Hi all,

My siblings and I have been saving to help provide for my parents after they've retired. We are all just starting out (I'm the oldest at 25, working in an industry that pays very little) and my two younger siblings are still in school. Our parents are in their early sixties and hoping to retire within the next 2-3 years and my mom won't have full medical benefits since she wants to retire early.

That being said, we're worried her medical bills won't be covered, so decided to start saving so that we can help out when need be.

We want to put the money somewhere it can grow, is not immediately accessible but can pulli t out without penalties (could be anywhere from 5-20 years in which we need it) and we can continue to contribute (so not a CD). It's only about $1k right now and sitting in a savings account earning 1%. I'd like to do some sort of stable mutual fund, but was wondering if anyone has done something like this before or could contribute any input.

Thanks so much!

I'm sorry to be blunt, but tell your Mom to stay with the job and put off retirement until she's entitled to retiree medical benefits. Also, have them buy long term care insurance.

With the direction income taxes are going to be going over the next few decades, you and your siblings will have enough problems trying to save for your own retirement. Don't cripple your own family's future to try and give your parents and early retirement.

We're not trying to give them early retirement and have in fact asked her to stick it out for the benefits, but right now she is determined to retire and fails to see the issue. Hopefully that will change over the next few years, but in the meantime are trying to prepare for the worst case scenario.

I hadn't considered the long term care insurance and will look into that, thank you.

well, you are giving them an early retirement. and frankly, that makes absolutely no sense. your parents are making an adult choice, and if they are selfish enough to make that choice, then you ought not be providing them with the cash to enable them to make that selfish choice. you are just starting out (you didn't list what your financial situation is, except that you are in a well paying industry...for now), and because of that you need to be focused on setting yourselves up first. this is very selfish of your parents. your parents have the ability to work a couple extra years and get medical coverage, but are unwilling to do so, why? makes absolutely no sense.

Well, IMHO, if he they haven’t actually told their parents that they are saving the money they aren’t “giving them early retirement” per se.
To me, that’s just looking after your parents and preparing to be better able to handle a situation should it arise further down the road. To me, it’s like an extended emergency fund.

Basically there are two scenarios. You don’t save a dime and try to convince your parents not to retire early, so they will get full medical insurance, or you put some cash away and still try to convince your parents not to retire early. No matter what happens, if they decide to retire or not, you will be better able to handle the situation if you have the money saved up.

If it were me (and it sort of is, since I too am saving a bit of cash to be able to help my parents should they need it), I’d put the money in a high interest (the best interest you can get anyway) savings account. If it turns out they don’t need my help financially – great – I’ll do something else with it (maybe save it for retirement) but if they do, I feel a lot better knowing that I am in a position to be able to help them out. They’ve done so much for me over the years so helping them if they need it is a no-brainer.

I agree that it's better to have money saved than not, generally.

But even so, the less financially irresponsible a parent (or sibling or friend) is being, the less likely it is that I would help them out.

In fact I have a specific example: between my parents (who split up years ago), I would be more likely to loan or give money to my mother than my father, even though she would be less likely to need such help. If my mother did need help it would be a temporary and/or unexpected situation, and I would trust her to spend the money wisely and get herself out of the situation. Whereas if I lent money to my father, he would spend it to get out of the current crisis, but sooner or later another crisis would pop up - it's always something with him.

I'm sort of in the same boat. My parents are terrible with money, and I make sure I have adequate savings for the day they come to me and say something along the lines of "our electricity is going to be turned off if we dont pay $90,000 by tomorrow"(ok, thats a slight exaggeration, but you get the point).

Just save what you can, and be prepared. No amount of asking, telling, pleading, etc... will get them to be more responsible if they have lived their entire lives irresponsibly.

My father has had his utilities cut off. It wasn't $90,000 but they did owe a few thousand. I did not offer to lend nor give him the money. It was just one of many financial crises he's managed to somehow find himself in over the years.

I actually said not very well paying. Currently I have some credit card debt I am aggressively trying to pay down and about $7k in student loans.



My parents actually aren't terrible with money... they haven't always made the best decisions but they've managed to pull themselves out of a low income class and provide a pretty good life for us.

I guess I'm looking at one of those more emotional decisions than purely financial. Because yes, financially, googoo and kombat are right... it doesn't make sense in those terms and I completely see that.

But they're my parents, and it's not so much a question of whether or not I do it, but whether I take the hit now while I have no mortgage and kids or if I take it later when I do.



Thank you.

This post makes me feel sad for the OP, and all subsequent posters who talk about doing the same for their parents.

To the OP, know that your mother will always receive medical care at an emergency room. This likely will destroy her credit if she doesn't pay the bills, but that isn't really the issue you are concerned about. Furthermore, it may help wake her from her current financial stupor about her immediate plans for her future.

I recommend strongly against enabling this behavior. Offer her unlimited love and support (emotionally) as any loving child should do. Going any further - especially now when you do NOT have the financial means to do so - puts you in danger of not being able to handle even your most modest of immediate problems (i.e. whip lash from a car crash, wallet/identiy stolen, etc), much less your own long term retirement savings.

EDIT: Removed pointless ranting.

You shouldnt make blanket statements. People get into trouble sometimes, and family should be there to help. I know there is this theory that all financial trouble is the fault of the person involved, but that is only 90% true. There are exceptions.

In this case, it's about something that hasn't even happened yet. A poor choice that is bad for everyone involved. And it's not too late to avoid it. So if the parent retires early despite advice against it, I don't think it would be the OP's responsibility to help.

This is different. lktx147's mom is making an intentional, conscious decision to put herself in what can potentially be a financially precarious position. "Getting into trouble" and "putting oneself in harm's way" are two different scenarios. Remember, this is not someone who *has to* retire early, she just insists on it.

lktx147, I'm pretty sure there's nothing I -- or anyone here -- can say that's going to change your mind about this plan, but if I were faced with this scenario, I think I'd focus on making my own financial condition so solid that it wouldn't be a major hardship for me to help poor ol' mom when she needs it. If you follow the standard advice here, you'd build up a multi-month emergency fund, fund your retirement, build an investment portfolio, etc. Then you'd be in a position of strength and easily able to help others. I commend you for trying to do what you believe to be the right thing; I just think you're going about it the wrong way.

Finally, the real concern for medical costs only runs at most 5 years until she qualifies for Medicare. How much can you reasonably expect to add to your $1,000 stake over 5 years while working at an admitted non-lucrative position?

I do admit that enabling bad behavior by lending/giving the parents money when they themselves have made poor decisions is a bad move.
For me, however, that is not the case. My parents never really sat down and talked to me about money but I learned from what they did (mostly my father).
They don’t have a mortgage, own land and have no credit card debt. My father is retired and my mother will retire soon. They are not in a bad financial place but I recently found out that there is a push for every single home to be connected to the municipal sewer system. They live out in the countryside where a lot of old buildings aren’t. The costs for this would be substantial and seeing as my parents have helped me so much over the years I see this as not only my duty but my privilege to help since I am in a position to do so (no debt whatsoever, six month EF fully funded, retirement savings + cash savings).

However, a few days ago I discussed the situation with my dad and he said that he already made plans for this, which means I won’t have to use the money. I will hold on to it though and am more than willing to use it for something else, should they need it. They might live for another 20-30 years if we’re lucky and who knows what will happen.

No thanks, this site is not about religion.