Post # 1
I found out the MIL does not have anything saved for retirement. She has never been good with money. She never has a steady job. Her house is up for sale, which will give some money but I’m afraid she’s just going to spend it and not save it.
Have any bees ever gone through this? what happens when she’s older and can’t work anymore?
Post # 2
AnonHoney: She will get whatever is available in the country where she lives in the way of old age security.
In Canada that would be OAP (Old Age Pension), CPP (Canada Pension plan, which is based on your contributions during your working life) and if your income is low enough GAIN (Guaranteed Annual Income Supplement).
People who do not save for retirement, and do not have a defined benefit pension plan, will retire into poverty.
Post # 3
Are you American? If she worked, she’ll get social security based on her earnings and her spouse’s.
Post # 4
- Wedding: October 2011 - Bed & Breakfast
This is my parents, except that they owe more on their house than it is worth. I offered to set them up with our financial planner and they declined. I made it 100% clear that I am not their retirement plan. They will not be living with me, I will not financially support them, etc. I started saving for retirement when I was 23. They could have done the same, but have instead chose to spend every cent they have (and don’t have) on non-essentials. Their choice, their consequences. Not my problem.
Post # 5
AnonHoney: If she’s never had a steady job, she prob. doesn’t have much coming in terms of social security checks. It looks like you guys might have to support her and give her money each month if that’s the case.
Post # 6
She deals with the consequences.
I started saving for my retirement at 22, my FI started at 20. We’re not our parents’ retirement plan. If a grown adult doesn’t have the foresight to be a responsible member of society, its no ones fault but their own.
Post # 7
AnonHoney: Yikes. As julies1949: said, it sounds like she’ll be depending on a government pension program (depending on her country of residence) which hopefully she’s paid into over the years, as well as whatever equity she has in her home. You and your DH should probably have some serious conversations about if and how much you would be willing to support her in her old age.
lovekiss: I think you’ve put yourself in a good situation by setting up expectations early on.
Post # 8
That’s a tough situation to be in, and a really bad one for a parent to put their children and their family in. On on hand, she’s your husband’s mom and morally, I think it is right to assist elderly/sick parents. But on the other, your husband has his own family to support and he is not obligated to support his mom. My parents have purchased insurance for extended care because they do not want to “burden” us. I don’t get people who would expect to become fully dependent on their adult children….
I can’t say what I would do if that were my situation – support MIL by letting her move in or let her get by on what she’s made for herself… it’s tough.
Post # 9
My parents both have great retirement plans and savings, so this is a non-issue for me, but it makes me really sad to see all these Bees who say it’s “not their problem.” If my parents didn’t have any retirement money coming in, I would absolutely do everything I could to help them. Do I HAVE to? Of course not. SHOULD I? Of course! My parents gave me everything growing up – they supported me financially, emotionally and in every other way. They paid for my college. If they fell on hard times, it would absolutely fall on me.
Obviously, there’s Social Security, but for most people (even those with steady jobs/incomes for their entire lives) it’s not nearly enough to live off of. I think you need to sit down with your MIL ASAP and figure out what her plan is – basically, what she will qualify for under Social Security and how she can make that work. If she can’t, then it’s obviously up to you and your husband, but I could never just let my parents become homeless or live in poverty if I could help them out. They deserve better than that.
Post # 10
AnonHoney: what will happen is she will have to live off whatever she gets for old age pension which in canada (as other pp said) its dependent on your contributions over the years…so she will more or less live in poverty and possibly be (expect to be) dependent on her son (and basically you) to support her……I’ve had worries about this with my IL’s because they have nothing in place for retirement and I basically told DH that “WE” better not be his parents retirement plan… it not fair to us and its fair to MY family…. and they better get their shyte in order sooner then later. iIt’s one thing when people come on hard times or loose money die to unforseen circumstances…but being stupid with money and just not ever putting any effort into making provisions and more or less saying “well whatever we expect our kids to pay for it” it NOT fair.
How could I explain to my parents/look them in the face and say “yes we are basically funding IL’s life from here on out” if we’re not doing the same for my family…..and the same would be if it was vs versa. Of course we wont let anything bad happen to anyone or live in poverty but I can tell ya anyone who doesnt do everything in their power to be able to set themselves up will be getting a big bowl of resentment from me.
Post # 11
I forgot to add…. my theory is basically that whatever we do for one of our parents we need to be able to do the exact same for the other set at any time…. so only half of our “resources” would be able to go towards helping whoever needs it at the time because who knows….5 days or 5 months or even if its 5 years later the other side might need help….
Also… I feel its the parents responsibility to set themselves up because in the end what if all our parents didnt do it… WE are supposed to be responsible for 5 extra adults, PLUS ourselves, PLUS our own children we’re trying to raise? Im sorry but thats too much and not realistic. I have 3 parents (a step-parent included) and DH has both his….. Im sorry but we cant have that many people depending on us to support them for the rest of their life, they will end up putting US in poverty!
Post # 12
OP, if you want to avoid a lot of the potential drama of whether or not you end up supporting an elderly parent with no income, then she needs to go to a financial planner with the proceeds from the sale of her home. She can make contributions to a Roth IRA and possibly a SEP-IRA or a traditional IRA, with extra annual contribution allowances for people approaching retirement age, as well as possibly purchasing an annuity or other investment fund. This late in life, it is incredibly difficult to catch up and make up the gap between what social security pays and what it actually costs to live, but it’s better than nothing.
Now as to what happens to her…. so she will get social security if she is in the US; the monthly benefit is based, in part, by your contributions to SSI/FICA when you were in the workforce, so spotty employment and/or low wages = small check. There will likely be a shortfall where she needs more money than what the SSI check pays. What happens there is up to you, your husband, and any other children she has, and while there is a noble path (supporting your parents), in American society it often is not practical (adult children earning too little and carrying too much debt, bad blood in the family, etc). It’s definitely a shame that our culture has become so self-centered, but it is what it is; only 2 generations ago, there would be no doubt, the younger generation would care for and pay for the older, but by that same token, 2 generations ago, most of the younger generation would not be entering the workforce with a hundred grand in student loan debt. But that is a discussion for another day. <br /><br />For now– be glad you are all discussing now, and get her to a financial planner and a CPA to discuss the best handling of the lump sum from the sale of her home.
Post # 14
lovekiss: Only commenting to say that it’s impressive that you are so financially independent, when it seems from your post that your parents likely didn’t raise you that way. To start saving for retirement at 23 is great and not common for those who did not have financial planning built into their upbringing. Good for you and your DH!
Post # 13
annb9: I think it depends on the experience you have as a child and your culture. It sounds like you had great, loving, supportive parents, but there are many of us with not so great experiences. My parents only had me so they could stay in the country; as soon as their paperwork went through, I was shipped off to Taiwan to be raised by my grandparents….and that was the best thing they did for my childhood lol.
Post # 15
annb9: i agree and think it is sad to see people say it isn’t their problem. it actually is. However, there is a distinction between helping parents out in unexpected hard times, and helping parents who selfishly didn’t plan at all for the future. I’d offer my home to my parents (and even his) if they needed to because it is the right thing to do. But I think it is wrong for parents to believe they can just fall back on their kids when they retire.