Would you subsidise parents?

[LifeAdvice]

This might be a bit more of a WWYD, but posting here as I’m not sure if I am BU or not.

I have recently become aware that my parents might not be as financially secure in retirement as I (and my siblings) thought. They both retired quite early, with a paid for house, a full retirement fund and some spare savings. They then sold their house and moved to the place they had always intended to retire too, however in doing so, had to get a small mortgage. Then the stock market went down and their retirement fund took a hit, but there was still a large amount there, and I (and they) assumed they had many more years for it to correct itself. They also knew they had a lot of equity in the house.

Over the last decade they have lived reasonably. They have had 2 medium inheritances and used them for house improvements and paying off (most of the mortgage). They have had some holidays, but mainly prefer to travel to see family. They spend money on keeping their home and garden nice, treating their grandchildren and children (just small things, but on a regular basis) and lunches or coffees out. They buy a new TV when they want one or new furniture etc, so my siblings and I didn’t think about their situation.

Recently I was talking to my Dad about my retirement account. Straight out of Uni Dad was v helpful with basic financial advice, and I still occasionally ask him about things, or tell him how a decision I made x number of years ago has worked out (eg “I now have XX in my retirement account, thanks for telling me to put a bit extra in it each month all those years ago” Or “do you think I should consolidate this fund?” Etc) Sometimes my Dad would mention their own accounts as an example, but not often. In doing this recently, my Dad hesitated and then shared that they didn’t have a lot of money left. He then tried to cover it and said they would use the house equity, but it left me very worried.

I feel torn, as I am wondering if I should help them financially? If not now, then at least offer now for later so they don’t need to worry? They haven’t asked and they never would. They would just worry and fuss in private. I would never be able to ask what they had or where they spent it. On reflection, I think they don’t look around for good deals and waste a lot of money by going for the first option, rather than researching - but it’s never been my issue before, and I couldn’t start now.

They have been good parents. Annoying at times, lifesaving at others - average parents! They paid for our education and gave us a great upbringing. They paid half of uni, we paid the other half and after that we were all financially independent. No financial gifts to any of us after uni, but plenty of practical help and small gifts etc.

Financially right now I am ok, but as each year passes I get more solid. I can’t afford to subsidise a whole other household (who can?!?) but I could start to give them money, and the amounts could increase as I get more financially secure. Of course, doing so delays my own financial security.

WWYD? And how and when would you do it? Knowing they were unlikely to ask and would suffer in silence?

I would absolutely subsidise them within my means. No questions asked or terms. My parents would give their last penny for me. I'd do the same for them.

NRTFT

I would help, but I would do it by saying to your DF that his comment has made you think about their future and that you don’t want them to worry about it. Your there to help them when and if they ever need it. They helped you financially, you would have been worse off if you had paid for uni outright so youd like to give back now.

I’m assuming you have siblings, are you in a position to talk to them without your parents knowing and see if they are willing to help too. Between you, you could could come up with a way to support them.

Maybe if the time comes and your parents have to downsize for financial reasons you and or you and your siblings could buy the house between you. Let your parents stay there until they are ready for sheltered accommodation or what ever they need. You would still have the property to sell afterwards.

@Bodule thank you, that is very kind. They were and are excellent parents, who would do anything for their children and grandchildren - move furniture in and out of uni flats, make curtains for flats, paint walls, dig out gardens, wait in all day for furniture deliveries for us, so we could be at work, child care, and thoughtful little gifts. They are never happier than when doing something for their family, or friends. Usually practical help too, not financial.

I don’t want them spending their final years worrying about money when I have the power to help. And yes, I might have wished they would have made different choices back then (retired later, saved more etc), they might have also wished I made different choices (had children!). And none of us can predict the future. If one of them passed away within a year, I’d be thinking how glad I was they retired early and got to enjoy some time before they went. You can’t make these decisions from hindsight.

@GOODCAT I like this approach. I might try it somehow, as I think Dad is more likely to let something slip to me. Maybe next time I give him an update on my position, I might try and ask a few more questions than I otherwise would and get a better picture. I like the idea of saying I’ll be there, like he was for me.

@Cameleongirl early 70s and an approx 20 year time frame for support is about right. However as someone else said, after they are 80, I don’t think they will be doing anything too wild and expensive! But I don’t want them to not do anything now or in the next 10 years due to worrying about money. As now is the only time they have to ‘do something’.

@SpiderinaWingMirror yes, they absolutely would be mortified by my offer. If not done carefully, they would clam up and never mention their finances again. They would eat beans on toast for every meal, but serve a roast when I came to visit, to make it look normal for me. That’s why I was so shocked Dad even mentioned it, and it makes me think he is already really worried, so it must be bad. But yes, I do take people’s point, sometimes people of that generation think it is bad, but it isn’t.

@ancientgran I could do this, but I would prefer to buy the next place they are in, to be honest. It seems like a cleaner transaction, rather than get valuations and % etc of the house they are in. But I’ll think about it.

@CSJobseeker yes, this is where I get a bit upset, as yes, in 20 years I will be older than they were when they retired, but yes (even without funding them) I will still need to be working.

Especially as I have no partner or children and so my financial security all falls to me. No inheritance either, now that I think about it!

So selfishly, I do think about the fact doing this will likely add years to my working life and stress levels. Years that they didn’t need to work. But what else can I do? I love them, they are good parents and they made the best decisions they could at the time. They are so generous with their time and help, and I want them to be happy in their last 20 years (hopefully!) I suppose helping them or not is not really the choice I am making, it is how and when to do so.

I think there’s a few nice things you could do for DP’s without necessarily handing over a lump of money.
I’d offer to pop over and spend an afternoon helping your lovely Dad with using some of the fuel and insurance deal search engines and set a little target to see how much you could try and save them each month on some fixed costs. Offer to be the tech operative if search engines etc aren’t his thing.
You could definitely from now start picking up the coffee and lunches bill.
Maybe you could pay for an annual holiday cottage for everyone to go away together?
You could pay for the Xmas groceries.
If you really wanted to splash the cash you could pay for private health insurance for them both…though I expect that could be a lot.
I’d do these things rather than give a lump of any kind which then puts pressures and obligations and possibly tensions on how that money might be spent.
Without wanting to sound disrespectful to your DP’s, the unusual thing that they did was to take on a higher mortgage straight after retirement. Most people tend to downsize rather than increase their financial loading once they stop work. If they don’t need the space, could downsizing be an option?

My brother and I financially help out our mother. She would probably survive without it but she wouldn’t be comfortable. She was a SAHM and came away with the bare minimum following divorce. Our father on the other hand retained the family home and has a good pension and a much younger wife who has had a very good career and only just retired. I only mention that to explain why we help mum but not dad.

Overall, I would absolutely help my parents if I could afford it.

If they love their house could you buy a chunk of it from them so they have the cash now and can stay in it and when they sell the house eventually you will get your money back?

As you say, you're family is not very good with money conversations, given that you've based all this on a vague "they don't have a lot of money left".

This is nuts. Don't make plans like the A, B, C you outlined above. You have no idea what the situation is. You may be offering to take on their mortgage or buy a property for them, when they may have more spending money than you do!

Sit them down and ask them, say 'I've being worrying since the last thing that Dad said about your finances, and if you're in trouble, I want to help but we need to be up front".

And then you can actual make some reasonable decisions. And that might well mean help cutting down their expenditure and shopping around for things, as it is really easy to fritter money away (personal experience there ...) without necessarily having a higher standard of living. I can't see that they'd want to jeopardise your financial security, surely that would just make them worry more?

I would (and have) subbed my parents when they needed it. Gladly.

But you don’t actually know that they do need it at the moment. Just a vague state from your Dad.

I really wouldn’t increase the bills you currently pay. It fritters your money and gives them an unrealistic feel for their budget.

And they clearly are not struggling at present.

You won’t be able to retire early, with no daughter to pay your bills. And if you spend a lot of your money on supporting your parents.

I think something like buying a share of their property or buying a flat for them to live in might be better as then you are helping them but also gaining some security.

Be very wary of them doing equity release. My late MIL did this about 10 years ago, taking £20,000 out of the value of her home. Then 6 years ago she was in a situation where she had to move out very quickly due to illness, it would take too long to sell the property and we needed to be able to rent her somewhere suitable to live quickly - we had about 2 weeks notice to get this all organised after she had a fall resulting in a lengthy hospital stay.

The terms of the equity release she had taken out said that the property could not be rented out, so between us and BIL we had to wipe out our own savings to pay off the equity release (approaching £40k by this point due to the interest rate she had agreed to) so that the property could be rented out to fund her a place in sheltered housing. We also had to pay solicitors to draw up a document stating that we now owned x% of the house in order to protect our own money.

From our experience I would say equity release is far more hassle than it is worth, and unless you are sitting in the room when it is all being discussed, sadly, I do think a lot of older people are taken advantage of when being sold this product.

I wouldn’t help because this is entirely self inflicted. Retiring early, holidays, taking out a mortgage etc. They need to live within their means which unfortunately means making some tough decisions.

If you start funding them now, they’ll just continue burn through money and you’ll just be pushing this scenario down the road by a few more years.

They need to wake up and get their shit together.

And yes, I might sound harsh but how many of us will likely end up working long beyond 70? You cannot work yourself into old age while they chill at home and you pay for them. I’m sorry, but no.

I would be a little resentful as our elderly and retired parents are most certainly in better finiacial position then most of us will be when we retire in 20-40 years from now, their pensions schemes better, they got more money in interest for savings and for their homes which most of them paid pittance for and I would also be aware that a lot of older people as others have mentioned worry they don’t have enough when in fact they have more then enough.

Saying that if it was my mum who has worked every day of her life to save and create a good life for me and my sister I would help, but she is savy with money and probably won’t get in such a position. I would go with your plan B if you can afford that is an investment for your future and will definitely afford you some luxuries in your future.

I wouldn't help. Sounds to me as though a combination of bad decisions and bad luck has led them to this and they need to take responsibility and change their lifestyle accordingly.

So basically you want to give them money? They're not struggling to buy food but you want to give them money for things they might like to do? So just offer to pay for a holiday or a car? If you can't afford it don't offer? it just seems like a massive non-problem.

Yes I would subsidise my parents and did in fact.

Me and my two siblings all paid towards their mortgage (it was split equally between our parents and us 3). They didn't buy a house until they were in their 60's and that was only with help from us.

They never had any money but were brilliant parents often going without for us.

We also paid for a sky subscription for them so my dad could watch the sports he loved.

Both my siblings have children but me and DH don't. Having said that, my siblings are both far better off than me and DH and always have been. Even though the mortgage payments were not that much it was still sometimes a bit of a struggle for me and DH to afford them.

@KrispyKale

It can definitely be time for you to be treating them when out together since they are the pensioners, that's my rule of thumb anyway!

Pensioners aren't all poor and dependent on the state pension are they? Pensioners now are often the richest people in the room. I'm not buying lunch for people who not only own their houses usually, but have paid the mortgage off (not the case here, but the case for most old people I know).

Are they struggling to pay bills or live the life that they want?

I mean they retired to where they wanted to & took on a mortgage to do so!

It sounds as if they have made some bad decisions tbh.

It probably isn't as bad as they are making out.

I think that I'd do nothing atm.

My worry is that now they have realised there is a problem, they will either, continue on, with the capital reducing quicker and quicker (as it does at the end stages) and suddenly with a bang they will be in trouble fast, with no income. They then might be vulnerable to an unwise home equity release, or selling before they want to (at a bad time, market wise) etc.

Alternatively they might massively course correct, reduce their income and try and live on nothing. I know they would hide it, but try and act like it was fine when we came over. Already they have mentioned one or two things that are broken, and when I asked about replacements they fobbed it off or blamed lack of supplies due to Covid. This could be true, but it’s also the first thing I would expect them to do if they were having money issues.

If they haven't been frittering their life savings away on gambling shopping sprees, alcohol, smokes etc then yes, I would.

Life has changed & become very expensive & if they were good parents to you who aren't trying to guilt trip you into supporting them, then it'd be a nice thing to do if you can afford it.

However if was married or in a long term relationship with shared finances it'd be something to discuss with partner too.

If $20 or $50 a week won't break your bank, it might really help them.

I think the key point is in your very last sentence - "suffer in silence".
No part of the lifestyle you have described indicates they will be suffering if you don't help them.

I absolutely would not be helping my parents support a lifestyle in which they did not shop around, or consider down sizing. But that's from my own viewpoint, where I do shop around and have not had the money to do my own house repairs/improvements.

If you have your own children, I think I would want to invest in their future rather than support my parents.

I guess if I had loads and loads of money then it would be neither here nor there.

@RosesAndHellebores

It sounds to me as though they haven’t cut their cloth, so no. I am well aware my mother and step have spent their capital—and my inheritance—. They have not acted wisely so no; they can sell up and buy a one bed flat. Obviously if all they had was a one bed flat, old furniture and hadn’t spent the last decade cruising and/or golfing in Florida I’d help faster than a heartbeat.

It isn't 'my inheritance' until they die and the will says so, they're currently spending their own money, maybe not in ways you would approve of but it's their choice.

@LifeAdvice your still not mentioning their age. My 88 yr old mother is now only agreeing to safety related upgrades. Is obviously planning for the next downsize selling her house and going into seniors apartment type housing.

No, l wouldn’t. They did retire very young which no one made them do, it was a choice and a rather indulgent one. They can also downsize to free up some cash, yes they may be reluctant to do it but it’s an option. It’s also a big commitment and out of order for you potentially to have to work past retirement age, when they retired super young

My parents both retired relatively young (55 and 62). Have always paid the minimum e.g. my siblings and l paid for driving lessons, for university etc. They could afford to pay for them but chose not to and their choice obviously but it obviously makes me think why should l help them out. I also have way more expenses than them and less help (e.g. they got free childcare from their parents and l won’t. They got free university and l didn’t).

Before you do anything, I think you should have a really honest talk with them about their finances. It's nice that you want to help, but if they are going to be receiving the benefits of your generosity they need to come clean about the situation.

Personally I 'd be talking about them downsizing - in their 70's they don't need to stay in a big house just because they like it there. Most people in that age group make the decision to downsize because it's a sensible thing to do, and it releases the money that they need to live on. It won't come as a great surprise if you suggest it - at their age they'd be well aware that it's an option taken up by many older people.

I'd do that rather than start to subsidise them. If you were wealthy, fair enough, but doing this will mean that you can't have the luxury of retiring early like they did .

You say they have spent your inheritance that always gets me surely the money is for them to spend as they please. If you want to help them do if not don’t it up to you.