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?

It's a no from me. They need a reality check and to cut their cloth

I started a thread a while ago about my having to support my parents financially, and I got some shockers of answers, some of which basically amounted to "let them die" because they "are adults". Some echoes of that here.

My situation is different from many PP, my parents had no income whatsoever once the pandemic lockdown started, they do not own their house, and the pandemic basically left them completely out of options. It was clear I had to step in and I did. No regrets and this is still the situation, but the callousness of some posters was really amazing.

As has been the case for some others on here, my parents paid for my education (for 19 years, until I was 25) and I am eternally grateful for that. The education is the reason I now have the income to support them, so there is some good karma for them, right?

I would absolutely help them, if you can’t have a frank discussion - start in small ways by helping out with bills, shopping, etc and try and Get them to tell you what they need. It’s absolutely the right thing to do if your finances allow.

I am quite baffled at this attitude of leaving parents to fend for themselves. Your actual parents who brought you into the world and literally raised you. How can you go to bed at night knowing your parents may struggle to switch on the heating or pay their bills?

Exactly this! Well done for taking care of them, it’s not a decision you will ever regret. My own experience as a parent has opened my eyes to the many sacrifices my parents made for me so I could have a good education, etc. they would never dream of reminding me what they have done for me.

@fallfallfall

I’m 65 with a “small” mortgage. My investment group recommended the mortgage over pulling invested money.

This isn't about pulling down investments. This is about them receiving 'medium' size inheritances and deciding to enhance their house rather than clear the debt.

The first thing they should do is to downsize and free up money from that.

This is about them being young enough to sort their own problems out, not to be made to feel senile and dependent at the age of only 70. By all means ask them if they are concerned about their savings and whether they have sought financial advice, but giving them little handouts like children sounds a long way off still. Most parents don’t expect to switch from advising their children to being told by their children they aren’t managing their finances properly at the age of only 70 (unless they have always been irresponsible with their finances!).

@Auroreforet

My dm has a very small pension. Her house needs a lot doing to it but she could never afford it. I have her bank details and occasionally put money in without saying anything. The amounts vary depending how flush I feel or if she has mentioned a large expense coming up. Sometimes she notices and I tell her it’s to help with travel to family or I heard she was meeting a friend and wanted her to have lunch etc. Often she won’t notice. It’s almost like a game we play to spare her pride but it also means if I couldn’t afford it I wouldn’t have to explain why I stopped.

I agree, @Auroreforet, pride can be a big issue when parents need help, although that may not be the case with the OP's parents, she won't know until she tries to discuss finances with them.

Back in the 1980's, my Mum was horrified to discover that my grandma had pawned her engagement ring to pay household bills, rather than tell her family that she was struggling. This was a woman who'd been widowed young, worked almost all her life, but prices were outpacing her state and work pensions.

Different scenario to the OP's, but people do have pride and we need to be careful. Your approach sounds just right for your Mum.

@CSJobseeker, however upgrades to the house might be seen as an investment with higher yields than the past stock market.

So on retirement they upsized the house, then over the years they have upsized it even more at a time in life when most people are downsizing.

Do you have inheritance tax or taxes on property where you are? If so I'd be concerned that you are funding them out of after tax income, the result of which their estate is maintaining its value and will be taxed heavily when they die. Far better for them to release some equity from the house (on which they seem to have over-invested) and reduce the value of their estate.

@Coffeepants

I would absolutely help them, if you can’t have a frank discussion - start in small ways by helping out with bills, shopping, etc and try and Get them to tell you what they need. It’s absolutely the right thing to do if your finances allow.

I am quite baffled at this attitude of leaving parents to fend for themselves. Your actual parents who brought you into the world and literally raised you. How can you go to bed at night knowing your parents may struggle to switch on the heating or pay their bills?

I think very few are suggesting that — mainly because the parents still have an unknown amount of money and aren't on their uppers. They could still have £200k stashed away for all the OP knows. The OP's a single woman likely to have to work 10 years longer than them before she gets her pension. Is it really fair for parents who've done what they wanted with their lives — retired early, moved abroad, gone on loads of holidays — to expect their children to support their lifestyle when they overspend?

I haven’t read the whole thread but I don’t think her parents have asked for help? The OP also mentioned they helped with education, etc. surely they have made sacrifices along the way for their children?

A lot of posters are saying ah too bad let them cut their cloth, etc. regardless of the circumstances, I would help out my parents in a heartbeat.

Where I come from, it's encouraged to help parents who are in need, it's family... so yes, do what you can if you do love them and are in a position to help. Yanbu.

Think this is a good point, cultural differences. Mine is similar in that parents are rarely in care homes and taken care of by children as they get older (with hired help where needed). But I appreciate the culture here is different so everyone may not have the same thinking.

I started a thread a while ago about my having to support my parents financially, and I got some shockers of answers, some of which basically amounted to "let them die" because they "are adults". Some echoes of that here

Out of interest, which posts on here 'echo' let them die?

What a load of hyperbolic nonsense. OP's parents retired at 55, bought a new house, had two inheritances, re modified new house, and live quite a nice lifestyle by all accounts. They haven't even asked for help, they've just said they haven't got as much left as they thought they would have. We're not talking about a pensioner who's had to work til pension age and is now choosing between heating and eating. For all we know, they could 'only' have half a million left, instead of the million they were expecting.

People are just asking why the OP should fund her parents retirement, which could last for another 20-25 years, on top of the 15 years they've already had, when they're sitting on an asset and OP will, in all likelihood, have to work past the age of 65? Bonkers.

Because they’re her parents? I don’t know, wouldn’t you do it for your children? It’s the same thing, isn’t it?

In your position no , I wouldn't help. You deserve to retire too and not be working until you are 70.

If you had paid off your house, no intention of having dc and very high paid job then yes, sure, but you are sounding very financially insecure. No one is coming to save you from the bread line. You also deserve a nice life when you're older too.

Tell your parents you will never see them in trouble because you love them. Advise them against equity release.

Could you save up and in the future buy them out at market value and they could rent back from you at market rent. That might be clawed back by care home fees so need to be careful bit you might end up with an asset plus they can give you rent rather than one of these awful Mccarthy and stone type living schemes which rinse pensioners for cash.

@Coffeepants

Because they’re her parents? I don’t know, wouldn’t you do it for your children? It’s the same thing, isn’t it?

No. I don't expect to have to keep my parents in the lifestyle they've become accustomed to because they're down to their last 400,000 quid (and neither would my parents expect it, tbh), but then it's not an expectation of my culture. If it's yours, then I fully appreciate that.

I would expect them to cut their cloth to suit their income, as they would me. If my mum and dad had to keep bailing me out because I'd overspent, or because I was spending money on things I couldn't afford (not including food, heating etc), they would think they'd failed as parents somewhere along the lines.

No I wouldn't. Sounds like they have been enjoying themselves spending far more than their finances appear to allow for. What position are your siblings in? I like to think if I was older (eg mortgage paid off) if I got an inheritance I would give a large amount to my children (if they were adults and could benefit more from it).

Should have said "I wouldn't now" as I have in the past.

@LifeAdvice

Just to centre my thoughts, I was thinking I could either:

A) start to take over payment for some every day things, to lighten the load and give them more available money on a day-to-day basis. I already pay their Netflix bill (I set it up and just put my details in years ago). I also pay their phone and iPad bills (gifts). I could look for more things like this? My problem is, this doesn’t go to the heart of the issue, and in fact kind of encourages more day-to-day wasteful spending.

B) Do nothing now, but talk about when they plan to sell the house (raising it as a general ‘what are your future plans’ discussion. As part of that I could discuss perhaps buying their next flat and having them live in it rent free, so they would have all their money. I could explain this would be an asset for me, and they would be good tenants, who would look after the place. Obviously this is an expensive option for me, i would need to save a lot between now and then to be in a position to do it, and to afford 2 mortgages, and I would lose money in no rent. However, I think it would be cheaper than paying them an allowance every week/ month?

C) pay them money every week/month. Obviously this would need a sensitive discussion first and may not happen for some years, but do I mention it early so they aren’t worried about money now? Just let them know that I will always be there financially? (Or be there to the amount of $xx financially and no more!)

Not sure. All options feel awful.

All of your comments and the suggestions here are coming from a truly kind and caring place, your parents are lucky to have you in their life. However... this is coming across to me as a bit controlling. You are worried about your parents finances, you want to do something about it, you want to pay them an allowance, you want to buy a flat and have them live there, etc. What do they want? Assuming they are mentally competent, let them be in control of their own life. Your dad mentioned to you that there isn't much money left, with no context of "much" this is meaningless. Have a conversation, tell them you are wondering whether they feel comfortable and secure about their future, ask them whether they would like any advice or support, let them know that you are able to help financially if they need it. Only then, if they do say they need it, is it time to think about solutions. I've no doubt they are well aware of the option of downsizing and have considered themselves when the best time would be.

"Coffeepants

Because they’re her parents? I don’t know, wouldn’t you do it for your children? It’s the same thing, isn’t it?"

I completely get this, but British culture, or some responses here, show an individualistic attitude. For me, especially after becoming a parent and appreciating what they've done for me even more, I don't see it even as sacrifice, it's" responsibility" to me, this "parenting" in reverse...Children gradually get more responsibility and at some point become savier to navigate the world than ageing parents, due to changing times. So the balance of parenting shifts, which, in the grand scheme of things, should make both the former child and parents proud. Circle of life..

Nowhere has OP suggested her parents are expecting it, she has put the pieces together. I’d do the same for my kids, siblings or parents. If they needed it, I’d help in any way I could to not see them suffer. Im financially independent but in my family we go out to a meal and fight to pay the bill, I would never expect help from my parents but If they had an inkling I needed help, they would do anything they could Maybe it is cultural, just seems really strange to me to leave your parents in the lurch.

@AngleseyBaby absolutely agree, I think it is a very British mentality. From my interactions with colleagues and friends here and lots of posts on MN, people are astounded if you are helping your aging parents even by visiting, cooking meals, doing their shopping. For me this is the bare minimum of expectation that I would have in terms of my responsibility to my parents. They put me through university, I was never charged rent, paid for my wedding, offered physical help when my children were born. I would not be who I am or where I am without their constant support and guidance. Attitudes on here are shocking.

[quote Coffeepants]@AngleseyBaby absolutely agree, I think it is a very British mentality. From my interactions with colleagues and friends here and lots of posts on MN, people are astounded if you are helping your aging parents even by visiting, cooking meals, doing their shopping. For me this is the bare minimum of expectation that I would have in terms of my responsibility to my parents. They put me through university, I was never charged rent, paid for my wedding, offered physical help when my children were born. I would not be who I am or where I am without their constant support and guidance. Attitudes on here are shocking.[/quote]
@Coffeepants. My personal attitude is that I chose to be a parent so I’ll do whatever I can for my children, but I don’t expect the same in return.

Your parents have clearly done a lot for you as a child and adult so it’s lovely that you want to help them in return, as does the OP. I’d have walked over hot coals for my Mum, but she certainly didn’t expect anything from me.