Taking Care Of Parents' Retirement Funds.

Yes yes I totally understand that

 

Dear Anusha,

Please forgive me if my thought is way out of line. Maybe they saved so much throughout their lives in order to educate two daughters and then to get them married. Now, they may feel it is time to enjoy life a little and fall back into their rhythm of saving money later. If this is the situation, any control over their finances brought in by their daughters would only make them feel terrible. Financial planning and emotions don't go well with each other. The problem with that though is when they were young, they obviously had higher income but that level of income can't be sustained after they get older. Moreover, when someone is older, sudden medical expenses may come which need to be provided for carefully.

Historically, how much they saved in the past could be one way to review their spending habits. Apparently, they saved something to ensure their children have a good lifestyle. This ratio of savings to earnings would help the discussions with the parents. Whether it is saving or spending, the habit once formed, it is difficult to change.

I am sure both daughters would help if they are in dire need of funds. Obviously, such needs are justified only if the parents are frugal in their spending now.

 

@Anusha2917 This is my personal experience. My dad was exactly like your mom. He worked extremely hard to educate me and my siblings(top private school in the city). My mom was SAHM. My dad was responsible for all the expenses . I was the last kid so I had seen how much he worked for everyone of his kid's marriage. My dad worked in one of the busiest departments in central government. Once he retired (he had too much energy) he wanted to do something to get occupied. He took up the project to rebuild his family temple(we supported him since we thought noble cause). He was a very strong devotee of perumal. He had all the time and retirement funds to spend lavishly. People around him extracted money. If you tell him you are suffering he will immediately donate no question asked. The whole retirement money was done in 2 years and project was half way . He took upon himself to finish the project and started getting loans. Unfortunately my mom wasn't aware of this since we were sending money and dad made very clear since he worked hard he wasn't sharing his money. By the time we figured out he almost finished the project with huge debt. My mom in her old age was suffering along with him because these people started coming home to get money.

We financially supported him and got him out but guess what he did next . Once everything was settled he went back to build kalyana manapam. It wasn't doable. We have to remove mom from home. It was emotionally draining and exhausting . He used to emotionally manipulate(feel bad for using this word since he was best dad I could ask for). We all were outside India and at some point he moved out without letting us know where he lived. After few months I got a phone call from house owner from my dad's old phone saying my dad fell down in steps and was transported to Government hospital. By the time we all reached he passed away . My mom, me and my siblings till date cannot get over this guilt. I was most affected by this since I was very close to him. My mom is still living with guilt that she didn't support her husband.

No financial advisor will work. I would recommend you to approach this psychologically. The more you control more they will start lying. Once trust is broken there will be anger and fights. I don't see any easy answer for this. I wish my dad never retired. I don't think anything else would have helped. He was destined to be that busy man.

 

Hi @Anusha2917, at the minimum, buy a good health insurance plan(10 or 15 lakhs sum insured) for your parents and keep a couple of lakhs aside for any emergencies. don't dwell too much into "educating" them about financial planning as it is not worth your time. I would suggest you to sign up for monthly physical bank statements for them so that they can be aware of their expenses and bank balance. Plan to get back to work as it would release most of your mental tension regarding the financial situation (like accepting money from husband) or discuss it openly with your spouse about your fears. trying to change your parents will not help instead work on backup options. enjoy their proximity.

 

I second @Viswamitra’s thoughts. I feel that many hardworking middle class families go through this. My parents worked hard and saved every penny for educating us and marrying off five daughters. My dad took voluntary retirement to follow his dream of helping people and didn’t get all his retirement benefits on time (he did receive the money but it came in installments). My mom rarely bought a new sari/ shalwar kameez for herself when she was working. So when she retired and all the kids were well settled, for several years she spent a lot of money on whatever she wanted. She jokes that she had 4-5 salwar kameez at a given time when she was working and now her wardrobe is so full that she doesn’t have room. It lasted for 4-5 years. She still buys stuff for us and her maids but it is not extreme anymore. My parents were in Government jobs and they get good pension and medical expenses are 80% covered.

I remember I was talking to my mom once, giving her the guan that how important savings are in the old age and she replied- “wouldn’t you take care of us if we don’t have money?”. I needed to make it clear that we would be happy to help but they receive more than enough in pension and shouldn’t be dependent on their kids.
All I can say is- be patient! Don’t be their parent. Once they start thinking about their finances, hopefully they will come around.

 

Sharing from my experience....

My parents never saved anything for their future. Not that they were spendthrifts, but they spent everything on us & for our future to give us a luxurious life beyond their capacity.
As a result, we grew up to be successful individuals today.

Had my parents thought about their retirement back then, we would have received basic/average education & support back in our childhood, which would have resulted a different life for us.

Keeping all the what's and ifs apart... The idea behind our background is that our parents did not plan their future, but planned ours well.

Today, I & my siblings share decent amount of money each month for my mothers spending. She has always been very careful with money throughout her life, and never wasted a penny unnecessarily. But now, she takes immense pleasure in gifting expensive things to her grand kids.
She spends lavishly on things like saree or phone or even foods like ice cream & chocolates sound weird to us. But this is what she enjoys after all.

We never expect her to save from our monthly allowance, rather we encourage her to spend & enjoy them. From that little savings my mom even booked flight ticket to one of her most favourite nephew last year for his Malaysia trip.
She occasionally support one of her not-so-well to do brother financially too.

But we keep a good amount of money aside thinking of her future. Especially medical expenses.
We don't save that amount on her name, but everyone knows how much we save or ready to spend for mother's purposes if need arises.
If not, that portion of the money will anyway remain with us.
Mom doesn't know about it, but she knows her children care for her and plan for the dark days just like how we plan for the rest of us at home.

Giving money to parents and then control their spending won't work. Especially when parents believe they know everything, it is hard to convince.

If you & your sibling really wanna plan for mom's insurance or any dark days, please go ahead and start a separate fund under your/your siblings' or joint control. No need to discuss this in detail with mom.

But continue to share your regular support, pocket money, gifts etc..etc..as usual & let them plan & decide how they want to utilize.