Hi PF,
My wife's parents are approaching retirement age, and we suspect they have little or no savings for it. My wife and I are looking for guidance on how to prepare them and ourselves for what's coming in the next 5-25 years financially. I realize this is as much a relationships issue as a personal finance one, but we're hoping to hear from others who have gone through a similar financial challenge with their parents.
My wife's parents are both 65. Her father (FIL) has a director-level corporate job, while her mother (MIL) is a part-time teacher. Their gross annual salaries are about $110,000 and $15,000 respectively.
FIL is very secretive with his money. His paycheck goes into a personal account, then he writes MIL a check for household bills and groceries. MIL rarely has enough left over for non-essentials, and major expenses like car or home repairs are usually a crisis. Vacations and luxuries for her are non-existent. We think that FIL's extra pay goes towards a significant spending/hoarding problem. He gets coffee and meals from shops daily, and has a couple rooms of the house filled with unused "toys" - outdoor equipment, books, etc.
These spending issues have come to our attention a few times in recent years, when FIL has done something so significant that MIL is ready to leave. At one point, FIL drew funds from a retirement account to buy several thousands of dollars worth of luxuries without telling MIL. It only came to light because he didn't manage the tax impact properly, and the IRS contacted MIL about the penalty. He refuses to talk money with MIL or us, and any attempt to pursue it is shut down with a fight.
FIL's retirement plan seems to be non-existent. His exact words when asked about retirement recently were "I'll work till I die." However, he's already facing some chronic health issues. He's ignored them and been hospitalized a couple times in the last two years already. Working much longer may not be an option. MIL does have some retirement savings, but we'd be surprised if it's over $10,000. She could certainly pursue a full-time position with her skills, but I don't know for how much longer she could keep up with kids.
We believe they own their home outright ($200-$225k). They have an open home equity loan and have new loans on their cars, as both of their old cars needed engine replacements. Credit card debt is a complete unknown, as FIL has a history of hiding it and letting it go to collections.
My wife and I started thinking hard about their retirement situation a few months ago. We realized that it very likely is going to fall to us to support them when they cannot support themselves. My wife unquestionably earns more than her siblings, so we will probably be the first ones asked to help. We have our finances in excellent shape for a mid-30's couple, but we're both reluctant to reward their poor choices by adding more funds to the money bonfire.
Where do we start to deal with this?
We've considered paying for them to have an appointment with a fee-only financial planner we use and trust, but FIL has already avoided meetings that MIL set up. If their finances are as dire as they seem, would it make any difference at this point?
If there's little we can do to break FIL's spending habits, is there any value in trying to salvage their retirement, or do we just let it collapse and go to bankruptcy and assume one or both of them will be living at our expense (either in our home or in a retirement home)? For what it's worth, we do NOT live in a filial responsibility state.
Thank you!
TL;DR: In-laws are a financial wreck. How do we start dealing with their debts and retirement without jeopardizing ourselves?
Submitted February 02, 2017 at 07:35PM by Throwaway913528 http://ift.tt/2kXFS4s
