FIL is a former accountant with personality issues. In the nearly 25 years I've been part of the family, he spent more time unemployed than not, eventually retiring at 62 b/c his UI was about to run out and no one would hire him. He had a small 401K, which he blew through quickly; by not working much his entire career, his SSA checks were $1,100. MIL hung on till 66 and got a $1,300 SSA check. Her 401K went to buy a new mobile home in cash, so they could relocate from HCOL to LCOL area near us. She sold her share of her Mom's home to her brother and netted almost $200K.
They could live well on their combined SSA checks in this area; lot rent for the mobile was only $400/mo, and it was in an over 55 community, so activities were fiscally conservative. I suggested a lazy portfolio and explained the 4% drawdown, stressing that letting the money grow for a decade would greatly increase their disposable income when they would need it more. They invested about 70% of it, leaving the rest in a savings account with a 0.25% interest rate. I suggested a CD ladder, but nothing came of it.
Just over 2 years into MIL's retirement, she passed after a quick bout w/cancer. While helping FIL with shutting down things in her name and claiming her higher SSA check, hubby & I discovered that they had squandered nearly all of the cash, plus all of their SSA income! We realized this would add financial stress to FIL's situation, and suggested part time work or a roommate to help w/costs. He's early 70's and still physically capable, just lazy. His Mom is still alive, pushing the century mark; his Dad passed at 103, so it's possible that he could be alive for 30 more years, managing that small nest egg judiciously should be a high priority. After what we saw on Christmas, it's clear that it's not.
FIL is panicking, b/c his bills keep going up. Over the last 18 months, he's asked us to liquidate $30K from his investment accounts, b/c he doesn't know how. Eyebrows were raised, but it's his money and his life, all we can do is advise. The main reason for the panic? He's "only" got $17K left! Hubby attempted to ascertain what his total monthly bills are, but he could not provide details. We suggested logging in to his accounts to appease him, see the total picture, and once again, remind him on the 4% drawdown rule. SSA is $1,400, as long as he draws down $600/mo, he should still be OK. Based on the $13K spent over the past 18 months, he's trending closer to $725/mo, not horrible, but perhaps call around to see if certain bills can be lowered? Ask the neighbors what company they use to insure their homes, stuff like that. Lots of nodding, but I don't expect any changes, although hubby is more hopeful.
While trying to ascertain what FIL's monthly spend is, he logs into the checking and savings account, and I realize that he's got $16K in the checking. We once again suggest a higher interest rate account, and he agrees to transfer $13K into savings, but I could see resistance; he doesn't want to do it. His monthly bills in the past month or two are about $2,100, so $3K is an ample cushion. I try to explain how this will help him earn some extra cash, and he could log in monthly to make sure he's got enough in checking to cover everything, even suggest setting up an auto transfer from savings to checking on the same day as SSA hits, so he can manage from a monthly cashflow perspective. I show him our account, and how we manage our bills based upon our paychecks, and he says he doesn't get a paycheck. We tell him yes, you do, your SSA is your "paycheck" for this example, but again, I can see him shaking his head no and it's pretty clear that he wants to just continue spending whatever he needs, and not actually ensure he's staying within his budget.
He keeps bringing up more issues he has, like he thinks all the accounts are in his wife's name, and we explain that he needs to change the ownership, but it's more likely that the bank will want to set up new accounts, and this stresses him too, b/c now he has to change the direct deposit on his SSA. OK, let's login to your SSA and see how that would work; hubby offers to take a day from work to go w/him to the SSA office and the bank as I show him things that he can easily do online or over the phone. I also take a look at the pdf of the bank statements, and it turns out that his name is on all the accounts, so that's great, but I then notice he's got a ton of other accounts with $40 here and $12 there, that aren't showing up online, so I suggest closing those and keeping things simple. As I'm cross referencing the account numbers, he decides that he's tired, it's late, he hates driving in the dark, etc. OK, no problem, perhaps next time you want help w/these things, you let us know in advance and we can set up a day to look things over? He concedes that would be better, but again, I sense a level of anger in the frustration. He's got bladder issues, so I suggest that while he uses the bathroom before taking the drive home, I'll print out the statements w/the account numbers, and I highlight which accounts to keep, which to close, and the toll free number of the bank. He's certain they want him to come in, so now he's gotta do that too! I suggest calling all these places first, b/c they probably can do a lot over the phone, and then he will know for sure what needs an in-person visit, and what documentation might be needed, so he won't need to make multiple trips.
We see him out the door, and he continues to make excuses; hubby shuts him down by suggesting he can sleep at our house for the night. He doesn't want to sleep on the blow up bed. OK, fine, hubby offers to get him a room at a local hotel; he turns that down too, all the while continuing to engage at the foot of the driveway. It's not productive, and I point out we can discuss at a later date, when it's not dark out and he's not tired. He leaves, and I note to hubby that we answered a myriad of questions that HE posed to us, in the course of 90 minutes, so it wasn't like we had spent half the day on it. Hubby doesn't understand either; his Dad literally does nothing but watch TV all day, and he came to our house in early afternoon, we took him to a movie and then to a Chinese restaurant, so nothing involving endurance.
The next morning, I wake up and recall that when MIL died, there still was some cash in that savings account, which we didn't account for the night before. Uh oh, that means his monthly burn rate is higher than we were seeing; there haven't been any major expenses, as Hubby and his brother split the funeral costs, so FIL didn't use any $$ for that. I decide to quickly login to his account and check what the amount was in savings when she passed; looks like another $10K wasn't accounted for, that's a problem; he's burning over $1,200/mo in addition to his SSA. As I'm about to logout, I notice that the savings account balance has dropped overnight as well! Sure enough, FIL wasn't too tired to login to his account when he got home, and transfer half the money right back into checking. To me, this looks like an act of defiance; lots of nodding in agreement and understanding the need to keep an eye on his monthly spend, but he's just not going to do it. Fine, I'm done! I know hubby has been concerned, b/c he plans to RE in 15 months, and our plans do NOT include financing his Dad when he screws up and runs out of money. Hubby feels a sense of obligation and guilt, even though he has seen a lifetime of bad financial decisions by his parents. So when hubby woke up, I told him about the transfer of funds, and suggested that he not go out of his way to help his Dad clean up his accounts or feel guilty about this anymore. I told him, I'm not wasting my time on this anymore; it's obvious that the advice is being ignored, so let him do what he wants, and if he does run out of money, he can figure it out on his own. Still, I feel bad for hubby; that's easier said than done. We just have to keep reminding ourselves:
Choices have consequences.
Some people figure that out the easy way.
Some people need to learn that the hard way.
Some people refuse to learn the lesson even when life rubs their nose in it.
Topic: Relatives who just don't get it (Read 2247141 times)