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February 28, 2013


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My Dad is 73 and is a retired accountant. He took a buyout at the age of 62 and I had anticipated he was well prepared for his retirement given his occupation. A few years ago, he was involved in a major accident that has left him with various deficiencies. Since then, he has been transitioning over the management of his finances to me. I was shocked to find that things were shaky and wished he would have involved me sooner. I have been able to make some changes and now my parents seem to be relieved with the revised financial picture. Things clearly could have been worse without an intervention and I could have been in a situation of having to provide support in later years.

Lesson learned: Those of us that are expected to help our parents in their remaining years need to force some uncomfortable conversations before situations get out of control.

My Mother has been retired for 38 years and is now 94 years old. I always had some idea of her finances, but about 10 years ago she asked I monitor it more closely. That same year she went out and bought a new RV and car without saying anything to me. I asked why and she said she is going to buy what ever she wants to buy! I said OK, but I think you made a mistake. Well she used the RV for one trip and put very few miles on the car before she quit driving. A few years later she said it probably wasn't her smartest purchase and we discussed that it was about giving up her financial independence and we would discuss any purchase of over $1000 before she made them. Things have gone well since, but in every decision I make (financial, medical, and personal) for her I try to get her involved as much as possible to give her that sense of empowerment we all need so it doesn't happen again.

The reason I posted about my mother is she was also a business owner. When it does come time for you to get involved in your parents finances tread carefully make it their decision and look out for these outburst of independence.

I'm pretty sure that my dad is doing fine. He's just so cheap that I'm sure he can live off social security alone. My mom on the other hand is struggling a little bit. She hates thinking about money and lets a financial planner do all the work. I have some questions about whether this is a good idea, but her financial situation seems stable so I guess it's okay.

My dad was an insurance and securities salesman for many years. he always preached the importance of life insurance, retirement, savings, etc. well he recently passed and we discovered he was in the midst of a personal bankruptcy, had 30K in CC debt, and had withdrawn almost all of his 401K from his current company. He was a consummate salesman and a good business man (having run a successful restaurant for 10 years) but apparently had trouble with his personal finances. He was the one parent I thought I wouldn't have to worry about when he retired/could no longer work.

My mom I've been concerned w/for years that her financial problems will become mine. She has filed for personal bankruptcy in the past, has lived w/my brother or my sister continuously for the past 10 years, works PT and has virtually no savings. She's banking on SS to carry her through...I'm betting it will be the kids that carry her though instead.

It's amazing how smart people can be so illiterate in areas of great importance such as personal finance.

I've wanted to broach the topic with my father all this time but I cannot seem to muster up the courage. We never talked about finances growing up and that is probably the first clue to me that there might be issues come retirement for my folks. I'm impressed with the courage of all the reader profile stories telling of their interventions with their families.

Travis --

Tell me about it. I've known several smart and successful business people who are having one major personal finance problem or another.

My dad is pretty much the same way. Has been in banking his entire career and really knows nothing about personal finance. I'm pretty sure our net worth is greater than my parents' even though they're over 30 years older than me and my dad's annual income alone (mom is a homemaker if you can even call it that) is more than double ours. He's never going to retire at this rate. I've spoken with them about this and they didn't change a single thing. I'm too tired of it and have just decided to let them do their thing knowing that I tried to warn them and I'm not going to give them a bailout.

My in laws are a live for today mind set. My wife finally came to the conclusion and said she did not know how poor of money managers her parents were until a recent health scare with the MIL. There parents died young so they figured they would die young. If it were not for m FIL pension they would be broke. That and SS is there sole income. They had a $100k Tax sheltered annuity that they burned through the first ten years of retiring at 62. They are now 78. They do have there funerals prearranged and have there crypts bought and paid for. Money is so tight we try to help them out by looking for savings in there bills and stuff because they are too proud to take any monetary help and all to generous in buying things for the grand kids. They have no emergency fund, no savings and only one car. They can not even afford a $300 ticket to go see there grandson in Texas. I fear my MIL passing before my FIL because he is clueless on the bill paying front and this responsibility will fall onto us.

Yes people were not taught this while growing up and I see mine and other genration who will fall into this trap unless they educate themselves and take responsibility for there finances.

My parents are both super smart people, but they don't understand how investments work. They just retired this year and they want to put all their money in a savings account because the markets are too risky. Thank god they have a sweet pension!

There is definitely a big difference between business and personal finance, but the skill set to be good at both is the same. I am interested to hear what the outcome is.

I'll be interested to hear how this turns out. My Dad is very similar and is a very bright man, but when it comes to anything saving/investing related he just completely ignores it and hopes for the best. We've had very similar discussion as you had with your Dad and it always ends the same way for us...that he really does not care.

I can relate to this post. I haven't had the chance to have that conversation with my father but it is something that eventually I will have to do. I need to make sure that my parents are set up for success like you said because like your situation, their financial struggles will become mine in the future.

FMF, what part does your mom take in their household finances? If they're like my parents were, the wife might do all the home related stuff including grocery shopping and bill paying. That could be another reason your dad doesn't know much about the budget if your mom controls a lot of spending due to job roles.

My parents are doing great and by example taught all us kids how to be prudent and plan for the future. My in laws, on the other hand, have made very poor financial decisions throughout their lives and we’re already helping them. I really struggle internally with resentment for having to compensate for their bad choices – I certainly don’t express these feelings to my spouse or in-laws, but it’s quite frustrating.

This is really shocking, and makes me wonder about my own parents. They are 85 and 78 and still very with it and active, and my Dad was an MBA working in corporate credit for many years, also sold real estate off and on, made me start my own IRA back in the 1980's. and they live in a pretty pricey retirement community. But maybe they arent that good with their own personal finance...?. Arggg, not sure I can start that awkward conversation.

My dad was a fireman his whole life, born in 1908 and died in 1988. During WWII he and his buddies were frequently called to London to help put out fires from the heavy bombing raids. My parents had a very happy marriage but my mother predeceased him by quite a few years. If she would have had access to the quality of healthcare that my wife and I have she would have lived much longer but it was the early days of Britain's National Health System and even though she had been in pain for a long time it took many months of waiting before you could see a specialist, then another long wait to have tests and be diagnosed. He retired with a very nice pension and lived comfortably his whole life. He was a workaholic and on his off days he worked as a gardener, a chauffeur, a painter, a wallpaper hanger, and delivered groceries (sometimes with me as a helper). He never owned a home but lived as a renter in one owned by the fire department. He grew lots of vegetables and we also kept chickens. As a child we never went to restaurants but my father always owned a car and we had a great family vacation every year. Towards the end of his life I paid for my parents to fly out to California for a visit. One of the highlights of my father's life was when he and I went off with camping gear to visit Yosemite National Park. One night he had an experience he never stopped recounting. He woke up in the tent and said there's someone rustling around outside so he got up to investigate. What he found was a huge black bear had clawed open our aluminium ice chest and was feasting on the bacon and other tasty food inside. He took the ice chest home with him as evidence when recounting his story back home in England where the only bears to be found are in the London Zoo. After Yosemite we camped in an interesting ghost town called "Old Bodie". It was bitterly cold that night and when we woke up the next morning he found his false teeth to be in a frozen block of ice and had to wait a long time until it was warm enough for them to thaw out.

My parents never had any investments and kept their savings in cash in a metal box locked in my father's desk. After his death my sister wrote to me and said "There's enough for his final expenses with about $100 left over, what should I do with it. My answer was, "It's all yours".

It just doesn't work like that for some people. My parents are self employed and owned businesses too. They just spend more than they earn and that's already good. Their earning fluctuate a lot and it's difficult to have a budget when you're in that situation. My dad has investments, but he likes to trade so that's a part of his income too.

I had the same conversation with my mother. She desperately wants to retire but can't tell me about her monthly expenses. When I asked her about general categories, especially taxes, she said she just pays it out of her savings account (which she never contributes to just draws on). She could not get the concept that if she was going to retire and draw on her savings that she needed to budget for taxes! It was too frustrating. I have all confidence that I'll end up supporting her some day.

Of course this is the same woman who had no health insurance but insisted she should spend her money on life insurance instead so she would have something to leave her kids.

My mother was a teacher and retired last year. She absolutely loves it. Her house is paid for and between her pension from the state system and SS, she is fine. She is still finding her niche in passing time. My father worked for the CORPS of Engineers and was given an early out option in the 1990's. He also collects SS now but loves his 30+ hr/week as a night guard at a beautiful 65 acre garden site. He sits in his shack and reads, fiddles with gadgets, cleans his guns, all night long. Occasionally I go and play chess with him, he is a strategic powerhouse as he is also a huge war buff and has read hundreds of books on the subject. He also loves driving around in his golf cart patrolling and looking for wildlife to photograph along the way. I hope my later years are as enjoyable.

Jim --

If she knew, I think he would have mentioned it. Plus we had a subsequent (and short) conversation where it seemed clear that she knew about as much as he did.

I think she does know more about where the money is kept and things like that, I just don't think she's ever run the numbers to see how much they live on, what it would take to retire, and so forth.

Seeing these comments is the reason I tell most people that banking on receiving an inheritance is foolish.


I'm right there with you. My in-laws have $0 in savings and currently do not work (early 60s). I guess they are hoping their children will be taking care of them. Currently my MIL is living with my brother-in-law. I've already made it clear that my MIL will not be moving in with us in the near future. I guess if I were to become very wealthy and could afford a large house, that might be a possibility but not without having her contribute to things like helping manage the household chores.

I also harbor some resentment for financial assistance as it has set us back from being able to buy a house. Luckily my wife is not working at the moment so she feels like the money I make is for our family only.

It's so interesting that so many of the financially savvy readers of this blog have parents who barely know the first thing about personal finance, even those who've run successful businesses! My parents were fortunate that they were able to get introduced to investing in their early 40s, much later than ideal but left them time enough to accumulate for retirement. They were always frugal, and they’re comfortably retired right now in their mid 70s.

MY ILs are another story. My FIL is a very successful business owner, and they’ve been divorced for ~20 years; both remarried shortly thereafter. Neither one of them has much of a net worth, but at least my FIL has a golden goose of a business to fund his lifestyle. I fear that neither of them will ever be able to retire; they’re mid 60s now. Heaven forbid if the business were to falter because practically the whole family (three generations) works there.

I'm fortunate to have parents who have their act together financially. However, I have an older ex-boyfriend who I'm still friends with, who does not.

He has a small business that generates a small income...but when bad or unexpected things happen, he turns to me.He's 63 with diabetes and other health issues and without financial help from me, he'd probably have been out on the street by now. He didn't even know he could collect Social Seucrity early! I was the one to tell him!

The way he mismanaged money was one of the major reasons we broke up. I was young at the time and he was much older then me...but even then I kept warning him that he needed to have savings, etc. to no avail. I struggle with the frustration and resentment of it all. It's easy to say I'm not responsible for him, and that's true...but when you are faced with a situation where someone could end up on the street without your help, it's tough to turn them down.


While it's tough, if you don't put your foot down, you have no right to be resentful. Think of it this way: what would happen to him if you were to move to another state or pass away? He'd find a way to manage. Now, if you want to maintain the relationship, you probably will have no choice to but to keep helping. My guess is that you have a "rescue complex" but that type of attitude may very well prevent you from being more financially secure.

My mom and my MIL are both open about their money. My MIL does not have a lot of money (SS and a very small pension) so we tend to pay for things for her (voluntarily). My mom is in good shape - two good sized annuities, SS, money in the bank, good medical and long-term care insurance, and a low cost of living. My sister commented the other day that our parents had more income in retirement than they ever did during their working years. With my father's recent passing I believe my mom is even better positioned financially. They lived beneath their means but did not deprive themselves.

@Noah. Honestly, my ex is one hospital visit from bankruptcy or being on the street. If it comes down to that, he may end up on the street before some kind of social services would kick in. Of course, when that happens you often lost a lot of control over the decisions you can make. Not only that, it doesn't really solve the problem from a big picture just shifts the cost to the taxpayers. It's easy to say I have a "reccue complex". But no matter what I decision I make it feels like lose/lose either way. I don't want him out on the street but I don't want to be out the money or jeopardize my own financial situation either.

One way or another the savers will bail out the non-savers. ex already lives in another, lower cost state. He's doing the best he can with his business and maintaining his health the best he can (after years of not doing so)...but he had a "work until I die" retirement plan.

Hopefully, blog pieces such as these will show people what a horrible plan that most of us can't pull that off even if we want to.

I think that there are several reasons why my parents never accumulated money during their lifetime.

1) Neither of them had much education as was typical with the working class in England during their lifetime (born in 1908 and 1910).

2) The investment world back in their days didn't include the working class. Mutual funds didn't exist and the stockmarket was the domain of the wealthy.

3) There were few ways that they could invest. They could open a savings account at the Post Office or they could invest money with what were known as Building Societies which were analogous to today's Savings & Loan companies. The returns were equivalent to having a checking account at a bank. There was a widespread feeling in Britain during my youth that the "working class" were well taken care of by the "Old Age Pension", as it was called, and that's what the majority depended upon to see them through their retirement years. In 1948 the British started their National Health System which was funded through general taxation and covered all healthcare needs without payments being required. Prior to 1998 public universities in Britain also did not charge for tuition. Thus with an "Old Age Pension", no charge for healthcare and no charge for education up through the university level there was little incentive for Brits to save the way that Americans feel the need to do so. These entitlement programs, including the building of State Universities throughout the country, came in with the Socialist, i.e. Labor party that were swept into office largely by the returning soldiers, sailors and airmen at the end of WWII, when the wartime leader, Winston Churchill, was soundly defeated.

I was fortunate that I emigrated, first to Canada in '56, then to the USA in '58, and that I was able to get a good education up to an MS degree in engineering. I soon found out about the stockmarket and mutual funds since they were well known, well advertised, and widely used among my fellow engineers. I would also attribute a good portion of my investment success to the availability of a 401K plan with a good company match and taking full advantage of it.

The other big difference in my day was that nearly everyone I knew in England was a renter yet in the USA, with hardly any exceptions, they were nearly all homeowners, and that can make a huge difference to your ability to grow wealth.

My mother will have a pension when she retires (wants to retire a year from now) but she has run the numbers and we frequently talk about those numbers as she gets closer to that time. She's managed her pension/length of employment in such a way that she'll actually make more when retired than she currently does, but once retired there will be no cost of living adjustments to her pension. She's counting on SS to be a bump when she becomes eligible in 8 years. Also, she has no mortgage on her house so that helps.

My father has already retired (a year ago) and since rehired as a contract worker at his previous place of employment. His work is basically his entire focus and I believe the rehire was from a want to work rather than a need. He has a pension and the full time contractor salary. I have no idea what he may have saved beyond his yearly income. He does not own a home (rents a small apartment) and lives fairly frugally from my view looking in. I don't think he's "wealthy" but I believe he has enough to continue his currently lifestyle.

My in laws have been retired for a couple years now. My FIL has a good size pension and had a generous salary previously. They do still have a mortgage and purchased an RV (equivalent to another small mortgage pymt) after retiring. I have no idea regarding specific numbers but from general discussions with my MIL, I believe they are in good shape.

It is understandable that you will feel awkward and uncomfortable when you sit and talk with your parents about the issue of finances and retirement. But you have to take the step and make progress; otherwise, as you have mentioned, "your parents' financial issues could become your financial issues". Not being selfish, but you need to them now. It may be a bit late, but nothing is too late when you move one step forward as soon as possible. Good luck!

My dad has much the same view, luckily he has nore coming in that going out. He's 87 and I've recently had to take over his bill paying since he can't remember to pay them much anymore. I wrote an article earlier this week on that. But your point is well taken, I think today's younger generation are much more active in planning their personal finances then past generations have been.

It sounds like your dad has definitely earned the right to retire with dignity. I hope that you are able to help him sort through his finances and give him the chance to rest a bit. I know several people in that situation and that is why I want to get the word out to young people to build their career and finances while they are young.

Folks, those of you talking about how resentful you feel about the "bad choices" of the older generation had better keep in mind what kind of attitudes you are modeling for your own children. One day you may well be in need of help yourself (yes, IT CAN HAPPEN TO YOU). At that point, you may find reaping what you've sown to be a bitter experience indeed.

FMF- Any updates? Did you get to broach the topic of retirement with your dad at Easter?

Luis --

Nope. My mom did read the post though and we talked briefly about it.

The conversation continues...

I hope they are as close to paying off the mortgage as your dad says they are. This is such a relatable story to all of readers and beyond. Definitely one of my favorite posts of the year. I look forward to reading more of it at Wealth Lion.

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