Author Topic: Case Study/Advice Needed: Financially inept in-laws about to retire  (Read 9836 times)

Hunny156

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Hi everyone!  Hubby's parents have finally realized that due to health and cost of living, they will be unable to continue living on the East Coast.  This couple has been given ton of opportunities to get ahead, and squandered every single one.  This is pretty much their last chance to get it right, so they are moving to Central TX and have 2 options:  Low-Income Senior Housing or buying a mobile home in cash.

In terms of savings, there is roughly $60K in a 401K, and a family home is being sold which will potentially net $225K.  Hubby & I are stepping in to help manage these remaining funds, as we have made it clear that we will not be supporting them and there are no more windfalls in their future, so they will need to live within their means.  Our goal is to take any remaining funds ($200K - $250K depending on which option they choose) and place it in a Vanguard account to provide an income stream when one of the spouses passes away.  We have done our best to make it clear that this money can not be spent on monthly expenses, they must live on their SSA to protect their future.

Based on the information I have been given, I have set up the following budget options for them.  Please review & let me know if there are things I am missing, recommendations you may have, anything that will help them achieve success in this final phase of their lives.

If they buy a new mobile home in cash (we have picked out a modest single wide which will be built w/the most insulation, metal roof, 30 year siding, plywood sub-floor, etc to ensure the home will last and require minimal maintenance.  Used is not an option, they will not consider it.):

Combined Monthly SS Income: $2,600

Monthly Expenses:
Auto Repair Savings              $50.00
Auto Insurance                      $35.00
Gas for Car                      $50.00
(Mobile home community is not near anything, so a car is a requirement)
Cable/Satellite/Internet      $100.00
(Hope to minimize this expense, but they just watch TV all day as their entertainment)
Lot Rent                              $200.00
(will increase to $400 in 4 years)
Water/Sewer                      $65.00
Electric                              $100.00
(estimating on high side b/c it is still a mobile home in TX heat)
Homeowner's Insurance      $60.00
Cell phones(Republic)              $25.00
Credit cards                      $0.00
(I suspect they are carrying balances, but given their budget and penchant for filing BK in the past, I'm sure they'll have no issues with not paying what they owe.)
Doctor Visit Co-pays              $100.00
Entertainment                      $200.00
(Mostly take out, shopping for fun & maybe a matinee)
Groceries                              $500.00
(I am including toiletries & cleaning supplies here, but hopefully they spend less)
Life Insurance                       $40.00
($40K term life - we would use to cover funeral expenses)
Medicare for both                  $238.00
Medigap for sicker parent      $150.00
Personal care                      $100.00
(She likes to get her nails & hair done every so often, I don't see her dropping this)
Prescription Co-pays              $120.00
Script plan for sicker parent   $45.00
Vitamins for sicker parent      $25.00
(I hope to get her to understand that she can get these way cheaper at Costco, she goes to the Vitamin store now...)

Total Expenses: $2,203
This leaves roughly $400/mo to account for stuff I'm sure they haven't told me about.  No concept of what a budget is or how it works.

If they choose low-income senior living, they require a 2 BR b/c they don't really get along, they haven't divorced just b/c they both know they can't afford to live w/o the other.  From my research, depending on which location they choose, they borderline qualify now, and upon the death of one, the other would have to re-qualify based upon their income at that time, so this option is more expensive and riskier, IMHO.

Combined Monthly SS Income: $2,600

Monthly Expenses:
Public Transportation                  $25.00
(This could be higher, their only options would be the facility bus that goes to the supermarket/Wal-Mart 2x/week & then an elderly transportation service by appointment only.)
Cable                                          $45.00
(No internet, these places have a computer room, so they can use the free internet there)
Cell phones(Republic)                  $25.00
Credit cards                          $0.00
(I suspect they are carrying balances, but given their budget and penchant for filing BK in the past, I'm sure they'll have no issues with not paying what they owe.)
Doctor Visit Co-pays                  $100.00
Entertainment                          $200.00
(Mostly take out, shopping for fun & maybe a matinee)
Groceries                                   $500.00
Life Insurance                           $40.00
($40K term life - we would use to cover funeral expenses)
Medicare for both                      $238.00
Medigap for sicker parent          $150.00
Personal care                          $100.00
(She likes to get her nails & hair done every so often, I don't see her dropping this, especially here, where the services are conveniently provided on-site!)
Prescription Co-pays                  $120.00
Script plan for sicker parent       $45.00
Vitamins for sicker parent          $25.00
(I hope to get her to understand that she can get these way cheaper at Costco, she goes to the Vitamin store now...)
Rent                                          $800.00
Utilities                                  $125.00

Total Expenses: $2,538

Yes, I am fully aware that this is a hair on fire way of living with minimal concessions being made.  Hubby & I have tried over the years to instill frugality, it's been a lost cause.  They won't even buy generic paper towels b/c the TV tells them Bounty is better.  We are hoping to help trim some of these things buy bringing them with us to Costco to buy some staples, but this will be a slow, painful process and we are probably idiots for attempting to "raise" hubby's grown, clueless parents.

If I still have your attention after this super long post, thanks for taking the time to read, and open for ideas on creative face-punching and ways to trim their expenses.

partgypsy

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #1 on: June 09, 2015, 10:41:37 AM »
Seriously, I am impressed they even told you this much about their finances, let alone being receptive to anything you say.

If you can actually advise them and they follow your advice you should seriously write a book or create a seminar, on how to get older parents to listen to their children about financial advice. And I'm not even going to call them financially irresponsible. Sure they should have more saved for retirement but they have assets and are not in debt.

(this is coming from a child whose parents do not share any but the most general information with all the details left out, and one of the two parents asks for money. I do know neither has a will, as "we don't have anything anyways so why write a will? or make a file with their important financial information in case of accident or illness. "Why, do you want to steal my identity? I know where everything is.")
« Last Edit: June 09, 2015, 10:43:12 AM by partgypsy »

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #2 on: June 09, 2015, 10:55:34 AM »
Seriously, I am impressed they even told you this much about their finances, let alone being receptive to anything you say.

If you can actually advise them and they follow your advice you should seriously write a book or create a seminar, on how to get older parents to listen to their children about financial advice. And I'm not even going to call them financially irresponsible. Sure they should have more saved for retirement but they have assets and are not in debt.

(this is coming from a child whose parents do not share any but the most general information with all the details left out, and one of the two parents asks for money. I do know neither has a will, as "we don't have anything anyways so why write a will? or make a file with their important financial information in case of accident or illness. "Why, do you want to steal my identity? I know where everything is.")

Thanks for your input.  I understand where you are coming from, my side of the family is exactly as yours, which has caused serious strain when the first parent passed away.  Maybe that's why they (she) is being receptive.

My MIL is not the type to do anything herself, which is why she's allowing us to help.  She had an eye-opening medical scare a few years back, where her husband could care less and her children live in TX, so she had no one to help her out.  This is more self preservation than anything else.

All the assets are hers.  The 401 would have been in far better shape if she had consulted ANYONE the day after 9/11, when she decided that she should move into bonds, after the market tanked.  Oy.

The house is her mother's house, which was left to the siblings 50/50 upon her death.  She is asking her brother to buy her out, which is a whole other mess and will ultimately determine if she can move or not.  They have always paid roughly 1/3 of market rent, living in the basement unit of the house, and just squandered every penny and then some.  The only reason they don't have much debt (I'm certain they have some) is b/c BK wiped it clean, and their credit is pretty poor, so no one will give the opportunity to get into debt.  Otherwise, I'm sure this picture would have been a lot worse.  ;)

MrMoogle

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #3 on: June 09, 2015, 11:01:58 AM »
Random thoughts:
Do they have any hobbies that cost money?  Maybe some of this is included in Entertainment.

What are you going to use the $200k for?  Could that cover funeral expenses?  I don't plan on getting life insurance when I retire, but then again I'm not living off of SS either. 

It's hard to say what's missing.  If you can get a hold of their CC/debit/savings accounts, and look at the last year, that will give you an idea about where it's going. 

How is their spending going to be limited to their SS?  Are the CC's going to be canceled? 

Any once a year expenses, like vacations?

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #4 on: June 09, 2015, 11:24:03 AM »
Random thoughts:
Do they have any hobbies that cost money?  Maybe some of this is included in Entertainment.

What are you going to use the $200k for?  Could that cover funeral expenses?  I don't plan on getting life insurance when I retire, but then again I'm not living off of SS either. 

It's hard to say what's missing.  If you can get a hold of their CC/debit/savings accounts, and look at the last year, that will give you an idea about where it's going. 

How is their spending going to be limited to their SS?  Are the CC's going to be canceled? 

Any once a year expenses, like vacations?

Thanks for your questions.  Hobbies would be eating out and shopping.  Once their car died, she substituted the mall with HSN.  Seems like she's mostly kicked that habit, but once they are here and have a car again, who knows what they will do.

More than likely, my MIL will pass away before my FIL.  His family so far has beaten the average lifespan, multiple males lived to see the century mark.  MIL will be 66 this year, FIL is in his early 70's, so we view the $200K as an income stream to supplement the lost SSI once one of them passes away.  The life insurance is her policy, and considering her many ailments, it's a miracle she even got one.  She feels it is her inheritance to her children - she's not thinking about post death expenses.

I'll probably be able to get a hold of statements this fall, once she decides which option to take.  Either way, I'm sure she will need to provide their SSN's, and if we have to, we know of someone who would be willing to pull credit reports.  From what I've been told, FIL's CC's are maxed out, and she only has an Amex, requiring her to pay in full every month.  She's been pretty good at doing that for several years now, since she took out a HELOC a few years back in order to pay off her credit card bills.  Don't get me started on that brilliant decision, but at least she did pay it off, and seemed to learn the lesson.  What she doesn't seem to understand is that her monthly income is about to drop 50% once she retires, and that's going to limit her ability to continue spending on the Amex.

We will be limiting her access to the cash reserves by placing it in a trust, where my husband will be the trustee for her.  The car and mobile home will be in her name, we won't take that risk, but I really hope she doesn't figure out about title loans or refinancing the paid off mobile home - she could get in trouble that way, easily.

Annual expenses like vacations will have to be budgeted for out of any extra cash they keep.  Their usual vacations are fairly cheap, a flight to TX and a few dinners that they pay for while visiting every other year or so, and even those trips were financially difficult for them.  They will probably have to limit themselves to driving to Houston & Galveston for vacations.

Catbert

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #5 on: June 09, 2015, 11:33:17 AM »
I probably would go with the senior low-income housing.  I say that as someone whose MIL living in a single wide near a small town Texas.  It was 12 miles on country roads to the grocery store and gas station.  Before she suddenly died DH was starting to grabble with what to do when her driving got even worse.  Her trailer was older (well new-ish when they got it 20 years earlier).  DH spent every trip there doing maintenance and some appliance would always break while he was there.

They might be fine now driving, maintaining trailer, visiting friends, etc.  But in the long run you may be glad for the things available in a senior housing complex.   

My biggest fear if I were you is that they'll just get more CCs to continue getting what they want.  Can you walk them through freezing their credit and then not help them unfreeze it.  This works better if they aren't tech savvy.

 

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #6 on: June 09, 2015, 12:43:10 PM »
I probably would go with the senior low-income housing.  I say that as someone whose MIL living in a single wide near a small town Texas.  It was 12 miles on country roads to the grocery store and gas station.  Before she suddenly died DH was starting to grabble with what to do when her driving got even worse.  Her trailer was older (well new-ish when they got it 20 years earlier).  DH spent every trip there doing maintenance and some appliance would always break while he was there.

They might be fine now driving, maintaining trailer, visiting friends, etc.  But in the long run you may be glad for the things available in a senior housing complex.   

My biggest fear if I were you is that they'll just get more CCs to continue getting what they want.  Can you walk them through freezing their credit and then not help them unfreeze it.  This works better if they aren't tech savvy.

I agree with you there, long term driving won't be feasible.  The senior housing is in the burbs, but its a lot closer to civilization than the mobile home community we are looking at.  The area is getting built out, but who knows how long that will take, and how that will change the neighborhood.

The senior housing, btw, is amazing, and much closer to where we live.  The amenities are like a resort!  The in-laws inability to plan or make compromises is the problem.  The 2 BR units are smaller than their current apartment and actually costs more than what they pay now in their totally unrealistic rent.  The bubble is going to pop one way or another, they will have to learn how to sleep in the beds they made.

I probably should note that the mobile home community is nowhere near typical either.  It is gated, has a pool, park, clubhouse, gym, etc.  Both options would be an upgrade to the amenities they have access to right now, which will no doubt could their judgement.  The MIL is more concerned with getting granite counter tops and laminate floors that look like wood.

Excellent point on freezing their credit.  Neither one of them is tech savvy, so I will look into that once they move and are settled in.  Thanks, I wouldn't have thought of that!

Zamboni

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #7 on: June 09, 2015, 01:09:30 PM »
The car and mobile home will be in her name, we won't take that risk, but I really hope she doesn't figure out about title loans or refinancing the paid off mobile home - she could get in trouble that way, easily.

Or a reverse mortgage!  Because that is how the banks take money from old people these days. But hey, the Fonz says it's a good idea, so it must be! Not sure they will do these on mobile homes, though.

I agree that the senior housing apt is their best bet long term. That way they can more easily make friends since they don't like each other. Less worry for you also since MIL will be closer to healthcare, hospital, doctor office, grocery store, etc. A trailer out in the country sounds like a disaster waiting to happen. I've delivered meals many times to low income seniors in their residences and it seems to me that those in the apts are in much, much better living situations that those trying to maintain their own homes.

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #8 on: June 09, 2015, 01:21:05 PM »
Yes, when I typed that, I was praying that reverse mortgages aren't a thing for mobile homes.  But I'm sure someone will exploit that loophole, eventually.

OK, so for those of you who feel that the senior living is the way to go, how do you feel about their budget being so tight?  I know I would never feel comfortable with that, but obviously, we are dealing with two very different approaches to finances, so it's easy for me to discount it. 

It's also easy for me to point out that the rent statistically goes up 3%/year in the places we have looked at, and that at the death of one spouse, the other spouse must be able to prove they are financially able to pay the rent, or they will lose the apartment.  I know that the trust account will be set up explicitly for that purpose, but at the end of the day, it is her (their) money, and if they choose to spend it frivolously and not worry about the future, is it really our place to say no? 

My side of the family is irreparably damaged due to my parents lack of planning, so I know what that is like, and it sucks.  I'd hate to see hubby have to go down that same road with his family.

jeromedawg

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #9 on: June 09, 2015, 01:36:45 PM »
Definitely don't forget about senior discounts where applicable :)

And as far as cable, are they willing to just watch over-the-air or public broadcasting? Or if not, can they settle for the absolute lowest-tier of cable programming etc?


This sort of reminds me of the situation with my in-laws. They're both pushing 70 and haven't yet retired and continue to insist on working (they run a restaurant that doesn't do that well and they totally overpay their employees; and the employees take advantage of them on that too by being lazy and stepping all over them). They've had *many* opportunities that were squandered basically because they let others walk all over them and take advantage of them. They have the tendency to run up their credit cards and then incur late fees (this has gotten better but not that much) and we don't really know how much they actually have saved up because they hoard cash piles out of paranoia. My wife opened a Discover savings account for them to get some interest but anytime we talk about investing for them, they get all paranoid and think the government will take it away and that it's not worth it. They took a 30yr mortgage out on a home in 2004 and had it refinanced several years ago to where it's more affordable - before they were basically defaulting on the payments for probably over a year. We think that if they sell it they'll probably get some $$$ back.  But they would only do this upon retiring, which means selling or walking away from the restaurant, which is probably not going to happen for who knows how long (until one of them gets injured or passes on I'd venture to guess). I don't think selling the restaurant would be that easy too because they're in a not-so-great and not-so-desirable area for a restaurant. They've talked about looking for cheap apartments, low-income housing near us, or *possibly* moving in with us esp if we get a bigger place (unlikely anytime soon) but who knows... we definitely don't want to be supporting them but I think my wife feels strongly the other way - that may change once we have our kid though.

It sucks when your parents don't plan well and you can see what's in-store. My wife always reminds me that her parents cannot plan for the life of them... it's pretty ridiculous. As an anecdote and classic example of this, they over-committed to bringing some food/appetizers to the baby shower and then my MIL calls my wife a couple weeks later and says they committed to a *huge* party/event at their restaurant on the same day so now they don't think they can either show up or bring food. My MIL naturally felt bad and tried to compensate by saying she'd just drive down and bring whatever food she could but wouldn't be able to stay or stay for long and would have to go back... they're over an hour away from us. This is my wife's life story, if you ask her - always second place to the restaurant. It's a pretty sad thing for her. Another one we're unsure of is how her mom keeps saying how she'll stay with us (leaving my FIL to run the restaurant) for a month after the baby comes to help out... my wife is like 99% sure it ain't gonna happen, so we're not banking on it one bit.
« Last Edit: June 09, 2015, 01:44:30 PM by jplee3 »

partgypsy

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #10 on: June 09, 2015, 01:38:55 PM »
Oh, OK, I see what you are saying.

You should look into whether if one spouse pre-deceases the other, whether the other will get increased social security benefits. I know for my mother if/when my father dies, her benefits will increase. This may change your calculations about what to do with the 200K or so that they may have. Also if they are willing to have it in stock funds, may be able to have a 4% withdrawal rate (8K a year), which may make a big difference if they choose senior housing which may be a safer bet.

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #11 on: June 09, 2015, 01:50:29 PM »
Definitely don't forget about senior discounts where applicable :)

And as far as cable, are they willing to just watch over-the-air or public broadcasting? Or if not, can they settle for the absolute lowest-tier of cable programming etc?


This sort of reminds me of the situation with my in-laws. They're both pushing 70 and haven't yet retired and continue to insist on working (they run a restaurant that doesn't do that well and they totally overpay their employees; and the employees take advantage of them on that too by being lazy and stepping all over them). They've had *many* opportunities that were squandered basically because they let others walk all over them and take advantage of them. They have the tendency to run up their credit cards and then incur late fees (this has gotten better but not that much) and we don't really know how much they actually have saved up because they hoard cash piles out of paranoia. My wife opened a Discover savings account for them to get some interest but anytime we talk about investing for them, they get all paranoid and think the government will take it away and that it's not worth it. They took a 30yr mortgage out on a home in 2004 and had it refinanced several years ago to where it's more affordable - before they were basically defaulting on the payments for probably over a year. We think that if they sell it they'll probably get some $$$ back.  But they would only do this upon retiring, which means selling or walking away from the restaurant, which is probably not going to happen for who knows how long (until one of them gets injured or passes on I'd venture to guess). I don't think selling the restaurant would be that easy too because they're in a not-so-great and not-so-desirable area for a restaurant. They've talked about looking for cheap apartments, low-income housing near us, or *possibly* moving in with us esp if we get a bigger place (unlikely anytime soon) but who knows... we definitely don't want to be supporting them but I think my wife feels strongly the other way - that may change once we have our kid though.

It sucks when your parents don't plan well and you can see what's in-store. My wife always reminds me that her parents cannot plan for the life of them... it's pretty ridiculous.

Yes, I'll have to become an expert on finding out what they qualify for to stretch that budget.  For example, if they qualify for subsidized cells, then that takes $20/mo out of the picture.  They may also be able to get some pantry basics at the local food bank.  It's a moral dilemma for me, b/c I know they would be taking resources from people who really do need it and may not have made a lifetime of poor decisions.  Several of the low income senior places have "Time to Live Life Well" scrolled across the entryway, and it pisses me off.  More like, "screw up your life and then still come out better than most!"

Sorry to hear about your in-laws, it's really tough to have to worry about adults who refuse to do it on their own.

We downsized to a house half the size last year, and this was at least some part of the rationale.  Too many mooches who looked at all the spare bedrooms and figured we'd be their meal ticket!  Not anymore.  We still have 3 BR's, but it's the Master, the office, and the gym.  We can squeeze a blow up bed in the gym for emergencies, but the goal is to make it unwelcoming for the long term.  ;)

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #12 on: June 09, 2015, 01:57:27 PM »
Oh, OK, I see what you are saying.

You should look into whether if one spouse pre-deceases the other, whether the other will get increased social security benefits. I know for my mother if/when my father dies, her benefits will increase. This may change your calculations about what to do with the 200K or so that they may have. Also if they are willing to have it in stock funds, may be able to have a 4% withdrawal rate (8K a year), which may make a big difference if they choose senior housing which may be a safer bet.

Yes, this is certainly something to look into.  My MIL was so clueless, she insisted on making an appt and going to the SSA office in person to determine her benefits.  She called us to let us know she did it, and of course, we asked the big question - how much is your benefit?  She was like, oh, I don't know, I didn't write it down.  It was like $1,250 or $1,450, something like that.  The woman said she'd mail me a letter.  It's utterly maddening to deal with at times like that...

I do know that when my Dad passed away, my Mom received a marginal increase in her benefits, so I'm expecting the difference to not be much, which will certainly determine how we invest these dollars.  I know, every situation is different, so hopefully my expectations are wrong.

norabird

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #13 on: June 09, 2015, 02:21:04 PM »
Honestly I think the SS income is pretty good and should be doable. I have a monthly take home of around 1700 in NYC and I do okay. Could they resell the mobile home for a profit if they need to downsize/move into assisted living perhaps?

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #14 on: June 09, 2015, 02:43:00 PM »
Honestly I think the SS income is pretty good and should be doable. I have a monthly take home of around 1700 in NYC and I do okay. Could they resell the mobile home for a profit if they need to downsize/move into assisted living perhaps?

Thanks for touching on that point!  To many mustachians, this would be a very doable monthly budget.  My FIRE monthly expenses should be around $3K/mo on the high side, and we already live close to this number, and we live well.

They are currently living in one of the boroughs of NYC with an annual income of $60K gross, with an effective tax rate of 3%, so their net and gross are almost equal.  Yet they have never been able to make it work due mostly to foolish spending.  This is what scares hubby & I.

From my research on mobile homes, they don't retain value very well, and moving them is rather expensive.  If there is anything worth salvaging when they are done with it, we would check with the park and see if they would allow us to rent it out.  They would be able to qualify for Medicaid nursing home care when the time comes.

partgypsy

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #15 on: June 11, 2015, 06:17:48 AM »
I personally would not like to do a mobile home in Tx, because tornados. Yes most tornados don't reach that far south but it can happen, esp in nothern part. And with climate change most likely will be seeing more extreme weather events

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #16 on: June 11, 2015, 11:24:12 AM »
Do you deal with your in-laws or does your husband?  I would suggest your husband be the intermediary because (from an outsider's perspective) I bet that after a few months of dealing with you there will be much anger and loss of the relationship.  Even if your MIL is receptive to your help now I would expect that to quickly change based on the dripping with contempt way you refer to your in-laws. 

When everything is said and done they may net close $300k plus SS?  This is actually far better then most senior citizen's I know.  Of course it's not ideal and your brief snapshot lists numerous large mistakes they have made over the years....but if you want to be able to help them out be careful with the way you approach them.  A few misspoken words or a bad tone of voice could make them decide they can handle things themselves.  Then you'd be stuck with a bigger mess down the road a few years.

Zamboni

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #17 on: June 11, 2015, 02:31:07 PM »
I don't think the budget is that tight with the senior housing apt.  The bigger concern I have is how realistic that budget is. For example $200 for entertainment is a HUGE amount of money (especially since they already have the entertainment provided by cable as a separate line item).  But is it more or less than they spend?  And what about getting some new dresses or purses?  Manis and pedis? Same for the groceries.  $500 seems high to me bc I spend $300 on 3 people. But is $500 realistic?

Villanelle

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #18 on: June 11, 2015, 02:38:29 PM »
How is it that they can live in a mobil home, but if it is a regular home they need two bedrooms?  A mobile home seems like it would be smaller than a 1 bedroom home.

jeromedawg

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #19 on: June 11, 2015, 02:45:02 PM »
Definitely don't forget about senior discounts where applicable :)

And as far as cable, are they willing to just watch over-the-air or public broadcasting? Or if not, can they settle for the absolute lowest-tier of cable programming etc?


This sort of reminds me of the situation with my in-laws. They're both pushing 70 and haven't yet retired and continue to insist on working (they run a restaurant that doesn't do that well and they totally overpay their employees; and the employees take advantage of them on that too by being lazy and stepping all over them). They've had *many* opportunities that were squandered basically because they let others walk all over them and take advantage of them. They have the tendency to run up their credit cards and then incur late fees (this has gotten better but not that much) and we don't really know how much they actually have saved up because they hoard cash piles out of paranoia. My wife opened a Discover savings account for them to get some interest but anytime we talk about investing for them, they get all paranoid and think the government will take it away and that it's not worth it. They took a 30yr mortgage out on a home in 2004 and had it refinanced several years ago to where it's more affordable - before they were basically defaulting on the payments for probably over a year. We think that if they sell it they'll probably get some $$$ back.  But they would only do this upon retiring, which means selling or walking away from the restaurant, which is probably not going to happen for who knows how long (until one of them gets injured or passes on I'd venture to guess). I don't think selling the restaurant would be that easy too because they're in a not-so-great and not-so-desirable area for a restaurant. They've talked about looking for cheap apartments, low-income housing near us, or *possibly* moving in with us esp if we get a bigger place (unlikely anytime soon) but who knows... we definitely don't want to be supporting them but I think my wife feels strongly the other way - that may change once we have our kid though.

It sucks when your parents don't plan well and you can see what's in-store. My wife always reminds me that her parents cannot plan for the life of them... it's pretty ridiculous.

Yes, I'll have to become an expert on finding out what they qualify for to stretch that budget.  For example, if they qualify for subsidized cells, then that takes $20/mo out of the picture.  They may also be able to get some pantry basics at the local food bank.  It's a moral dilemma for me, b/c I know they would be taking resources from people who really do need it and may not have made a lifetime of poor decisions.  Several of the low income senior places have "Time to Live Life Well" scrolled across the entryway, and it pisses me off.  More like, "screw up your life and then still come out better than most!"

Sorry to hear about your in-laws, it's really tough to have to worry about adults who refuse to do it on their own.

We downsized to a house half the size last year, and this was at least some part of the rationale.  Too many mooches who looked at all the spare bedrooms and figured we'd be their meal ticket!  Not anymore.  We still have 3 BR's, but it's the Master, the office, and the gym.  We can squeeze a blow up bed in the gym for emergencies, but the goal is to make it unwelcoming for the long term.  ;)

Yea, but if you get too into it, finding deals for them might consume you. But I guess if you didn't love them you wouldn't be here trying to help them either :) I figure at some point most of us will have to make sacrifices for our parents whether or not we/they like it. I guess question is "what is sacrifice to you?" and that's different for everyone. There's definitely more of a burden on my wife to support her parents, so naturally I share some of that burden with her. I'm sure this is similar for other married couples especially.

My in-laws actually don't ask for much and they try to keep us away from discussions on finances. It's just that my wife is very concerned about them so a lot of the worries come from her concern (rather than them asking us for stuff). That doesn't excuse their poor decision-making in the past, and I think there are consequences of that poor decision-making that appears in subtle ways more as a side-effect. E.g. the biggest thing we 'helped' them with when they were in serious debt was loaning $10k to them not long after we were married. It wasn't really a bad hit to is but in principal that's a lot of $$$. They paid back half of it and we wrote off the rest because prior to that they were technically paying for my wife's car insurance and phone bills prior to getting married. This was long before any of us were much financially savvy. Anyway, other dumb things come up like them forgetting to pay a credit card and incurring late fees, and then asking my wife about it or to help fix it. Or rushing to distribute hundreds of copies of menu mailer that ended up having the wrong pricing and other typos, requiring our time to go up and help them fix it. It's all the 'small' things that come up as a result of dumb mistakes where they were too proud/embarrassed to ask others for help. Just victims of poor-planning, saying "yes" or "ok" to everything without checking, not asking for help when they should, and just lack general awareness.

« Last Edit: June 11, 2015, 02:48:31 PM by jplee3 »

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #20 on: June 11, 2015, 03:58:55 PM »
Wow, so much good feedback, where do I begin?

Tornadoes are certainly a concern, we weren't too far off from the ones that touched down here last month.  We were driving home in the middle of the storm, and watching those clouds trying to form funnels - wow.  Totally scary.  I'm not so sure that is a big factor, they would have to evacuate, and that's what insurance is for, right?  She'll go for the lowest deductible, I know her well.  ;)

Dripping with contempt, lol - yeah, a little bit.  ;)  They weren't parents of the year either and did a lot to hurt my hubby growing up, but it's all we got!  Rest assured that I do not address my MIL this way.  I try to lay it out factually, and keep it simple, b/c otherwise, she will get overwhelmed.  And she deals with both hubby & I, but when we talk, we talk all three of us together.  Ironically, I feel that he is sometimes too harsh with her, but he knows how she is, and I suspect a little forcefulness helps push her along, or else she'd never make a decision.  For the record, she has done many things wrong, but overall, I actually like her.  My FIL, he's a lost cause and everyone tolerates him, he's like a potted plant in the background.  Where my hubby has forgiven his mom, he has not and will not forgive his dad.

Should be close to $300K plus SSA, so yeah, they could be in far worse shape given how little they have planned for the future.  It's a totally different mindset, which is why we look at that $300K and think, it could go in a heartbeat.  If they decide on the mobile home for example, that $60K is a sunk cost.  No way will that be worth anywhere near that once they deliver it on site, but given their inability to budget, paying for it up front and giving them a little more freedom w/the monthly SSA will make things more comfortable.

The budget HOPEFULLY has some padding into it, but I'm not sure.  I created the budget to give them an idea, a comparison between the two options.  Complete with pie charts, b/c I really like Excel, and I want to make sure they really understand what they are doing.  It's not like they can change their mind and move back to NY and live in the basement apartment again if things don't work out.  My SIL has suggested providing additional funding monthly if necessary, but we are all hoping that it won't come to that.  They know how these two are as well, and they have similar concerns about spending.

I've been out grocery shopping w/them many times, and it's just a whole bunch of wastefulness.  Everything from name brand paper towels to the finest cut of filet mignon to individual bottled water, tea and sodas.  Then they cook big batches, but won't eat leftovers and if it's been in the fridge for 2-3 days, out to the trash it goes.  The take out is hysterical, and this habit isn't going to fly out here.  They both decide to order from a local pizzeria, and they each get a meatball sub.  The bell rings, and one of them shuffles upstairs, pays for the individual meal, then goes downstairs, and the other one comes up, and does the same thing. Poor delivery person!  That's another concern, they don't pool resources.  I get that many people don't and it works fine, but my FIL opted to retire early, so he gets a much smaller check than she will be getting.  But then they do activities together like eating, shopping, movies, etc, which they split 50/50 or pretty close to that.  So guess who runs out of cash and the other one holds it over their head?  They decided to stay together for financial reasons, yet their finances could be so much better if they were fair and held each other accountable.  I know, pipe dream!

So, the 2 BR low income units are roughly 800 sq ft.  Their 2 BR apt is about 1400 sq ft.  The largest single wide is a 3 BR, 2 Ba, almost 1,200 sq ft.  They each get their own BR, and then there's a spare room which will probably just be storage.  The apartment is very tight on closet space, they actually have a closet out on the balcony which won't be able to store things that need climate control.

I totally agree, I worry too much about them, I will probably run myself ragged trying to score deals and furnish the place as much as possible before their arrival, and I will be the type to help too much.  It's coded in my DNA, I think.  I also get a thrill from helping people score deals, some of my friends jokingly call me their personal shopper.  I could care less about buying stuff for myself (other than Vanguard), but I enjoy researching stuff and finding great deals for others.

Hubby does have to keep me in check when my mind wanders into all the things we can do to help.  We've already done a ton here, and we know that the elder care responsibility for them will fall largely on our shoulders, but they have to actually do a lot of the heavy lifting here too, or they might never figure it out on their own.  At the same time, we do have selfish reasons for helping.  My BIL's relationship is very strained w/his parents, so we know that there won't be much support there when the time comes.  Hubby & I are hoping that if we help them along a better path now, we won't be stuck cleaning up a mess down the line, or shouldering too much responsibility.

I hope I answered everyone!

GizmoTX

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #21 on: June 11, 2015, 04:56:39 PM »
I favor the senior apt over the mobile home. It sounds like there would be more social life & walkable options with the apt. Storms in TX are deadly & they'd need to vacate the mobile home -- does the community have an adequate shelter very nearby? Finally, the mobile home will completely lose its value over time yet be assessed annual property taxes. With an apt, there is more flexibility if assisted living is needed down the road.

snuggler

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #22 on: June 11, 2015, 05:09:11 PM »
I just wanted to pipe in to let you know that your in-laws are so lucky to have your help. You are really looking out for them and I can tell that you are working really hard to find a solution. Kudos to you.

frugaldrummer

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #23 on: June 11, 2015, 11:49:58 PM »
Just a few thoughts:
 - check to make sure that they are maximizing their social security benefits. You mentioned that FIL retired early, just make sure that now, he wouldn't get more money from taking the 50% spouse benefit based on MILs income. 

-Also, does MIL have to retire now? Given their spendthrift ways, working a couple years longer may pay off in higher SS  income for life.  Or perhaps one or both of them could find a low stress part time job?

- Your budget does not account for the extra $60k available if they rent an apartment instead of buying.  That could generate a SWR amount of  $2400 a year or $200 a month.  That would make the two budgets more comparable.  I'd vote for the apartment because of closer proximity to town and no maintenance surprises.

-

shadowmoss

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #24 on: June 12, 2015, 01:45:48 AM »
I vote for the apartment.  My parent's have lived in them for decades, and up until a couple of months ago when Mom moved out here she lived in one alone after Dad passed.  They have lived in them in 2 states, MO and TN.  Nice apartments, all of them.

I, and now Mom as well, live in a mobile home in a 55+ park.  If I had realized how bad of condition the one I led Mom to buy was in I would never have suggested it.  However, the mobiles here all go for $1K-$5K to purchase, and the lot rent goes up each year. 

There is a LOT of upkeep to a mobile.  Our family has owned several through the years.  Now that Mom can't do as much of the upkeep herself (she and my Dad were my original DIY'ers) she has to hire it done.  Even with using the guys who live in the park and make money doing things around there part time, it gets expensive.  Just as a start the roof needs to be coated every year.  Unless you have a park model with shingles.  Those have their own issues...

The apartment rent will tend to follow the resident's income.  This varies by state and complex, but will tend to be more forgiving in my experience.  Also, all maintenance will be handled by the complex (NOT so with the mobile).

Just advice worth what you paid for it.

Zamboni

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #25 on: June 12, 2015, 05:56:17 AM »
I'll chime one last time voting for the senior apt. Just seen too many seniors through my volunteer work and know that those in the apts are as a rule much, much better off in terms of living conditions. They also have more people around to help each other out because some of the seniors are quite caring and tend to keep an eye on each other in a neighborly way. Again, a trailer out in the stix is not a great idea imho.  I would not put my parents in one unless I lived right next door.

There tends to not be much lead time at all on tornado evacuation orders, which I'm sure you realize, and many people just ignore them, unfortunately.

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #26 on: June 12, 2015, 08:47:13 AM »
Just a few thoughts:
 - check to make sure that they are maximizing their social security benefits. You mentioned that FIL retired early, just make sure that now, he wouldn't get more money from taking the 50% spouse benefit based on MILs income. 

-Also, does MIL have to retire now? Given their spendthrift ways, working a couple years longer may pay off in higher SS  income for life.  Or perhaps one or both of them could find a low stress part time job?

- Your budget does not account for the extra $60k available if they rent an apartment instead of buying.  That could generate a SWR amount of  $2400 a year or $200 a month.  That would make the two budgets more comparable.  I'd vote for the apartment because of closer proximity to town and no maintenance surprises.

-

I had no idea about the spousal income changing.  I think once we do get them down here and settled in, we'll need to take them to the SSA office, and see what we can do to maximize their income.  My MIL has Lupus and is in poor shape, so disability may even be an option, I don't know.

I really hope that the move here will be life-changing, especially for her.  Having access to a pool and physical therapy type gym equipment may make her more active, which could help her lose some excess weight, thus relieving the stress on her legs and feet.  She's had several fractures in her feet, just had a hip replaced early this year, and if something doesn't give, she may need the other hip and possibly both knees replaced too.  Medical bills eating into their cash is a big concern, gotta get the best medigap plan for her specific needs.

My MIL has decided that she is retiring the day after she qualifies for SSA, which would be November 1st.  I asked her to get that in writing, b/c the difference between retiring at 65 and 66 to SSA would mean almost $200/mo difference.  I hope she listens to me on that point.  I do know that if she stays another month, and retires on December 1st, she would get an extra $500/year, and even that is not enough to motivate her.  Stick a fork in her, she is done.

I suspect that if my MIL can get a seated, low stress part time job once she is settled, she probably will do it, just to get away from FIL.  But she is a social butterfly, she's going to do great whichever option she chooses.  FIL could be trouble in tight spaces, he makes enemies rather easily.

My FIL is an accountant (stop laughing!), and he could easily pick up work during tax season.  I've suggested it in the past, but it's clear he refuses to work.  He's the king of entitled behavior.  I've been w/hubby for 20 years, and he's worked maybe 6 of those years.  He's walked away from secure jobs w/pensions b/c a co-worker was mean to him.  Lost cause there.

Excellent point about the extra $60K, that does normalize both budgets, especially if you look forward to 4 years from now, when the lot rent will eat up another $200/mo.

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #27 on: June 12, 2015, 08:50:43 AM »
In case anyone is interested, here are the potential options:

Mobile Home Community:
http://www.robertscommunities.com/oak-ranch/

Low Income closest to me & shopping:
http://www.merrittcommunities.com/leanderstation/leander-tx-apartments.asp

Low Income - units a bit older, still pretty close to me, but they include cable in the rent, so best value:
http://www.merrittcommunities.com/sangabriel/georgetown-tx-apartments.asp

norabird

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #28 on: June 12, 2015, 10:45:19 AM »
The Leander ones are really very nice! (Not that the georgetown ones are bad).

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #29 on: June 12, 2015, 10:55:13 AM »
The Leander ones are really very nice! (Not that the georgetown ones are bad).

Georgetown has historically been an area where retirees live, and it is a lovely place.  The company that created these communities - Georgetown was their first attempt.  Ironically, what my MIL likes least about this place is that its located next to your stereotypical trailer park!

Leander Station is one of the newest ones around, and I like that the train to Austin stops about a mile away.  A mega-supermarket is practically next door, but everything is bigger in TX, so I suspect that a woman in my MIL's condition would find crossing the parking lot to be a challenge.  If they do the apartment they have to forego the car, but lots of people have cars there, so hopefully they make a few friends and cover someone's lunch out every so often in exchange for rides.  And of course, we are less than 5 miles away, so we would help out too.

My MIL is on the waiting list for all these places, but lately, the Georgetown one is the one with vacancies coming up.  Leander Station is a hot commodity right now...

TaxChick

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #30 on: June 12, 2015, 04:49:30 PM »
I agree with several other posters that an apartment would be much better than the mobile home park. 
      The mobile home will decrease in value very quickly.
      The maintenance will most likely become "your problem."
      Given the in-laws history, you would have to worry about unknown refinances, etc.
      As they get older, the apartment will most likely be better suited to their physical issues.
      The apartments are closer to you. This will become important when you have to run over multiple times per day.

      They are very lucky to have you. They may take you for granted, but kudos to you for doing the right thing.

Hunny156

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #31 on: June 15, 2015, 09:59:58 AM »
Thank you everyone, for all the great advice!  MIL should be coming to visit at the end of August to make her decision.  I will make sure to bring up all the points brought up here, and hopefully she will decide on the apartment option.  Long term, it does make the most sense.  The apartment will be a lot smaller, but that could be a good thing, limit the amount of consumerist stuff they can buy and store.  Not to mention, it will get them outside of the apartment, instead of staying in all the time and watching TV.  The apartments do have lots of activities planned, and that should keep them busy on site or nearby, instead of having a car and expenses from that as well.

I know she'll balk at the perception of a tighter budget, but that should just be more motivation to trim expenses and/or get a part time job to help out.  I'll keep everyone posted!

bb11

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #32 on: June 29, 2015, 02:20:15 PM »
I'd go for the apartments, seems like a much friendlier situation for seniors.

I also don't think the budget is that tight? Seems like a pretty standard one for seniors. Most people don't have a lot of money saved, so SS is it. The question is just can they stick to it? (My parents will be having the same problem I'm sure)

TrMama

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #33 on: June 29, 2015, 03:32:06 PM »
we know that the elder care responsibility for them will fall largely on our shoulders,

^^ This is by far the biggest reason to move them into the apartment that's closest to you. If you present the mobile home in the sticks as a viable option, you're basically giving yourself a commute to that place for the next decade. Keep them close to you so you can easily check on them.

As much as possible, set up their life so they can "age in place". The senior's apartment is a much better choice in this regard.

Axecleaver

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #34 on: June 30, 2015, 08:06:10 AM »
Survivor benefits are somewhat complex, but there's a SSA page here which describes them: http://www.ssa.gov/planners/survivors/onyourown5.html

There's also a good page here from NASI.org with some examples.
https://www.nasi.org/learn/socialsecurity/widowed-spouses

Basically, the surviving spouse gets the higher of either their own benefits, or their spouse's benefits, but cannot receive both. You should model the scenario if your MIL dies first, or your FIL dies first to see what would happen.

lizzzi

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Re: Case Study/Advice Needed: Financially inept in-laws about to retire
« Reply #35 on: June 30, 2015, 09:28:05 AM »
As a nurse with 44 years of experience--23 years of that spent trekking the wilds as a public health and community health nurse--I would hands-down vote for the apartments, not the mobile home. +1000 to the reasons others have given upthread.

I was interested to see that you're looking at Georgetown, TX. I was a New Yorker all those years, with in-laws who were native Texans, but hadn't lived there for ages...and they came back to TX and retired to Georgetown. What a nice place to live.