This is a tough question that will affect more and more of us every day. Pensions are becoming rarer and most people retiring today have very little retirement savings. Luckily, social security is still paying out, but that might change in the future. People are also living longer these days and it’s easy to see that more and older retirees will need help financially.
Of course, you should help your parents out if they need it. For me, the question really is how much I should help my parents. I come from an Asian background and our culture expects the kids to support their parents in their old age. I saw this with my maternal grandmother. She was my only grandparents who lived longer. She had 9 kids and they all chipped in to support her when she retired. I know this is common with other cultures too.
Now that my parents are getting older, I’ll have to think about this more. My dad is still making money from his various hustles, but we don’t know how long that will last. He rents out his condos in Chiang Mai to Japanese retirees, day trades, sells Buddha amulets, and lends money. However, he is 67 now and he is starting to slow down a bit. My mom is splitting time in Thailand with staying with us to help raise Baby RB40 and she doesn’t have any income.
The problem with their retirement is that they won’t have much income. They don’t have pensions and they don’t qualify for social security benefits because they didn’t earn 40 credits. The worked in the US for many years, but just didn’t make enough to qualify. They have some assets, but I don’t think that is going to last long once they start to live off of it. My dad invests in Thailand’s stock market, but I don’t trust him at all. He doesn’t believe in dividends and only trades for short term gains. He makes good income from IPOs though. He gets some shares from the underwriting broker somehow and always makes a bundle whenever there is an IPO.
My dad is a unique case. He was orphaned at 8 years old and he has always fought for everything he got. He never asked anyone for anything and he won’t ask for financial assistance from his kids. He doesn’t mind it if I send him money though. FYI, it is very common for Asian people to send money to their parents. When I was making a good salary, I sent anywhere from $2,000 to $5,000 per year to my parents. Now that I don’t have a corporate job anymore, I’m not sending them much.
Help out financially
I will have to keep a close eye on my parent’s finances because at some point we’ll have to help out more. Luckily, I have 2 brothers who have good jobs and are willing to help out financially. We would like our parents to spend more time in the US as they get older so we can keep an eye on them. This will cost more than them retiring in Thailand.
My mom has been staying with us for almost 6 months now and our monthly expense hasn’t increased much. She eats what we eat and doesn’t buy anything. By staying with us, her cost of living is very low.
The only big problem is healthcare. She can’t get health insurance because she has some pre-existing conditions: glaucoma and cataract. These things need to be monitored on a regular basis. Luckily, Portland has some healthcare assistance for low income people. She was able to see an optometrist and pay minimally because she doesn’t have any income. It’s not an ideal situation to not have health insurance, but we are making it work for now. She plans to go back to Thailand a few months per year and she can get a complete health check there. She can also get any needed procedures because Thailand has public healthcare. I’m hoping to get emergency health insurance for her later this year.
Make a plan
For the long term, I would like my parents to move into a condo nearby. I went in with my brother on a one bedroom condo a few years ago for this purpose. It is being rented out right now and makes enough to break even. Once they move in, the 3 of us can share the costs of their condo and groceries. They can live in the US part time and go visit Thailand a few months per year to take care of any big health issues. At some point they will qualify for Medicaid, so that should help us out.
Here are some points that I learn so far
- It’s probably better for them to spend all their money first. That way they will qualify for many services for low income/asset people like Medicaid and food assistance program.
- Keep the condo in our name so we can deduct tax.
- Combining households is a great way to cut expenses, but it can be quite difficult.
- We’d better treat our parents right so Baby RB40 sees a good example and treats us well when he is a billionaire.
How about you? Would you be willing to help out your parent financially? Assuming they are not extravagant, I think we are obligated to help out. I don’t mind paying for my mom’s cost of living at all. It’s not all that expensive because she is also very frugal. If she insists on driving a luxury car and spa visits, then it might be a different story.
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.