Author Topic: how do you save when you have to support your parents financially?  (Read 6977 times)

tryingtosave

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Just wondering if anyone else is in the same situation as I am. Having to support my parents and the in-laws financially. With so much money going to them every month, seems like itíll take forever to save enough to retire.

At a high level, we are immigrants. Both our parents moved us here to the US when we were young to give us a better life. In return, they worked jobs that have no retirement plan/401k/etc. They also did not save for retirement as they wanted to give us a good life at the time. Plus the culture is that your kids will support you when you retire.

Fast forward to now, none of them are working anymore. SS is very minimal, medical insurance is very high, no other source of income so everything is on us. My wife and I are very lucky to have good jobs, but we are technically supporting 8 people(2 are our kids). Every time I do the numbers, it seems like I would be working for the rest of my life. And with "retired" adults going out everyday, expenses seem to only get higher. Even though they are very reasonable and are just doing their normal day to day stuff. I just don't see an end to all these spending and watching my would be savings going out the door. Well I know there is an end but its not one that anyone would wish for.

swick

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Re: how do you save when you have to support your parents financially?
« Reply #1 on: October 21, 2016, 08:01:00 AM »
Welcome to the forums :)

It is a bit of a tough situation. If  you are committed to supporting them you have to get creative as well accepting the fact you may not be able to retire early, but you have your family around and that might be worth it to you (if not, that is a different problem) So it becomes more about crafting the best life you can.

I would highly encourage you to do a case study, the community is pretty good about helping problem solve or see areas you may be able to reduce expenses in. http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/

You don't mention if any of the parents live with you? If so, do you have built in child-care? Do they contribute to the household in other ways that you would have to pay for (this helps with perspective) Do they have skills and talents that they are or could be using more to help the overall situation? What is your relationship like, what expectations do every member of the family have? If your parents aren't living with you, would it be something to look at to reduce costs?  There are lots of options to explore, some more info would help :)

obstinate

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Re: how do you save when you have to support your parents financially?
« Reply #2 on: October 21, 2016, 08:16:50 AM »
Fundamentally, if you don't save a certain fraction of your infome, you will not retire early. You need to find a way to reduce expenses or increase your income.

Why is medical insurance high for elderly parents? Aren't they using Medicare? Why do their expenses go up? Even if you're supporting them, you should decide on a fixed stipend that seems reasonable and vary it only with inflation/CPI.

You can also look into things like having them move in with you.

LouLou

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Re: how do you save when you have to support your parents financially?
« Reply #3 on: October 21, 2016, 08:54:41 AM »
What do you mean they go out everyday?

We support my mother, but she lives with us and contributes to the household.  Really, it is a fair exchange (especially childcare).  If she has a medical event where she can no longer contribute, we will just be supporting her

We did make it abundantly clear what the terms were though.  We give her a set amount of spending money every month, and will not give a penny more.  If she wants more money or live on her own, she is free to go back to work.  Our job is not to provide the retirement of her dreams.  If you want to support all of your parents, it has to be in your terms and not theirs.  And you should not sacrifice your children's future (or yours).

I agree to get creative. It may be less expensive for all of you to live in a house with many bedrooms and having communal groceries, rather than the two of you supporting a bunch of different households. (Try to find a house where you can have a separate space to retreat to).  The parents can have specific tasks that reduce costs.  One parent can be in charge of going to farmer's markets towards the end of the day to get tons of cheap groceries that the farmers basically give away.  Other parents can cook meals so you and your spouse don't have to.  A parent can do all of the laundry, etc. 

In my view, you and your spouse can be in charge of bringing in money to the household.  Your parents should really be handling everything else, within their abilities.  It can actually be pretty great if the relationship works right.  My husband and I get the benefits of two incomes AND a stay-at-home parent.  I haven't done my laundry in ages, and we never have to worry about finding a babysitter!

ooeei

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Re: how do you save when you have to support your parents financially?
« Reply #4 on: October 21, 2016, 09:14:25 AM »
Now that you're supporting them, you have to assume somewhat of a parental or "in charge" role with them.  I know this is especially hard for many immigrant families, where the culture dictates that the elders are in charge.  The fact of the matter is, your life in America is largely dependent on the amount of money you have.  They may be pissed if you draw boundaries, and start talking about respect and everything they did for you to guilt trip you.  You control the input, but if you let someone else (who may not have the same values or long term thinking as you) control the output, you may just be shoveling water out of a sinking ship.

From their perspective, they feel like spending all the money you earn is fine because that's what their parents did to them, and their parents to them, and on up the line.  The problem with that is, that will end up with your kids having to support you someday.  It's also frustrating to see someone else spending your money on things you wouldn't spend it on.  It's like loaning a friend money for rent one month so they don't get evicted, then seeing them post a picture of a big fancy sushi dinner downtown a week later. 

You have to set boundaries.  You are in charge now.  Your house, your rules (or in this case, your money).  They don't get to dictate the terms of how you support them.  They may be used to the culture of where they came from, where the older folks call the shots no matter what, but that's not how America operates for the most part.  Hinging your retirement on the next generation is risky, and in a way selfish.  You're the transition generation, so it's going to be extra hard for you (and maybe your kids).  You get the costs of the old system, and none of the benefits.  You have to set limits on those costs.

When my girlfriend and I first started dating she mentioned someday she'd like to support her parents, since they did so for her grandparents, they're immigrants as well.  She has since changed her mind after seeing them constantly spending money they don't have on stupid stuff while we live frugally.  Her dad works 10 hours a week for just over minimum wage, his health is declining and he probably won't be working there 3 years from now.  He just bought a brand new car for around $30,000.  My girlfriend has been driving the same car since 2009, and has no plans of upgrading anytime soon.  They buy giant bulk items at Costco and throw 50+% of them away, they just like buying them.  The other day they gave us a huge box of granola bars because they bought it to try and he didn't like them (who buys 50 granola bars without trying them?).   They're constantly buying new reusable water bottles, random DIY supplies they don't use, all sorts of stuff.  Before we met, my girlfriend took them out to $200 worth of sushi about once a month when she'd visit them because she felt like it was her duty.  That has stopped as well.

Her grandparents are similar.  They just don't understand money very well.  To them, renting is throwing money away, even if you're only living somewhere a year.  They get full time care from their daughters, and refused to move with one of them to her new city if she got a rental because of how stupid they thought it was.  She bought a house.
« Last Edit: October 21, 2016, 09:17:38 AM by ooeei »

yachi

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Re: how do you save when you have to support your parents financially?
« Reply #5 on: October 21, 2016, 09:50:22 AM »
I just want to highlight these things:

itíll take forever to save enough to retire...
Plus the culture is that your kids will support you when you retire.


Your parents will likely say not to worry about retirement since your kids will support you, but whichever generation in your family breaks from tradition in regards to retirement is going to be trapped between supporting parents or saving for retirement.

I second the option of writing a case study to get more detailed responses on where to trim expenses.  I would use caution in automatically excusing children supporting parents as 'the culture'.  There are likely many social behaviors and customs in your parent's culture that counterbalanced the financial support you are providing.  Childcare, household chores, meal preparation, living under one roof, grocery shopping, and networking within the community are all things that might be expected of supported parents in the culture your parents came from.  If they are not providing the counterbalancing social behaviors because they are inconvenient, then you really are not living in the same culture.

Not all cultures have evolved in a market where there is an ability to build up wealth using investments to eventually support retirement.  Mustachianism is something of a counter-cultural movement anyway where we break from the typical cultural norm of spending nearly everything for convenience.  In some cultures, both within and outside of the US, the cultural norm is to spend everything that's available.  When nothing is saved, it results in feast and famine cycles that families need to adjust to.

AMandM

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Re: how do you save when you have to support your parents financially?
« Reply #6 on: October 21, 2016, 10:45:52 AM »
I'm also the daughter of an immigrant, who grew up with my grandmother living with us, so I'm very sympathetic to the expectation that children will take care of elderly parents. My view, probably not a popular one around here, is that you may simply have to give up the idea that you "should" retire early.  It sounds like your parents and in-laws had normal working lives, didn't retire early, and spent their earnings to give their children a better life.  If you work all your adult life, supporting them, and still retire with enough savings to support yourself, you're way ahead of them.

This is not to suggest that you should be an infinite ATM for your parents.  I agree with the suggestions of giving them a fixed amount each month, of finding ways to reduce expenses, of possibly combining households.  I don't think it's your business to micromanage their spending, though, much less to think of yourself as in charge of them.

You don't mention any siblings--are you and your wife the only support for both sets of parents? 

Mel70

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Re: how do you save when you have to support your parents financially?
« Reply #7 on: October 21, 2016, 10:46:58 AM »
Just wondering if anyone else is in the same situation as I am. Having to support my parents and the in-laws financially. With so much money going to them every month, seems like itíll take forever to save enough to retire.

At a high level, we are immigrants. Both our parents moved us here to the US when we were young to give us a better life. In return, they worked jobs that have no retirement plan/401k/etc. They also did not save for retirement as they wanted to give us a good life at the time. Plus the culture is that your kids will support you when you retire.

Fast forward to now, none of them are working anymore. SS is very minimal, medical insurance is very high, no other source of income so everything is on us. My wife and I are very lucky to have good jobs, but we are technically supporting 8 people(2 are our kids). Every time I do the numbers, it seems like I would be working for the rest of my life. And with "retired" adults going out everyday, expenses seem to only get higher. Even though they are very reasonable and are just doing their normal day to day stuff. I just don't see an end to all these spending and watching my would be savings going out the door. Well I know there is an end but its not one that anyone would wish for.

Our family is kind of in a similar situation. Same cultural background, etc. However, in order to maintain our financial situation balanced, and to provide for our children without burdening with our own retirement, we have assigned a monthly stipend. If there is a large or unexpected expense or medical bill, we make the exception. It is difficult to talk to your IL or parents about money. In our case, we had to convince them to buy a town home they could actually pay for, rather than the larger, fancier home they wanted us to finance for them. They were angry at the time, but oh well. They also wanted a new car because the one they have was "old." It worked perfectly well. We had older cars at the time. We said no, sorry. We have to think about our children. Mind you, they would come to our house and criticize our older appliances, offering to pay for new ones (they have credit card debt, don't even know what interest rate they are paying), etc.

When you say they go out every day and expenses get higher, my impression is that you just cover their expenses, without talking about sticking to a budget, etc. This might have to change. I agree with other posts, it will be a good idea to provide information for a case study and see how you can improve your financial situation in a way that fits your family obligations but also meet your personal goals. Good luck! 

mm1970

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Re: how do you save when you have to support your parents financially?
« Reply #8 on: October 21, 2016, 11:02:26 AM »
Just wondering if anyone else is in the same situation as I am. Having to support my parents and the in-laws financially. With so much money going to them every month, seems like itíll take forever to save enough to retire.

At a high level, we are immigrants. Both our parents moved us here to the US when we were young to give us a better life. In return, they worked jobs that have no retirement plan/401k/etc. They also did not save for retirement as they wanted to give us a good life at the time. Plus the culture is that your kids will support you when you retire.

Fast forward to now, none of them are working anymore. SS is very minimal, medical insurance is very high, no other source of income so everything is on us. My wife and I are very lucky to have good jobs, but we are technically supporting 8 people(2 are our kids). Every time I do the numbers, it seems like I would be working for the rest of my life. And with "retired" adults going out everyday, expenses seem to only get higher. Even though they are very reasonable and are just doing their normal day to day stuff. I just don't see an end to all these spending and watching my would be savings going out the door. Well I know there is an end but its not one that anyone would wish for.

I agree on a case study.
How old are you?
How old are the parents?

What is the living situation?

How much do you give them?

In other words, how many years will you have to support 4 other people, how much money do you give them, what kind of lifestyle do they lead, etc.

I have friends from China, and learned a decade ago or so that they were sending their parents money every month, because that's what you do.  My friend's parents moved to the US in the 1980s.  So, grandparents stayed in China.  They didn't LIVE in one house, but sent money.

Likewise, being "American" now, my friend and her sister both moved out of state. So, their parents didn't "live" with them, but they both sent money.

They sent a limited amount of money, though, because the parents liked to gamble.


Unfortunately you are in the middle.  Unless you start cranking on income and savings, you aren't going to retire early.  You need to limit the amount of support you give the parents, unless you want to be a burden on your own children.  I'm not going to judge which is "right" - multiple generation households vs American style "don't burden your kids".  Benefits to both.

yachi

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Re: how do you save when you have to support your parents financially?
« Reply #9 on: October 21, 2016, 11:05:31 AM »
What happens taxwise in these situations?  Do you get to name parents as dependents?  Do they have to count your support as income?

tryingtosave

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Re: how do you save when you have to support your parents financially?
« Reply #10 on: October 21, 2016, 11:19:43 AM »
thanks for all the feedbacks. Yes we know being the transition generation would be tough for us but I definitely don't want my kids to have to support us or go through what I am trying to work through now if I can help it.

Without going through all the details. Not 65 yet so can't use Medicare. Cobra is like 800 a month for one.

My parents are helping to watch my youngest one in return for the cost of daycare. There goes 2k a month but its a wash since I have to pay that either way.

The older kid is in daycare, so there goes some more money.

They have worked hard their whole life so they want to enjoy their retirement. I agree. So this includes having coffee out every morning to socialize with other retires and get some exercise in by walking around. Eating out every weekend(nothing fancy but not something I would normally do). Cost is not significant but definitely "throwing away" some money here

They love to travel and go on vacation 2-3 times a year. I benefitted from that as a kid so I am not going to take that away from them. There goes some more money.

They do have there own places. Luckily no mortgage so just paying for day to day stuff. I don't really want to live together as they are very strong traditional minded parents where they are 100% right all the time and everything we are doing the "American" way is wrong. So I don't think I can deal with that every single day in the same house. I know, financially it would make sense to all live together but I think it will ruin the relationship very quickly.

Trimming cost is not an option for them since they want to continue the lifestyle before they stopped working. And they don't see anything wrong with that. Especially when that's how the previous generations and their friends and family did it. Also, they know that we can afford it. Whenever we disagree, there comes the guilt trip. Constantly reminding my kids to never do that, be good to your parents. etc etc. now its 6 mouths against 2.

Overall, its not the problem of supporting them. Its just the fact that all these could have been savings toward retirement. Its wrong to think like this but if it wasn't for this. I would be able to retire much earlier without these. Then again, it could be worst.

phred

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Re: how do you save when you have to support your parents financially?
« Reply #11 on: October 21, 2016, 11:33:42 AM »
While you are able to support them now, if you don't start savings now, you may not be able to support them later on.  Also, what will you do if laid-off or disabled?

   You really have no choice but to start taking at least 10% off the top and squirreling it away.

   Do the parents have anything they won't miss that you can convert to money?  Anything of theirs you can take back for a refund?  Yard sale?

   Not wanting to seem hostile, but would it be cheaper to move them back to the Old Country?  Sometimes the elderly dream of returning "home".

   $2,000 a month for child care?  Egad!  In my immigrant culture the Na-na is both proud and happy to do it willingly without submitting an invoice.

Goldielocks

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Re: how do you save when you have to support your parents financially?
« Reply #12 on: October 21, 2016, 11:48:46 AM »
Okay,  you need a bit of control, for certain.

I would take the retirement savings off the top, then deposit the remainder into a checking account for a month or two, while making a budget. -- starting with the $ deposited.

Sit parents down and show the budget.  Be prepared to pull up the actual bank statement that shows the amount deposited is real.   Sounds like they are mentally healthy, so that is good.

Ask the what they want money cut on -- your house?  car?  Daycare for oldest?  clothing for kids?  etc.   you get the picture.  Have them decide for themselves what a reasonable amount is, and make a fixed $ transfer to them for that amount.

ooeei

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Re: how do you save when you have to support your parents financially?
« Reply #13 on: October 21, 2016, 11:54:38 AM »
They have worked hard their whole life so they want to enjoy their retirement. I agree. So this includes having coffee out every morning to socialize with other retires and get some exercise in by walking around. Eating out every weekend(nothing fancy but not something I would normally do). Cost is not significant but definitely "throwing away" some money here

They love to travel and go on vacation 2-3 times a year. I benefitted from that as a kid so I am not going to take that away from them. There goes some more money.

I get that they want to enjoy their retirement, but if you let them spend all of your money, and you don't want your kids supporting you, how is your retirement going to look?  I vote heartily on the fixed amount group. 

Quote
Trimming cost is not an option for them since they want to continue the lifestyle before they stopped working. And they don't see anything wrong with that. Especially when that's how the previous generations and their friends and family did it. Also, they know that we can afford it. Whenever we disagree, there comes the guilt trip. Constantly reminding my kids to never do that, be good to your parents. etc etc. now its 6 mouths against 2.

It is an option, they just won't like it.  It's like when your kids want a candy bar at the store, or the latest greatest gadget every 2-3 months.  You have to tell them no, even if they get mad about it.  "BUT BILLY'S MOM GOT HIM THE LATEST IPAD!  I WOULD GET IT FOR MY KIDS IF I LOVED THEM!"  I know it's not easy, but you have to move past the guilt trip affecting you, or resign to the fact that you're a grown parent who's not in control of your own life. 

They also shouldn't know what you can/can't "afford."  To them "afford" means you won't go broke doing it.  Your salaries and expenses are your business.  Make up something you're saving up for (kids' college?), or a bill that's increasing if you have to.  You've got to stand up to them at some point, and remind them that you're not in the old country where everyone lived together and the old people spent the young people's money.  Maybe guilt trip THEM a little about how you don't want to put your kids in this same situation, so you're saving for them.

Additionally, if they're under 65, there's no way you should be financing their dining out and vacations (or anything else, honestly).  They could reasonably live another 30-40 years.  I'm fairly sure supporting your parents for 40 years wasn't tradition in the old country.  They're retiring early, and spending your early retirement money on coffee and vacations.  Pick an amount to give them that will cover BASICS.  That means a decent place to stay, a few hundred for groceries, and maybe a little bit extra for transport and utilities.  Let them finance the new cars, vacations, and weekly restaurant trips with a part time job if it's so important to them.  If they bail on babysitting, you can get daycare for the same cost anyway.  Personally I think it'd be better if you just gave them enough to help with the basics instead of covering them completely, but it doesn't sound like you are up for that yet.

Okay,  you need a bit of control, for certain.

I would take the retirement savings off the top, then deposit the remainder into a checking account for a month or two, while making a budget. -- starting with the $ deposited.

Sit parents down and show the budget.  Be prepared to pull up the actual bank statement that shows the amount deposited is real.   Sounds like they are mentally healthy, so that is good.

Ask the what they want money cut on -- your house?  car?  Daycare for oldest?  clothing for kids?  etc.   you get the picture.  Have them decide for themselves what a reasonable amount is, and make a fixed $ transfer to them for that amount.

This is an interesting idea, but I'd be hesitant to get them MORE involved in the finances, as what if they find something to cut OP doesn't want to?  It's not their decision, he or she is being very generous by giving them anything.   
« Last Edit: October 21, 2016, 12:03:04 PM by ooeei »

MrMoogle

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Re: how do you save when you have to support your parents financially?
« Reply #14 on: October 21, 2016, 11:56:30 AM »
You are saving for normal retirement right?  Even if it's not early retirement?
In the future, you could be retirement age, and both sets of parents could still be quite healthy.  What happens then?  You work until 80 so they can have their retirement?  Then you die a few days after they do?

Are they disabled?  How are they retired before 65, but completely relying on you to fund it?

How much $$ are you giving them each year per person?  Where are you living?

This sounds so scary to me, I hope you are taking care of yourself and not just your parents.

Goldielocks

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Re: how do you save when you have to support your parents financially?
« Reply #15 on: October 21, 2016, 11:57:37 AM »
Yeah,  it's a risk...  but it sounds like they are wholly in the OP's pocket now, and not caring about what impact it has, and the OP does not push back.   

I am also very good with using numbers to get what I want (statistics and lies, and all of that)...  so that is how I would slant the budget...

Captain FIRE

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Re: how do you save when you have to support your parents financially?
« Reply #16 on: October 21, 2016, 11:59:50 AM »
What is the game plan when you no longer need daycare?  Is the expectation that you'll keep giving them $2k a month?
On the flip side, why don't they also watch the older kid?  Even if you pay them, if the money goes their credit card debt (unlikely, but still), that at least gets them further ahead and you are in the same position.

ooeei

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Re: how do you save when you have to support your parents financially?
« Reply #17 on: October 21, 2016, 12:00:42 PM »
Yeah,  it's a risk...  but it sounds like they are wholly in the OP's pocket now, and not caring about what impact it has, and the OP does not push back.   

I am also very good with using numbers to get what I want (statistics and lies, and all of that)...  so that is how I would slant the budget...

Well it's certainly the less confrontational option, it'd just be too risky to me that they'd find a way around it.  Distancing them from the finances makes them less informed, and gives OP the advantage.  It also helps set a boundary that he doesn't have to explain everything in detail to them because it's not their call. 

If OP isn't able to set that boundary, your way is certainly better than what's currently going on.

doneby35

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Re: how do you save when you have to support your parents financially?
« Reply #18 on: October 21, 2016, 12:05:01 PM »
This is actually tricky. Where I come from, there is no such thing as retirement, let alone early retirement. You just work until you die, no matter how hard core of a saver you are.
I support my parents financially, they are over 65, no SS, no medicare, no savings, no nothing (families living in 3rd world countries do not have these luxuries).
There is really nothing I can do about it, it is what it is. You can't just tell your parents you're going to stop because in America it's expected not to support your parents, however you can tell them that they do not need their 2-3 vacations/year since you are the one supporting them. As long as they have a place to stay (and you said they are mortgage free) and have enough to pay for bills and groceries and health insurance, they should be fine.
You also mentioned they are not 65 yet, why not talk to them into getting some part time jobs to bring in a little more income?

ooeei

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Re: how do you save when you have to support your parents financially?
« Reply #19 on: October 21, 2016, 12:06:41 PM »
You are saving for normal retirement right?  Even if it's not early retirement?
In the future, you could be retirement age, and both sets of parents could still be quite healthy.  What happens then?  You work until 80 so they can have their retirement?  Then you die a few days after they do?

Are they disabled?  How are they retired before 65, but completely relying on you to fund it?

How much $$ are you giving them each year per person?  Where are you living?

This sounds so scary to me, I hope you are taking care of yourself and not just your parents.

By that point OP's children will be working to support all of them.  That's the traditional idea anyway.  Then again, traditionally I don't think people stopped working 30+ years before they expected to die.  They also didn't traditionally live in 3 different houses.  OP is paying their bills, but as mentioned earlier in the thread, doesn't get the typical benefit of a live in cook, cleaner, and babysitter.

My girlfriend's parents and grandparents used to live together, and split up recently.  I think my GF's dad was fed up with being nearly 70 years old and not the head of his own house. 
« Last Edit: October 21, 2016, 12:08:38 PM by ooeei »

MrMoogle

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Re: how do you save when you have to support your parents financially?
« Reply #20 on: October 21, 2016, 12:12:28 PM »
You are saving for normal retirement right?  Even if it's not early retirement?
In the future, you could be retirement age, and both sets of parents could still be quite healthy.  What happens then?  You work until 80 so they can have their retirement?  Then you die a few days after they do?

Are they disabled?  How are they retired before 65, but completely relying on you to fund it?

How much $$ are you giving them each year per person?  Where are you living?

This sounds so scary to me, I hope you are taking care of yourself and not just your parents.

By that point OP's children will be working to support all of them.  That's the traditional idea anyway.  Then again, traditionally I don't think people stopped working 30+ years before they expected to die.  They also didn't traditionally live in 3 different houses.  OP is paying their bills, but as mentioned earlier in the thread, doesn't get the typical benefit of a live in cook, cleaner, and babysitter.

My girlfriend's parents and grandparents used to live together, and split up recently.  I think my GF's dad was fed up with being nearly 70 years old and not the head of his own house. 

OP said:
Yes we know being the transition generation would be tough for us but I definitely don't want my kids to have to support us or go through what I am trying to work through now if I can help it.
so he/she doesn't want that.  And can a worker support two generations and not just one?  I'd imagine supporting 12 retired people (8 grandparents and 4 parents of a couple) would be a bit rough to do with 2 workers.

CloserToFree

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Re: how do you save when you have to support your parents financially?
« Reply #21 on: October 21, 2016, 12:16:28 PM »
This sounds like such a challenging situation, OP.  I've been through a similar period with one of my parents and can see how hard it must feel to push back on any of this, because they're your parents (or in-laws) and you love them and want them to have a good life, not to mention the complexity of the cultural expectations at play.  I think it's key, though, that you do some serious thinking about what kind of life you want to live -- and model for your kids.  Yes, the parents/ILs "want" to go out for coffee, meals, etc. and lead a certain level of lifestyle...but is it really worth it to you and your spouse to live the next 10-30+ years being controlled by their wants and needs?  What about YOU and YOUR future (and marriage, and kids...)? 

I agree with the posters who have suggested giving only a set (and reasonable) amount via a stipend, which they then need to determine how to spend in line with their wants and needs. Maybe if faced with the hard numbers and difficult choices, they might decide to, for example, sell their house/apt and move to a less expensive one so they can spend any excess on their lifestyle.  And also reasonable to ask for more help (additional childcare, help with meals/cleaning/errands, etc.) in return.  Or make the financial assistance an explicitly temporary thing ("this is just until you qualify for SS/Medicare...").

I won't pretend that it's easy to draw these boundaries, but there are loving ways to have the difficult conversations.  The world they grew up in is different from the one your kids will grow up in.  In short, try not to let yourself be financially enslaved by a well-meaning but enabling mindset about the lifestyle your parents/ILs "deserve."  Hopefully you'll figure out a happy medium that gives you guys a chance of retirement while also making you feel good about fulfilling your perceived family duties.  Good luck and keep us posted!

The_Dude

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Re: how do you save when you have to support your parents financially?
« Reply #22 on: October 21, 2016, 03:29:18 PM »
They have worked hard their whole life so they want to enjoy their retirement. I agree.

They love to travel and go on vacation 2-3 times a year. I benefited from that as a kid so I am not going to take that away from them.

I don't really want to live together as they are very strong traditional minded parents where they are 100% right all the time and everything we are doing the "American" way is wrong.

Trimming cost is not an option for them since they want to continue the lifestyle before they stopped working.

If you are truly looking for advice rather than empathy or ranting then lets review a few things:
  • Parents are between 62 and 65 years old.  Given that they retired before 65 or the FRA they retired early.
  • Have zero retirement savings.  This doesn't automatically mean that it is due to raising kids.  It probably also means they are consumers who spent every dollar they earned.
  • Trimming costs aren't an option.  Same parents who spent every dollar they earned aren't willing to cut back their lifestyle.  You agree with this.

You seem to resent the fact you are expected to pay for your parent's early retirement but agree that you should do it.  I think you need to first figure out what you really believe and come to some sort of understanding with yourself.  It sounds like the parental support is the 3rd rail of your finances so that leaves control only over your own spending and income.  You have already said you have good jobs so I'll assume income is efficiently maximized.  That leaves just your own expenses.  If you are not saving a minimum of 15% (the minimum for a college educated person to retire at 65 with typical retirement portfolio) then you need to cut back your own expenses until you do. 

I don't know the culture or country you are originally from but it sure sounds like your parents are wanting their cake and eating it too by picking and choosing American or homeland cultural items as they see fit (or benefit from).  These sound a lot like Americans: no savings, eating out a lot, 2-3 destination vacations a year, nuclear family living quarters, retirement at 60-62, etc. compared to the only traditional homeland sounding activity is support kids growing up and then kids support their parents. 

The cultures I've been exposed to that still heavily focus on pouring all family resources into the kids typically still saving for the future, living together in larger familial dwellings, home cooked meals pretty much always etc.  And because of the desire to save at least a little and work really hard the parental support doesn't start until much later in life absent a medical reason.

« Last Edit: October 21, 2016, 03:34:00 PM by The_Dude »

MrMoogle

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Re: how do you save when you have to support your parents financially?
« Reply #23 on: October 21, 2016, 03:47:43 PM »
You seem to resent the fact you are expected to pay for your parent's early retirement but agree that you should do it.  I think you need to first figure out what you really believe and come to some sort of understanding with yourself. 
It could be the OP's SO and the OP are disagreeing here.  One thinks their parents are their responsibility and one thinks they should help, but not completely fund an ER.

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Re: how do you save when you have to support your parents financially?
« Reply #24 on: October 21, 2016, 04:30:47 PM »
Some thoughts...
Did they pay for your education?   If so, consider this your student loan repayment.
Are you glad that they moved to America or would you rather be in the old country?  If you are happy here then consider this the price you pay to live here. If you'd rather go back to the old country, do that.  (Or threaten that to shake things up!)

Say you written up a new budget and include an X% retirement savings line and tell them things are going to have to tighten up.

Any chance both sets of parents would live together?

Mr. Green

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Re: how do you save when you have to support your parents financially?
« Reply #25 on: October 21, 2016, 04:54:51 PM »
How secure are your jobs? If you need an angle to justify cutting back at little bit you could simply tell them that if one of your lost your job it would be disastrous. And it really would be if you're supporting 8 people. That's a tremendous amount of pressure and I applaud you for being able to handle it. We supported my dad for a number of years and just that one additional person to worry about seemed like all I could take at times. If your jobs aren't 100% rock solid I would be concerned about this angle, especially since your parents are young and likely have many years left to live.

Cassie

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Re: how do you save when you have to support your parents financially?
« Reply #26 on: October 21, 2016, 09:30:00 PM »
Vacations, coffee out everyday ,etc. Are you kidding me???  WE are semi-retired at 62 and don't do all of that. We take 1 vacation/year. If one of you loses your job the house of cards will fall. I would give them a stipend you can afford and let them figure it out. They retired too early and all of them need p.t. jobs. This is way too much pressure for your family.

Lmoot

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Re: how do you save when you have to support your parents financially?
« Reply #27 on: October 22, 2016, 03:23:32 AM »
 I live with my 87-year-old grandmother who has health issues. I moved in a couple of years ago and rented my house out when she had some  Health scares, and never left. She has started declining and now needs help with things like grocery shopping and paying bills. So I have been privy to her expenses. My dad and my aunt have recently been stressing over the amount of money she has left to live on. Although she is very thrifty in some areas, like fixing things instead of buying new ones, like many older people she is a creature of habit and will continue doing things and spending money on things even if it doesn't make sense or even if there is a cheaper option.

 Case in point just yesterday I found out she was paying much more for Internet TV phone than she needed to, and got her bill down from almost $200! To $140.  She was donating up to $500 a month to charities she's been donating to her whole life. They send her a request for a donation, of course, and she pays it automatically. The problem is she's living longer than her money at this point.  Now because she can't drive I do all of her grocery shopping for her, and I have cut her bill in half or more by shopping at discount and bulk stores, where she previously shopped at only one store, despite it being up to three times costlier than other options.

She buys DVDs at $10-$15 a pop, tons of them.  My dad gave her his password to Netflix but for some reason out of habit she continues to buy the DVDs.  So what I am saying with all of this is make sure they are doing the cheapest option and not just what is habitual.  Make sure you talk to them about the reality. My grandmother was spending money on things like plants for her garden hundreds of dollars at a time, and $50 shirts, because that's what she's always done when her husband was still alive. It wasn't until her children sat her down with an accountant and revealed the reality, before she started making some changes in her spending habits.
« Last Edit: October 22, 2016, 03:29:09 AM by Lmoot »

Bee21

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Re: how do you save when you have to support your parents financially?
« Reply #28 on: October 22, 2016, 09:11:18 PM »
This cultural responsibility of looking after the parents is a hard thing. It worked well in old farming communities, when large families lived together in the same household, looking after elders/kids, cooking together, working on the family land together. It made complete sense in that setting. In modern societies, with nuclear families, 21 century,  not really. It is not a cultural thing, it is a very selfish thing to expect you and your wife to fully support 2 sets of parents at an ideal sort of lifestyle level. Do you guys have siblings? Do they chip in? Do you cover every expense?

I am an only child, and while my parents are comfortably retired now,  when one of them dies, the surviving one will be struggling financially. This is not their fault, they always led a very simple, frugal life, just the reality of the country they live in.Adding health problems and end of life care, and we are looking at a very large chunk of money, especially that they live at the other side of the world. I wont be able to help with the everyday care (which saddens me) but i will be able to contribute financially. I am already saving for this and the rental income from my investment property is earmarked for their support. I am ok with this, it is important for me that they are comfortable. But i would be seriously pissed off if i was in your shoes. Coffee and eating out and travelling? Wtf. Expecting you to fund everything is selfish. I would sit down with them, calculate the basic expenses, add some luxuries and come up with a number you are able to contribute without resentment. See what government support they are able to access and and make sure they get it.  It will be ugly, but you have to be sure that you are able to fund your own retirement, so that you won't have to rely on your kids, and you can also fund your kid's education ( in case you have to rely on them for future support lol).

Cassie

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Re: how do you save when you have to support your parents financially?
« Reply #29 on: October 23, 2016, 01:19:56 PM »
They may qualify for some services like low income senior housing, assistance with utilities, free cell phone ( a federal program).  They should look into this.

Mel70

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Re: how do you save when you have to support your parents financially?
« Reply #30 on: October 25, 2016, 11:05:29 AM »
The local senior center might have some resources as well, in terms of PT jobs for them, free socializing/meals/entertainment.
You can use your Flex Fed Plan to cover childcare costs during the summer if they are residents. That's tax savings for you. Are you claiming them as your dependents?

I agree with the other posters that the expectation shouldn't be "to continue their lifestyle as it was before retiring" but understand that you are not taking care of yourself and your family because of some of those expenses (such as the vacations). Now that they are retired, they can reduce those vacations to once a year so you can start saving.

As other people mentioned, we are talking about potential decades of support. Childcare costs will take care of themselves as the kids grow older, but you also need to think about college savings. Who is your top priority? Continue a $2000 subsidy because they got used to it, or saving that money so your kids can graduate college with a minimum of debt?

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Re: how do you save when you have to support your parents financially?
« Reply #31 on: October 25, 2016, 11:34:04 AM »
Without going through all the details. Not 65 yet so can't use Medicare. Cobra is like 800 a month for one. 

If they are not yet 65, and don't qualify for healthcare, why are they retired? Why are they not working still? (And for someone who will let them play catch-up in their retirement funds) Are they disabled?

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My parents are helping to watch my youngest one in return for the cost of daycare. There goes 2k a month but its a wash since I have to pay that either way.
Where is the helping?  If you are paying daycare rates, that's not help, that's just expensive in-home daycare.

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They have worked hard their whole life so they want to enjoy their retirement. I agree. So this includes having coffee out every morning to socialize with other retires and get some exercise in by walking around. Eating out every weekend(nothing fancy but not something I would normally do). Cost is not significant but definitely "throwing away" some money here
Is there a senior center around you? Ours has free coffee (well, subsidized by tax payers...) 
This becomes a keeping up with the Jones sort of thing- other retirees have funds where they can go out frequently, travel frequently. If you don't have that, it isn't "normal" to be doing it.

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They love to travel and go on vacation 2-3 times a year. I benefitted from that as a kid so I am not going to take that away from them. There goes some more money.
That is a lot of travel! Especially on someone else's money.

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Trimming cost is not an option for them since they want to continue the lifestyle before they stopped working.
Provide less money to them. They will have to trim costs.  Tell them what your budget to them is, and they need to live within it.  It is generous that you are giving them anything.  That you are giving them $2k per month is a lot more than a lot of grandparents get for watching the kids. That's income to them already, and you are giving them more.  Since you are from a culture where kids take care of their parents, I am shocked that the same kid also pays for the grandparent to watch their grandkids- it seems like that would be in exchange for you helping them out!



It will be nice if you can count on your kids to support you, but in the US, you really can't. Your kids will be more American than you will. You need to take care of yourself first, and others second. What happens in the generation that wasn't able to have kids? Early retirement might not be possible, but make sure you are at least set for for regular retirement!



dodojojo

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Re: how do you save when you have to support your parents financially?
« Reply #32 on: October 25, 2016, 02:26:36 PM »
I'm in the same boat.  Luckily, my mom isn't preventing me from saving for RE, but I am planning for a larger RE total to cushion potential elderly parent care.

I don't begrudge supporting my mom as she worked incredibly hard to raise her kids and made enormous sacrifices.  No, it's the not really about the dollars (of course being MMM-centric, I have limits), it's the emotional guilt trips that are the biggest headaches.  She literally refuses to apply for government programs like low-income housing for which she is perfectly eligible.  Each time I bring it up she blows up and I gradually realized it's a psychological issue--accepting senior housing means she has to live alone (she currently lives with and supports my middle-age brother...another story there).  Which is culturally alien to her and she fears living alone in her old age.  She is still working and has enough to pay her rent, but once she retires, her very low level of Social Security isn't going to be enough to pay her current rent.  At that point, I probably will have to kick in some financial help.

It's really difficult to reason with someone with both old world cultural and emotional hangups.  The MMM concepts really do not get through at all.

urbanista

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Re: how do you save when you have to support your parents financially?
« Reply #33 on: October 25, 2016, 03:12:20 PM »
I will go against a popular opinion and say, be grateful that you parents brought you to the US when you were still young. Because they could have stayed in your home country, like my parents did. They had an opportunity to immigrate when I was a child but simpl chickened out.

So that I had to immigrate all by myself in my middle twenties, pay for my (multiple) degrees out of pocket, help my siblings immigrate, and finally get my parents here too. Now I have to support 3 adults (dad has remarried) in a very HCLA.

It helps that I do have siblings who chime in, but boy, did I have to work two jobs all my life. From 18 to 40 I was either doing two jobs (one full time) or a full time job and part-time university with virtually no breaks. I am close to retirement but can't retire as my parents have no income, so must work extra years till they can collect age pension. Then I am done working for money.

But what is the alternative? Let them stay in a war torn country living on $50 a month, no family no friends?

ooeei

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Re: how do you save when you have to support your parents financially?
« Reply #34 on: October 26, 2016, 07:06:48 AM »
I will go against a popular opinion and say, be grateful that you parents brought you to the US when you were still young. Because they could have stayed in your home country, like my parents did. They had an opportunity to immigrate when I was a child but simpl chickened out.

So that I had to immigrate all by myself in my middle twenties, pay for my (multiple) degrees out of pocket, help my siblings immigrate, and finally get my parents here too. Now I have to support 3 adults (dad has remarried) in a very HCLA.

It helps that I do have siblings who chime in, but boy, did I have to work two jobs all my life. From 18 to 40 I was either doing two jobs (one full time) or a full time job and part-time university with virtually no breaks. I am close to retirement but can't retire as my parents have no income, so must work extra years till they can collect age pension. Then I am done working for money.

But what is the alternative? Let them stay in a war torn country living on $50 a month, no family no friends?

There's a difference between being grateful and helping someone out, and getting taken advantage of.  Paying for 2-3 vacations every year, coffee every morning, as well as living expenses is a bit much in my opinion.  Helping them out is fine, but there's no reason they can't contribute a bit to their "fun money".

frugaldrummer

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Re: how do you save when you have to support your parents financially?
« Reply #35 on: October 27, 2016, 11:46:44 AM »
I'm confused by a couple of things:

 - you're paying them the $2k that childcare would cost - is this where their coffee and vacation money is coming from?  If so, isn't that their business what they spend the money on that they have earned by working for you?

 - why did they retire early?  Their Social Security payments would have been higher if they had waited for full retirement age, plus there wouldn't be the COBRA payment for insurance.  I know it's too late to change this, but was this a forced retirement or just willful disregard on their part?

 - Are you the only child?  Or are there other siblings who just aren't pulling their weight?

 - Why does your older child go to daycare?  Couldn't they watch both kids and save you some money there?

 - since their home is paid off, is there any option in the future to downsize to a less expensive home and free up some of that cash?

I agree with others here, a case study would be helpful.

mm1970

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Re: how do you save when you have to support your parents financially?
« Reply #36 on: October 27, 2016, 03:17:22 PM »
I'm confused by a couple of things:

- you're paying them the $2k that childcare would cost - is this where their coffee and vacation money is coming from?  If so, isn't that their business what they spend the money on that they have earned by working for you?

 - why did they retire early?  Their Social Security payments would have been higher if they had waited for full retirement age, plus there wouldn't be the COBRA payment for insurance.  I know it's too late to change this, but was this a forced retirement or just willful disregard on their part?

 - Are you the only child?  Or are there other siblings who just aren't pulling their weight?

- Why does your older child go to daycare?  Couldn't they watch both kids and save you some money there?

 - since their home is paid off, is there any option in the future to downsize to a less expensive home and free up some of that cash?

I agree with others here, a case study would be helpful.

And what happens when you no longer are paying them for daycare?