Need Advice for Stepbrother

[MarieIG]

How old is he? (I'm wondering what income he could get with a lifetime SPIA.) Normally, I would like some of the other ideas, but if he has a tendency to BTD, it may be better to put a small potion in a MM for emergencies and price compare annuities.

Not that it is impossible to sell them, but it is much less likely than him selling his equities or taking out a HELOC.

(I also liked the suggestion of looking into getting a room mate to lower his overhead.)

 

[joesxm3]

He just turned 65 this month. Does your age affect the anuity paymetns and price?

 

[MarieIG]

He just turned 65 this month. Does your age affect the anuity paymetns and price?

Age and gender typically effect payouts. For the same cost, an older male would receive a higher monthly income that a younger female.

 

[Fermion]

If he is 65, you might check and see if he can get a discount on his real estate taxes. Our county does this for seniors with low income (though his income really isn't that low with the VA + SS).

 

[joesxm3]

Found the forms for property tax relief. Had done these for stepdad.

Just not sure how to notify mortgage company to change his monthly payment but we can figure that out I imagine.

 

[Sunset]

Great that you are giving some advice and helping get free $$$ for him.

Be sure you are aware of how far you are willing to go to help.

I probably helped my Sister too much.
I did in the end I saved my Sister from foreclosure, by buying her house so she could stay in it. Years later after she died, folks thought she owned it and expected to inherit it
She hadn't updated her Will so it gave her house to some "friends".

I'm sure some weren't happy when I told the executor she didn't own it.

 

[joesxm3]

I thought about that too. But I hope it does not get to the point of me buying the house.

 

[Major Tom]

Has he asked for any advice? If not, a whole buncha you-shoulds won't get you very far.

For the most part, this. However, if you are able to find a way to gently suggest a course of action, the ideas may take root in his head. If, at some point in the future, he gets himself into a hole and realizes he needs help, he may remember some of what you said, and be ready to act on it. However, it's a big if, and it may be too late by then.

The problem I find with other people, is that they rarely do what I think they should

 

[RetiredHappy]

I would do either of these: pay down the loan or buy a fixed income annuity that pays him about $310 per month starting immediately, for life. If the mortgage is more than 5%, then paying down the mortgage is a no-brainer for me.

 

[Music Lover]

The problem with giving financial advice to someone who is financially illiterate is that they'll probably end up broke regardless, and the only thing that will change is that you'll shoulder some or all of the blame.

You can't win.

 

[Sunset]

Paying down the mortgage is a big danger, as due to the limited income and lack of financial acuity, this person will end up in foreclosure.
One large bill , like car repair, appliance repair/replacement etc will push him into missing payments.

He needs the cash available to pay large expenses that will come up, or even the creep up in price of things like insurance, medical, etc that will exceed his inflation protected income.

 

[Sunset]

...... BTW he seems to not have any credit card debt.

....

Are you really sure about that ?

Again a tale of my Sister,

my Sister only admitted her CC debt when she went to the bank to re-finance her mortgage, and the bank said I needed to co-sign.
Naturally I asked the banker why and it was because Sister had $30K in CC debt

Years later, after her swearing off CC's, I saw she had one. I asked a friend to ask her how much she owed. Friend reported she only owed $100.. A month later I found out from seeing a bill laying out, it was minimum payment of $100 and she really owed nearly $5K

Fact is folks with spending problems often lie.

 

[LateToFIRE]

^^^

I somewhat agree with the sentiment that likely not much you can do that won't backfire or end up with the same result... this fellow ends up broke and in foreclosure. It's virtually impossible to help someone who is a financial trainwreck by nature and been that way all their life. So, I do like the idea of the annuity because the control of the funds is out of his hands and at least provides some continuing income. I do know a (now deceased) friend where this worked nicely in an inheritance situation. Caveat, as previously stated, you just have to make sure neither the inheritance, nor the solution screw up their govt benefits.

 

[rayvt]

Paying down the mortgage is a bad idea. It will just be that much less money he'll have after the bank forecloses. Because with 99% cerrtainty his house WILL get foreclosed.

Somebody who is 65 years old and in this financial position is not going to change. Even if they listened to your advice, they will not understand it. But he won't listen to your advice anyway.

 

[joesxm3]

Well, he claims that he would like me to help him work on a budget, apply for property tax relief and sign up for Medicare B and apply for state Medicare help.

I was clear asking if he wanted my help and telling him that if he felt I was being too pushy to just say so and I would back off.

He does seem to be a financial basket case. He does not seem to be able to figure out how to provide the proof of 2022 VA payments needed for the property relief application.

It turns out that his VA is just over the income limit for senior citizen tax relief.

We will have about 6 months before any money is getting paid out from the probate process.

And, as I just noticed, Medicaid will be seeking reimbursement for the monies that they paid out taking care of my mother. At the least that will be two or three months of nursing home at $13,000 a month. I am not sure how much of the hospital bills ended up being covered by Medicaid. I guess I will find out when they put the lien on the estate.

For now I will focus on making sure he does not miss a mortgage payment.

I just spent four years taking care of my mother and step father. I don't plan on another 20 taking care of him.

To add to the fun. Mice got into stepdad's car and damaged the headliner. I put six traps in the car and have caught four so far. I had smelly dryer sheets in there but the mice just crapped on them and gave me the finger.

I had a chance to get rid of the car last summer to the Nissan dealer but I thought the $6000 offer was a rip off. Now with the mouse damage they probably won't want it.

On the bright side. I did not expect to get any inheritance. So anything left after the claw backs and car issues will be gravy.

 

[Koolau]

I will again mention BFF who passed last year $500K in the hole. He asked me often how I always had money (since he had none.) We made roughly the same money and his DW made more than mine did. I talked to him a dozen times about simple saving and investing. He swore he understood it, but he admitted that he could NOT put off his desires for things even though it would have been less stressful (deciding who to pay at month's end, for instance.) He agreed that he'd have more money if he could just wait until he had the cash - but, constitutionally, he was incapable of waiting.

Your Stepbrother needs to decide what he wants. A life of things with bills and stress or a stable life style with less stress (and, eventually) MORE things. It's a clear choice that too many can't seem to deal with. YMMV

 

[Finance Dave]

If he really wants help, I'd keep the 50k in the money market. He is likely going to be needing some of it each month.

Putting any in stocks and then having stocks go way down would not be good.

I'd steer clear in general. Nothing good can come from helping unless he really wants help.

So many people buying houses they can't afford. Renting for $900 was just fine and allowed him some cushion for blow money. Now that is gone. House poor.

The above. You say you plan to give him advice, but did he ask for it? And will he follow it? If the answer to either of those is no, then I'd back away.

The advice I'd give would be to sell the house and rent again at a much lower rent amount...or buy a much less expensive house.

 

[FloridaJim57]

Please take this in the spirit it is given, I am not trying to be a wise guy or sarcastic. Every single time I have tried to help someone in such a situtation it exploded in my face and I was blamed for any problem in their life. The annuity is a good idea just make sure the added income does count against any income restrictions such as healthcare, etc. Good luck and don't be afraid to say "call me if you want my help" and walk away.

 

[ncbill]

Please take this in the spirit it is given, I am not trying to be a wise guy or sarcastic. Every single time I have tried to help someone in such a situtation it exploded in my face and I was blamed for any problem in their life. The annuity is a good idea just make sure the added income does count against any income restrictions such as healthcare, etc. Good luck and don't be afraid to say "call me if you want my help" and walk away.

This is probably the OP's best option, though a $50k immediate annuity (life or life with 10 years certain) in my state at age 65 only gets you ~$300/month.

Even if the house blows up in their face they still would have sufficient income to rent, at least for most places in the USA.