Author Topic: Saving to help elderly parents  (Read 5437 times)

TheOfficeLady

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Saving to help elderly parents
« on: January 21, 2015, 01:17:36 PM »
I've noticed a lot of older people I work with end up having to spend money on elderly parents. Do people here save for that? If so, how much are you socking away?

TexasStash

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Re: Saving to help elderly parents
« Reply #1 on: January 21, 2015, 03:27:35 PM »
I don't save for that, but that's because while my parents can be spendy on some things, they are overall very smart with their money and are very unlikely to need my help because they ran out of money.

I'm not at all surprised that this comes up, though. My parents have more than a few friends who found themselves with very little in savings as they neared retirement age. And it seems some of them will be working well past "normal retirement age" to catch up.

I don't know that planning to spend money on elderly parents changes the story much from a Mustachian perspective though because Mustachian's typically have eliminated frivolous expenses and are actively saving in tax-efficient, high yield investments like stocks already. It might cause one to increase the "safer" investments in a portfolio like bonds since parents will have a shorter time horizon. And it would change your magic number for early retirement possibly. But I would say keep doing what you are already doing to cut out unnecessary expenses and invest in a smart, diversified manner, and you'll be well prepared to start helping elderly parents should the need arise.

Malaysia41

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Re: Saving to help elderly parents
« Reply #2 on: January 21, 2015, 04:21:24 PM »
My biggest worry about them is if one of them needs LTC. They lack LTC insurance.

Here's the contingency plan should they need help: we're moving in!  The money we'd otherwise pay for rent (living somewhere in the big wide world) will go toward their medical expenses and any nursing care that's needed.

They're in their 70s and pretty damned healthy. Crossing fingers they'll continue to be healthy and independent. 

caliq

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Re: Saving to help elderly parents
« Reply #3 on: January 21, 2015, 05:01:39 PM »
I'm planning on my parents living with me at some point; we (DH & I) have a really great relationship with them.  I haven't put a dollar amount on supporting them, but I know they are worse off in a material sense from helping me out after some dumb decisions when I was younger, so I plan to return the favor.  My current plan involves working well past FI (as long as I'm enjoying it!) and building a sizable stashe, so like TexasStashe said, I don't think it matters if I put an exact number on their support. 

frugaldrummer

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Re: Saving to help elderly parents
« Reply #4 on: January 21, 2015, 05:37:17 PM »
My mom is widowed, at 82 she still works part time and relies on that income and Social Security.  When she retired at 65 my ex and I helped her buy a house in our city (she was in a townhouse prior with just a little equity).  We paid the down payment and renovations, she paid the mortgage and upkeep, we owned it 50:50.

I got divorced and lived there with my mom for a while, and then bought a new home for myself.  Given her age and bilateral knee replacements, I made sure to find a house with a downstairs bedroom and bathroom for when she needed to come live with me. About a year later she chose to sell her house and move in with me. 

It works well - she actually cooks for me a lot, and takes care of some other household things like waiting for repairmen, which simplifies my life.  She doesn't have to pay me rent, but she does pay for a cleaning lady. She's able to save more money now that she's not paying a mortgage, which means her savings are increasing and that gives me peace of mind that there is more of a cushion to pay for an assistant or nursing home care should she need that in the future. 

So I would say, if you have a good relationship with your parents, just try to buy a house with a granny flat or some space suitable for them to possibly live in in the future; retirement money goes a lot further if they don't have to pay rent.

lakemom

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Re: Saving to help elderly parents
« Reply #5 on: January 21, 2015, 05:38:20 PM »
My biggest worry about them is if one of them needs LTC. They lack LTC insurance.

Here's the contingency plan should they need help: we're moving in!  The money we'd otherwise pay for rent (living somewhere in the big wide world) will go toward their medical expenses and any nursing care that's needed.

They're in their 70s and pretty damned healthy. Crossing fingers they'll continue to be healthy and independent.

If they are healthy they should be checking into a LTC policy right now.  You may want to go with them to look into care facilities that are solely medicare supported and those that are private pay (cash or through a LTC policy) and it may scare them into finding a policy before its too late. 

mozar

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Re: Saving to help elderly parents
« Reply #6 on: January 21, 2015, 06:24:57 PM »
My mother and her three brothers all plan on working well into their 70's. They also each inherited 250k. it's been tough trying to keep my mom from blowing it. She will be able to get the divorce benefit which should add another 1k a month. My dad will get a pension if he stays put. LTC I have no idea.

Yankuba

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Re: Saving to help elderly parents
« Reply #7 on: January 21, 2015, 06:41:14 PM »
My mom is widowed, at 82 she still works part time and relies on that income and Social Security.  When she retired at 65 my ex and I helped her buy a house in our city (she was in a townhouse prior with just a little equity).  We paid the down payment and renovations, she paid the mortgage and upkeep, we owned it 50:50.

I got divorced and lived there with my mom for a while, and then bought a new home for myself.  Given her age and bilateral knee replacements, I made sure to find a house with a downstairs bedroom and bathroom for when she needed to come live with me. About a year later she chose to sell her house and move in with me. 

It works well - she actually cooks for me a lot, and takes care of some other household things like waiting for repairmen, which simplifies my life.  She doesn't have to pay me rent, but she does pay for a cleaning lady. She's able to save more money now that she's not paying a mortgage, which means her savings are increasing and that gives me peace of mind that there is more of a cushion to pay for an assistant or nursing home care should she need that in the future. 

So I would say, if you have a good relationship with your parents, just try to buy a house with a granny flat or some space suitable for them to possibly live in in the future; retirement money goes a lot further if they don't have to pay rent.

What is a "cleaning lady?"

frugaldrummer

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Re: Saving to help elderly parents
« Reply #8 on: January 21, 2015, 06:57:34 PM »
A WONDERFUL person who comes once every two weeks and cleans bathrooms and vacuums and changes sheets.  Worth every single penny!  Especially since, knowing she is coming forces you to go around the house and pick up all your shit :)

bogart

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Re: Saving to help elderly parents
« Reply #9 on: January 21, 2015, 07:45:55 PM »
I think it's an important thing to think about, depending on your family circumstances, at least if you live in the US (I don't know what options/resources are available other places so cannot comment on those).  My dad is declining with dementia in a nursing home, which is paid for by Medicaid (medical/LTC for the very poor, not to be confused with Medicare which covers medical care but not generally LTC for those 65+).  Even if I wanted to and chose to SAH, i.e., quit my job, I couldn't care for him at this point, but I wouldn't choose to, either, a decision that reflects his earlier behaviors, i.e., he's not a very nice person (he's also not an ogre, just to be clear -- and I do tend to him, and his care, in the nursing home, i.e., advocate for him, visit, etc.).  OTOH I'd drop everything, including my financial well being, to care for my mom, who IS a wonderful person (but who'd be horrified if I did that), but who's also a planner, i.e., has savings and, among other things, LTCI (my parents are divorced, so their fates are largely separate).  But that said, watching my dad's decline and those of others of my parents' generation has shown me just how much care can be required, and one motivation for achieving FI is being able to leave the workforce if my mom needs care.  And while my wonderful parent happens also to be a planner, and the not-wonderful parent is/was not, I don't think those characteristics always line up, Mustachian ideology notwithstanding, so it's not hard to imagine having a parent who deserves personal care but hasn't planned ahead to allow for it. 

I've seen 2 friends  navigating this general issue with unexpected challenges that affect their budgets.  One whose dad, also a dementia sufferer, was living with her felt she had to find another place for him after he assaulted her -- she lives alone and didn't feel safe.  He doesn't require skilled nursing care for now, but cannot be left alone or manage things like preparing meals independently, and even the place she has found has cost more $$ per month than her dad has in income, so she's making up the difference which I think runs her maybe $8K per year (and when he requires more care, who knows?)?  Another's dad is dying of cancer and my friend is using FMLA to be able to be with her -- of course, not knowing how long her dad will be here, she wants to spend time with him, but she doesn't know if the FMLA will be enough, or not, and if not, whether she can afford to quit her job. 

As for what the OP should do, I'd say it depends pretty significantly on (a) what your other responsibilities are e.g. to kids if you have them; (b) your parents and your relationship with them; and (c) what arrangements they've made, or could make, to ensure that they have the care they want access to if they need it.

Hayden Frys Mustache

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Re: Saving to help elderly parents
« Reply #10 on: January 21, 2015, 11:11:05 PM »
A WONDERFUL person who comes once every two weeks and cleans bathrooms and vacuums and changes sheets.  Worth every single penny!  Especially since, knowing she is coming forces you to go around the house and pick up all your shit :)

This might be the least Mustachian thing I've read on this blog.

frugaldrummer

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Re: Saving to help elderly parents
« Reply #11 on: January 22, 2015, 03:58:41 AM »
Perhaps. But I'm self employed and earn a lot more per hour at work than what the cleaning lady costs. my life is pretty busy, if I spent that time cleaning it would likely come out of work time and cost me more money in lost earnings.

It's a luxury but one that adds a lot of value to my life.  I'd gladly work an extra year to pay for this service the rest of my life.

coffeehound

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Re: Saving to help elderly parents
« Reply #12 on: January 22, 2015, 04:39:25 PM »
I look at saving for parental care like the instructions for using oxygen masks on airplanes.  Gotta get my finances secure before I try to assist anyone else.  So, no.  I don't save or put money aside to help my (closer to 80 than 70) parents.

If my money mustache were luxuriant, then I'd consider working an extra year or two to put aside money to help my parents.

frugaldrummer

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Re: Saving to help elderly parents
« Reply #13 on: January 22, 2015, 05:13:23 PM »
And in regards to long term care - once the parent has spent down their estate, they would likely qualify for medicaid to pay for a nursing home - BUT - it can be quite challenging to get them INTO a nursing home for dementia.

Most nursing home admissions happen when someone has been in the hospital, and is admitted to a nursing home for rehab afterwards. That's the easy way to get there.  If you have a "healthy" demented parent with Alzheimer's, it can be quite difficult to get them admitted to a nursing home as a medicaid beneficiary.

Malaysia41

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Re: Saving to help elderly parents
« Reply #14 on: January 22, 2015, 05:51:58 PM »
This thread spurred me to look into LTC insurance for my parents.  I thought I'd check with our provider, Met Life.  We purchased it through a broker years ago.  The broker had been recommended by CFPs.   I just trusted it'd be good. Stoopid.

OMG the reviews are TERRIBLE!  I'm considering canceling the policy.  It's $2k per year for two of us - 51 and 42 y.o.  From the comments, it looks like we can look forward to :

- crazy expensive premium increases up to 102% in some years
- impossible to navigate customer service
- Kafka-esque claims processes

Doh!
« Last Edit: January 22, 2015, 05:58:51 PM by Malaysia41 »