Author Topic: In-laws retiring with little money...  (Read 6843 times)

Another Reader

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Re: In-laws retiring with little money...
« Reply #50 on: April 08, 2019, 08:34:38 PM »
That was not atypical of the loan modifications early on.  Especially with the sleazy servicers.  The in-laws likely won't be around in 2034, but when they or their heirs sell, the actual lender is going to get a nice payday.


So it sounds like they basically just signed away the loss and it's a sunk cost at this point. I've seen some lawsuits here and there but doesn't seem like they're very successful and even then probably not much to get out of them anyway. Do you think it's better for them to sell the place as soon as they can and downsize into a 55+ community or something like that, rather than waiting to pass it on to in their estate?

That's a question for them and those ultimately responsible for their care to decide.  I would certainly understand the payment requirements if they sell before 2034 and what they would net out of a sale so an informed decision can be made.  They are getting rental income that is not payable to the lender if they stay where they are, so that's something to consider as well.

lhamo

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Re: In-laws retiring with little money...
« Reply #51 on: April 08, 2019, 08:57:09 PM »
If I were you and your wife (and any other siblings she might have), I would not be counting on any kind of an estate from her parents.  If you are lucky, you will have the time/money to get them moved into some kind of continuing care community that will accept Medicaid after their own funds run out.  I would start researching the options NOW, as the better ones are likely to have waiting lists.

Finances_With_Purpose

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Re: In-laws retiring with little money...
« Reply #52 on: April 08, 2019, 09:11:49 PM »
Sounds like you got the wisdom you needed re: investments.

I'll add this: only be as risky as they're willing to be, and make extra sure you are clear and that they understand if you're the one setting things up.  You really, really want to know their risk appetite before doing anything, and as others said, it's probably very very low as their main goal now is capital preservation. 

One way to do get clarity with them is by using what's called the speaker-listener technique, where they literally repeat things back to you as they understood it so you're sure that they got the message.  It sounds overly simplistic until you try it and realize that wow, humans are awful at communicating with one another.  (It's especially useful in conflict situations, like marriage conflict.) 

That's awful about the mortgage, but I don't know what you can do about it.  Maybe a refi, but that's complicated, too, and would definitely increase their payment.  It sounds like they may be living beyond their means house-wise.  But at least it's on cruise control for many years. 

Another tip, re: investments: they don't make enough returns to use the 4% rule over the long term.  But you can use half of their average rate of return as a proxy.  It'll help their capital last a lot longer.  With staggered CDs right now, you might get a little over 2%, especially if you weight it long-term.  So that makes their (kind-of) safe withdrawal rate around 1% or slightly above. 

If I were them, I would bank the spare payments now as much as possible to increase my income for later years and especially in the event of any unexpected expenses (like medical) which could make the situation more challenging. 

jeromedawg

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Re: In-laws retiring with little money...
« Reply #53 on: April 08, 2019, 10:59:33 PM »
If I were you and your wife (and any other siblings she might have), I would not be counting on any kind of an estate from her parents.  If you are lucky, you will have the time/money to get them moved into some kind of continuing care community that will accept Medicaid after their own funds run out.  I would start researching the options NOW, as the better ones are likely to have waiting lists.

We definitely aren't counting on it at all - we're just trying to preserve what they have despite the bone-headed decisions they (well, more so my FIL) have made throughout the years. Ultimately, we're just preemptively trying to reduce the potential likely burden they may be to us whether financially, emotionally, physically, mentally, etc... it's amazing how much they've squandered in their lifetime due to reckless decision-making. And a lot of the things my FIL blindly signed/didn't read before signing we're seeing the spillover from consistently, one after the other... It's like whack-a-mole...
« Last Edit: April 08, 2019, 11:04:02 PM by jeromedawg »