Money from my parents

[haapai]

Aug 2, 2024 10:12:12 GMT -5 Bonny said:

Aug 1, 2024 12:13:34 GMT -5 haapai said:

My parents told me a couple of years ago that they intended to start giving my brother and me about a thousand dollars a month when they reached their late eighties.  I sorta blacked out when they mentioned it and never made any plans that involved it.  My dad told me at the time that his parents had done something similar when they reached the same age. 

Last week, dad announced that he had changed his mind and wanted to start giving sooner.  In his words, the money is just piling up and they aren't spending it.  He'd prefer to see us having fun with it now instead of after he and mom die. 

He asked for a deposit slip so that he could set things up. 

It took me five days to tell my partner about it.  I considered saying nothing but my parents want me to have some fun with this money and that puts the kibosh on just funneling it into an investment account.  It is hard to hide an extra $1000 or even $500 a month when you've been living on a take-home pay of $425 a week. 

I suspect that there are a whole lot of other middle-aged folks also getting similar gifts from their parents.  You probably know a few and you should not be hurt if they haven't ever mentioned it, or only told you about it after their parents had passed.  If I lived in the same town as my brother and parents, talking about it would also affect them.  That is, people would assume that my brother was getting a similar amount and they would speculate as to how much money my parents had.  In order to protect other recipients and the givers from unwanted attentions, I'd have to keep mum. 

In my case, the gifts have nothing to do with avoiding state or federal inheritance taxes.  My folks simply do not have that kind of money but that's pretty much the first thing that most folks would assume. 

I'm pretty messed up by this life-changing turn of events.  It's been a week and I still haven't mailed the deposit slip.  Thank goodness you guys are out there for me to ramble at.  If any of you have gotten similar gifts and wish to share some advice, I'd love to hear it.  I feel so alone right now. 

Also, could someone re-post a link to that boogleheads piece on dealing with windfalls?  I think that I need to read it again. 

First of all be grateful and be thankful they have extra money and are starting to share now. I came within days of having to support each of my parents assisted living/skilled nursing facilities since they were so terrible with money. We could afford it but both of us would have been very resentful and it wouldn't have helped our marriage.

Do you keep separate accounts from your partner? This is YOUR money. If your retirement isn't reasonably funded (I seem to recall that you had a late start) you can set aside a portion of that money. Having some fun is important too. If you're worried about an income bump which will affect your ACA status take the time to talk with a CPA and explore something like double-tax free bonds.

I like PatStab's suggestions although I'd be leary about lying and stating that you wrecked the car. That could cause a whole 'nother issue about worry. Maybe mechanical failure?

Good luck and enjoy!

My partner and I keep separate accounts.  Yes, I got a late start on retirement savings but I'm now at the point where a 4% draw on my retirement accounts plus social security would pretty be pretty close to what I am living on now (before the gifting).  I intend to continue contributing for as long as possible and I'm terrified by the thought of having to retire at less than my full retirement age. 

resolution was the poster that mentioned an ACA subsidy but it is convenient that you have confused us.  I'm not married to my partner and he is on expanded medicaid.  It's a barrier to marriage.  If we married,  I'm pretty sure that he would no longer qualify and I would have to carry him on my health insurance instead.  That would reduce the retirement contributions that I could make significantly.  I might even have trouble grabbing the 50% match on the first 5%.  On the other hand, not being married means that he cannot receive my much larger social security benefit if I predecease him.  It also means that even if I leave him the house, the property taxes will explode once it legally changes ownership.  When you apply perpetuity-ish math to the extra income that he would receive and the extra expenses that he would avoid, the result is astounding.  Maybe I should consider marrying him before he hits Medicare age.  A few years of carrying him on the group plan at work would be a pittance compared to the pile of money he would need otherwise. 

I'm amused by crone's advice to lie to my mom about totaling the car.  My mom might not have any business driving alone but she still has good days and bad days.  Lying to her about totaling the car on one of her good days would not work.  Also, I am not good at lying to others.  I'd rather have her resent me for being part of the plot to go down to one vehicle than risk the repercussions of being (rightfully) perceived as deceitful. 

[minnesotapaintlady]

Aug 2, 2024 11:01:26 GMT -5 haapai said:

Aug 2, 2024 10:12:12 GMT -5 Bonny said:

First of all be grateful and be thankful they have extra money and are starting to share now. I came within days of having to support each of my parents assisted living/skilled nursing facilities since they were so terrible with money. We could afford it but both of us would have been very resentful and it wouldn't have helped our marriage.

Do you keep separate accounts from your partner? This is YOUR money. If your retirement isn't reasonably funded (I seem to recall that you had a late start) you can set aside a portion of that money. Having some fun is important too. If you're worried about an income bump which will affect your ACA status take the time to talk with a CPA and explore something like double-tax free bonds.

I like PatStab's suggestions although I'd be leary about lying and stating that you wrecked the car. That could cause a whole 'nother issue about worry. Maybe mechanical failure?

Good luck and enjoy!

My partner and I keep separate accounts.  Yes, I got a late start on retirement savings but I'm now at the point where a 4% draw on my retirement accounts plus social security would pretty be pretty close to what I am living on now (before the gifting).  I intend to continue contributing for as long as possible and I'm terrified by the thought of having to retire at less than my full retirement age. 

resolution was the poster that mentioned an ACA subsidy but it is convenient that you have confused us.  I'm not married to my partner and he is on expanded medicaid.  It's a barrier to marriage.  If we married,  I'm pretty sure that he would no longer qualify and I would have to carry him on my health insurance instead.  That would reduce the retirement contributions that I could make significantly.  I might even have trouble grabbing the 50% match on the first 5%.  On the other hand, not being married means that he cannot receive my much larger social security benefit if I predecease him.  It also means that even if I leave him the house, the property taxes will explode once it legally changes ownership.  When you apply perpetuity-ish math to the extra income that he would receive and the extra expenses that he would avoid, the result is astounding.  Maybe I should consider marrying him before he hits Medicare age.  A few years of carrying him on the group plan at work would be a pittance compared to the pile of money he would need otherwise. 

I'm amused by crone's advice to lie to my mom about totaling the car.  My mom might not have any business driving alone but she still has good days and bad days.  Lying to her about totaling the car on one of her good days would not work.  Also, I am not good at lying to others.  I'd rather have her resent me for being part of the plot to go down to one vehicle than risk the repercussions of being (rightfully) perceived as deceitful. 

Are you funding your Roth IRA?  If parents are gifting you $1000/month, I would max that first. The contributions can be used for anything prior to 59.5 if you want/need to tap it, and it's tax-free growth forever if you don't.

[Opti]

Aug 2, 2024 10:08:13 GMT -5 resolution said:

Aug 2, 2024 9:13:04 GMT -5 Opti said:

What is his thought on Venmo and other apps?

He likes Cash App the best, but he also likes Venmo. He has a review of several cash transfer apps on his site. clark.com/personal-finance-credit/best-way-to-send-money/#h-how-safe-are-the-best-ways-to-send-money-online

Thank you. This is very helpful. I knew some of this, but it's spelled out very well.  

[minnesotapaintlady]

Aug 2, 2024 7:47:04 GMT -5 resolution said:

I listen to the Clark Howard podcast, and he is always saying that Zelle is easier to hack and doesn't have the same consumer protections as the other cash transfer apps. His recommendation is that if you use Zelle, that you connect it to a separate bank account that only contains a small amount of cash that you want to transfer.

This is bringing me flashbacks from last week's mini vacation.  My mom and her sisters are all huge Clark Howard fans, and it seems like literally everything they talk about is preceded by "Clark Howard says..." 

It's starting to creep me out a little.

[Opti]

I don't have to worry I will join the Clark Howard collective if I check out what he says on phone plans, correct?

[Bonny]

Aug 2, 2024 11:36:19 GMT -5 minnesotapaintlady said:

Aug 2, 2024 7:47:04 GMT -5 resolution said:

I listen to the Clark Howard podcast, and he is always saying that Zelle is easier to hack and doesn't have the same consumer protections as the other cash transfer apps. His recommendation is that if you use Zelle, that you connect it to a separate bank account that only contains a small amount of cash that you want to transfer.

This is bringing me flashbacks from last week's mini vacation.  My mom and her sisters are all huge Clark Howard fans, and it seems like literally everything they talk about is preceded by "Clark Howard says..." 

It's starting to creep me out a little.

Lol, I think when I first joined Bogleheads I thought everyone was so smart. And some posters really are but they are human too. But it doesn't take very long to figure out some of these folks are a little off. The things folks will do to avoid paying taxes and get themselves into bigger messes is 

But DH and I have done a few of our own. Just glad none of them were catastrophic! 

[zibazinski]

I only zelle to family members so I feel secure.

[movingforward]

Dad just recently mentioned that if he lives past 83 (he is 77 now), that he would like to gift my brother and me some money so he can see us enjoy it. I have talked about going to New Zealand and Australia for years so that is definitely something I would do with the money.

I also might pay some on the principal of my townhome. I know Phil would say invest it but I already have a lot going to investments. The thought of having no mortgage to worry about is exciting.

I think Splitting money between fun and responsible is a good way to spend it.

[movingforward]

Aug 2, 2024 10:06:52 GMT -5 minnesotapaintlady said:

I've only been on two cruises so far, and both to the same place, but I'm addicted now...such a chill way to vacation.  If I wasn't drowning in debt right now I'd be booking another one for sure!

I am seriously thinking about being one of those people that lives on cruise ships for a year after retirement.

[haapai]

The deposit slip has been mailed.  It only took me two and a half weeks.  I hope that my brother forgives me for cinching the pipeline for so long. 

I'm still pretty shocked by my reactions to this gift.  I cannot explain why "tell no-one" kicked in so strongly.  

I'm also worried about getting off-kilter again.  I've worked so long and so hard to understand what my means are and what I can afford and how much I need to save.  Getting this amount of money gifted to me (even with some warning), has me unnerved.  I know from experience that I am pretty lousy at figuring out what I can afford and I do not know how to adapt to having so much more.  I'll be thinking a lot about how to segregate this gift from the rest of my income in order to reduce the chances that I just increase my standard of living without thinking much about it. 

[azucena]

Glad you've come around. Feel free to keep talking it thru here. I think you realizing that it could be a problem and set you back to old bad spending habits is a positive sign of change.

[haapai]

One of the reasons why "tell no-one" kicked in so hard has to do with what has been going on at work.  The company told us months ago that they intended to transfer their pension obligations to insurance companies but the letters that detailed our options were sent out only recently. 

A lot of folks in their fifties were pretty shocked to receive lump-sum payout offers of less than $20k.  Worse, some of these folks hadn't been contributing to their 401(k)s or had borrowed from them.  (The company started putting 3% of our gross pay into our 401(k)s when they froze us out of the plan, which was about 12 years ago for most of us.)  Quite a few folks had 401(k) balances that were lower than the lump-sum payout.  Those folks are in a lot of pain and some of them are wailing loudly and angrily. 

I will not be discussing my good fortune with anyone at work.  Too many financial idiots, too much misdirected anger. 

On the brighter side, the buyout offer does mean that I don't have to worry too much about buying a car and having anyone wonder about how I could afford it after decades of driving rusty wrecks.  Most of them will just assume that I took the lump sum offer and bought a car instead of rolling it over into a retirement account. 

[resolution]

Aug 14, 2024 9:31:51 GMT -5 haapai said:

One of the reasons why "tell no-one" kicked in so hard has to do with what has been going on at work.  The company told us months ago that they intended to transfer their pension obligations to insurance companies but the letters that detailed our options were sent out only recently. 

A lot of folks in their fifties were pretty shocked to receive lump-sum payout offers of less than $20k.  Worse, some of these folks hadn't been contributing to their 401(k)s or had borrowed from them.  (The company started putting 3% of our gross pay into our 401(k)s when they froze us out of the plan, which was about 12 years ago for most of us.)  Quite a few folks had 401(k) balances that were lower than the lump-sum payout.  Those folks are in a lot of pain and some of them are wailing loudly and angrily. 

I will not be discussing my good fortune with anyone at work.  Too many financial idiots, too much misdirected anger. 

On the brighter side, the buyout offer does mean that I don't have to worry too much about buying a car and having anyone wonder about how I could afford it after decades of driving rusty wrecks.  Most of them will just assume that I took the lump sum offer and bought a car instead of rolling it over into a retirement account. 

It is really smart not to say anything about it at work. People have all kinds of different ideas about money and about what kind of responsibilities we have for the people around us. I had one coworker ask me what I would do if I won the lottery (which I never play) and then get mad at me when I didn't immediately say I would pay off everyone else's mortgage. When I moved out of state, several coworkers tried to talk me into letting another coworker move into my house, which I knew for a fact she couldn't afford. One of my friends let a coworker rent his condo, and she stopped paying rent for about five years. He was afraid to evict her because he didn't want all of his coworkers to be mad at him.

Anyway, it is much smarter to just never let them suspect that you have anything.

[minnesotapaintlady]

If the influx of money is giving you a ton of angst, just have it direct deposited into a brokerage account and ignore it's existence for now.  You don't have to make any decisions about what to do with it immediately.

[swamp]

Aug 2, 2024 9:53:54 GMT -5 NomoreDramaQ1015 said:

Aug 1, 2024 21:59:47 GMT -5 bean29 said:

I have no concept of what a disney cruise involves and how old the kids are on the cruises. We took our kids to Universal Studios in Florida when they were 17 and 13 and everyone in the family had a great time. Same year we went to LA and stayed at the Beverly Hills Montage, went to a La Dodgers game, went sight seeing on Rodeo Drive, and we went to Santa Monica Pier. It is 95 per person to get on pier now, don’t know if they charged a lot then to or not. DS will be 31 this fall, so it was 14 years ago already.

My brother does family cruises a lot.
His kids were College age when they started. They went to Costa Rico once, and they went on an Alaskan Cruise once too. They did a Disney Cruise last year, but now all his kids have little ones.

Abby loves Disney but the idea of going to the parks is my personal idea of hell no matter how much I love Disney I HATE amusement parks anymore. After playing around on their web site the cruise sounds like it would be the best of both worlds.  The girls get their Disney on but I won't get stabby.  Plus we get to see a lot of places we wouldn't otherwise if we had to book each as a separate vacation.

Gwen made me promise I'll lie about her age and say she is 12 so she can do the Bibbity Bobbity Boutique.  I guess she's wanted to do that since she was a toddler and I am NOT going to ruin her chance by telling them she is 14.

I said doesn't bother me my dad passed me off as 12 till I was almost 17 years old to get the children's discount.  

I've thought about doing Universal since we're probably going on the tropical cruise so we'd be in the area.  I'd really like to see Harry Potter World.  I'd have to price it out or see if we can get a package deal through a travel agent.

Disney cruises rock. 

Your kids are perfect ages for it.  They have lots of stuff for teens to do.  You and DH do your thing, and the girls spend their time in the teen centers.    They have dances, contests, video games, and all sorts of activites to keep them occupied. 

[The Walk of the Penguin Mich]

Aug 1, 2024 14:26:46 GMT -5 NomoreDramaQ1015 said:

We are going to inherit a little over $100k from my FIL's estate.  What we did it sit down and made three lists: what we NEED to do, what we SHOULD do and what we WISH to do.

What we need to do obviously comes first above all else.  

The other two there is some wiggle room.

We get another $38k in the next couple of days.  That will mostly go to the longer term "need" items and "should" list.  However I am going to price out a Disney Cruise.  I want to take a lifetime vacation with the kids.  I will always carry with me my memories of going to Borneo in college.  I want to provide something like that for the girls.

MIL would have a conniption about it but my FIL would approve.  He wanted us to enjoy the money.  Obviously not to the point that we end up on "I won the lottery" but he didn't want us hoarding it all till we pass either.  He told DH his desire was to make sure his kids were taken care of and comfortable.  We plan on honoring that.

We do not cruise with Disney and have no interest in doing so. However, the one thing I have heard is that they don’t just cater to kids, but let adults go on vacation too.

My suggestion is to go into the Cruise Critics boards for Disney cruises and see what tricks you can learn.  The one thing I will warn you is that just paying for cruises and airfare isn’t the end of it, there are lots of extras, and those extras add up.  Even with Viking, where WiFi, specialty dining and soft drinks some alcohol (at meals), and excursions are covered, we usually pay out an additional 15% in extra excursions and gratuities.  

[andi9899]

Aug 2, 2024 11:36:19 GMT -5 minnesotapaintlady said:

Aug 2, 2024 7:47:04 GMT -5 resolution said:

I listen to the Clark Howard podcast, and he is always saying that Zelle is easier to hack and doesn't have the same consumer protections as the other cash transfer apps. His recommendation is that if you use Zelle, that you connect it to a separate bank account that only contains a small amount of cash that you want to transfer.

This is bringing me flashbacks from last week's mini vacation.  My mom and her sisters are all huge Clark Howard fans, and it seems like literally everything they talk about is preceded by "Clark Howard says..." 

It's starting to creep me out a little.

Who is Clark Howard? Is he the new Dave Ramsey?

[minnesotapaintlady]

Aug 14, 2024 15:11:34 GMT -5 andi9899 said:

Aug 2, 2024 11:36:19 GMT -5 minnesotapaintlady said:

This is bringing me flashbacks from last week's mini vacation.  My mom and her sisters are all huge Clark Howard fans, and it seems like literally everything they talk about is preceded by "Clark Howard says..." 

It's starting to creep me out a little.

Who is Clark Howard? Is he the new Dave Ramsey?

Sort of.  He has a personal finance podcast, but it's not really a "plan" like Dave with his baby steps and no credit cards stance.  It's more of a general discussing of everything from explaining investments to how to get a deal on a dishwasher. 

My mom and aunts just love him, but I can't really get into the show myself...and I was subjected to a lot of them in the 20 hours of driving! LOL  Which is odd because I love personal finance topics in general.  I think it's just that I prefer to dive into certain topics in depth and his show is more a random throwing together of things and a lot of it didn't interest me or I already knew plenty about.

[haapai]

Aug 14, 2024 10:01:52 GMT -5 minnesotapaintlady said:

If the influx of money is giving you a ton of angst, just have it direct deposited into a brokerage account and ignore it's existence for now.  You don't have to make any decisions about what to do with it immediately.

I may just have to do that.  I talked to my parents this morning.  They've set up the transfer but mom still wants to hold onto the second car.  

I'm in a position to buy a car on my own but it really would be better if I bought my parents' sedan and made it more difficult for my mom to drive alone.  My dad and my brother have been talking about the need to go down to one car for about three years now.  There was an incident about three years ago when she got lost and the police that pulled her over described her as confused and my dad had to go and pick her up.  I've also been a passenger in a vehicle that she was driving and seen her get lost.  She's not a dangerous driver, but something bad happens when she tries to use GPS directions to get somewhere.  She seems to be concentrating on the driving so much that she misses the cues that the GPS system is giving her.  Then the GPS system instantly formulates a new route, which just might take you to the end of a dead-end sand road before instructing you to turn around. 

I'll find out if my dad has been successful in convincing her that they don't need two vehicles in about a month when I visit them. 

You guys might be onto something when you asked if there wasn't a better way to transfer money.  When dad went to the bank to set up the monthly transfer, everyone at the bank seemed a little confused and uncertain as to whether they had set things up right.  The teller called over another teller and eventually a manager swung by.  Dad says that the folks at the banks are used to setting up such transfers when the recipient is a business but they don't seem to do a lot of similar transfers between two personal accounts. 

[haapai]

The transfer worked and mom has acquiesced to selling the second car. 

Things got a little weird when dad told me that the car was worth about $9K but he wanted to sell it to me for $6K.  I countered with an offer of $7500.  (I didn't like the size of the discount and my brother has a child heading off to college and another child doing driver training this year.  I didn't want to grab a car at a steep discount when they were obviously on the market for one, or at least would be about a year from now.)  

Then dad tried to tell me that the car was actually valued between $9K and $10K, which seemed to be an attempt to bid me up to $8K. 

Then someone on dad's end of the text message conversation implied that someone was a koala.  After looking this up, I decided to stop texting.  Things had gotten a little weird. 

Dad and I decided the next day that $6K was the price.  I can live with that price.  I can also live with the mystery of who called who a koala and why.  My mother might have picked up the other phone when she heard the buzzing from our text messages and added something to the conversation.  My brother also might have been in on that text thread and inclined to call either me or my dad stupid in Antipodean slang.  My parents took me all around the world when I was young in order to expose me to different people and different ways of thinking.  One of the results of that upbringing is a high tolerance for not really knowing what the heck is being said or why. 

[raeoflyte]

Aug 23, 2024 11:46:25 GMT -5 haapai said:

The transfer worked and mom has acquiesced to selling the second car. 

Things got a little weird when dad told me that the car was worth about $9K but he wanted to sell it to me for $6K.  I countered with an offer of $7500.  (I didn't like the size of the discount and my brother has a child heading off to college and another child doing driver training this year.  I didn't want to grab a car at a steep discount when they were obviously on the market for one, or at least would be about a year from now.)  

Then dad tried to tell me that the car was actually valued between $9K and $10K, which seemed to be an attempt to bid me up to $8K. 

Then someone on dad's end of the text message conversation implied that someone was a koala.  After looking this up, I decided to stop texting.  Things had gotten a little weird. 

Dad and I decided the next day that $6K was the price.  I can live with that price.  I can also live with the mystery of who called who a koala and why.  My mother might have picked up the other phone when she heard the buzzing from our text messages and added something to the conversation.  My brother also might have been in on that text thread and inclined to call either me or my dad stupid in Antipodean slang.  My parents took me all around the world when I was young in order to expose me to different people and different ways of thinking.  One of the results of that upbringing is a high tolerance for not really knowing what the heck is being said or why. 

What did you find that koala is an insult? And is it a group text with your mom and brother too?

I would guess it was some kind of auto-correct and easiest to just clarify what they meant in the text or with a phone call.

[thyme4change]

Can you actually lie about a kid’s age? I thought on cruises you have to have a passport and all kinds of travel documents. Maybe that doesn’t trickle into the on-board activities?