Author Topic: Older parents, no savings, what to do?  (Read 1342 times)

GMoney

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Older parents, no savings, what to do?
« on: February 23, 2020, 10:16:05 PM »
I could use some help figuring this out (US-based). I'm the only child of my mom and dad (66 and 68) who are retired, have gone through what little retirement money they had, and are mostly surviving on social security. No house, no debt. They both have mild to moderate health problems, and if I had to guess, my mom will outlive my dad. I'm their only child in my late 20s and I currently live out of state (might move closer but that's a different post). Money has constantly been a problem for them; I have certainly been smarter with my own money choices but even I have been overlooking their impending long-term care for too long. I really want to help them and me prepare for long-term care but still unsure where to start. Here's what I have done:

The only savings they have is from what I've been paying back that I borrowed years ago, currently in an Ally savings account I started for them. Also back in November, I started a traditional IRA under mom's name but there's nothing in it currently. I'm familiar with the simple but effective investing strategy of buying low-cost index funds, however I'm not sure if that's the best route to go as it's not exactly long-term; it is what I'm doing currently. that's I had them start filling out forms like their living will, POA, mental health preferences, and POLST.

Other than that, how could I approach this?
« Last Edit: February 23, 2020, 10:18:05 PM by GMoney »

marty998

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Re: Older parents, no savings, what to do?
« Reply #1 on: February 24, 2020, 01:13:49 AM »
What are they existing on now? Social security? Is that sufficient for their needs? Is that a defined amount for life or will it run out before they pass?

Do they own their own home?

MayDay

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Re: Older parents, no savings, what to do?
« Reply #2 on: February 24, 2020, 05:10:37 AM »
At this point if they are retired, have spent their money, and don't own a house, there is nothing to save except for money you give them. Since they have a clear track record of NOT saving I would suggest you save it for them under your name.

In general they will be renters forever, possibly qualifying for income based rent assistance,and if they eventually need a nursing home they will go into a Medicaid one. All things considered this is t a terrible situation, compared to many places on earth.

The tricky thing is they won't have much to spend and things like an expensive prescription may be out of their budget. Or perhaps they'll get into CC debt, which really since they won't be leaving an inheritance either way, probably doesn't matter.

In your 20's it's probably unrealistic that your could (or should) support them fully as you need to be saving for your own retirement and possibly supporting children. So the reality is they will likely need to live with the consequences of the decisions they made heir whole lives. That is on them and you aren't responsible for fixing their mistakes.


Malkynn

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Re: Older parents, no savings, what to do?
« Reply #3 on: February 24, 2020, 05:29:28 AM »
My best advice on this, and I am absolutely dead serious, is get yourself a good therapist who can help you process your feelings and decisions as this goes forward and gets more complicated.

It's incredibly difficult to be the child of financially irresponsible and medically compromised parents. As things deteriorate, you will have so many conflicting internal emotions and drives, it will feel almost impossible to keep them straight. You will need objective support from someone whose only motivation is to help you make the right decisions for you.


LaineyAZ

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Re: Older parents, no savings, what to do?
« Reply #4 on: February 24, 2020, 06:39:25 AM »
Check out which government benefits they would be entitled to as seniors.  Senior subsidized housing, which is tied to monthly income, could be a lifesaver and at their ages they are eligible now.

Sibley

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Re: Older parents, no savings, what to do?
« Reply #5 on: February 24, 2020, 09:34:28 AM »
My best advice on this, and I am absolutely dead serious, is get yourself a good therapist who can help you process your feelings and decisions as this goes forward and gets more complicated.

It's incredibly difficult to be the child of financially irresponsible and medically compromised parents. As things deteriorate, you will have so many conflicting internal emotions and drives, it will feel almost impossible to keep them straight. You will need objective support from someone whose only motivation is to help you make the right decisions for you.

^^^ This. Absolutely, this.

Cassie

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Re: Older parents, no savings, what to do?
« Reply #6 on: February 24, 2020, 09:49:49 AM »
Low income senior housing frequently have long waiting list so best to apply now. They also may qualify for food stamps. They will just have to live on what they make.

Laura33

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Re: Older parents, no savings, what to do?
« Reply #7 on: February 24, 2020, 10:02:30 AM »
First, do what Malkynn says.

Second, talk to an elder-care attorney and/or geriatric specialist -- in their state.  You want to find out what resources are available to them, and what you do/don't want to do.

For example, if your mom doesn't have any earned income, she may not be eligible to contribute to an IRA.

For example, if your parents need to go into a nursing home on Medicaid, they will be required to spend down any savings in their name first.  So that loan you're paying back:  if you put it in an account under their name, it will get sucked dry for medical bills.  You may instead want to either save that money in your own name (and just mentally dedicate it for their future needs), or pay it to them directly every month to cover ongoing expenses.  My preference is the former, because then you'd have a pot set aside to cover extras for them, without all the drag on your current finances.  But they may want something different.

Honestly, the best thing you can do for them is to educate yourself on what other resources are available for them, and what the rules are to qualify/maintain that.  We have a confusing web of a social safety net, from food stamps to senior housing to Medicaid to social workers to who knows what -- but it is a safety net, and you should know what those resources are now, before your parents are in a crisis.

MrThatsDifferent

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Re: Older parents, no savings, what to do?
« Reply #8 on: February 24, 2020, 12:20:12 PM »
Wow, that’s rough OP.  I’m not sure I have any helpful advice as it’s difficult trying to manage the lives of two adults. And honestly, that’s not your job. They have money, are looking after theirselves and they’re living their life. Let them. You gotta do you buddy and take care of yourself. They’re not that old. They could work little side jobs if they want, that’s on them. It’s sweet of you to worry about them, but they’ve made it this far. They’re not going to have the financial future you will have, that’s ok. They’ll be happiest knowing you’re looking after yourself and living your best life, and making sure you give yourself the possible future you can. Focus on that, keep in contact, get to know them as people, and share your life. Otherwise, let them lead their adult lives, while you lead yours.

Sibley

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Re: Older parents, no savings, what to do?
« Reply #9 on: February 24, 2020, 01:05:36 PM »
GMoney, I'm both ahead and behind of you. My parents aren't retired (yet), but it's coming and money is expected to be a problem.

Honestly, your goal is to ensure the minimums are met: adequate housing, nutrition, medical care, social interaction. If they are able to exceed minimums while remaining within their income, great! It's a luxury. There are plenty of seniors who live on social security and maybe a small pension, and they get by. They can't travel like they might prefer, or splurge on gifts for grandkids or whatever. But they're not suffering. That's the minimum goal. As long as you hit that goal, you're good.

Depending on income levels, check into SNAP (food stamps), Medicaid, housing assistance, utility assistance, I've even heard of cable for $10 or $20 for low income families. The local Area Agency on Aging may (or may not) have information. Local senior centers, libraries, or other institutions may have programs that can assist or provide socialization/activities. Helping figure out all this stuff out is often invaluable, because it's complicated. And all it costs you is some time.

My parents have a lifetime of sub-optimal financial decisions, plus plain bad luck. They simply don't have a lot of assets, and their budgeting isn't so great either. But that's not actually my problem to fix. I care that they are warm and fed and can see the doctor and get their meds. I will do my best to help them achieve that, without jeopardizing my future.

Fishindude

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Re: Older parents, no savings, what to do?
« Reply #10 on: February 24, 2020, 01:28:30 PM »
Get them in some income based government housing and they should be able to get by on their social security income.
My mother in law does just fine on this program.

GizmoTX

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Re: Older parents, no savings, what to do?
« Reply #11 on: February 24, 2020, 01:32:23 PM »
OP, you are not & should not be your parents' retirement plan. Do you get any indication that they expect this, or is this coming from your fears? I agree that neither is eligible to make IRA contributions unless they have earned income in the same year.

I have a sister & brother the ages of your parents, each single & not living together, who are in the same money situation & each is one episode away from disaster. I help when asked with advice, questions designed to help them find their own answers. We will not be providing any money, been there, & it's a potential bottomless pit. As others have said, they've made their own bad decisions. My brother has named me & another brother with power of attorney for medical & financial decisions if he is unable. My sister hasn't bothered to.

GMoney

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Re: Older parents, no savings, what to do?
« Reply #12 on: February 24, 2020, 06:39:46 PM »
My best advice on this, and I am absolutely dead serious, is get yourself a good therapist who can help you process your feelings and decisions as this goes forward and gets more complicated.

It's incredibly difficult to be the child of financially irresponsible and medically compromised parents. As things deteriorate, you will have so many conflicting internal emotions and drives, it will feel almost impossible to keep them straight. You will need objective support from someone whose only motivation is to help you make the right decisions for you.

Thank you, I needed to hear this. I will look for a professional therapist and talk about those things. I think you're definitely right.

Low income senior housing frequently have long waiting list so best to apply now. They also may qualify for food stamps. They will just have to live on what they make.

Thanks. I'll be visiting soon so I'll be sure to do this.

Second, talk to an elder-care attorney and/or geriatric specialist -- in their state.  You want to find out what resources are available to them, and what you do/don't want to do.

For example, if your mom doesn't have any earned income, she may not be eligible to contribute to an IRA.

That's a great idea, thanks. Re: the IRA that's good to know. She'll be working for the 2020 census in a few weeks, so if she to wants to contribute I'm sure that makes her definitely eligible.

Honestly, your goal is to ensure the minimums are met: adequate housing, nutrition, medical care, social interaction. If they are able to exceed minimums while remaining within their income, great! It's a luxury. There are plenty of seniors who live on social security and maybe a small pension, and they get by. They can't travel like they might prefer, or splurge on gifts for grandkids or whatever. But they're not suffering. That's the minimum goal. As long as you hit that goal, you're good.

Thanks for your perspective and tips, I'm a more relieved after reading it. And I appreciate the direction.

Overall, I've gotten the message that I shouldn't bear the brunt of their financial mistakes, so thanks to everyone for the support. My emotions must have been getting in the way of my judgement. If anyone has anything else to share I would love to hear it!
« Last Edit: February 24, 2020, 07:37:28 PM by GMoney »

dodojojo

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Re: Older parents, no savings, what to do?
« Reply #13 on: February 24, 2020, 07:39:59 PM »
Get them in some income based government housing and they should be able to get by on their social security income.
My mother in law does just fine on this program.

Yep, that's what I did about 2 years ago.  My mom's rent was about to increase to exceed her SS.  So it meant she could never retire.  I researched low income housing for seniors.  Got a list of buildings in her city/county and called them one by one.  Nearly of them weren't even taking applications because of 5-9 year long waiting lists.  But we lucked out incredibly when we hit one building that had an open application window not far off.  She was in the building within six months.  I asked the manager why it went so quickly (I expected a waiting list of years) and she said our application arrived on the first day of applications.  I guess the building must have cleared their waiting list.  And it was first come, first served (if eligible).  If it had arrived a day sooner, they wouldn't have even accepted it.  USPS really delivered it on this one!

Affordable housing is a game changer.  Other than health, if you've got housing down, almost every thing after that is do-able on a modest budget.

SimpleCycle

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Re: Older parents, no savings, what to do?
« Reply #14 on: February 24, 2020, 09:17:41 PM »
So they are both collecting social security?  But working a little?  Are they making ends meet or are they living beyond their means?

If they can make ends meet on Social Security, they will probably be okay.  Medicaid will eventually pay for long term care for them, either at home or in a nursing home.  They may be eligible for Medicaid now, if their income is low enough.  Medicaid for seniors covers what Medicare doesn't cover.  People on here sometimes say they'd never want to be in a Medicaid nursing home, but it's how the vast majority of nursing home care is paid for in this country.

If they are not able to make ends meet on their social security, that's a bigger problem and the only way for them to solve it is to reduce expenses or increase income.  They may be eligible for need-based programs depending on their SS income.  Food stamps, low-income senior housing, heating assistance, Medicaid, paratransit and reduced transit fare.  There are actually lots of programs for low-income seniors.  Also, it goes without saying, but you can't actually make them reduce expenses or increase income.

I think it would be worth meeting with an elder care attorney to talk through all the options and possibilities.  Also, you can contact the local Agency on Aging - they are a great resource to connect you with what programs there are in your parents area.

frugaldrummer

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Re: Older parents, no savings, what to do?
« Reply #15 on: February 24, 2020, 11:35:31 PM »
Are they adventurous at all? Would retirement to another country give them a better lifestyle for their money? My friend retired to Guadalajara with his wife and really loved it. He was diagnosed with stage 4 lung cancer a few years in but had great care in that city (med school is there) including chemo at home! Wish we had that here for my boyfriend!