Planning for future in-laws retirement

[hzsfre]

Hi folks,

I mentioned this in my https://forum.mrmoneymustache.com/welcome-to-the-forum/say-hi-and-introduce-yourself/msg60025/#msg60025, but I'm trying to get a solidish plan in place for the retirement of my future in-laws.

Some backstory -- they are immigrants who have spent nearly all they've ever made on legal fees in the pursuit of green cards. The good news is that they are getting them. The bad news is that both are about 50 working in manual labor type jobs that won't allow them to save up a meaningful amount for retirement or continue working into their golden years. They are fantastic, hardworking people and have sacrificed everything for their children. They have three children in total: my girlfriend, a younger sister, and and even younger brother who is still in high school.

I'm unsure about the future prospects for the siblings, given that the brother has no idea what he wants to do and the sister hasn't yet gotten into college, so I feel as if I have to plan in such a way that my girlfriend and I will exclusively support her parents, and any contributions from the other two will be a pleasant surprise.

Obviously, this makes the burden of financial independence a bit higher. They'll be getting some money from Social Security when that time comes, but other than that, I don't think there's a big safety net. We've kicked around a few ideas about how to best accomplish this while not sacrificing our own goals. We've considered buying them a condo and letting the other kids/SS take care of groceries and bills.  However, what I'm thinking makes more sense is buying a duplex, letting them live in one side and renting the other side out. They would take good care of the property, and her dad (who is a handyman) could take care of much of the maintenance, as well as keep an eye on any tenants we had. Obviously, when they don't need it anymore, we could sell or take on another tenant.

Is anyone here dealing with a similar dilemma? Any tips?

Thanks!

[Adventine]

I'm preparing myself for a similar situation with my own parents.

I think your second idea would be much more feasible. They would have something to occupy their time, and you would have somebody (hopefully) trustworthy  to manage your property. This also gives them "dignity" in the sense that they aren't just waiting for dole outs, but are instead doing something productive and meaningful in exchange for financial support from you guys.

If I may ask, which country do your girlfriend's parents come from?

[Zaga]

My brother had a house which he was never able to sell when he moved, it's a tiny 3 bedroom 1 bath rance in a less desirable (but perfectly safe) part of town.  Well now we are very grateful for this, because this is where we keep our mother!  It's great to have a cheap place that we know she's okay, plus this way we can keep people from taking advantage of her.  (That's a whole other story, and why she needs the help now.)

Anyways, he and I split the bills that her Social Security/tiny pension can't cover, it's a low stress way to keep our mother under shelter and not in the same house as either of us.  We do have another brother, but he can't financially help, though he did put her up for a year while she was recovering from knee replacement, so he's done his part as well.

[Paul der Krake]

The duplex idea is great and your future father-in-law sounds like the perfect property manager. Correct me if I'm wrong, but it sounds like they are currently stuck in low-paying jobs because of unlawful presence? If so, getting their green cards will most likely affect their employment opportunities in a drastic way if they get them soon- they may not need much help from you at all.

Your girlfriend and her family are very lucky to have you in their lives.

[hzsfre]

Thanks for the kind words folks. I started looking at duplexes last night, and it seems like anything non-shitty in the Seattle area starts at about 500k, so this may mean a few extra years of work.

I'm preparing myself for a similar situation with my own parents.

I think your second idea would be much more feasible. They would have something to occupy their time, and you would have somebody (hopefully) trustworthy  to manage your property. This also gives them "dignity" in the sense that they aren't just waiting for dole outs, but are instead doing something productive and meaningful in exchange for financial support from you guys.

If I may ask, which country do your girlfriend's parents come from?

They are from the Philippines. I'm fortunate with my parents since my dad was pretty successful with his career. They should have enough money to last them as long as they need.

The duplex idea is great and your future father-in-law sounds like the perfect property manager. Correct me if I'm wrong, but it sounds like they are currently stuck in low-paying jobs because of unlawful presence? If so, getting their green cards will most likely affect their employment opportunities in a drastic way if they get them soon- they may not need much help from you at all.

Your girlfriend and her family are very lucky to have you in their lives.

They're here quite legally; it's just that their experiences and degrees back home aren't honored in America. The good news is that since all their income is "on the books," it should be eligible for Social Security. The other issue is that their English isn't great, and that's a barrier to entry for quite a few jobs. My girlfriend has tried to get them to take English classes, but they aren't too interested.

[Adventine]

hzsfre, it's great that you've made these plans to help your future in-laws out. Not everybody is so lucky.

Apart from the planning you are already doing, you may want to start thinking about how their eventual medical expenses will be paid. Will you and your girlfriend be shouldering this as well?

I bring this up because your in-laws sound like they are traditional Filipino. Which means they are most probably expecting their kids (and their kids' spouses) to support them in their old age, especially if they can't manage their medical expenses.

Something you should definitely take into account while planning for your own retirement.

[smedleyb]

My only question is: are you engaged to your girlfriend?  Is marriage around the corner?

You refer this this nice couple as your in-laws but at this point they're just your girlfriend's parents.  I think it's too early to be thinking about their future when your's is up in the air. 

[Unionville]

You might google "Dave Ramsey" and "Enabling".  He talks a lot about when (or when not) and how to help relatives who have money problems. 

[ysette9]

In this case I am very sensitive to your situation since there are very different cultural expectations at play here. My husband is an immigrant from an Asian country also and there is something of an unspoken expectation between us that we too will help his parents in retirement. The important part here is that you are 1) thinking about it early 2) willing to help out without resentment. For me personally, I have been thinking long and hard about what I am willing to do and under what conditions. In my case that means financial support is okay but sharing a house is definitely off the table.

I like the duplex idea and am contemplating something like that myself. Your girlfriend (future wife?) should be initiating a conversation with her parents, if they will participate, on what their expectations and dreams are in retirement. Do they dream of spending part of their time in the Philippines? They may be able to spend part of the year there on little more than the cost of a plane ticket if they still have a house/family over there and can get medical care as most countries in the world except the US do. That might allow you to house them part of the year and rent out their half of the duplex the other part of the year, making it that much easier to help them out.

Personally I don't agree with the comment about enabling people with money problems in this particular situation, though generally speaking I am on board. Again, it comes down to different cultural expectations. Parents in the west support their kids but not (ideally) at the cost of their own retirement. Asian parents have very different cultural norms and it is common to sacrifice tremendously to provide opportunities for the kids, with the knowledge that the kids will turn around and support the parents in their old age. Being that you have a multi-cultural relationship, it is really important to talk frankly about these expectations and what you are and are not willing to support so you don't end up with hard feelings down the line.

Good luck!

[frugaldrummer]

Bless you for caring about your future in laws. 
The duplex idea sounds too expensive in your area. What about planning to eventually buy a home for yourself that has a granny flat or has the potential to put a rental unit in the basement or such? If FIL is handy, perhaps he could help you build sweat equity in the home by doing the renovations. They wouldn't have to live there now but it would be an option when they retire. Having them close could save you a boatload in childcare when you have kids. If their housing is covered they should be able to meet the rest of their expenses with social security.

[Mori]

Does it have to be in Seattle proper? How far out would you have to go to make it a bit more feasible for you?