NBR: Parents and retirement

Nancy6306 · November 2010

I was just wondering if any of you worry about your being financially ready to retire. Lately, I've been thinking about this quite a bit. My parents divorced over 20 years ago. My father remarried, he is self employed, and owns his home (mortgage free), has liquid cash, and within the last year started getting social security.

My mom, on the other hand, is who really has me worried. She just turned 66 last week. She started collecting social security 2-3 years ago. As a result of collecting it early, she gets less than what she would have received had she waited until last year when she turned 65. Basically, her social security check covers her rent. She works part-time to cover her other living expenses.

Over the years, my mom has not used wisdom regarding her finances. She would literally give her shirt off her back to help her family and friends. She is a devout Christian and gives above and beyond to any need the church may have in addition to other ministries. My grandmother passed away almost four years ago and my mom got about $20,000 (her 3 brothers also got that amount). My mom was handing out money like it grew on a tree. I declined to accept any of it as my husband and I are doing well. The only money she has left is maybe about $5,000 that one of my siblings is holding and that is because she was afraid my mom would piss right through that.

I understand that we should all help those that are less fortunate but my mom has gone a little overboard. A lot of times we are on the phone and she'll even suggest that I give to her church for a need they have, or that I should send money to St Jude's Hospital, or that I should adopt a World Vision child, etc....She'll go out of her way to look for ways to give her money away. I'm scared of what will happen when she is no longer able to work and depend solely on social security. Although my husband earns about $150k/yr, I've been a stay at home mom since the birth of DD#2. His salary supports our family of five minus $40,000 of that just in taxes per year.

My husband's parents are financially set. They own their own home, plus commercial rental property. FIL is a retired police officer and MIL is a retired nurse. They both get a pension, plus their full social security checks.

Doodle2011 · November 2010

My dad is extremely frugal, invests wisely, and lives simply. He is 76 and will be totally fine, I have no worries about him. My mom left him after 38 years of marriage, she is almost 70, and she is blowing through money like it's her job. The split was reasonably amicable, and my dad still manages the finances and transfers her money when she needs it. He has expressed concern about her "burn rate" and has stated that if she continues at her current pace, and lives another 10-15+ years, she may not have enough. I have told him that they each should spend every last penny, and enjoy life and retirement, and not worry about leaving anything for us after they pass. However, I am concerned that my mom is going a little nuts and may be left in a bad spot, especially if my dad passes first and she is in charge of her brokerage accounts. If he does pass first, I will suggest she get a financial planner to make sure she is on track. I am more worried about my own DH when it comes to retirement. I have done a reasonably good job of getting a 401(k) going, but he has nothing. He is self-employed and has put his money into his business and our house. My goal for 2011 is to get him started with an IRA and to get us both going with emergency savings. I lost my job at the end of August so we have been making do with what he earns and unemployment. I am anxious to get back to the work force so we can make these goals happen this coming year.

racampbell1 · November 2010

Yes, I worry about this a lot. I think my dad and step-mom will be okay, as will DH's parents, but my mom... that is another story. She is working but doesn't make much and she has diabetes that is managed, but she has a hard time physically ... I'm not sure she'll be able to work until 65. Our own retirement plans are, shall we say, soft at best. I'm the primary breadwinner and on a reduced schedule to be able to spend more time with DD. Things are tight but I wouldn't trade the extra time with her for all the money in the world! We have an investment property which is upside down at least for now, and I have 401k, but like pp, DH doesn't have anything lined up as he is self-employed. Our short term financial goals include getting him an IRA and putting something, anything in it!

stever · November 2010

My dad's retired and horrible with money but is fortunate to have a generous enough government pension that his inattentiveness doesn't matter so much.

My mom doesn't have such an iron-clad pension, but she saves and invests verryyyyy wisely, so hopefully I won't have to worry to much about her.

robynlesley · November 2010

My parents situation is tenuous due to a lot of reasons and my DH and I have added to their stress. We're moving in with them (as soon as work on a ground floor master suite for them is finished in about 3-4 weeks) early next year. When we do, we'll be able to pay off our debt and pay them back for money they lent us.

Once we've done that, they should be OK. And hopefully we will be on our way, too. In the meantime, while things are in flux, we'll help each other.

MissAmethyst · November 2010

My mom just had a nasty divorce (second husband) that left her in weird financial situation. She had been planning to retire in 2 years and the divorce make that seem unlikely. Then, I was watching TV one night and saw something about divorced spouses collecting social security based on a previous marriage. Her first husband (my dad) make a whole lot more money than she did. According to the SSA, now that she is no longer married, her SS can be based on my dad's earnings, instead of her own (because they were married for at least 10 years). Interesting rule.

Nancy6306 · November 2010

MissAmethyst, I just found that what you mentioned on your post regarding a spouse able to get collect SS benefits based on their ex-spouses's earnings. I've encouraged my mom to go to the SS office to look into this. My parents were married for close to 20 years and my mom was a stay at home mom for the majority of that time. In light of that, not only is it an interesting rule but a fair one, too.

MissAmethyst · November 2010

hocus:

MissAmethyst:
My mom just had a nasty divorce (second husband) that left her in weird financial situation. She had been planning to retire in 2 years and the divorce make that seem unlikely. Then, I was watching TV one night and saw something about divorced spouses collecting social security based on a previous marriage. Her first husband (my dad) make a whole lot more money than she did. According to the SSA, now that she is no longer married, her SS can be based on my dad's earnings, instead of her own (because they were married for at least 10 years). Interesting rule.

Is your father dead? Because I think that would be the only way she could collect.

My father is still alive. This is copied directly from the ssa.gov website:

If you are divorced, but your marriage lasted 10 years or longer, you can receive benefits on your ex-spouse's record (even if he or she has remarried) if:

You are unmarried;
You are age 62 or older;
The benefit you are entitled to receive based on your own work is less than the benefit you would receive based on your ex-spouse's work; and
Your ex-spouse is entitled to Social Security retirement or disability benefits.

If you remarry, you generally cannot collect benefits on your former spouse's record unless your later marriage ends (whether by death, divorce or annulment).

https://www.socialsecurity.gov/retire2/divspouse.htm

M.Amy · November 2010

I worry about DH's parents. They have very few liquid assets and I wonder how they are going to afford it when they cannot live independently.

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