Irresponsible old people

[Rob Base 2.0]

More of a vent then a question

So my mom is one of these irresponsible people. She never earned a lot. She made the tragic mistake of picking the wrong partner.  Then after the divorce (25 years ago) she was close minded about finances. She did survive cancer though. Despite me pestering her about investing, advising her NOT to take her SS early, and other financial things - she NEVER invested and took SS early (while she still worked).  So she literally has almost nothing saved and now she thinks she will lose her job (she is now 70 and has worked most of her life).

Her company is merging with another and she is pretty sure she will lose her job.  She says she was planning to retire at 71 anyway (in my head I was like "how?") so she says she's not too worried, but I think she's not thinking it through.

I am done giving advice as she does the opposite regardless......The other thing she mentioned is she is pretty sure the mid level manager that supervises her will lose his job too.  He is 64.  And they were talking among themselves in private, and he mentioned to my mom- "at least you have your SS check".........64 and a mid level manager and nothing saved?!?? Mom is a secretary.

 

[Value Buy]

I assume there is no pension or 401-k?
Is the house paid for, or does she rent?

[Shooby]

 That's very sad. But, she is an adult.  After my dad died, my mom got a bit too free with her spending.   And, i told her that if she runs out of money, she will be moving in with me and living in one of my kid's bedrooms.  She straightened up after that.

[Shooby]

 It is wrong for the older generation to bankrupt their own children.  Parents are financially responsible for their children.   Children are not financially responsible for their parents.  Yes, you can help your parents.  But, you should not bankrupt your personal finances or jeopardize your children's futures because you have an irresponsible parent.

[Deleted]

Yeah, there are sad stories out there.  My mother had a friend who somehow hadn't worked enough eligible quarters for SS and hadn't stayed married to anyone long enough to get Spousal benefits but was planning to retire at age 62 and collect SS.  Mom had to tell her about the 40 quarters requirement (and that her work as a hairdresser probably wouldn't get her a very big check).

I've seen stories here, too- typically it's women but not always.  Mom wants to quit work and collect a measly SS payment at 62 and hopes the kids will chip in to support her.  Or, even sadder, Dad dies and Mom can't live on the reduced SS benefits (even though they shouldhave known this would happen if one died).

I'm grateful I had my own career and learned how to invest early.

[Deleted]

My mom spent my dad into high credit card debt several times over the years and when my great gpa died he left them enough to pay it off along with their house. Not long after my dad retired and received a gov pension worth 85% of his high 3 salary.

So no debt, a golden pension and what do my parents do? Let's try two failed businesses and continued deficit credit card spending resulting in 100k in debt today. My dad went back to work in a manual labor job at the age of 68. They could not leave well enough alone.

FFS, their retirement plan now is to wait for my gpa to die to which I'm sure more dumbass decisions will be made and it would get blown as well. I have made it clear I am not their backstop.

[Rob Base 2.0]

May 8, 2017 20:52:21 GMT -5 Value Buy said:

I assume there is no pension or 401-k?
Is the house paid for, or does she rent?

No pension, no 401k. She rents a small apartment in NYC.

She has about $200,000 in savings accounts and T-bills.

That's it.

She never made a lot of money. But she had some money after the divorce she should have used better than T-bills. Also her parents left her and her brother a house (worth about $300 K I would say). They procrastinated and brother is a jerk too, and by the time they were going to do anything it caught fire.

[Shooby]

  Well, she has $200k.  That isn't exactly destitute.

[alabamagal]

Sorry that you are having to deal with this.  We have same issue with my in-laws.  Through variuos life decisions, they ended up at retirement age with no savings, no house and social security income.  There was a small life insurance policy when FIL died.  I think my MIL gets about $800 a month in social security.  She spends $400 or $450 a month on rent to her slumlord - aka my sister in law.  She lives in the very outer suburbs of a large city in what we call a rural slum.  But she is content with her life.  She has an old car to drive to church and can walk to the library for entertainment.  She refuses to apply for any aid - pretty sure she would get some food stamps.

I know according to a lot of standards here she is not doing well, but she has a roof over her head and food to eat.

[Deleted]

May 9, 2017 6:39:50 GMT -5 Rob Base 2.0 said:

May 8, 2017 20:52:21 GMT -5 Value Buy said:

I assume there is no pension or 401-k?
Is the house paid for, or does she rent?

No pension, no 401k. She rents a small apartment in NYC.

She has about $200,000 in savings accounts and T-bills.

That's it.

She never made a lot of money. But she had some money after the divorce she should have used better than T-bills. Also her parents left her and her brother a house (worth about $300 K I would say). They procrastinated and brother is a jerk too, and by the time they were going to do anything it caught fire.

I'll agree with Shooby that that isn't destitute.  If you could get her to limit her withdrawal rate to $10,000 a year, that would last her 20 years.  Maybe do a CD ladder.  There was a time for a more aggressive savings strategy, but now isn't it.

I probably would suggest a LCOLer location, though, than NYC.  Has she considered moving closer to you?  Your basement even?  That would be the most responsible thing for her to do at this point.  

[Wisconsin Beth]

May 9, 2017 6:39:50 GMT -5 Rob Base 2.0 said:

May 8, 2017 20:52:21 GMT -5 Value Buy said:

I assume there is no pension or 401-k?
Is the house paid for, or does she rent?

No pension, no 401k. She rents a small apartment in NYC.

She has about $200,000 in savings accounts and T-bills.

That's it.

She never made a lot of money. But she had some money after the divorce she should have used better than T-bills. Also her parents left her and her brother a house (worth about $300 K I would say). They procrastinated and brother is a jerk too, and by the time they were going to do anything it caught fire.

I assume she's not going to be able to stay in NYC.

My MIL and her sisters took the first offer on their mother's house, which was a low ball offer made around the height of the housing market boom. We'd suggested a couple of things but she was convinced the house wouldn't sell for the amount the City had it valued at. It would have. My mom still worked for the Assessor's Offices then so we knew the ratios and percentages data.

[Deleted]

May 9, 2017 6:39:50 GMT -5 Rob Base 2.0 said:

May 8, 2017 20:52:21 GMT -5 Value Buy said:

I assume there is no pension or 401-k?
Is the house paid for, or does she rent?

No pension, no 401k. She rents a small apartment in NYC.

She has about $200,000 in savings accounts and T-bills.

That's it.

She never made a lot of money. But she had some money after the divorce she should have used better than T-bills. Also her parents left her and her brother a house (worth about $300 K I would say). They procrastinated and brother is a jerk too, and by the time they were going to do anything it caught fire.

So, the house wasn't insured and is worth nothing now?  What about the dirt it sat on?  Can they sell that?

I also agree that 200K is not "almost nothing".  I was thinking the situation was a lot worse. 

[Shooby]

  $200k saved by a secretary living in NYC isn't exactly irresponsible.

[Rob Base 2.0]

I agree $200K is something. But not much.

Honestly I don't know her "plan" and at this point I don't want to know. Whatever it is I am sure it will make no sense and she won't listen to anything I say so I try to pretend to be supportive and try to change the subject.

About 5 years ago she mentioned moving to Florida and living in this small prefab building thing (kind of like a nice version of a trailer). You could buy it for $20k but had to pay a monthly maintenance fee. Her friend did that. Then friend had major health issues and had to sell at a loss and move in with family in NYC. So I am not sure if this is still the plan.

I was surprised when my wife said she could live in our basement. I don't think she thought that through. I don't think it would be fair to my wife since she has patents in Europe in a similar situation. But they own their house (although it's falling apart and it's too big for them to maintain- mowing lawn, cleaning, etc. ) and have European support system (although it's not as good as it was. ). And her brother lives close to them but he doesn't help at all.

I am going to wait and see how it plays out. She MIGHT not lose her job. But from what she said I think she will. We'll see.

[Rob Base 2.0]

Also the burned down house was not insured and land not worth much. And they been paying tax on it. It's all in brothers name because at time the parents set it up she was married and brother wasn't so parents thinking was she would taken care of by husband but the brother didn't have someone to take care of him. Gotta love old people's views on finance theories.

[Shooby]

  I kind of think you aren't giving her enough credit.  She had a low paying job.  Went through a divorce and cancer and all that managed to bank $200K , even without investing.  And the older generation was not much into investing.  If anything, i dont think buying property at her age makes sense.  Renting is fine.  And no she probably isnt' going to listen to you.  Most parents really dont' want advice from their kids.
  At some point, she probably is going to lose her job and that is an impending reality.

[Deleted]

Senior trailer parks are common around here.  20K for a little "house", and then a few hundred a month for lot rent.  200K and SS would go a long way with housing mostly covered. 

[Rob Base 2.0]

The $200 K is from divorce settlement, NOT from her saving her salary.

For having a low paying job she did OK. BUT she didn't need a car (subway). She could have saved some money. Waited to take SS later and other things.

The thing is I don't understand the not listening. I graduate with a BS in business and was #2 in my class (mediocre school though) and was in the top 20% of my MBA class (mediocre school) and none of my family wants to listen to me.

I have a computer problem- I ask my brother who is good with computers. During my MBA project I have a quickbooks question I call my mom who uses it for her job.

It will be interesting how this plays out. And unfortunately I suspect it will be a bit sad too.

[Waffle]

If I live long enough, I will be subsidizing too old people for as long as they live. I can't bring myself to call them irresponsible - although I'm sure some of you would. But they are both definitely much poorer than Rob Base's mother. 

[Shooby]

May 9, 2017 8:20:34 GMT -5 Rob Base 2.0 said:

The $200 K is from divorce settlement, NOT from her saving her salary.

For having a low paying job she did OK. BUT she didn't need a car (subway). She could have saved some money. Waited to take SS later and other things.

The thing is I don't understand the not listening. I graduate with a BS in business and was #2 in my class (mediocre school though) and was in the top 20% of my MBA class (mediocre school) and none of my family wants to listen to me.

I have a computer problem- I ask my brother who is good with computers. During my MBA project I have a quickbooks question I call my mom who uses it for her job.

It will be interesting how this plays out. And unfortunately I suspect it will be a bit sad too.

You are her little boy.  You can have PhD's coming out your ears.  She isnt gonna see you as that.  And, adults want to live life on their own terms.

[Deleted]

May 9, 2017 8:20:34 GMT -5 Rob Base 2.0 said:

The $200 K is from divorce settlement, NOT from her saving her salary.

For having a low paying job she did OK. BUT she didn't need a car (subway). She could have saved some money. Waited to take SS later and other things.

The thing is I don't understand the not listening. I graduate with a BS in business and was #2 in my class (mediocre school though) and was in the top 20% of my MBA class (mediocre school) and none of my family wants to listen to me.

I have a computer problem- I ask my brother who is good with computers. During my MBA project I have a quickbooks question I call my mom who uses it for her job.

It will be interesting how this plays out. And unfortunately I suspect it will be a bit sad too.

Powdered butt syndrome.

Once you've powdered someone's butt and changed their diapers you no longer want to take advice from them. 

[MJ2.0]

I know my opinion doesn't matter but I am not feeling your attitude/tone regarding your mother.  It's not like she is an evil person (at least not according to the information in this thread) - she is just a dodo about money/investing... so what?  A lot of much older people - especially the ones who lived during the Great Depression - are wary of the stock market and investing. 

She lives in an apartment in NYC, which I assume is either in the 'hood or has been rent controlled for a long time.  If it's neither of those, she needs to move out of the city.  Is she in Manhattan proper or one of the suburbs (Brooklyn/Queens/Yonkers)?  She should try to move to a 1-bed/studio in one of the suburbs or to LI/SI.  It'll be much cheaper there.


But apparently you don't care what happens to her, so I don't know why I'm bothering to type this out. 


My mom isn't the greatest with money/investing either, but she does have a 401k. She has borrowed against it a couple of times but has (I believe) paid it back. I know I will be helping her in some shape or form, but she knows that I will NOT bankrupt myself to do so.  I have my son and myself to prioritize, and right now I have my own debt mountain to take care of.

[tractor]

My Dad is going through this right now. He never planned for the future because he figured he would be dead by his mid-60's (both his parents died in their early 60's). He's 75 now, just had to sell the family home last month because he couldn't afford to keep it. After two divorces and frivolous spending, he only cleared $50,000 from the house ands that's what he has to live on (along with SS). He is planning on moving in by me, and last night we had a meeting with a builder to put on an addition. He had plans drawn up for a $150,000 addition that he figured we would pay for. I had to tell him last night that would not happen, he has the 50 grand to spend and that's it. We will cover all expenses after that, and he will have his SS to live on after that. He was pretty dejected, but we'll work through it.

Reality sucks, he's lived beyond his means for over 50 years, it's too late to change that now.

[movingforward]

I know everyone on YM thinks you needs millions to retire, but you would be surprised how long 200K will actually last a person. I have relatives that retired on 200K - 300K and have managed to live okay. I admit that it isn't the retirement I personally would want but they certainly aren't eating cat food.

[Rob Base 2.0]

MJ I missed the part where I said I don't care what happens to my mom?

What I said was I am not going to be involved. As my previously involvement did no good as mom does what she will.

when push comes to shove I will help with some baseline support with strings attached. But she's not going to listen until she totally fails, unfortunately. And that is where my "attitude" comes in. Most of this could have been avoided.

And apartment NOT rent controlled and in queeens.

[movingforward]

Sounds like she needs to move to a 50 and over community (one where rent is based on your income) in a LCOLA.

[naughtybear]

MJ didn't say you posted that, she inferred by the tone and nature and attitude of your post that you may not care too much. We all read the written word differently.

[Bonny]

C'mon you know I win this contest!

Mom died leaving an upside down estate of $400,000; a combination of upside house <$300k>,  $60k in credit card debt and $40k in IRS debt. I even had to do a voluntary repo of her car that the bank issued a $1500 1099 to the estate.

Dad is on poverty level Medicaid; $1200/mthly early SS and perhaps $1000 in the bank. He's not allowed to have more than $1500 in assets or he can't qualify for aid. He does have a life estate in his girlfriend's house. They have a reverse mortgage on the house which is being used to subsidize their lifestyle. She does have another property which is rented to her middle daughter. Hopefully the kids will cooperate if/when she has to go into assisted living because I don't think there will be much equity in the house my dad and she are living in, especially if it has to be sold during a market downturn.

I don't know what my father thinks will happen when he has to go into assisted living. Up my way it's about $10k/mth. I suspect that there is a long wait list for Medicaid eligible space.

My parents had a great time partying up when I was younger. At some point the piper needs to be paid!

[Waffle]

May 9, 2017 9:26:46 GMT -5 tractor said:

My Dad is going through this right now. He never planned for the future because he figured he would be dead by his mid-60's (both his parents died in their early 60's). He's 75 now, just had to sell the family home last month because he couldn't afford to keep it. After two divorces and frivolous spending, he only cleared $50,000 from the house ands that's what he has to live on (along with SS). He is planning on moving in by me, and last night we had a meeting with a builder to put on an addition. He had plans drawn up for a $150,000 addition that he figured we would pay for. I had to tell him last night that would not happen, he has the 50 grand to spend and that's it. We will cover all expenses after that, and he will have his SS to live on after that. He was pretty dejected, but we'll work through it.

Reality sucks, he's lived beyond his means for over 50 years, it's too late to change that now.

I think my mother and your dad share the same thought process.   When she retired she took an option that gave her much more money in the early years and much less in the later years because she thought she was going to be dead long before the retirement amount went down. Now she is 77 with no savings and little income.

[emma1420]

I give your mom credit for continuing to work all throughout her 60's and holding onto her divorce settlement.  I get that it's frustrating though.

My mother has easily received over 750k in cash over the last 25 years between her divorce settlement, the alimony she received, the money given to her by her parents, etc. And during that time, she's gotten herself into six figures worth of credit card debt.  She never made more than $12 an hour her entire working life, and stopped working at 59 and claimed SSDI, and cashed in her defined benefit pension at 59 and a half.   She's now in her early 60's and the money from her pension is almost gone. She's now on a very fixed income (I believe she brings in only $1400 a month).

People make choices about their lives and have to deal with the consequences.  If people don't plan ahead but don't complain about it, or expect others to support them, I don't really have an issue with that.  It's their life their choice.   it's when they don't plan ahead and then spend the next 30 years talking about how unfair life is that it irritates me.

So if your mom isn't worried too much or isn't asking or expecting you to help her then I'd see if I could hold onto that.  Even if the situation overall is frustrating.