Author Topic: Convincing my parents to retire?  (Read 2640 times)

Bird In Hand

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Convincing my parents to retire?
« on: October 18, 2017, 08:21:49 AM »
I know an obvious answer is "Don't.  That's their own decision to make."  I understand that, but what can I say? -- I care about my parents and I think they're needlessly sacrificing their best remaining years due to irrational financial fears and a lifetime habit of penny-pinching.

My parents are in their mid 60's and very frugal.  Their mortgage is paid off.  One parent has a lifelong chronic disease that is starting to show complications, and the other is starting to develop minor/moderate health ailments due to a stressful and sedentary job.  Based on family history and current health, they probably have about 15-25 years left.  Maybe 10-20 of those years they'll be healthy enough to enjoy life fully.  They have a decent-but-not-great LTC insurance.

Pensions (COLA'd) and SS amount to ~90k before taxes, about twice their actual living expenses.  Additionally their 401k's would support about $20k/year for the rest of their lives (assuming 4% SWR for 30 years).  They've likely been FI for 5-10 years.

If they retire now, they will have to shell out about $10k extra for a year or two to stay on employer health insurance until Medicare kicks in.  I'm frustrated that they apparently value ~$15k more than the best/healthiest remaining year or two of their lives.

Has anyone else here been in this kind of situation with parents or other relatives?  At what point should I just shrug and accept that I'm going to get an unnecessarily large inheritance because my parents have fallen victim to OMY syndrome?

Cwadda

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Re: Convincing my parents to retire?
« Reply #1 on: October 18, 2017, 08:36:57 AM »
PTF, my parents are in a very similar situation. They have plenty.

honeybbq

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Re: Convincing my parents to retire?
« Reply #2 on: October 18, 2017, 10:07:57 AM »
What is their reasoning? Money fears or fears of boredom?

Bird In Hand

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Re: Convincing my parents to retire?
« Reply #3 on: October 18, 2017, 10:50:08 AM »
What is their reasoning? Money fears or fears of boredom?

1. "What if we haven't saved enough?  What if the pension goes belly-up?  What if the stock market crashes?"  I think this one is irrational because their (state) pension + SS is as close to guaranteed as you can get, and roughly doubles their current living expenses.  Plus another $20k/year from pre-tax accounts on top of that.

2. "Paying $10k/year for health insurance is too much!"  I understand it's a lot of money, but it's irrational to let that stop them from retiring because they have more than enough to cover it (see #1).  My parents are the kind of people who would rather pay $5 for a meal they don't enjoy because it has a larger portion or is otherwise a "better value" than a $10 meal they love.

3. Yes, they are a little uncertain about how to fill some of their time once retired, and probably a little worried that they will lack purpose.  This one totally makes sense to me, but at the same time both have lamented that their jobs make their lives more stressful, and they find it difficult to manage non-work obligations due to lack of time and energy.

ixtap

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Re: Convincing my parents to retire?
« Reply #4 on: October 18, 2017, 11:06:59 AM »
Words will not do it. For one thing, you are hung up on rational vs. irrational, when it is more a case of preferences. It is not irrational to continue working when you can. It may not align with your preferences and priorities, but it does not reach the level of irrational unless their jobs are literally killing them.

Retire yourself and show them how wonderful it can be.

Bird In Hand

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Re: Convincing my parents to retire?
« Reply #5 on: October 18, 2017, 11:45:47 AM »
Words will not do it. For one thing, you are hung up on rational vs. irrational, when it is more a case of preferences. It is not irrational to continue working when you can. It may not align with your preferences and priorities, but it does not reach the level of irrational unless their jobs are literally killing them.

Maybe rational/irrational wasn't the best choice of words. 

How about this: their preference to achieve 100% guaranteed financial security before retiring is impossible.  They would probably admit to being 99.5% safe already -- circumstances that would put their state pension and SS at risk are exceedingly unlikely -- but it seems like they'll spend the rest of their lives chasing that last 0.5%.

IMO their jobs are killing them (slowly) and I think they would reluctantly agree with that.  It's widely understood/accepted that long-term sedentary and stressful jobs contribute significantly to chronic disease and other bad health outcomes.

Honestly I think they're finding it impossible to overcome the mindset that comes from a lifetime of scrimping and saving.  Stopping saving is going to be traumatic enough...but to draw down existing savings?  Terrifying.

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Retire yourself and show them how wonderful it can be.

Hah.  We're on track to be FI in 5-10 years, so that's a distinct possibility.

Beach_Stache

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Re: Convincing my parents to retire?
« Reply #6 on: October 18, 2017, 01:56:11 PM »
Retirement can be one of the most stressful times of a person's life.  Talking about it is good, but they may feel pressured into it.  Sounds like they are not quite sure how to draw down their 401k's, a little knowledge goes a long ways.  Most people may know how to save but not what to do after that, so are you showing them or help show them how to do it?  Have you helped them picture what their retirement would be like?  Do they even know what their retirement might be like?  Maybe they have a lot of friends at work and feel like they are serving a purpose?  Or maybe they hate their jobs and it really is just fear?

I tried to convince my Father to retire for 5 years.  I told him that as a federal employee on CSRS retirement system after 32 years of working that he was working full time for like 25% of the pay.  I had been telling him this for years, then he met w/HR after a retirement seminar and they told him the same thing and he gave like 7 working days notice.  Sometimes an outsiders input will help, sometimes just picturing what they are going to do w/their time will help. 

Maybe start w/helping them see what their ideal retirement would look like, how much they will spend in retirement, how much they have, and how easy it would be for them to do it. 

Bird In Hand

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Re: Convincing my parents to retire?
« Reply #7 on: October 18, 2017, 03:19:52 PM »
Good points, Beach_Stache.  I love your story about your dad ignoring your advice for years and then finally coming around only when it came from someone else. :D

I'm trying my best to help my parents see that they're already FI.  In their case it's pretty simple since all they have to do is apply for their pensions and file for SS -- bam, income replaced at ~100%.  Withdrawal from 401k's is almost an afterthought at that point, but it might help to make sure they know the ins and outs of how to withdraw what they need (if they ever need it).

As far as helping them picture what their retirement will be like, that's a tough one!  Like many people who have worked at the same place for decades, I think a big part of their identity is their work, and I'm sure it's psychologically difficult to give that up.

I've broached the idea of part time or volunteer work in their areas of expertise -- something where they would still feel valued but with less stress and time demand.  They seem really resistant to change, and maybe worried that they won't be able to find any work (paid or otherwise) that they're good at or will enjoy.

I've tried emphasizing how they'll have more time and energy to do some of the things they like.  I get a little more traction there, but not enough to overcome the inertia of status quo.

Next on my list of things to try is guilt.  "Your grandkids hardly know their grandparents because you're so busy with work.  They're going to be grown up before you know it.  If you don't retire now you'll miss their childhoods!"  :D

Cassie

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Re: Convincing my parents to retire?
« Reply #8 on: October 18, 2017, 03:47:15 PM »
I am around your parents age and when their friends start dying or becoming very disabled they may change their minds. I lost 3 good friends between ages 59-67. That sure puts life and money into perspective.  Now is the time they should be spending $, doing what they really enjoy and pampering themselves a little after a lifetime of saving. After all that is the point.  They clearly can afford it.

mxt0133

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Re: Convincing my parents to retire?
« Reply #9 on: October 18, 2017, 04:33:16 PM »
My mom was all set to retire this year.  We had talked about it for 2 years, their 401k balance has increased, their expense were tracked and they have more than enough.  My dad is already collecting SS with my mom getting half of it, via File and Restrict to let her benefits increase until 70.

But since she doesn't want to pay $300-$500 in Medicare and supplemental insurance she decided to keep working until she can't any more, she's 66.

For her it's not the money but the thought of having nothing to do all day.  My dad is retired and she is afraid that all they will do is argue with each other all day.

Sometimes is not about the money.

Cassie

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Re: Convincing my parents to retire?
« Reply #10 on: October 18, 2017, 04:53:08 PM »
It sounds like it is partly about the $ not wanting to pay for supplemental insurance.  She could also do volunteer work to spend some of her time. But some people are their jobs. I do work p.t. from home about 10 hours/week because I enjoy it.  But I have flexible hours and can do it from anywhere with internet.

Bird In Hand

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Re: Convincing my parents to retire?
« Reply #11 on: October 19, 2017, 07:00:04 AM »
I am around your parents age and when their friends start dying or becoming very disabled they may change their minds. I lost 3 good friends between ages 59-67. That sure puts life and money into perspective.

You're very right, and I had forgotten about this.  When one of my parents' similarly aged (or younger) friends or acquaintances has died or become seriously ill, they've been a lot more receptive to thinking about retirement.

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Now is the time they should be spending $, doing what they really enjoy and pampering themselves a little after a lifetime of saving. After all that is the point.  They clearly can afford it.

I agree with you, but they are not receptive to this line of thinking.  Words like "pamper" and "you deserve it" or "you've earned it" get translated to "waste of money" and "spendthrift" -- concepts that are anathema to them.

Bird In Hand

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Re: Convincing my parents to retire?
« Reply #12 on: October 19, 2017, 07:03:58 AM »
But since she doesn't want to pay $300-$500 in Medicare and supplemental insurance she decided to keep working until she can't any more, she's 66.

So, this is crazy (IMO), and the kind of thing that drives my parents' decision to not retire.  But...

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For her it's not the money but the thought of having nothing to do all day.  My dad is retired and she is afraid that all they will do is argue with each other all day.

This makes perfect sense.  It's also instructive to those of us who are hoping to retire early but haven't really figured out what their purpose will be in retirement.  I know that figuring this out is on my must-do list over the next 5-10 years as we approach FI!

Heroes821

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Re: Convincing my parents to retire?
« Reply #13 on: October 19, 2017, 09:04:45 AM »
But since she doesn't want to pay $300-$500 in Medicare and supplemental insurance she decided to keep working until she can't any more, she's 66.

So, this is crazy (IMO), and the kind of thing that drives my parents' decision to not retire.  But...

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For her it's not the money but the thought of having nothing to do all day.  My dad is retired and she is afraid that all they will do is argue with each other all day.

This makes perfect sense.  It's also instructive to those of us who are hoping to retire early but haven't really figured out what their purpose will be in retirement.  I know that figuring this out is on my must-do list over the next 5-10 years as we approach FI!

I think part of it too is how we view the term retirement. For those of us aiming to FIRE we see retirement as freedom to be constructive in unique ways that allow us to learn and grow and possibly make some side hustle money, because we no longer need wage income.

To the older generations or those who don't yet understand FIRE. Retirement means sitting at home waiting to die because you are no longer useful or capable of working. I know that is how my Grandpa's peers feel about it. It's definitely a mentality that my mother has as well.

My Grandpa has been retired since 1989 and while he keeps active gardening, working on his house, and walking 4 miles in the park every single day regardless of weather.  He refuses to go out of his state, a trip further than Cleveland (1 hour away) is too far from home.  And even though he is happy, his retirement is not much beyond being a homebody reading the paper and watching the news.


Cassie

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Re: Convincing my parents to retire?
« Reply #14 on: October 19, 2017, 11:20:54 AM »
I also do some volunteering which is a great way to spend time. maybe if you suggest some ways they could spend their time that might help.  WE also go to events, movies, festivals, travel, invite friends over for dinner/cards  that we were too tired to do when working f.t.  Many options versus working or just sitting at home. WE have also found we like things that we did not expect too. Some friends talked us into going on a cruise and we love them. We now take 2/year.

Bird In Hand

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Re: Convincing my parents to retire?
« Reply #15 on: July 17, 2018, 02:39:16 PM »
Update: I continued discussing the financial ins-and-outs with my parents over the last 8 months, answering specific questions where I could, pointing them to other resources to fill in the gaps, and encouraging them to attend retirement seminars sponsored by their employers.

I think all of that did help.  A few times they talked to reps at Fidelity and Vanguard to double-check the answers I was giving them, and fortunately for me, my answers were confirmed :D

Another big factor was that a couple more friends their age died rather suddenly.  Combined with some of their own health issues, I think it really made them realize that their own time is limited and precious.

Bottom line is that my dad retired last month, and my mom is retiring before the end of the year.  I'm really happy about this.  I also feel partially responsible for pushing them to retire earlier than they might have, so I hope it doesn't backfire spectacularly!  :D
« Last Edit: July 17, 2018, 08:13:37 PM by Bird In Hand »

calimom

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Re: Convincing my parents to retire?
« Reply #16 on: July 17, 2018, 04:11:01 PM »
Now they will want you to come to dinner every night and take a yearly seniors' cruise to Alaska with them! And don't forget the afternoon bridge game…


lhamo

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Re: Convincing my parents to retire?
« Reply #17 on: July 17, 2018, 04:28:49 PM »
Glad to hear they are retiring!

Since you are near FIRE levels yourself, I would strongly recommend that you consider offering to cover the cost of special splurges that would allow you and your kids to spend more time with them and do interesting things that might not be possible as they get older/more infirm.  I have many, many regrets in retrospect that we did not do more of this earlier with both my mom and my inlaws, and now it is too late (mom passed last year, inlaws too ill).  It isn't that they can't afford it when they are healthier -- it is that they won't, and by the time they regret having more money than time it is too late.  You'll most likely get all the money back in an inheritance anyway.

Bird In Hand

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Re: Convincing my parents to retire?
« Reply #18 on: July 18, 2018, 06:48:34 AM »
Since you are near FIRE levels yourself, I would strongly recommend that you consider offering to cover the cost of special splurges that would allow you and your kids to spend more time with them and do interesting things that might not be possible as they get older/more infirm.  I have many, many regrets in retrospect that we did not do more of this earlier with both my mom and my inlaws, and now it is too late (mom passed last year, inlaws too ill).  It isn't that they can't afford it when they are healthier -- it is that they won't, and by the time they regret having more money than time it is too late.  You'll most likely get all the money back in an inheritance anyway.

I appreciate your insight and advice about this.  I had already been thinking about having my parents come for longer/more frequent visits, and occasionally flying out to see them (it's a little tougher that way because of school and work schedules on our end, not to mention 2.5x more airfare and hotel when we travel).  But maybe it's worth considering something a little more fun than a staycation.  :)  My first choice would be to convince them that it's OK to spend some of their own $$ on themselves, because we definitely don't need to inherit it.