Vicious cycle where they live down to expectations?
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Some people need special needs trusts set up for them where a certain amount of $ is distributed to them each month to live and at the same time they canāt piss it all away and donāt have full control over it.
I havenāt redone my estate plan since my divorce 13 years ago. I know itās something I need to do but I always get busy with something else. Iāve learned a lot through the years about what I need to do and not do! Iām remarried and what Iāve learned about my current husband was that he grew up with nothing worked hard and then when he became successful and in an unhappy marriage he had a wife that spent $ and he let her because it was easier than saying no and he just spent what he wanted to as well without thinking about the costs or savings for his future. Live for today worry about tomorrow. Pretty dumb! Anyway his divorce pretty much wiped him out due to the bitterness of it and legal fees etc. I learned then that I was not ever commingling $ with him, or at least my money with his, that I had to make sure my kids and him are taken care of if I die before him but also that if he gets anything of mine that itās not given to him outright because heāll just piss it away on the āfunā things he wants to do. Iām the rational one he is the one that would travel 365 days a year. A lot of why I havenāt redone my estate plan is just the complexity of it because for him I want the 401k he would get of mine I want to be put in a trust FBO him but also so that when he dies it then reverts back to my kids not his kids. So complicated but his kids have no relationship with my kids or me and essentially none with their father so they are not getting a penny of my assets. My husband has to be given an allowance essentially or he will have nothing. Hopefully I donāt die before him and itās a non issue. But it is hard when people are spendthrifts!! I get that.
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One option for helping loved ones with spending is a āTrue Link Cardā. https://www.truelinkfinancial.com/
Works like a credit card, but it is a debit card that you can block places they can use it, and put dollar limits on types of expenses. You can track spending. Works well when your loved one needs but canāt handle financial independence.
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This!
So many who lack, for assorted reasons, the ability to be in control of their lives, successfully (food/clothing/shelter without assistance is the minimum) also feel they should have autonomy over their choices and there is no legal means to protect most of them from themselves. Iāve seen this with seniors who are aging and on the path to dementia, those close to them know something is wrong, but the senior disagrees and even if you wanted an ugly fight, they would likely be able to put up a good front in court. Banks & doctors are often unable to really help, too. Tough places to be.
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I would love to hear more about this. It does sound like a possible solution.
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@rickle1 I certainly think if one has health issues and foresees not a long life, that will definitely indicate a good time to retire if the finances can handle it. I see it as āgoing the distanceā with 65 as a good goal. DH retired 10 months earlier than planned, but it turns out the timing was appropriate to spend time with his parents who then died 1 month and 4 months after he retired ā so he spent a lot of time with them in a distant state.
I am very much looking to retiring in under 5 months as I can pick up Medicare and we both will be on our Medicare insurance. My work now is all about the insurance coverage and less about the earnings - but having the earnings pays the bills. Making the transition to retirement plans. DH is living a healthier lifestyle and although diet and exercise (or the ābetter termsā eat healthy and live healthy) will be a struggle, I will not have the āstrugglesā and issues that work has.
Some of the ātransition workā has had me not even read the last 3 issues of Kiplingerās Personal Finance (got another issue in the mail). IDK if it is because I have āother irons in the fireā and we have plans in place and also things to do on the check list.
Continuing to have a close relationship with offspring (in other cities) and assist them with transitions too.
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@shawbridge I think the plan is good. As you say, he has several things already (living in a more cost friendly area, having a pension, having supportive family). The trust will certainly help him make it through OK.
Would he not have been upset if the family said someone would pay the Uber charge? Unfortunately he has not ādevelopedā in many ways in life to really manage life w/o family help.
Sounds like he is a bit of a loner and has developed some habits (like the automatic lottery spending) - but if that is his bit of hope, of entertainment (in addition to his sports teams). He fills up his day with what must make him happy.
I have a few deep family issues with two siblings who have cut themselves off from me/my H, but not my other two siblings - older sister has made great efforts to stay connected with these two, and she almost was cut out by younger sister as well - many years very minimal contact.
These two siblings have made their own choices - which ultimately have hurt themselves and their children more than me. One has bipolar disorder (mother and grandmother also had - mother was treated for, but mother had some narcissistic tendencies as well) that she handles by immersing herself in doing well with work, with a social life with her business owner H - living in the ārightā neighborhood and acting out āliving the lifeā, exercising, drinking (no meds, no therapy). Sister didnāt like how the drug at the time made her feel. She dis-associates herself with friends all the time and then makes new friends. I believe her 2nd husband is now her lifeline and she gradually distanced herself from me and then told me I was not welcome in her home (I live states away from her). The other sibling (younger brother) cannot return to the US - he is a convicted felon that skipped out on probation (for a fairly good reason to ādo somethingā as many policemen in the small town local police force were mad that he got probation and some were talking about plans to plant drugs and get him arrested) - however he made the felony bed himself.
Interestingly, our DDs/family are not cut off. DDs donāt understand it. Now brotherās daughter has cut H and me out too (not invited to her wedding, which of course her dad canāt attend). DDs/significant others are invited to the wedding, which got postponed from Oct 2020 to Oct 2021 - only DD2/BF will be able to attend as DD1 is having a baby in Sept and has two children who would not be invited to āadults onlyā wedding and reception in another state - and DD1 could have managed coming with my help/baby and some hotel babysitting, but DH and I are not invited.
@bookworm thanks so much for explaining behaviors and the link to mental illness. It explains so much.
Iāll just leave it there
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My folks are the poster children for retirement and how it used to be. We never had much money growing up. I would say we were lower middle class, but sometimes we might have tasted middle class for a short period of time. Dad worked construction(union with pension) and Mom worked as school secretary and eventually went to the board of ed.(pension). They bought a house in 1971 and never went bigger. Paid it off in 1997. Dad had to retire at 55 heart attack. Mom worked until 65.5. Once the pension and social security checks started for Dad my folks never had to worry about money again. Check this they never put any money into the market.
Dad passed. Mom probably spends about 30-35% of her take home from one pension and social security. Once the house is paid for and if you happen to live in a low property tax state you really donāt need much to live on. Just a supplemental ins plan for medicare.
That is the way it was supposed to be.
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Unfortunately pensions are not what they used to be. My husband has a pension from his managerial job but new employees in his company do not. He has stayed at this company his whole career also, the thinking was that he would not have as good as pension in another job.
Both of my kids and both of their significant others do not have pensions. Have worked for companies that did, but no longer do.
I would be interested if any companies offer pensions? Iām not talking about state employee or teacher retirement accounts because most of those are instead of social security. I know Ohio is set up that way.
But do any companies offer an old fashioned pension for new employees? And you can still draw social security?
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My Hās company not only stopped pensions for new employees, but they froze pension amounts for current employees. H and his peers were fortunate that they werenāt quite ready to retire. They had time to buckle down & contribute more to their 401k accounts, but it was a bummer to suddenly find out in your late 40ās/early 50ās that your pension will be considerably less than what you had expected.
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And then there were the employees that their pensions were stolen. Pension fraud.
My dental hygienist, her parents pension disappeared, stolen by Denny McClain
Another problem that some pensions had was that they were underfunded due to overly optimistic assumptions on investment gains at the time the money was supposed to be put in.
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I know the New York teacherās union employees get great pensions. Iām not talking teachers, but the union employees.
Unions are very good at protecting employees. I had a number of classes on unionism in college, and I definitely understand the need for unions. I donāt have an issue with unions protecting their members. That said, my brother retired with a union pension from the same company as my H, and while he didnāt lose as much as my H, he did lose some of his expected pension. I donāt think anyone can plan on company pensions anymore. Even if they offer them, the company can change them down the line.
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Public pensions are definitely the way to go if you can get one. State and federal ones are bankruptcy proof.
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Hās granddad retired with a pension. The company folded shortly after he retired and he got nothing.
My local govt pension will.be roughly 35-40% of my salary. And the fund is fully funded which is supposedly rare. I donāt pay anything but new hires now do. But, they took out almost any hopes of COLA several years back. Economic conditions must meet this long list. At the time, the conditions were only met once in 15 years. And then council must agree to raise it. But the real ugly part was when before Obamacare, they raised the insurance costs so high that it was greater than most peopleās pensions. Those who werenāt old enough for Medicare were in a bind because most had too many pre existing conditions to get it anywhere else. At least those of us who hadnāt retired know to stay until Medicare or now have ACA options
Thanks for all of your thoughts.
@bluebayou, Iām hoping the the NJ pension works in TN (at least for rational spending).
@bookworm, I think the issue here is some kind of Aspergers. My father, a brilliant theoretical physicist, was seriously on the spectrum (as were pretty much all of his peers). Alas, my brother got some of the lack of reading of the world but without the extraordinary intelligence (the chairman of the MIT physics department told me that my father was the smartest guy he had ever met).
@srparent15, the trust I set up from my motherās estate would only pay out a certain amount of money each month or year and would require the trustee (my sister) to agree to larger expenditures. We did that for precisely the reason you suggest.
@rickle1, I think my parents tried that for years. I switched my mother a few years ago to an excellent financial advisor who offered to work with my brother and help him do a financial plan when he retired and then again when he was going to move to TN. My brother evaded this opportunity repeatedly with strange excuses. Not going to happen. Iām hoping that he can be somewhat happy in the world he has created for himself.
He doesnāt understand the big picture, when things happen to him that he doesnāt like, he feels that people are out to get him. Included in that, sometimes, is me. Ah well.
@somemom, thanks for capturing that strange dichotomy between wanting financial independence (and being legally/socially entitled to it) and not being able to manage it ā and not being able to understand that they canāt manage it.
My brother was on the autism spectrum, although not diagnosed until late in life. He was brilliant. He also had issues with handling money ā¦ or for that matter, pretty much anything in his life. He passed away after a stroke a couple years ago, but I canāt tell you how worried we were about him for years. Itās tough to see our family members struggle to manage in life.
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Just caught up on the thread. Whew - lots of topics and info!
My spouse and I always saved for retirement first, kidsā college second. We are not super frugal, but careful. We donāt buy anything unless we have the cash for it. Sometimes it is a better deal to finance the purchase, but we always have the cash in the bank.
We did finance the purchase of our house - stayed in it, paid it off early. And one car - and paid it off early.
For many years we made less than $85K a year combined in a pretty high COL area (DC). While not extravagant, we have been able to give our kids āthingsā and experiences and fun. We are paying for their college and they will graduate debt free which makes me feel good.
I do not, however, feel the need to work to a certain age or to have a certain amount of $ for the kids. I feel I have done my job and done it pretty well. I would like to be able to help them with grad school, or $ towards a car, or give their our old one, etc if we can. They will get whatever is left after we are gone (they know not to expect much!) It may end up being a decent amount. It may not.
I freak out thinking we donāt have enough to retire at 60 (and according to this thread and other things I read, we have saved more than most people in this country). We need to do some serious number crunching. Weād like to retire at at 60 (I donāt want to work to 65 and die at 65-1/2!) Healthcare is really the question mark for us.
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