Parents retirement/inheritance

[DVM gone riding]

This is going to be kinda long I hope you will stay with me and I can make it make sense. My parents spent most of their lives self-employed and saved nothing for retirement. When G-ma dies Mom will be getting some money. We est about 100k depends on how long G-ma goes (she is 91 now) and how much she needs at the very end. Right now she is in a retirement home but no sort of assisted living yet.

My dad is super super conservative when it comes to any sort of investing. His idea is to pay down the house. I know that if that happens they will then just re-borrow the money to live on as they have done that through out their lives. They both feel comfortable investing in real estate and have done that several times with good success but they general spend/live off the wind fall when Dad is between jobs.

Income stuff:
SSx2=1200/mos maybe slightly more
rental 1=800
bedroom rentals=1200-1600/mos-right now only 800 but that just happened soon both an upstairs and down stairs apt will be ready to rent so they should bring in 1600+ a month with that.

Dad works some and can bring in decent money occ but that isn't consistent-remodeling contractor-as long as he works 1-2 jobs a year they will be able to maintain their live style and they are working on paying down more debt but he is going to hit a point were he just can't do it. Or he might die suddenly of a heart attack.

They are early 60's

Expenses
Mortgage-they owe about 150k give or take 50k on a house worth 300-400k but hard to say with the changes recently
--1300/mos i think this is the primary plus the HELOC but might just be the mortgage
besides the HELOC they may have 1-2 other lines of credit and they pay some for a time share that they of course shouldn't have bought-more impt they shouldn't have bought MORE after they bought the first but that is the kinda of thing Dad does.

the cars are currently paid for.

I am not even going to touch the CC issue mom will some times borrow from Heloc etc and pay them off for now I think they are under control. My mother is a pro at borrowing from Peter to pay Paul believe it or not they have great credit!!

My mom had an annuity that was purchased for her by her Mother but it was done way to early in life and so had never gained anything at all-I think the broker made money off this it was the wrong thing to do. So she isn't interested in that even though it would make more sense at her current age then it did 10-20 yrs ago. All of this was robbed to buy houses, and then not really replaced when houses were sold.

I think they should put half in index funds and half in bonds (I know this isn't very aggressive but they are older) Or consider buying a different annuity which will start paying out immediately.

The rental has a line of credit but no mortgage so I think I have convinced mom that it would work for her to live there if need by or she can live with me or in the rental her and I bought together. (not currently costing or making anything so not included but will be another source of income for my mom eventually)

Mom knows I will make sure she is ok. She also knows I don't want to live with my Dad as cold as it sounds while I love him he can't afford to live to 80+yrs.

I have told them they can't sell their place until they can live off the proceeds the rest of their lives. We all kinda assume Dad will die suddenly he doesn't have the best health but realistically he could go another 20 yrs. Mom will almost for sure go 20-30 or more, more years, her mother is 91 and doing well.

So what would all you suggest???

My mother does know that I am doing this but isn't likely to give me any better numbers.

[Nazgul Girl]

DVM07, please don't take this the wrong way, but your parents have made their beds, and they're going to lie in them. Not saving anything much for retirement will mean that they will be living off social security checks and rental income. From the amounts you've posted, they should be able to live a less-than-thrilling lifestyle on their income. Unless your mother learns to control her spending, and unless you have a better idea of how much debt they really have, there really isn't much constructive advice you can give. Trust me; they're pros at surviving and will continue to do so. Grandma's money from the inheritance should be saved prudently, but they probably won't do it. I don't think there is too much you can do for them, except to love them, and learn from their poor examples. I don't think they'll listen to you. At least 10k from the inheritance should be put into an emergency fund, but it will probably be drained in short order.

I really don't have too much other advice for them, but I'm wondering why you're all upset about this. Are your student loans paid down ? Are you saving enough for YOUR retirement ? Do you have any credit card debt of your own ? Do you have a five-figure emergency fund ? If you can't say "yes" to all of these questions, I'd quit worrying so much about them, and get your own house in order. Best wishes to you and yours.

[Deleted]

Potential for assisted living and 100K = DON'T count your chickens before they hatch...

Not knowing within 50K how much they owe on the house? I'm guessing you should think things are much worse than they appear.. sorry, but honest.

I would say, right now, that if your parents ever hope to have any help from you, they need to lay it all out on the table NOW.... so you can help them, cut up the cards, live on a budget and visit the idea they may have to work part time, if they can find it...

A paid off smaller place, handicapped accessible... which cannot be mortgaged, would be nice. I've said this before, but 15 (?) around then years ago, my father knew what was coming, and helped his parents sell their place and used the down payment on apartment building he built... with the bottom appartment to their specifications and handicapped accessible... they lived there rent free... he owns the building.

[phil5185]

We knew a couple that were aged 70, retired. Had a Fifth-Wheel 35 footer, a big pickup to pull it, an old car, and a moped. They parked in an AZ Park in the winter & a MT Park in the summer. Fished a lot, went to local rodeos, Friday nite Fishfry at the Elks.

We sometimes went to the Elks with them, and we usually went out to breakfast on Sat mornings.

They had their two SS checks and their Medicare coverage - and probably less than $10,000 (altho I don't know that). They were very happy, fun to be with, enjoyed themselves and the people around them.

I wouldn't worry about your folks, they know how to do for themselves.

[DVM gone riding]

nazgugirl let see -yes I am actively paying down my SL I have been out working for just 4 yrs now and had 81k in SL debt when I started and have 62k now. Yes I am saving for retirement actively-I started an IRA as soon as I was out and the 401k one year latter when I became eligible with more then enough to get the match. I have no CC debt I never have since the first day I got a cc-at 18 yrs. and yes I have an emer fund of close to 5 figures but I also have long term disability insurance and a steady income. I have learned a lot from my parents mistakes.

phil thanks I know somehow they will manage for quiet a while its the eventually part were they can't take care of themselves that worries me so much.

Mom asked me what I would suggest doing with the money so I was hoping to get some suggestions that might work well for them. While paying off the mortgage is a valid idea I think a) the money will get spent by re-borrowing b) they could get a much better rate of return doing something else. I have thought of suggesting buying two rentals with it, the problem is my dad doesn't buy rentable rentals, he buys "fixers" and since he can do all of the fixing he can get really really bad fixers, it would work except he fixes them to well and treats them like hobbies (ie takes his sweet time) then instead of keeping them as rentals they need the money so they sell-most always at a profit-but then they spend the money because he doesn't have any other work-rinse and repeat and you have no savings but a middle class life.

The only reason they have the one rental is they took so long fixing it the market crashed, and the only reason there isn't a mortgage on it is because its in a flood plain and dad doesn't want to pay the insurance!!

[Gardening Grandma]

dvm07.
Have your parents asked for your advice? Unless they have, I'd steer as clear as I could. If they HAVE asked for your advice, then you could legitimately respond that without all the numbers, you cannot offer any. You can't give good, specific advice without accurate information.

"Mom knows I will make sure she is ok."
Have you assured her of that? I'd be very careful about making promises. If she is assuming that you are going to take care of her, why should she rein in the borrowing?

[DVM gone riding]

oped I agree, there actually is a lot more than 100k (I think it is about 600k+ at the moment) but there are four daughters and some charities in the mix, Mom is actually good with numbers and has by now seen all of her mothers finances-Gma is blind now so one or the other of the daughters goes to all appts with her and Mom and one of the other sisters are executers.

[DVM gone riding]

GG Yeah maybe it is counter productive, but she is my mother and very supportive of me and my carrier. Yes I have told her that if she ever needs to she can live with me, but that dad can't-and she knows I am not joking about that. At the same time she would rather not, she would like to be able to provide for herself.

[Deleted]

Yeah... i think i came on a bit strong... i'm not ready to go with Phil yet, but i think gramma is probably right in that plowing right in there might not be the best approach...

I think the 'mom knows i'll take care of her' is what worried me...

[Gardening Grandma]

Yes I have told her that if she ever needs to she can live with me, but that dad can't-and she knows I am not joking about that.

I can't help wondering what the plan is if she DOES need to live with you and your dad is still living? I don't really think that expecting him to die before that happens is a good plan.... just sayin......

[cronewitch]

Any advice you give will be wrong then it will be your fault they need help. I would assure them they are adults and will make the best choices if there is an inheritance. They are still young, at least a couple of decades from needing help probably and it may be a few more years before they even find out if there will be an estate.

Children shouldn't be relied on to plan the parents retirement. They had decades before you were grown to think about old age and make choices. I wouldn't promise to take on their future retirement planning or be a safety net. If anything let them know they have low income housing for seniors who don't have money to live alone.

[reader79]

I don't think you should count on there being an inheritance at all. Your grandmother is still alive, and if she has lasted until 91, there is a good chance that she can go on for quite a while. My other grandmother in Florida decided last fall that she did not like being alone, and started burning $10K/month on aides to stay with her 24 hours a day. My uncle estimates that she has about six months of cash left, until all she has is her SS and veterans benefits from my grandfather. These cover the monthly fees at her retirement community, but not much else. The money that you are mentally splitting up already might be gone in a few years.

[Deleted]

"I don't think you should count on there being an inheritance at all."

Agreed and exhalts reader 79.

DH's grandfather lived to 102 but we don't expect that any of his children (including MIL) to make it into their 90s.

"If they HAVE asked for your advice, then you could legitimately respond that without all the numbers, you cannot offer any. You can't give good, specific advice without accurate information."

Also agree. You need an accurate picture.

I used to worry about my mom all the time. She and my dad were real estate agents and investors; always a financial roller coaster. They effectively went bankrupt twice and it would have happened again if my mom wasn't diagnosed with stage 4 pancreatic cancer on Jan 4th, 2008. 41 days later she was dead 5 days after her 70th birthday.

While her estate was upside and a mess to clean up, she really enjoyed her life, especially the last 10 years. I think I was more worried about her financial situation than she was!

You're a good daughter to care but as others have said, your folks will figure it out.

As to my father? Shortly after my parents divorced (she 58, he 61) he hooked up with a very nice lady who has a little bit of money. They are still together after 14 years. Who wouda thunk?

[Savoir Faire-Demogague in NJ]

I'd like to stir the pot some more by adding that your folks who are in their early 60s, will likely live for another 25 to 30 years.