MSN has an article about adults starting to face the reality that they may have to financially support their parent's retirement:
Many boomers didn't save much for retirement, assuming they had a few years to catch up. According to Boston College researchers, 40% of baby boomers are at risk of not being able to afford their current lifestyles in retirement. Perhaps more worrisome, a 2006 survey of 2,500 boomers found that 59% of the respondents had done no formal retirement planning.
Is it ever too early to meddle in your parents' financial affairs? Is it your responsibility to plan to care for people who are still working and able to save and invest on their own behalf? What if their financial needs compromise your lifestyle or your security? And what if your folks should have known better than to leave retirement to chance -- and yet have?
My mom is a smart cookie, and she's completely financially secure in her future despite having been widowed relatively early in life and having to raise and educate two children by herself. Some of the things that she's done that have ensured her financial security include: (1) as soon as she saw the stock markets moving downwards (pre-Lehman), she moved all her equities into fixed income. Rather than anguish about her losses (just under 10%) and having unrealistic expectations of market recovery, she moved immediately to preserve. And (2) She is in her mid-70s and she is still working full time. As far as I know, she doesn't expect to quit anytime soon.
On the other hand, my mother, being very traditionally Chinese, has a very multi-generational approach towards family. She has always made it clear that my family is welcome to live in her home, free of charge, whenever we like (thus, she hasn't yet downsized, despite it being nearly 20 years since my sister and I left home), which I took advantage of my first year out of college. It is her unconditional offer to help my family that makes her such a central part of my ultimate emergency plan.
The problem thus lies in J's family. Namely, J's mother. She is an absolute financial wreck-in-waiting.
On the one hand, she has some rather weird frugal habits: she keeps things forever, and does things like reusing gift cards and wrapping paper. Yet, this is a woman who was divorced 30 years ago, got a very minimal spousal support settlement (which I don't believe she is receiving anymore), worked for 10 years as a school administrator, and has been retired, at this point, for the last 15 years. The only money she has is the money she saved in her 10 years of working (which was apparently significant, given her low salary), some inherited money, and whatever she gets from the government.
And if that wasn't bad enough, a good amount of her savings were in equities. And unlike my mother, she was/is/will probably always be unable to give up on the amounts lost. So she continues to hold her equities, hoping for a magical market rebound.
Srsly, a friggin' tragedy in the making.
I cannot stand my MIL. As far as I'm concerned, she is the model that the mythical succubus was based upon. And the feeling is absolutely mutual. Unfortunately, I also love my husband, and I know that he feels a great deal of responsibility for making sure his mother is cared for. So I have no doubt that at some point down the road, I'll have to bite the bullet and agree (unenthusiastically) when she comes asking to live with us. I just hope that by that time, we'll have enough resources to not only have a house qua house, but one that might also have some sort of a nice separate guest cottage on the other side of... maybe a nice duck pond? Or an ocean perhaps?
This is 100% definitely, no doubt about it, my situation. My parents have spent their retirement funds. My father is mentally ill and probably won't be able to keep a job into his 80s as he had hoped. My mother stopped working in her mid-50s. Screwed, I tell you...
Posted by: PT-LawMom | March 16, 2009 at 12:36 AM