Author Topic: Parents  (Read 8786 times)

ash7962

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Parents
« on: May 25, 2015, 05:18:11 PM »
I'm looking for a little bit of perspective and advice on my parent's situation.  So first a little backstory; my dad is 52 and my mom is 50.  Dad got laid off from his job my junior year in college which was 5 years ago.  After that he followed his dreams of becoming an options trader working out of his living room.  This was well and good for many years, and dad earned enough money to cover the bills along side Mom's salary.  However, in the last month he recently lost a bunch of money very quickly and lost confidence in his trading strategy.  After all that they've still got a pretty nice nest egg since Dad was smart enough to not bet all his money in options trading, and Mom is still working full time.  However, after losing that money and stopping stock trading Dad started to freak out because of the hit to their NW and the fact that Mom's salary isn't enough to cover the bills on its own.  Dad is having a mini break down, so they got me involved.  I built a spreadsheet with their info and figure they can spend about 2800/mo plus pay off their mortgage (done in 3 years), and never run out of money.  Mom would either retire when their NW can cover 2800/mo (Mom age 58), or she could work a bit more to allow them to spend more per year.

The problem is that Dad can not seem to get on board with this plan.  They currently spend 38,000$/year plus mortgage, so I've suggested they spend about 400$ less per month.  I've looked at their budget and feel they could easily cut it without even breaking a sweat.  That's where the problems start... He can't get over not bringing in money while Mom does.  I've tried telling him that reducing spending while maintaining happiness is just as valuable as bringing in more money, but he says that's not contributing to the household.  He IS reducing spending, but I won't know how successful that is until a month or so has passed and I can look at their numbers again.  Also my plan would have them withdrawing small amounts from his IRA with the penalty for a few years, and he can't get over paying the penalty (they don't have a 5yr buffer for a conversion ladder).  Secondly, he can't get over the fact that reducing their spending is causing them to "live like paupers" (Mom disagrees and has told him so).  I think the 2nd reason is more a cover for his insecurity in not being the breadwinner, or his need to keep up with the Joneses.

Next problem: He keeps sending me emails about how he has to now sell the house to make ends meet.  I can't believe that he would rather sell the house than cut their budget a bit.  He wants to move to a 1br apartment, but Mom's passion is gardening.  The worst thing is that when I ask him for the numbers on why he thinks that's the best move he just tells me he "feels" that he can't withdraw from his IRA before 65 and he "feels" like selling the house will solve their problems.  Arguably, selling the house isn't a terrible move financially since it would bring their 4% withdrawal rate closer to what Dad has deemed enough money to not "live like a pauper", but I think it would be a huge step back for them in terms of happiness (especially for Mom).

Final problem:  Dad IS looking for a job which would also solve their financial dilemmas.  Even a minimum wage job would cover their remaining expenses, and allow his IRA to grow enough to cover even their ridiculous spending within 5-10 years.  However, he is attempting to find a job at a similar level to what he was at before he was laid off.  I believe he is too prideful to grab a minimum wage job, and he would rather sell the house first.  I don't get his priorities.  Its possible there is a different motivation behind all this that he hasn't told me, but I can't see it.

OK sorry for that wall of text... I tried to get it shorter but its hard.  Anyway help?  Strategies for getting Dad on board with this plan?  I want him to stop freaking out since their situation is not bad.  Any advice on how to explain that withdrawing from the IRA with penalty is not the end of the world?  The numbers work with tax and 10% penalty factored into their withdrawal.  I'm really afraid he will make a crazy decision because of whatever craziness is happening in his head right now.  Just any advice, opinions on the situation, or anything is appreciated.  Maybe one of you will see something I haven't.

mozar

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Re: Parents
« Reply #1 on: May 25, 2015, 05:27:43 PM »
What I see is that you should step back. Your dad doesn't really want your help. I feel bad for your mom. Maybe talk to her and see how she is doing.

humblefi

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Re: Parents
« Reply #2 on: May 25, 2015, 05:40:21 PM »
This is a tough one..but here is one possible strategy to use that may help your dad see things differently.

>> reducing their spending is causing them to "live like paupers"
If so, then selling the house and living in a 1 bedroom apartment is also like "live like paupers".
If possible, compare it with what their friends are doing and see if that changes things for him.
Also, mayme mom's passion for gardening is not known to dad...so, you OR more importantly, she should make it known to him.

One other possible scenario is: your had is hiding something w.r.t. his health. Perhaps he feels that he has only 5 years to enjoy life.
And hence the need to splurge right away.

Another possible scenario is this. If possible, you pay off the remaining $38K mortgage. This would be a gift to your mom.
If they do not accept it, then ask them to treat it as a loan to you...an interest free one that can be paid over time say at $100 a month.

Hope that helps. Best of luck.

ash7962

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Re: Parents
« Reply #3 on: May 25, 2015, 06:17:01 PM »
What I see is that you should step back. Your dad doesn't really want your help. I feel bad for your mom. Maybe talk to her and see how she is doing.

It might be true that he does not want my help, but they both pulled me in and asked me to look at their expenses.  Also they have put out the idea of moving in with me to relieve their monetary pressures which is something Dad is on board with.  Not an idea that I'm particularly fond of, though I would never let my parents not have somewhere to live.  If they want to get involved with my household then there will have to be some transparency on their side as well.  That's how I feel.

ash7962

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Re: Parents
« Reply #4 on: May 25, 2015, 06:23:28 PM »
This is a tough one..but here is one possible strategy to use that may help your dad see things differently.

>> reducing their spending is causing them to "live like paupers"
If so, then selling the house and living in a 1 bedroom apartment is also like "live like paupers".
If possible, compare it with what their friends are doing and see if that changes things for him.
Also, mayme mom's passion for gardening is not known to dad...so, you OR more importantly, she should make it known to him.

One other possible scenario is: your had is hiding something w.r.t. his health. Perhaps he feels that he has only 5 years to enjoy life.
And hence the need to splurge right away.

Another possible scenario is this. If possible, you pay off the remaining $38K mortgage. This would be a gift to your mom.
If they do not accept it, then ask them to treat it as a loan to you...an interest free one that can be paid over time say at $100 a month.

Hope that helps. Best of luck.

Their spending is 38k/year without mortgage payments.  And Mom's gardening passion is totally known to Dad, no question about that one.  I don't think I have the means to totally pay off their mortgage at this point.  I have agreed to take over the remaining student loan they were paying (he had previously refused this offer on many occasions). 

You might be right about the health...  I will contemplate that and keep it in mind during future visits.  Thanks.

vagon

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Re: Parents
« Reply #5 on: May 25, 2015, 06:34:25 PM »
Tough one.

Some thoughts:
- Is there a community garden near the 1 bedders? Your mum might like spending more time with a community and enjoy the lower maintenance on the 1 bedder.
- Have you asked your dad what makes him happy? Maybe have him prioritise his wants and needs (if you havent already).
- Could you pitch min wage work to him as a hobby? For example if he likes coffee could he be a part time barista?

ash7962

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Re: Parents
« Reply #6 on: May 25, 2015, 06:43:59 PM »
Tough one.

Some thoughts:
- Is there a community garden near the 1 bedders? Your mum might like spending more time with a community and enjoy the lower maintenance on the 1 bedder.
- Have you asked your dad what makes him happy? Maybe have him prioritise his wants and needs (if you havent already).
- Could you pitch min wage work to him as a hobby? For example if he likes coffee could he be a part time barista?

One of my mom's side projects is actually to start a community garden.  I have asked her how she feels about the 1br deal, and she has stated she would like to keep her back yard garden.  She might agree if the community garden was further along, so I will keep that in mind as a possibility.  She would also be fine moving to a lower COL area where they could sell their current house and buy a new one outright with some cash left over.  Her elderly mother is still alive though invalid, so Mom won't move until her mother is no longer with us.

I have asked what makes him happy, and he kinda brushes it aside.  I don't think he knows, though I pitched him the "if all jobs paid 0$ and all things costed 0$ what would you most like to do?" question.  He agreed to consider it.  Also I wanted to say that my dad isn't a bad guy or anything.. he's just going through a crisis of identity or something.  Its possible he doesn't want or trust the advice of his daughter who is half his age and only a few years out of college.  He used to be the one to give me advice, but now we've totally flipped positions.  I will also try to pitch the barista idea since he does love coffee.. he doesn't have any actual hobbies (he just watches lots of tv), but he's been learning Java recently.  We'll see where that goes.

PS thanks everyone for reading my wall of text and taking the time to respond.. helps me to just to get it all out there too.

BrickByBrick

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Re: Parents
« Reply #7 on: May 25, 2015, 07:47:22 PM »
I'm not a psychologist or anything, but as you have said it seems to be more of a pride/insecurity thing with your dad.  Based on the numbers you've mentioned, and that they are basically fine aside from needing to reduce their expenses a bit, it sounds like he has done well.  His confidence has been shaken though, so perhaps you and your mom could set up some short-term goals that he could knock out that would give him some quick-wins?  Hopefully this would bring his confidence back up to tackle a bigger project, the mortgage, which would likewise reduce their monthly expenses.

I had a somewhat similar experience with my parents.  My dad handled his and my mom's finances their whole life (and he handled them well), but he ran into a situation a couple years back that caused a confidence and pride crisis on his part, even though they were never really in danger.  I encouraged him to teach my mom what she needed to know in the event of his unexpected death, and that fortunately led to them getting on a budget and her taking over the day-to-day finances.  It's very obvious now that despite what a great job he has done up to this point, being the sole responsible party for their retirement was stressing him out.  They are both much happier now, financially and otherwise.

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Re: Parents
« Reply #8 on: May 25, 2015, 08:04:41 PM »
It kind of sounds like your dad is experiencing some kind of mental illness, going through a midlife crisis, or perhaps has some kind of disease impairing his cognitive abilities (early onset Alzheimer's, for instance.) He seems irrational and unable to follow a logical argument (beyond what I would expect from someone who just as old-fashioned ideas, like the husband must provide, etc.) If he traded options profitably for years I assume he has/had the ability to follow a logical system and methodology.

The tough thing is that you can nudge him, but you can't make him do anything or not do anything. The more drastic moves (selling the house, moving in with you) your mother needs to fight if she's against them.  His job search kind of proves your point; if they were desperate he'd have to take a minimum wage job, no matter his pride. The fact that he can hold out for his old salary shows they're not in dire straits at all.

I think the best you can do is make suggestions and ensure your mother's wishes aren't completely trampled. Make sure your father is aware of the cost of straining their marriage, no matter what he "feels" about certain options.

asiljoy

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Re: Parents
« Reply #9 on: May 25, 2015, 08:26:18 PM »
It sounds like your Dad went through quite a shock not that long ago by losing all that money. It SUCKS to fail like that. It's a massive hit to the ego to go from the provider to being supported, even by loved ones. IT SUCKS SO HARD. I'd asked your parents give it time to simmer before doing anything drastic like selling the house. And maybe ask your Dad to find other ways to contribute to the household in the short term? Flip stuff on craigslist? Clip coupons? Bake bread?

My Dad lost his business after 35 years, but was short of retirement. They could have retired, but it would have been painful. But he did the same thing your Dad did where he wanted an equivalent management position, the kind of position that doesn't really exist anymore. He eventually was convinced that being a minion instead of the master had perks that were undeniable, like less stress, more flexibility to work the hours wanted, etc. They definitely went through an adjustment period, but he found a niche and they seem happier than they have in years. My Mom isn't stressed because my Dad isn't stressed, they have found hobbies, and they have plenty of time to come see family/dote on their grandson.

Good luck to them. This is tough.


ash7962

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Re: Parents
« Reply #10 on: May 25, 2015, 08:54:39 PM »
BrickByBrick- That is a great idea to have him show Mom some things.  It might restore a little confidence to teach someone and having 2 people making the decisions could lift some weight off of his shoulders.  It might be better coming from Mom too instead of his 25 year old kid.  It might be tough for him to take advice from me since its not too long ago I was just screwing around not even thinking about the future.

okits- yeah my goals are to try to keep them moving on a good path and not make any crazy decisions.  I'm really hoping his thinking is temporary and just brought on by the amount of stress he's been feeling.  I think his world was just kinda overturned.  Mom is planning on asking him to do some therapy, so I'm hoping he's open to it and that it'll help.  Maybe all he needs is some time, but its so hard to watch this happen to them.

asiljoy- Definitely took a hit to the ego, and I was hoping to give him some time.  We went over finances last weekend (him, Mom, and I), and looked at ways for them to reduce costs.  We agreed they'd reduce spending in the short term and invest the cash they were holding so it could eventually support him.  At that point we said we'd revisit in 2 months, but he's still been super stressed.  Keeps telling me its not gonna work, we're heading for a bear market, he needs to do something now. I'm not sure what his plans were for retirement, but suspect he might have just expected to trade options for the rest of his life.  He asked me to come over next week so maybe I'll ply him with some of the perks you mentioned of being a minion.  Maybe if I bring over some articles about the 4% rule and go over the math again it'll start to sink in.  Mom and I think he might just be the kinda person who is happy to just work.

Again thanks all.  I'm going to mention some of this stuff to Mom so that we can maybe figure out a plan to help support him.  Maybe just to go over things to remind him of if hes getting depressed about all this.

asiljoy

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Re: Parents
« Reply #11 on: May 25, 2015, 10:31:44 PM »
I think my mom ended up showing him something like this just to get him thinking about why he was taking a job/what he needed out of a job to support their lifestyle:

http://www.getrichslowly.org/blog/2011/06/21/hourly-vs-salary-which-is-better/



Good luck to them!

Greg

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Re: Parents
« Reply #12 on: May 29, 2015, 09:05:12 AM »
Consider yourself lucky, at lest they came to you for help.  My folks need my help and won't accept it, and probably won't ask for it until it's too late (budgeting problems).

ash7962

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Re: Parents
« Reply #13 on: May 29, 2015, 09:44:43 AM »
Consider yourself lucky, at lest they came to you for help.  My folks need my help and won't accept it, and probably won't ask for it until it's too late (budgeting problems).

That would be an even more frustrating situation.  It remains to be seen if my parents will actually take my advice or not, but I at least have the ability to try.  I've pretty much just stopped worrying about it and plan on just providing as much support and/or advice as they ask.  In the end they'll make their own decisions which they and I will have to live with, and I've made peace with the fact that I might have to step in if their money runs out.  Taking care of elderly parents is always a possibility anyway, its just potentially coming a little sooner for me.  Still going to try to help them get on track spending wise, but I'm no longer going to stress about it.  On that note, I'm going over to my parent's house for a bit tomorrow, and Dad and I have plans to cook a meal for Mom.  He doesn't know yet that I'm planning on having us ride bikes over to the grocery store instead of drive hehe.  He got his bike all outfitted for grocery runs years ago but has never used it.  Hoping that doing this work will take his mind off of crazy mode for a little while, give him a small sense of accomplishment of completing something beneficial to the household, and also give him some beginner cooking confidence.  I'm planning on crock pot stew which is so easy to make that a child could do it.  Wish me luck..

Avidconsumer

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Re: Parents
« Reply #14 on: May 29, 2015, 09:52:00 AM »
This is a tough one..but here is one possible strategy to use that may help your dad see things differently.

>> reducing their spending is causing them to "live like paupers"
If so, then selling the house and living in a 1 bedroom apartment is also like "live like paupers".
If possible, compare it with what their friends are doing and see if that changes things for him.
Also, mayme mom's passion for gardening is not known to dad...so, you OR more importantly, she should make it known to him.

One other possible scenario is: your had is hiding something w.r.t. his health. Perhaps he feels that he has only 5 years to enjoy life.
And hence the need to splurge right away.

Another possible scenario is this. If possible, you pay off the remaining $38K mortgage. This would be a gift to your mom.
If they do not accept it, then ask them to treat it as a loan to you...an interest free one that can be paid over time say at $100 a month.

Hope that helps. Best of luck.

Their spending is 38k/year without mortgage payments.  And Mom's gardening passion is totally known to Dad, no question about that one.  I don't think I have the means to totally pay off their mortgage at this point.  I have agreed to take over the remaining student loan they were paying (he had previously refused this offer on many occasions). 

You might be right about the health...  I will contemplate that and keep it in mind during future visits.  Thanks.

They were paying off your student loan?

begood

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Re: Parents
« Reply #15 on: May 29, 2015, 10:12:03 AM »
He can start to withdraw the IRA penalty-free at 59.5, right? He doesn't have to wait until 65. Seven years to wait might be easier for him to stomach than 12.5.

They are YOUNG. Trust me - I'm turning 51 in June. ;) It sounds like he has had a huge blow to his ego, which has left him afraid - afraid of failing again, failing your mom, failing you. Men, in particular, seem to define themselves by their work, and your dad's work just bit him in the ass. Maybe a few visits to a "career coach" - aka a psychologist who understands men and identity and work and the ways the three intersect - could help him focus on what to do next? He could be depressed, too, after what he sees as a failure to succeed in his work. Depression and anxiety can lead to disproportionate reactions... such as selling an almost-paid-for house when cutting cable would suffice.

ash7962

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Re: Parents
« Reply #16 on: May 29, 2015, 10:33:17 AM »
This is a tough one..but here is one possible strategy to use that may help your dad see things differently.

>> reducing their spending is causing them to "live like paupers"
If so, then selling the house and living in a 1 bedroom apartment is also like "live like paupers".
If possible, compare it with what their friends are doing and see if that changes things for him.
Also, mayme mom's passion for gardening is not known to dad...so, you OR more importantly, she should make it known to him.

One other possible scenario is: your had is hiding something w.r.t. his health. Perhaps he feels that he has only 5 years to enjoy life.
And hence the need to splurge right away.

Another possible scenario is this. If possible, you pay off the remaining $38K mortgage. This would be a gift to your mom.
If they do not accept it, then ask them to treat it as a loan to you...an interest free one that can be paid over time say at $100 a month.

Hope that helps. Best of luck.

Their spending is 38k/year without mortgage payments.  And Mom's gardening passion is totally known to Dad, no question about that one.  I don't think I have the means to totally pay off their mortgage at this point.  I have agreed to take over the remaining student loan they were paying (he had previously refused this offer on many occasions). 

You might be right about the health...  I will contemplate that and keep it in mind during future visits.  Thanks.

They were paying off your student loan?

Yup they were.  I believe it is technically a line of credit on thier house that they used to pay for my college (so not in my name).  One of their goals was to pay for both my brother and my college educations.  For the record, I've been practically begging for them to at least let me help pay it for years.  Part of the reason they were so insistent that they pay is because they had already finished paying for my older brother's college education completely, so they feel its unfair if I have to pitch in for mine when he didn't.  My dad still had a job for my brother's entire college career, but he got laid off my junior year.  Also I know my dad was trying to keep up rich appearances post lay off.  When I graduated I immediately got a job that was double my brother's income and right in line with my dad's before he was laid off.  I am totally grateful for the amazing position I am in because of my parent's efforts, but it just makes sense for me to pay the loan and give back a little.  I'm just happy they finally agreed to let me.

ash7962

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Re: Parents
« Reply #17 on: May 29, 2015, 10:39:47 AM »
He can start to withdraw the IRA penalty-free at 59.5, right? He doesn't have to wait until 65. Seven years to wait might be easier for him to stomach than 12.5.

They are YOUNG. Trust me - I'm turning 51 in June. ;) It sounds like he has had a huge blow to his ego, which has left him afraid - afraid of failing again, failing your mom, failing you. Men, in particular, seem to define themselves by their work, and your dad's work just bit him in the ass. Maybe a few visits to a "career coach" - aka a psychologist who understands men and identity and work and the ways the three intersect - could help him focus on what to do next? He could be depressed, too, after what he sees as a failure to succeed in his work. Depression and anxiety can lead to disproportionate reactions... such as selling an almost-paid-for house when cutting cable would suffice.

Yeah 59.5 is the age.  I think you hit the nail on the head with what he's feeling.  He feels like a failure, and another part is that he was playing with retirement calculators to see how much he could withdraw at age 65.  When the calculators popped up 70k/year I believe his eyes turned into $$s.  He wants to protect the IRA purely to have more money even though he has no idea what he'd do with it.  They spend 38-40k/year right now, but he still wants the 70k/year.  To be honest, I think he partly wants to work til 65 just because he has no idea what to do with himself all day if he doesn't have work.  No hobbies or anything, so I think that's part of why he's freaking out so much.  Too much time in the day with nothing to do.  Another reason why learning to cook would be good for him.

frugaliknowit

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Re: Parents
« Reply #18 on: May 29, 2015, 10:57:31 AM »
A couple of thoughts:

1.  Having to draw from an IRA with penalty IS bad news, now way around it.  You don't say how much your parents have, but unless it's like $5Million, it's awfully early in life to be sucking money out.
2.  Your Dad needs to work.  Since he has been out of work 5 years, it is unlikely he can find a job at the same level.  It's a good time for a career change.  He needs to think of something.  In the interim, he should make some cash driving for Uber, working at Home Depot, or whatever.  It would be good for his spirit.  He can upgrade from there.  Anything is better than staying home and drawing from an IRA and paying penalties and taxes on it at 52.
3.  Trading from one's living room is not a sustainable job.  One cannot consistently make profits.

TrMama

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Re: Parents
« Reply #19 on: May 29, 2015, 11:03:42 AM »
I agree with the others who pointed out this sounds more like a mental health issue, than a financial problem.  Have you pointed out to him that he's already in early retirement? That if he gets a "retirement job", it'll just be so that he and your mom can have an even cushier retirement later?

Pre-retirement therapy might be a good fit for him. Just a few sessions to help him figure out what he wants his retirement to look like and how to transition into it. Sometimes there are even group sessions so he can see he's not the only one grappling with these issues.

A full physical with his Dr probably also wouldn't hurt. Just to rule out any physical causes for the mental changes he's experienced lately. Plus, it would give him something to focus on.

Finally, if there's any money available for a trip, now might be a good time. Sometimes getting out of your normal environment and routine can be beneficial for putting your life in perspective. Is there somewhere they've always wanted to go? Now would be a good time.

MayDay

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Re: Parents
« Reply #20 on: May 29, 2015, 11:05:13 AM »
Are you or your mom involved in any organizations that "need" his help? Maybe if you can convince him that the Hospice you volunteer for desperately needs someone to build wheelchair ramps, or your mom's community garden group needs him to organize a fundraiser, or whatever. Ideally something that might turn into a part or full time job.

My uncle just retired suddenly/unexpectedly at the same age, and is volunteering his time and business skills to professors at the local college who are trying to get start ups off the ground. It's "prestigious" compared to flipping burgers, and currently pays nothing, but keeps him busy and could turn into a real job if the companies take off.

I'd put all my money on psychological issues surrounding not being the breadwinner.
« Last Edit: May 29, 2015, 11:08:31 AM by MayDay »

ash7962

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Re: Parents
« Reply #21 on: May 29, 2015, 11:29:59 AM »
@frugaliknowit- the money they need to withdraw from the IRA is well under 4%, that is considering the extra they have to withdraw to cover the taxes and 10% penalty on it.  With time on their side, and a 5% return, it should still grow enough to cover their entire expense need before they turn 65.  If there's a worst case scenario and there's some kind of extended market situation where they are gaining substantially less than 5% rate of return, then they're in no worse shape than they are now.  That said, it would definitely help if he had a job.  More money, and hopefully more happiness for him.

@MayDay - volunteering is a good idea, get him out of the house and gives him something to do.  I used to volunteer for an animal rescue group but working for them would never generate profit.  My mom's community garden might be in need of some hard labor soon, but I think it might be good for them to retain some separate activities so they can get some "me" time without their other half.

@TrMama - Going to try to pitch the early retirement job thing tomorrow.  As someone else said now is kinda the time to be a minion rather than master, so going to go with that as an approach.  I've also been trying to get him to think about what activities make him happy to steer him towards what he wants his retirement to look like.  Group therapy sessions might be a really good idea for him.  I am not sure how receptive he will be on the therapy front, but group therapy might make it easier on his pride.

Thanks everyone for taking the time to read and comment. Since people have been responding I will try to report in on how tomorrow goes.  We'll see if I can get anywhere armed with all these ideas haha.

CommonCents

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Re: Parents
« Reply #22 on: May 29, 2015, 11:46:48 AM »
If they won't take your money for student loans due to fairness with your brother, would your brother be willing to repay part of the sum he received from them to support them in retirement?

wordnerd

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Re: Parents
« Reply #23 on: May 29, 2015, 12:02:20 PM »
My dad had similar attitudes about not bringing in money (my mom is 12 years younger, so it's now become the status quo), though my parents' spending is much higher than yours. My dad wasn't willing to take minimum wage work, but seemed able to make peace with doing part-time work that used his skills. So, at 73, he tutors part-time for $30ish an hour, which is good for his pride and still contributes to the finances.

Axecleaver

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Re: Parents
« Reply #24 on: May 29, 2015, 12:16:23 PM »
For early IRA withdrawal, look into SEPP (Substantially Equal Periodic Payments). This allows you to access your IRA dollars early - for exactly the reasons your parents are going through now. You do not pay the penalty once you've set up a SEPP, as long as you continue the payments for five years or reach age 59.5 (i'm a little fuzzy on how these two limit rules interact). There are some good articles here on it, I believe there's a MMM article on this, and MadFientist did a really good writeup on them.

IRS FAQ: http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Substantially-Equal-Periodic-Payments

ash7962

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Re: Parents
« Reply #25 on: May 29, 2015, 03:26:43 PM »
@CommonCents - I have briefly talked to my brother mostly so that he is aware of what is happening with our parents.  He says he'd rather not contribute at the time which is fine with me.  I believe my college costs were higher and my pay is now higher too.  Just makes more sense for me to finish off this loan.  The extra monthly payments make a much smaller impact on me than it would on my brother, and its only temporary.  I plan on destroying that loan :)

@wordnerd - My dad was a manager for most of his working career, and he's also pretty handy I think.  I was hoping to spin that into the idea of managing the household like a business.  Ohh that is actually a great way to put it for him.  Run the house like a business!

@Axecleaver - That is an amazing suggestion.  I've looked into it a bit, and found some calculators.  Looks like they could easily cover their remaining expenses pulling 1-2% of their IRA until Dad turns 59.5.  Dad will hopefully be more in favor if he knows he's not paying a penalty.  When their cash is just about to run out they will have about 6 months left on their mortgage, or just over 5k.  I think at that point I could gift them the rest (possibly with the help of my bro on this one), so they would be able to withdraw less from the SEPP and not have to worry about mortgage.  This is an even better plan than what I had come up with.  I'll have to play with more numbers but I'm sure this would make it much easier for Dad's IRA to reach levels to where it covers their spending. 


You guys are all so great, I feel like I am so well equipped to go over there tomorrow.  Thank you thank you thank you.

mm1970

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Re: Parents
« Reply #26 on: May 29, 2015, 05:06:29 PM »
Gosh, I don't really know how to help - I think maybe to get your dad thinking about a "second career" is a good thing.  I imagine that it's tough at his age though.

But that's the weird thing.  My husband and I aren't too far off that (turning 45 and 47 this year), and I have a hard time relating.  So maybe it's just a personality type thing.

ash7962

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Re: Parents
« Reply #27 on: June 01, 2015, 06:54:47 PM »
Well here's the update.  I'll start with the progress made.  We cooked a meal which turned out well, and Dad did most of the cooking.  I handled the instructions and planning, and just focused on teaching him some basics.  After we cooked he said "Its great that we cooked, but I don't think I could make that again on my own."  To which I replied "maybe not, but you learned what size things should be when diced, how to peel a clove of garlic, and how to brown some beef.  Do you remember those things?"  He thought for a few seconds and then agreed that he could.  He asked me to come back and cook again next week, so I'm taking that as a good sign.  Mom made some pound cake to go with fresh strawberries from her garden so that was for dessert.  After eating I said something about it being a feast and dad kinda paused and went "yeah I guess it was".  You kinda had to be there, but I think he said it with a bit of surprise and maybe a little pride.

He also set up an account with Mint, and we looked through some of his and Mom's spending from the last month.  They were still a little over the budget I asked them to target, but I expected them to take a few months to dial back the spending. They had two charges at target, one for 377$ and one for 127$.  I asked what they bought and neither could recall what they spent almost 400$ on in a single shopping trip.  Mom seemed shocked that they had spent so much.  I suggested they stay away from target for a month and see how they feel.

We also briefly went over their financial plan again, and it seemed like he started feeling better about their situation.  Honestly, between the money they have saved and SS income in a few years, they would really have to try to screw their money situation up.  He agreed that they don't need to sell the house, yay.  The bad part is that he's still looking for a job similar to his previous one.  I tried the questions about whether he might rather enjoy a less stressful job that didn't pay as much since they don't need a higher paying one, but he still insists on trying to find the manager job.  His reasons were that he wants to give mom the life she deserves and make sure she doesn't feel like she married a loser.  How chivalrous.  I lost it a tiny bit and told him that he was being selfish.  I said I've never heard Mom say she wants more money, but instead is all for the budget cuts.  I said Mom doesn't care what kind of job you have, Mom knows what makes her happy, and it doesn't cost a lot of money.  He keeps saying he's doing it for Mom, but its really for himself.  He wants others to know he can "take care of" Mom and spend money on her, and it embarrasses him to imagine anyone thinking otherwise.  The only reason he wants a high paying job is for himself. 

I feel like a curtain has been lifted and I'm seeing my Dad clearly now.  I used to think he was so logical and sure of himself, but now he seems like a highschool kid who was just shunned from the popular kid group for not having the most expensive car or clothes.  I will stop rambling now and end with a final note.  I plan on keeping up with the cooking lessons, keep an eye on their spending in Mint, and I have also suggested he sign up to be an Uber drive while he looks for his manager job.  I think the situation has at least calmed down a lot, but hopefully over time his stress levels will continue to lower.  I still think he's got a ways to go on the happiness front, but that might take a long time and isn't really in my control.  For now things seem ok, so thanks everyone for reading and for all the helpful advice.

asiljoy

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Re: Parents
« Reply #28 on: June 01, 2015, 09:14:03 PM »
His reasons were that he wants to give mom the life she deserves and make sure she doesn't feel like she married a loser.  How chivalrous.  I lost it a tiny bit and told him that he was being selfish.  I said I've never heard Mom say she wants more money, but instead is all for the budget cuts.  I said Mom doesn't care what kind of job you have, Mom knows what makes her happy, and it doesn't cost a lot of money.  ....

I feel like a curtain has been lifted and I'm seeing my Dad clearly now.  I used to think he was so logical and sure of himself, but now he seems like a highschool kid who was just shunned from the popular kid group for not having the most expensive car or clothes. 

Pride. It's a bitch.

Remember, the guy has had his entire self-worth wrapped up in being a provider and you made it seem like he's come a long way. I mean, he's come down from the 'selling the house' ledge and is willing to start cooking meals at home and, gasp, budget! Your Dad took a kick in the proverbial nuts and he's come around quite a bit already. Give him time to come around to the rest.

On a side note, if he's anything like my Dad, he doesn't believe your Mom. My Dad insisted that my Mom was making sacrifices in an attempt to make him feel better about not being able to follow through on their pretty extravagant retirement plans. Now, my Mom doesn't spend money. She's happy reading library books and taking their dog on long walks, but my Dad always wanted to make sure he'd be able to get her 'anything'. That's something they need to work out on their own. Really. You're not going to be able to sort out their relationship.

Pat yourself on the back. It seems like things are heading in the right direction :D Deep breath.  :D


vagon

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Re: Parents
« Reply #29 on: June 01, 2015, 09:17:34 PM »
Journey of 1000 miles and all, but congrats - it sounds like you have him on the right track and he's taken the first step.

ash7962

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Re: Parents
« Reply #30 on: June 01, 2015, 10:54:44 PM »
Pride. It's a bitch.

Remember, the guy has had his entire self-worth wrapped up in being a provider and you made it seem like he's come a long way. I mean, he's come down from the 'selling the house' ledge and is willing to start cooking meals at home and, gasp, budget! Your Dad took a kick in the proverbial nuts and he's come around quite a bit already. Give him time to come around to the rest.

On a side note, if he's anything like my Dad, he doesn't believe your Mom. My Dad insisted that my Mom was making sacrifices in an attempt to make him feel better about not being able to follow through on their pretty extravagant retirement plans. Now, my Mom doesn't spend money. She's happy reading library books and taking their dog on long walks, but my Dad always wanted to make sure he'd be able to get her 'anything'. That's something they need to work out on their own. Really. You're not going to be able to sort out their relationship.

Pat yourself on the back. It seems like things are heading in the right direction :D Deep breath.  :D

You're totally right on all counts.  I'm kicking myself for not being more supportive of the changes he has already made.  I'm stubborn as hell and don't think I would have turned around as quickly as he has.  I've been in the "must fix all things" mode.  Overreacting must be a family trait.  Since I now know for sure that they're not in any financial danger I'm going to try to take a step back and let them work on it for a bit.  I will still keep up the cooking lessons though to spend some time with him and mom.  I do want him to know that I'm there for them both, and that I don't think he's a failure.

asiljoy

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Re: Parents
« Reply #31 on: June 02, 2015, 06:14:17 AM »
I think the cooking lessons are a great idea! Your Dad seems like a facts kind of guy. You ever show him Good Eats?