Family Members Decisions Affecting Your Retirement Plans?

[tskeeter]

Nazul's thread about how the decisions of family members is affecting those family member's retirement plans got me to thinking about how much the decisions of family members can affect each of our retirement plans.

For example, we are extending our working careers, in part, to make sure we will be able to help provide for family members, when they need it.  DW has a brother who has mild learning disabilities.  And he is married to a woman who has even more serious learning disabilities.  Once they are no longer able to work, they will not be able to live on what they will get from SS and a very small pension earned working as a bagger in a grocery store less than 30 hours a week.  So, the family is going to need to be able to subsidize their living expenses, maybe for up to 30 years or more.  I expect that our contribution to that assistance will add up to well in excess of $100K during DW's brother's retirement. 

DW's parents didn't do as effective a job as they could have to provide for their own retirement.  They ended up in bankruptcy in their early 70's because they lived beyond their means.  They stripped so much money out of the home that they lived in for 30 years that they had less than $10K in equity in the house when they had to sell it because they couldn't afford the mortgage payments.  (The house sold for about $300K.)  And then there was the $100K in credit card debt.  After the bankruptcy, they were left with about $3,600 a month in SS and pension income and just over $100K in retirement accounts.  And then they insisted on renting a three bedroom, 1,800 square foot townhouse for the two of them.  $43K a year doesn't go very far when rent takes 50% of your income, you've got a car payment, and you need to eat and go to the doctor.  So, it's going to be up to the family to help with things like dental bills and travel expenses to visit children and grandchildren scattered from Boston to Anchorage.  And to provide for care and assistance when DW's Mom can't live on her own any more.  So, some of us bought homes designed so we can care for an aging parent, when it gets to that point.  Considering that DW's Mom is likely to live for another 20 or 25 years, the amount of financial assistance she will probably need could easily run into the $250K range.

So, overall, we're thinking we need to be able to provide somewhere between $250K and $500K in assistance to DW's family over the next 30 years or so.  That means we need to go into retirement with enough resources to fund what will be basically retirement for two families.     

[Rocky Mtn Saver]

My siblings and I will be helping out our mom financially as she ages, for sure, but hopefully we can do it as a team and avoid anyone taking an overly large hit to his/her finances.  But, yes, I'm thinking about that aspect as I plan for my own future. 

[Bonny]

My dad may wind up needing some support especially if something happens to his long-term girlfriend. We haven't really "planned" on anything except that we bought a house within 30 minutes of their house. The probability of her out living him is pretty high as I think her mom passed at age 98. But he really as nothing but his SS and a 1/4 interest in the Trust that owns the house. Since the house has a reverse mortgage with a growing balance that 1/4 interest doesn't mean much other than he has the right to live there if she passes.

Like tskeeter's wife's parents, my parents blew their money through a serious of bad business decisions with the final blow to their finances when they filed bk and divorced when mom was 58 and dad 60 in 1996. House was entirely mortgaged up despite the fact they had owned it since 1963. DB took over the payments but was in some sort of foreclosure until he finally lost it in about 2010. It had doubled in value over the time he owned it but he too, kept pulling out equity via NINJA refi loans.

DH made it very clear during the time that I was settling my mother's estate (I've posted about how it was a -$400k estate) and my brother kept asking for money including from our own personal funds that he wouldn't give my brother any money. It was painful but DH was absolutely right. My brother is a black hole when it comes to financial stuff...and he used to sell his services as a "Financial Planner".

I think if we had to we would take my dad in. For sure there would be a level of resentment as @patstab suggests. My dad did not believe in giving us anything including no help towards college. This despite the fact that his mom, practically a single mom, put all three of her children through Catholic High School. My parents were living it up during the 70s while they made me pay for everything other than food and housing. They also left us at home while they traveled to Europe several times "because we never appreciate anything we don't pay for". They were drinking a lot back then and neither one could recall some of the stuff they said or did. Since they came from abusive homes themselves they thought they were great parents.

DH is an only child and only his mom is still around. She's set financially with a great government pension in excess of $100k, plus investment income from a net worth in excess of $1M. But she's been on DH's case for the last month complaining that her siblings children "help them out (financially)". DH has already explained that the two of us are living on almost have of what she's getting now. Her response? "I know you have money in the bank"  If she pulls that kind of stunt on me she is not going to like the answer I tell her, LOL!

[Peace Of Mind]

Family Members Decisions Affecting Your Retirement Plans?

My families decisions to leave me money has definitely affected my retirement plans.  I'm now an orphan and the sibs are on their own.  One has already blown all of his inheritance and the other flipped mom's house he was soooo attached to that he begged to buy it "to keep it in the family".     Like I ever believed that.  He sold it as soon as the market turned around.  I just wanted rid of anything they were a part of even if I had to give it away - which I would have done.   Ha!  If he only knew.   But I had to try to get my train wreck brother some money since mom already gave him most of his portion while she was still alive.   All the money, her belongings we gave him (almost all of it) and her car - gone.  All of it.  I think Bonnie, Nancy and I have the same brother.  

DH's family are all fine but we would help the parents if they ever needed us to and we have.  Nothing significant to date but they know we are there for them if need be.  They may not leave much, if anything, but they probably would never ask unless they really were desperate.  We all keep an eye on his mom.  She's a minimalist so we have to make sure she is taking proper care of herself.  She's 81 now.  His dad and wife are set.

[Deleted]

It's scary enough just trying to plan to be able to take care of myself. I'd really go nuts trying to plan to take care of someone else long-term too. My children don't have any disabilities and my Mom has lived her life the way she wanted to, so I've just been planning for me. I hold myself to the same standard I have for my Mom; I don't expect my children to supplement my lifestyle if I don't plan for my future. I want to be free to live my life and I want the same for them. If someone gets sick, that's different. Something major and unexpected would have to happen for someone else to factor into my retirement plans.

I'm not even close to retirement and I'm already tired of working and I don't really want to live on even less than I do now so I can save more to take care of someone that could have had or should have a plan for themselves. Maybe I'm selfish, but that's how I feel.

[stillmovingforward]

Oh yah! Is it ever!
My first retirement account (which wasn't much) was cleaned out to try and keep our son healthy due to lack of medical insurance. My father died and left a financial mess for my mother (due to both having to retire early, he from bad health and her to take care of him. Then there were the medical bills during and afterwards...........). She gets enough to support herself but not enough to afford housing close enough for me to keep an eye on her. She now lives with me. I have been gaining with my retirement account but am thinking of downgrading the percentage I put in. So I can sock away some 'run the hell away' money, if need be. I have myself, my mother, and 3 minor children to look out for. At least I have a good education that has always been kept current and NO student loans!

[DVM gone riding]

I would make sure my mother has a roof over her head and basic necessities like heat and food and basic medical care but other than that I don't feel I have a responsibility to anyone elses standard of living.

43k as Crone points out all the time is plenty of money to get an acceptable live for two people. if they don't like living within their means that is their issue. I have a mentally limited brother I won't pay a dime for him. He has made his choices and he has to live within the government rules. I bet that brother of yours could qualify for lowincome housing and the like but won't if family is all going to make it good. I have told my mother that my brother can/will live on the streets when they pass if he doesn't obey the governments rules.

[Deleted]

Mom : my mom will probably have a choice between the three of us and would probably pick me. She will be fine in retirement, will mostly need physical/emotional assistance.

MIL: already lives with us and I don't see that changing anytime soon. no hardship financially

Biological father: will send some money but not enough to affect retirement

Siblings: depend...

So don't plan on working any longer to support family members but that may change...

[dcmetrocrab]

DH and I plan on buying a home that will squeeze in the 'rents as needed (either set, hopefully not both at the same time, LOL) and help out where we can. We both come from a culture where kids help out the parents. Both sets are fairly Americanized, my mom in particular especially not wanting to burden anyone, but somehow DH and I still grew up with it ingrained in our heads. We don't view it as a negative, it just is.

[Gardening Grandma]

I just have one sibling... She married well (twice), but in retirement she and BIL have made some unwise decisions. The bottom line is that if he dies first, her only income would be the widow's SS allotment - whatever that is. They do own their home, but I'm not sure what his will says about his half (community property state). He had indicated that he wanted his share to go to his kids. She couldn't live there on just a widow's SS benefit anyway.

DH and I have talked about the possibility of her coming to live with us (don't know if she'd even want to as she lives in another state close to her only grandchild), but she'd have the offer on the table.

[The Captain]

Interesting question.

I come from a working class blue collar background. 

DH is from a family that likes to consider themselves "blue blood".

My brother and sister are actually better off financially than am I (and DH and I are doing just fine).  My father as well.

DH's sister's family has always been stretched thin financially, we've helped them out a few times, and we're pretty sure his parents were providing financial support for awhile as well.

DH's parents lived very well in retirement and we think their funds are running out.  His sister will not be in any position to help them financially and I'm a bit concerned we will be asked to provide assistance as needed.  I have already made it clear to DH that we can have a live-in situation, but I do not plan on supporting two households.  Hopefully it will never come to that.

And, the icing on the cake - DH's parents had no problem moving hundreds of miles away when they retired so they could live where they wanted to (which is fine of course, their choice).  Now that they are in poor health they are moving back closer to DH and his sister and have made both of them promise they won't move.  Really?

I agreed since we don't plan on moving from the area until we retire (at least 10 years or so) but I thought that was a rather cheeky request everything considered.

[souldoubt]

Threads like these make me think I'm a bad person.  I would do everything in my power to provide a place to live for my mom or gf's dad as they age but able bodied adults who make poor choices are on their own.  I've seen too many cases of people dropping dead before retirement or having health issues after they retire to push back my retirement to assist people who don't help themselves.  Obviously this doesn't apply to someone who has mental limitations but people living high on the hog and/or making repeatedly bad choices can eat cat food in retirement for all I care.    

[Phoenix84]

Retirement is a ways off, so who knows.  But for now, I don't anticipate having to subsidize anyone else.  Not that I would be inclined to do that in the first place.  I generally am not a fan of wholesale subsidizing family, and would not really feel obligated to do it.  The only way I might consider subsidizing someone financially over a long period of time is if I had a disabled child.

[Abby Normal]

Early in our marriage, I had a hard time convincing DH to save for retirement.  I would always end up asking " Do you want to retire like your grandparents, my mother, or your aunt".

His grandparents were well off, my mother comfortable, and his aunt had the cat food retirement plan.

[Phoenix84]

Apr 7, 2014 19:06:20 GMT -5 CCL said:

$43,000 per year doesn't sound too bad to me.

Yes, I agree.  A lot of people live on less than that.  Even people with famlies live on less than that, a couple of seniors could keep their expenses low and manage just fine.  I would not subsidize someone in that situation.

[tskeeter]

Apr 7, 2014 19:06:20 GMT -5 CCL said:

$43,000 per year doesn't sound too bad to me.

You're right.  It's a fair amount of money to live on in many parts of the country.  Unless you're paying $1,800 a month for rent.  And have a $300 a month car payment.  And bail out a mildly mentally challenged son to the tune of $5K - $10K every few years. 

In all fairness, FIL passed away three years ago next June.  So, of course, the total SS income dropped by an amount equal to what my MIL was getting.  So her current income is about $36K -$37K a year.  Not a lot, but not starving.  

The challenge has always been the way both my FIL and MIL have made decisions.  Overall, a pretty short term view.  If we've got enough to pay today's bills, we're doing just fine.  Which is a bit surprising for a couple who are both well educated.  Partly a reflection of their generation and their upbringing.  I believe that my MIL was almost completely ignorant of their finances until everything was so out of control that bankruptcy was inevitable.  My FIL earned the money and, pretty much, my MIL spent the money.  Although my FIL indulged himself with leased luxury cars and endless donations, that they really couldn't afford, to every charity that asked and to their church.

And part of the challenge has been a question of perspective.  When my FIL retired with $230K in retirement accounts, he thought he was doing really, really well.  They grew up in a time when $100K was a small fortune, so thought they were quite well to do, when they were far from it.

Unfortunately, parents tend to think they are adults.  And they are reluctant to listen advice about their finances from their children.  Even when the kids are better off than Mom and Dad.    

[Gardening Grandma]

tskeeer,
Sounds a lot like my mother - even before her Alzheimer's diagnosis... At one point she sold a plot of land for close to a half a million dollars. She propmtly donated most of it to her church group to build a new church.  By the time she was diagnosed, she had about $10K in savings - and she thought she was well off.

[happyhoix]

My mom is living in an assisted living facility right now. She has alzheimers and needs assistance with toileting/bathing/dressing/taking her meds so none of her daughters can take care of her at home (three of us work full time and the oldest refuses to have anything to do with her).

My oldest sister stopped work at 50 because she didn't want to work anymore. She's gotten by on what her husband earns, and now that he died, with his pension. SHe was able to get on disability (for what, we don't know). SHe lives in one of the highest cost of living area in the country and refuses to move, but complains all the time about how broke she is. She gets her groceries delivered because she doesn't like having to bring them home herself. She has 5+ pets who eat and need vet care, she loves to collect antiques. She has a certification and brags that she could do PT work whenever she wanted to, but she never wants to. She complains the government doesn't give her more in disability. She complains that all her siblings work, and our husbands work, so we're 'rolling' in money and we ought to give her some.

Doubt that I will. Maybe I'll pay a utility bill for her, or a water bill, if it comes to it, but she could sell her house and move to a LCOL area where her disability and pension would go a lot further. Until she's willing to do that, I'm not very willing to help her.

[tskeeter]

Apr 8, 2014 10:45:09 GMT -5 Gardening Grandma said:

I just have one sibling... She married well (twice), but in retirement she and BIL have made some unwise decisions. The bottom line is that if he dies first, her only income would be the widow's SS allotment - whatever that is. They do own their home, but I'm not sure what his will says about his half (community property state). He had indicated that he wanted his share to go to his kids. She couldn't live there on just a widow's SS benefit anyway.

DH and I have talked about the possibility of her coming to live with us (don't know if she'd even want to as she lives in another state close to her only grandchild), but she'd have the offer on the table.

Grandma, the surviving spouse SS benefit is equal to what the working spouse got.  So, if your spouse got $2K a month and you got $1K a month in spousal benefits, when your spouse passes away, you would get $2K a month in surviving spouse benefits and the $1K a month would stop.  My MIL was quite surprised when she found out the she didn't get her spousal SS benefits, plus my FIL's benefits, too.  She hadn't planned on the total SS income dropping by 1/3.

[tskeeter]

Apr 8, 2014 15:47:34 GMT -5 Gardening Grandma said:

tskeeer,
Sounds a lot like my mother - even before her Alzheimer's diagnosis... At one point she sold a plot of land for close to a half a million dollars. She propmtly donated most of it to her church group to build a new church.  By the time she was diagnosed, she had about $10K in savings - and she thought she was well off.

Yeah, nobody in the family realized that my FIL's financial judgement, which was probably not that great to start with, had deteriorated badly.  We didn't know how to read the signs that things were getting off kilter, so that we could try to step in and get things under control while they were still fixable.  By the time we really started to understand how things were, there was no equity in the house and so much credit card debt that the kids couldn't step in and fix things by paying the credit cards off. 

[Gardening Grandma]

Apr 8, 2014 15:57:26 GMT -5 tskeeter said:

Apr 8, 2014 15:47:34 GMT -5 Gardening Grandma said:

tskeeer,
Sounds a lot like my mother - even before her Alzheimer's diagnosis... At one point she sold a plot of land for close to a half a million dollars. She propmtly donated most of it to her church group to build a new church.  By the time she was diagnosed, she had about $10K in savings - and she thought she was well off.

Yeah, nobody in the family realized that my FIL's financial judgement, which was probably not that great to start with, had deteriorated badly.  We didn't know how to read the signs that things were getting off kilter, so that we could try to step in and get things under control while they were still fixable.  By the time we really started to understand how things were, there was no equity in the house and so much credit card debt that the kids couldn't step in and fix things by paying the credit cards off. 

In my mother's case, she was always very secretive.  It didn't help that she lived in another country.  But, even when they live near you and even if you do realize things are getting out of kilter, it's not that easy to step in and right the ship.  If they don't want to give up control, they will fight and it can take an expensive court battle to become their custodian...  And you can still lose since being "bad with money" isn't really the same thing as being mentally incompetent..  Very frustrating for the family members who are left to pick up the pieces.

 

[tskeeter]

Apr 7, 2014 23:09:41 GMT -5 DVM gone riding said:

I would make sure my mother has a roof over her head and basic necessities like heat and food and basic medical care but other than that I don't feel I have a responsibility to anyone elses standard of living.

43k as Crone points out all the time is plenty of money to get an acceptable live for two people. if they don't like living within their means that is their issue. I have a mentally limited brother I won't pay a dime for him. He has made his choices and he has to live within the government rules. I bet that brother of yours could qualify for lowincome housing and the like but won't if family is all going to make it good. I have told my mother that my brother can/will live on the streets when they pass if he doesn't obey the governments rules.

You're right, DVM, that we don't have a responsibility to anyone else's standard of living.  (Except for the responsibility our elected representatives have subjected us to.)  But, when MIL needs $5K worth of dental work and is putting it off because she can't pay for it, even her SIL believes that it is appropriate to step in and take care of things if it doesn't have too big an impact on the SIL's finances.  If it meant we couldn't pay the mortgage, that's one thing.  Since we can write a check to cover the cost, we're willing to do that, even though we believe she should be living in less expensive digs.

I recognize that I kind of have two sets of rules.  One set for parents.  I'm more willing to accept that they make different financial decisions than I would.  And a second set for fully capable siblings.  If they make bad financial decisions, tough noogies.  I guess their life is going to suck.  Even with the mentally challenged BIL, I'm willing to let him go to the food bank if he doesn't want to get a second job so that he works more than 25 or 30 hours a week.  I'm not going to write checks so he can work part time, while I work full time and then some.  His limitations don't prevent him from working more than part time.