re: Providing advice for parents who do not have enough for retirement (long)

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first thing you need to figure out are your social security #s right for your mother. She is a retired teacher with a state pension, did she pay into social security?

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I was thinking the same thing.

Also, they are taking retirement before 66 (I'm guessing that's their "full" retirement age), they didn't make much money during their working years (seeing as dad is only making $55K now), and mom was a teacher. It seems that $1,900 per parent is a lot.

I would definitely go with them to the SS website and make sure that the $1,900 is correct. I just checked mine and I'm scheduled to get a little over $3K if I retire at 67. I'm almost 50 and I've been contributing the max for about 10-15 years, and before that I was contributing almost the max. It's hard to believe that they are going to take their Social Security YEARS earlier than full retirement age and both will be getting $1,900.

ETA: There is a chance the mom is on SS Disability. In many cases, those on SS Disability see a sharp decline in the their benefit once they hit retirement age because they didn't put into the system during their years on disability.

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Not just for heir finances but his mental health too. He’s 100 pounds overweight because he is absolutely lazy at home, but he’s a hard worker at work. I need to show him that working a few more years is in his best interest in more ways than one.

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Please, please also bring up mental health. Your mother's autoimmune disease, their financial picture, etc may be weighing heavily on him & contributing to his dis-engagement (weight gain, wanting to quit working). So many ppl in the South suffer in silence, esp from depression, while engaging in all sorts of self-harm to assuage mental pain. Does he indulge your mama's spending because he thinks she's headed to an early grave and doesn't want to deny her? You want both of them to be happy, making good solid logical decisions & enjoying their lives....not worrying, spending $$ they don't have, and creating stress for you. Opening up clear lines of communication about how Pops feels and thinks can be therapeutic for both of you.

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and think of ways to generate more income.

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however it sounds like it is too late for them. This is why i tell people over and over the sooner you have cash flow the sooner you can technically retire once it meets or exceeds expenses.

Sounds like they did not plan well at all. for passive income they could have used RE, private lending, dividend payers, etc. Sounds like they will be stuck living on a tight SS budget for the rest of their lives. this is my worst nightmare and why i stay driven to avoid this. thanks for the reminder to keep me pushing myself and my business so i do not have these issues later in life. Good luck!

I'm sorry for your situation.

The Dave ramsey method sounds best for them. And that will force him to work until debts are in order.

You and I are different. If my family/inlaws needs me, they are moving in. I have 4 kids, but I can make it work. And having grandparents present for the formative child years is an asset worth more than money.

Good luck. POA doesn't sound like a bad idea if you feel that you are brunting more than your share.

I never said that he had to take on the brunt.

And I never implied that the parents would give up control.

But if they do put a lot in his shoulders, then the POA makes sense.

You can't help someone who doesn't want it. And that would not be a knock on the OP.

You are in a pickle. Should have had this conversation 10 years ago so they could actually face reality and do something about it.

Are you 100% positive that your mom will get SS on top of her teachers pension? In many southern states that is not the case. I would put your own eyes on her SS statement to confirm. That really changes the equation if that is not the case.

The fact that they are spending money on renovations in their current predicament is obscene. They need Dave Ramsey type of help.

As their child, you are going to have a hard time getting them to course correct. I think you need some kind of third party both of y'all trust to help.

We are dealing with this with grandparents right now who have only SS and just went into an assisted living facility. The main burden is not on us, but we see the reality of their situation up close. At some point, their kids will have to cover some of the cost, but the problem is all but one of them couldn't contribute a dime, so it all falls on the only responsible party in the family.

Reality is you will have to pay for their mess at some point more than likely. Just remember when that day comes that they spent plenty of money raising you.

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how is your mom getting SS if she has a state retirement?

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Some state employees around the nation pay into their retirement system and social security.

"My parents spend outside of their means and are still hardheaded even when telling me that they don't have enough for retirement."

You've got your work cut out.

Those life-long spending habits are tough to change. Retiring at 63 shows the continuation of bad decisions. I also wonder if your mom is eligible for SS. Has she received any future benefit notices?

My advice would be to provide some Tough Love. Be brutally honest and paint a picture of the future if things do not change.

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To those asking - yes my mother is eligible for social security as Alabama teachers pay both into a pension and social security.

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Well, that's a bright spot in the conversation. Situation isn't nearly as dire as some are making out, provided that their material wants/needs get under control. The wild card is healthcare & expenses related to declining health (ex, to make existing house wheelchair accessible, bathrooms more accessible w/limited mobility).

The fact that they are seeking advice is very positive. We thought our son & DIL were doing fine financially and then about 6 months ago they asked for help managing their income & expenses.

We helped them develop a budget and just doing that made a big difference in their outlook and attitude.

As others have said, do a realistic budget asap. Understand that a budget is just a plan and life has a way of interfering with plans.

You need to look at their Social Security Statement. It will show their projected payment at full retirement age (FRA) and how much it is discounted by taking SS before FRA. The payment is reduced by ~ 25% at age 62 and the amount reduced decreases until it reaches 100% at FRA. (Just fyi, you can get >100% if you wait past FRA to take SS but that does not seem to be an option here.)

FRA for them is probably between 66 and 67. I think FRA is 66 years and 2 months now.

Based on my experience $1,900 per month seems high at age 63 for someone making $55k to $65k.

And double check that your mother can draw SS and her teacher's retirement. A teacher friend in Missouri paid into SS but she can not get a SS payment. I didn't believe it but googled it and that is correct. Different states do it differently.

What is their medical insurance when your dad retires? Medicare does not start until age 65. Are they using your mother's medical insurance from her work? You need to understand that.

There may be non-profit organizations in their home town that offer free financial advice for seniors. I do not live in a large city or town and there are several organizations that do that here. A senior center, or their bank, or United Way may be able to point you in the right direction.