

OTOH, sometimes people do see the light.  Many of us here may have changed because someone at some point talked about investing or LBYM.  Someone may not ask for advice simply because they are totally clueless.

Concerning people who don't move their money even when they realize they are paying high and unnecessary fees to a financial planner: I think that often they have formed a personal relationship with the planner, and although they don't admit it, they are too embarassed to move their money.  Instead they rationalize their choice.

 

[TromboneAl]

Note that I don't wholeheartedly recommend Straight Talk. It's slightly too technical for real dummies. Also, someone might say "Oh, of course he recommends low-cost no-load funds, since he's the head of Vanguard."

 

[SecondCor521]

"Don't give advice -- the wise don't need it and the fools don't heed it."

Forgot where I heard that one.

2Cor521

 

[kaudrey]

Scuba - I understand you want to help. My parents, who retired at 57 (they are now 70), saved all of their lives and won't run out of money if they live to 150.

My mother's sister, who is 74, and her husband (somewhere in his 60s, it's a second marriage), both still work, and will have to keep doing so. They live in a depressed area, so jobs aren't plentiful, and they don't make a lot. But, despite their meager incomes, they always seem to have the latest electronic gadgets and a new car every few years.

A few years ago, my parents started giving them money every Christmas ($10K). My aunt doesn't ask for it, but she doesn't do much to stop the spending either, and my parents, at this stage in life, would rather help than nag (they've had many money discussions over time). Once they get older and can't work, they'll have to rely on the gov't, as I don't think my parents intend to increase their contributions.

Sometimes you just have to accept a situation and realize that you can only do so much, and you shouldn't feel guilty if you can't do anything at all. They are adults and must face the consequences of their behaviors.

Karen

 

[spideyrdpd]

People say its too late but whats the alternative ?
They will have to modify there life style eventually why not start today ?
They may not save/accumulate much but whatever they do it can only help.
I would also look at their insurance issues. Since they havent done any other planning i would bet that they dont have the right (or enuff) insurance on their home.
She can look at working for a county hospital that would have some sort of pension plan.
He might also look into something at the hopsital not sure how well the satelite biz would pay anyway

 

[Andy]

I know someone similar, late 40's, recent widow, low paying job(his was much higher). She went thru close to 100k in the past 18 monthes-money from his retirement account, a small inheritance she got and $$ from SS as they classified him disabled for about 10 monthes. Needless to say no saving, lots of credit card debit.

She is now losing the house(she did get it sold, so at least it didn't go to foreclosure) , is going to a rental, still buying junk like crazy.
It makes me sad, but like Al T said, she would be mad if I tried to talk to her-heck, sometimes I think she is mad just by my non buying presence when she is loading up the cart at Target or Walmart! :

On the other hand, my Mom never had much and lived quite creatively on SS and a small(less then $500/mo) pension. So sometimes I think perhaps I am the one doing this all wrong.