Trooper
Thinks s/he gets paid by the post
Looking for some input for a financial dilemma for my Mom (DM). She is currently 86, in very good health, and lives alone at home. She has always loved ballroom dancing and about 3 or 4 years ago, began dancing at Fred Astaire. She really loves it...except...it's very expensive. The instructors there can be manipulative, at times persuading her to signup for lessons, dances, and events which are very pricey.
DM has about $120K in an IRA with Chase Private Client. I recently got online access to this, and despite being in more funds than I would recommend, it seems OK. 46/54 AA and mostly low-cost funds although I haven't really dug into it. She also has $19K in a taxable brokerage account, and has racked up about that much in credit card debt. She agreed to after some resistance to put together a monthly budget, but feels like she nets about $1,500/month after her SS, pension, and RMDs. This is before the cost of the dancing.
DM doesn't want to give up the dancing and has been considering a HELOC to fund a year or two of dancing. While it has been hard to pin her down about how much the dancing costs - there are lessons, weekly "showcases", dresses, local events, regional events, national events, etc. - she feels she will only physically be able to dance for another "year or so" at which point she will stop. I'm ballparking all of this at about $25-30K/year.
Last night I got DM to agree to pay off the credit cards with the taxable brokerage account. She also has about $330K of equity in her home, which has a remaining mortgage. Mom does not have LTC insurance; as such DW and I told her a number of years ago that her home would be her long-term care plan. Like I mentioned above, she is in good health and has no comorbidities.
Looking for your thoughts about a HELOC in this situation, or any other feedback. I've never had a HELOC, but know they can be risky (upfront costs, variable interest, subject to call, etc.). Foremost I am extremely nervous that any claim on DM's home equity will diminish her ability to afford LTC, and DW and I cannot take care of her. I have been steering her away from the HELOC but I feel like the bad guy that's keeping her away from her dancing passion. It seems like DM's alienated her advisor at Chase after he told her she couldn't afford the dancing, but she has agreed for the three of us to meet, once she has done a budget. I also told DM that she needs to have some $ in reserve for unforeseen expenses like new roof car repairs etc.
Thanks.
DM has about $120K in an IRA with Chase Private Client. I recently got online access to this, and despite being in more funds than I would recommend, it seems OK. 46/54 AA and mostly low-cost funds although I haven't really dug into it. She also has $19K in a taxable brokerage account, and has racked up about that much in credit card debt. She agreed to after some resistance to put together a monthly budget, but feels like she nets about $1,500/month after her SS, pension, and RMDs. This is before the cost of the dancing.
DM doesn't want to give up the dancing and has been considering a HELOC to fund a year or two of dancing. While it has been hard to pin her down about how much the dancing costs - there are lessons, weekly "showcases", dresses, local events, regional events, national events, etc. - she feels she will only physically be able to dance for another "year or so" at which point she will stop. I'm ballparking all of this at about $25-30K/year.
Last night I got DM to agree to pay off the credit cards with the taxable brokerage account. She also has about $330K of equity in her home, which has a remaining mortgage. Mom does not have LTC insurance; as such DW and I told her a number of years ago that her home would be her long-term care plan. Like I mentioned above, she is in good health and has no comorbidities.
Looking for your thoughts about a HELOC in this situation, or any other feedback. I've never had a HELOC, but know they can be risky (upfront costs, variable interest, subject to call, etc.). Foremost I am extremely nervous that any claim on DM's home equity will diminish her ability to afford LTC, and DW and I cannot take care of her. I have been steering her away from the HELOC but I feel like the bad guy that's keeping her away from her dancing passion. It seems like DM's alienated her advisor at Chase after he told her she couldn't afford the dancing, but she has agreed for the three of us to meet, once she has done a budget. I also told DM that she needs to have some $ in reserve for unforeseen expenses like new roof car repairs etc.
Thanks.
Last edited:
