Worried About Parents Retirement

[Erik_in_TN]

First off, I am a habitual worrier who tends to look at the glass half-empty. But that is my top resolution for the new year to work on that.

Anyhow, I am 29 and live approx 45-min to an hour from my parents. They are in their late 50's-early 60's and quickly approaching "The Golden Years". I watch a lot of Suze Orman and other financial planning shows on TV, and from what I'm hearing, it seems to me that my parents may be on the naive side when it comes to retirement planning. I have brought this subject up to them before. They always tell me that they are fine, and to not worry about them, etc etc. But certain comments I have heard them say in the past lead me to believe they might be in for a shock when it comes time to retire. My father gets pensions from his job, my mother has always been a stay at home mom. They both think people such as Suze Orman and others are "full of it" on the subject of retirement.

They believe social security will be the safety net + my dads pension when that time comes. My mother assures me that if worse comes to worse, they can always sell the house in the event of an emergency. They tell me not to worry about them and they will be fine...but I still cannot help that gut feeling considering the ridiculous amounts of $$$$ people are told to have saved by the time they reach retirement age, which my parents do not have.

Should I listen to them and leave the issue alone? Thanks for any tidbits. Having a nervous day this afternoon... (probably due to watching too much Money-Talk news).

 

[powellrj]

As a parent, please stay out it unless you are asked.

 

[bumbershoot]

Sounds like this is something they do not feel is your business. So you might not have any real idea of what they have saved.

 

[MIGrandma]

I can understand your concern, but try not to worry about it. If they aren't worried about it, they're probably not going to change.

Pensions can be cancelled, your Dad shouldn't be completely relying on having one. And social security probably wouldn't be enough to live on either. They should be putting money away, but you can't force them to do that, or to be more concerned about their retirement.

My Dad died 2 years ago, and Mom gets about 2/3 of what his pension from GM was, plus social security. It's enough for her to live on, but she doesn't have a whole lot left at the end of the month. Dad left her a nice life insurance amount, which we put into a separate savings account in my name only. She keeps wanting to travel, and "spend her money." I keep telling her she should leave it in the bank, because GM has already changed her health insurance so now she has to pay a portion (health, dental, vision) of it each month, and she has higher co-pays, and has to pay part of some of her medical bills where she never had to before. I keep telling her what if GM cancels pensions, she would need that money that's in the bank just to live. I hate to see her squander it away on traveling. Or if they do away with the retiree/spouse health insurance, if she fell and broke a hip she would have to pay her own hospital bill and that money in the bank would be gone in a snap. She just doesn't seem to "get it" though.

So I do understand how you're feeling, it's hard I know.

 

[pearlieq]

This is definitley worth worrying about. If something were to go wrong, who do you think will be figuring out how to make it work and making up the shortfall?

What is your parents' lifestyle like? Do they have a modest home? Is it paid for? Is it a place they can grow old in or doest it require a lot of maintenance and upkeep?

Do they have simple tastes? Are they generally frugal and responsible with their money? Do they save for things before they purchase them?

How is their health? Do they have chronic conditions like diabetes? Do they try to stay healthy and active?

What is their community like? Is the cost of living generally pretty low? Are they near medical care? Is there much in the way of community resources? Is there anything within walking distance of their home or are they dependent on cars? Do they have friends, family, or a church community?

So much depends on who they are. If they own a manageable home in a good area and their big indulgence is a weekly breakfast after church at the local diner, they're probably going to be fine on SS and the pension.

If they have too much mortgage on too much house, credit card debt, and a penchant for QVC, you may have trouble a-brewing.

One thing that should be part of the conversation in any situation would be long term care insurance. Their SS and pension income won't cover much if one or both of them needs care.

 

[Snoozan]

Just one comment to MIGrandma - why don't you let your mother take some of "her" money and travel a bit? Didn't her husband leave it to her as beneficary? No one says she needs to spend it all, but if she's up to travelling, then why not let her? Life's too short - what if something happens and she goes quickly, without any of the memories she'd have made while travelling? Wouldn't you feel guilty over that? I'm almost 51 and a cancer survivor and boy, that's a wake-up call to do the things I want, when I want, while I still can. I'm travelling to the Grand Canyon later this winter and there's lots more I want to see. Sure, I could save all my money for retirement, but what if I don't survive long after retirement? Lots of things could happen, but let her live her life now!

 

[Erik_in_TN]

If they own a manageable home in a good area and their big indulgence is a weekly breakfast after church at the local diner, they're probably going to be fine on SS and the pension.

That's a pretty close aim to my parents. They like to eat out a couple times a week. No CC debt. Their home still has payments to go however. But it is in a good area and luckily they would not HAVE to use the strairs if ever becoming disabled. They do not over indulge and appreciate the simple things. (One vacation in the Fall to the coast).

I'm probably just putting my nose where it does not belong and letting the worry bug get the best of me.

 

[disney1990]

Just one comment to MIGrandma - why don't you let your mother take some of "her" money and travel a bit? Didn't her husband leave it to her as beneficary? No one says she needs to spend it all, but if she's up to travelling, then why not let her? Life's too short - what if something happens and she goes quickly, without any of the memories she'd have made while travelling? Wouldn't you feel guilty over that? I'm almost 51 and a cancer survivor and boy, that's a wake-up call to do the things I want, when I want, while I still can. I'm travelling to the Grand Canyon later this winter and there's lots more I want to see. Sure, I could save all my money for retirement, but what if I don't survive long after retirement? Lots of things could happen, but let her live her life now!

I absolutely agree. Let Mom travel if she wants to. Nobody knows what tomorrow will bring. I tried and tried to get my Mom to travel after my step-father died. Now she is too sick to do so.

 

[bumbershoot]

Just one comment to MIGrandma - why don't you let your mother take some of "her" money and travel a bit? Didn't her husband leave it to her as beneficary? No one says she needs to spend it all, but if she's up to travelling, then why not let her?

Absolutely! I would love it if MIL would start traveling! I don't like her much (at all) and we have almost no relationship, but I'd invite her on our disney trips if she would even think about leaving her city. We keep urging her to visit her family in Korea, but she refuses.

FWIW she lives on her late husband's pension and half what he was receiving in SS, and if it weren't for the IRS debt her husband left her with (and no life insurance b/c they thought she'd die first and no savings), she'd be doing well. Of course, that's just one person. But she pays whatever portion of medicare and prescription drug insurance she has to pay from her pension/SS, it's not provided for her by the pension.


Can a company cancel a pension that's already being drawn from????

 

[FayeW]

My Dad died 2 years ago, and Mom gets about 2/3 of what his pension from GM was, plus social security. It's enough for her to live on, but she doesn't have a whole lot left at the end of the month. Dad left her a nice life insurance amount, which we put into a separate savings account in my name only. She keeps wanting to travel, and "spend her money." I keep telling her she should leave it in the bank, because GM has already changed her health insurance so now she has to pay a portion (health, dental, vision) of it each month, and she has higher co-pays, and has to pay part of some of her medical bills where she never had to before. I keep telling her what if GM cancels pensions, she would need that money that's in the bank just to live. I hate to see her squander it away on traveling. Or if they do away with the retiree/spouse health insurance, if she fell and broke a hip she would have to pay her own hospital bill and that money in the bank would be gone in a snap. She just doesn't seem to "get it" though.
:

Somebody's not getting it, all right, but that somebody is YOU!

How dare you keep your mother's money from her and not allow her to spend it! It is HER money, not yours.

 

[tasha99]

Somebody's not getting it, all right, but that somebody is YOU!

How dare you keep your mother's money from her and not allow her to spend it! It is HER money, not yours.

I agree. Life is short and she may not be able to travel later.

 

[XYSRUS]

I say it sure is something to talk about with your parents. Especially if you're an only child. If something were to happen to 1 or both what would they want you to do? What kind of care do they want? Where do they want to live? How much resources are available to secure what they want in the future? Right now I'm back to work paying for my mom b/c she talked the talk but didn't walk the walk. Things, care, housing ....is all extremely costly. I advise everyone to start talking to their parents now...get the conversations going...

 

[abdmom]

Quote:
Originally Posted by MIGrandma

My Dad died 2 years ago, and Mom gets about 2/3 of what his pension from GM was, plus social security. It's enough for her to live on, but she doesn't have a whole lot left at the end of the month. Dad left her a nice life insurance amount, which we put into a separate savings account in my name only. She keeps wanting to travel, and "spend her money." I keep telling her she should leave it in the bank, because GM has already changed her health insurance so now she has to pay a portion (health, dental, vision) of it each month, and she has higher co-pays, and has to pay part of some of her medical bills where she never had to before. I keep telling her what if GM cancels pensions, she would need that money that's in the bank just to live. I hate to see her squander it away on traveling. Or if they do away with the retiree/spouse health insurance, if she fell and broke a hip she would have to pay her own hospital bill and that money in the bank would be gone in a snap. She just doesn't seem to "get it" though.
:
Somebody's not getting it, all right, but that somebody is YOU!

How dare you keep your mother's money from her and not allow her to spend it! It is HER money, not yours.

 

[pearlieq]

How dare you keep your mother's money from her and not allow her to spend it! It is HER money, not yours.

First of all, I doubt she's actually keeping her money from her, unless she has POA. What's more likely is that she's pointing out some realities and her mom is reluctantly agreeing with her for now.

Given that her mom is dependent on a pension and health insurance from a very vulnerable company, it seems pretty sensible to keep a cushion. No nationalized health care here--you pay for it until you're eligible for Medicare and even then you pay quite a bit. GM defaulting on either the pension or the insurance is a pretty plausible risk.

I'm sure it sounds quite romantic to have Mom go on a grand tour, but it's sure going to suck if the pension goes and she's stuck living in a senior studio apartment with $90/month for personal expenses.

There is nothing cruel about being responsible.

 

[abdmom]

Dad left her a nice life insurance amount, which we put into a separate savings account in my name only.

Sounds like she took the money from her mom to me.

 

[minkydog]

OP, I think you need to stay out of their business. We are in our 50s (and btw, this is definitely no where close to your "golden years") and I would be offended if my kids tried to tell me how to spend, save or invest my money.

Let me tell you a story--my DHs grandfather came her from Greece when he was 17 with a few American dollars in his pocket. He had no place to stay and no relatives, but he managed to get a job working in a restaurant. He slept on the floor in the kitchen for several years. Eventually though, he saved up enough to move into a small house, buy the restaurant he'd been sleeping in, and find a nice American girl to marry. He worked 6 days a week, 12 hours a day for about 45 years, never took a vacation or a day off. He retired at age 66 planning to travel some, maybe go back to Greece for a vacation. Too bad he got sick and died 4 months later. They never got to do anything. Of course his widow was left with a tidy nest egg, which her children promptly squandered on themselves. So all the money they had--wasted.

My DH is disabled. We live on SSDI and some private disability payments. We do have IRAs and 401k's and some stocks, which of course took a huge hit last year. But honestly? I'm not worried about it. If push comes to shove we'll sell the house and live in our (paid for) RV, which would actually please us no end. We may do that anyway. But I just DARE one of my kids to stick their noses in MY business. They'll draw back a nub!

 

[pearlieq]

But I just DARE one of my kids to stick their noses in MY business. They'll draw back a nub!

As long as you plan on them returning the favor should things not go according to your plans...

 

[Becky2005]

Somebody's not getting it, all right, but that somebody is YOU!

How dare you keep your mother's money from her and not allow her to spend it! It is HER money, not yours.

I agree. So it sounds like mom has to save what she ends up with at the end of the month to be able to travel even though her DH left her life insurance (unless the daughter was the benificiary?)

OP -- I would butt out of it. You have no idea what they may have stashed away. My parents get SS and my dad was a barber, so self-employed. Basically, they aren't weatlhy & I can guarantee you they never saved as much as Suze Orman said to save. However, I'm also convinced they are secret millionaires or something. I know they worry about their budget, etc... however, when money is REALLY needed for something, it magically appears. I also know they don't use their CC & if they do, they pay it off immediately. It's always been like this.

I have no idea what the source of this money is nor is it any of my business to know at the moment. They are in their 70's and seem to be doing just fine. I know my parents sold the house we grew up in once my dad turned 65? It might have been 55? It was back when you had to be a certain age to use your one time not declare capital gains tax on it.

For all you know they could be stashing money around the house. We had to take care of some things when MIL died and FIL was incapacitated at the time. We found a VHS tape holder that he would just throw paper bills into whenever. Turns out he had about $5,000 in there just as an emergency stash from throwing a $5, $10 or $20 in there whenever.

 

[minkydog]

As long as you plan on them returning the favor should things not go according to your plans...

I appreciate your concern, but DH and I have been pulling our own weight since we were 17. If things go south we will NOT be burdening our kids with our upkeep.

 

[Randi]

there is a government program that insures pensions the same as the FDIC insures bank deposits. I can't think of the name of it right now or the details, but I think it may just cover pensions that are already being paid out.

I am newly retired & I found that the amt I receive from Soc Sec is not too far off from what I have been living on for the last few years. I hadn't had a raise in 3 years anyway. I live quite frugally, and don't have any major plans for retirement that will cost a lot. I bought a Medigap policy that will cover expenses that Medicare doesn't. That policy is only costing me $20 a month more than I had been paying through my employer's group insurance.

I also don't think you should worry about your parents yet. At some time in the future it may be wise to sit down with them and see what their plans are.