Recently my younger brother asked me to step up and "be responsible" by using expected windfall money to renovate our mother's house. The windfall is coming from the pending sale of real estate inherited from a different family member.
My mom's financial situation is that she owns the house outright, and she has been living on a fixed income from her retirement account for decades, which is enough to live well in a HCOL city but not enough to pay for major house renovations. We're talking about potentially as much as $100,000 worth of work that needs to be done on the house. She also has some debt from maxed credit cards and a HELOC. Her financial advisor has told her that she should not sell her stocks to pay for fixing up the house, unless she's prepared for a reduction in the monthly check she gets from that account. Her employment prospects are nil and she has zero hustle to get creative to make money (she was a trust fund kid).
My financial situation is that, after many years of living in poverty unable to save a dime, I finally have a high-income job, and I'm continuing to live as frugally as I can in a HCOL city so that I can put as much of my money as possible into retirement and investment accounts. I'm 37 and am trying to retire as quickly as possible, since the men in my family do not have a good track record of living long lives and I have two chronic conditions that may shorten my life as well.
The situation with the house is that it was built in the 1940s, and my mom has lived in it since the early '90s (I grew up in it), but aside from basic maintenance on the HVAC and a couple appliance upgrades, she has done virtually nothing to maintain it. At this point, the yard needs to be re-graded and a new sidewalk needs to be poured to redirect water away from the foundation. All of the wood on the outside of the house, including the porch, needs to be replaced because it's rotting. The kitchen needs to be completely redone because it's literally falling apart. There are some longstanding plumbing issues that, in order to be fixed, probably require ripping out the bathroom floor and hallway ceiling. Those are probably the most critical fixes. Then there are other "nice-to-haves" like redone bathrooms, finishing the basement, and generally trying to "keep up with the neighbors" who are wealthier than us.
My suggestion to her was to sell the house to someone who can afford to do those renovations, and move into a place she can afford. However this would require a lot of work and time to downsize, and admittedly I have some stuff stored there too that I need to deal with. She is reluctantly open to the idea, but she's not a "make things happen" kind of person and I fear she will continue to just do nothing. Perhaps this is why my brother is so insistent that I be the one to make things happen, and use my own money to do it. (He is still in school, not in a position to pay for anything). (And if it wasn't clear already - I do not live in that house, but I would inherit it if mom were to pass away).
So, I ran the numbers. If I used my windfall to pay for renovating the house (a sunk cost I would expect no return on), I would reach my minimum retirement account balance goal in approximately 10 years. If instead I used that windfall to put into my investment account, assuming 7% returns I would reach my minimum retirement balance goal in approximately 8 years.
Long story short - if I paid for the renovation out of the goodness of my heart to help my mother, I would have to work an additional two years or so before I could retire. Essentially the renovation costs two years of my life. AITA if I don't pay for it and instead she sells the house to move into a place she can afford? (wouldn't that be part of that whole downsizing Boomer thing that people do at that age anyway?)
Submitted May 25, 2021 at 10:01PM by bemusedly https://ift.tt/3fJn42R
