This is a sequel to Anti-Mustachian Mother in Law:
http://forum.mrmoneymustache.com/ask-a-mustachian/non-mustachian-mother-in-lawI'm open to suggestions on how to deal my mother-in-law. Here is my dilemma: While her net worth is about $ 1.3 million, she insists on living in a condo worth $1.25 million. She is 75 years old, has a mortgage for $275K at 4.6% and a HELOC for $25K at 4%. She has about $350K in cash, investments and retirement. Her ridiculous monthly expenses are $ 7,700 ($ 3,800 of which are her mortgage, HELOC and HOA) and she has income from SS, pensions and her work of about $ 6,500.
The consensus from the original thread is that she should deficit spend and that she will make it to the end of her life without running out of money. Here is the question: How should she deficit spend?
Should she spend her savings and retirement first? If so, how much is safe?
Is borrowing from a HELOC (Variable rate currently 4%) better than spending her savings and retirement?
Or is a reverse mortgage a better option than either of those?
The only other thing to add is that she will retire within a few years and lose about $1,300 a month of her income making her deficit closer to $2,500 a month. My wife would like her to work less and travel more while she still can. Thanks.