What would you do if your parents were broke or in debt and unable to work? Would you take care of them? Would you pay off their debts?
Fortunately this isn’t an issue for me since my dad may be 90 years old but makes every frugal person or blogger I know look like complete wastrel spendthrifts.
Should you take care of aging parents?
I ran across an article where a guy my age was being sued for filial support of $250 / month by his estranged 71 year old mother who was in credit card debt to the tune of $28,000.
Here’s the full article: Payback time for parents.
This is a bit of a strange situation or “family” since his parents basically ran out on him when he was a teenager, but the laws are still out there to allow this to happen (in all Canadian provinces but Alberta). Personally, I found the idea of this guy having to pay for a parent he had seen 10 times in the last 30 years quite offensive, but maybe there’s more to the story than it seems.
In general, I think most people should take care of their parents, but what if you can’t have them live with you because you don’t have the space? What do you do if they have Alzheimers and need near-constant care but you need to go to work to pay the bills? A nursing home may be the only option in that case. And I’ve read of several cases in the US where kids have been sued by nursing homes to pay their parent’s bills.
Options for seniors?
What do you do if you have the space and the time but they kind of drive you crazy and you don’t want to live with them? That’s the situation with my ex’s mother. Since her husband died, she’s lived in an independent living setup of a 2 bedroom apartment with meals provided and regular nursing visits. It costs over $2,400 per month. Old age security covers about half of the bill and the remainder comes from a combination of the kids and her savings from selling the family home. She spends 95% of her waking hours watching TV alone with no human contact. Fortunately she has an extremely obese little dog to keep her company that never gets taken for walks. This is a lady who gambled away over a quarter of a million bucks in VLT addiction in her late 60’s.
Should the kids be having to pay because she blew through savings? (And is that abusive to the dog?)
According to this site, the average cost for one person in a retirement home is about $2,100 per month. Fortunately, there are rent controls and subsidy options for low income seniors, but it may mean that they have to move away from family or their community.
How much does the average senior make?
The average senior in Canada pulls in $7,100 per year from Old Age Security, $6,200 from the Canada Pension Plan, $15,000 from RRSP’s and pensions – and employment income of $12,500 according to this site. Only 59% of Canadians have income from investments and 67% have income from RRSP’s and pensions. That’s an average of about $40k/year – but for every senior like my dad who gets no OAS or CPP (clawed back) and still makes a very large income from investments and annuities, there’s probably 2 or 3 people that make very little non-government money.
And is it fair that someone who worked incredibly hard, lived extremely below their means and saved like my dad should receive NOTHING from the system that he paid into for 50 or 60 years? Isn’t that a disincentive for saving?
How much will you make as a senior?
Finally, for Canadians, here’s a retirement income calculator to determine CPP, OAS, pension or RRSP’s and other income: Retirement income calculator.
The calculator results came in at $37,000* in today’s dollars after age 65 for me, so it looks like I’m more than covered even if there’s either no CPP or OAS, it’s reduced, there’s hyper-inflation or the markets tank. Hmm, maybe that means I should spend more now. Or save it so I can live in a super cool retirement home down the road. I hear there’s some that have in-house wine making rooms…
* This considers pension accounts only and that CPP & OAS is either negligible or won’t exist (although I don’t believe that will be the case) – everything else is getting spent before I hit 65.
wow, your pops is 90? nice genetics. Just from your writings he seems like a man I would love to meet, bet he has a million stories.
I will definitely take care of my folks as they have been way to good to me and my children throughout my life. Sweet people and it would be an honor to help them if they ever needed me.
~Mike
No, it is not fair to ask the kids to look after mom/dad, however this is starting to be the norm http://www.findingdulcinea.com/features/home/When-Parents-Move-in-With-Adult-Children.html
Alot of seniors are having difficulties as they did not take into account the inflation when they planned for their retirement. Some just didn't plan at all, all the money was spent in paying off the home, going on trips or an addiction.
A generation ago, women didn't plan at all, more men handled the money, so when the husband passed first, the wife was left holding the bag of debt, and financial burden.
Or had alot of money to spend due to life insurance or wills, and wasn't sure how to manage it, so they spent it all (I have a friend who's mother did this).
The sold called "nest egg" either wasn't enough to live on, or was spent on a nice trip or an emergency. Some kids drain their parents too, so that has to be taken into account. They simply ask for money as if the parent was still working, leaving the parent in a debt situation and the child being better off.
The norm seems to be adding a "mother in law suite" in the home for the parent that is left behind to live with their children and grand children, and end up being the free caregiver for the grandkids instead of using a daycare/dayhome.
Sometimes it works out, but most of the time it doesn't seem to.
http://www.ericdigests.org/pre-925/adult.htm
Only if your parents change your diapers, fed you, sheltered you, taught you ethics and morals, educated you, and acted as though they loved you.
If they left you under the Seventh Avenue Overpass as soon after childbirth as your mother could carry you down there, maybe not.
Hey Mike – yeah, he's good at telling stories – that's for sure. Hopefully when I'm that age, I'll be more into what I'm doing today rather than things that happened 70 years ago though.
WBY and Funny About Money – I think most of us would agree that there's a moral responsibility to take care of parents, I'm definitely not arguing that. I don't think it's a really black and white issue some of the time though. Do we do things like pay for them to stay in an up-scale resort-type accommodation though if they've gambled their savings away – or help them learn to live within their reduced means? Do we give them financial support if they kicked us out of the house at 15 or 16 and maintained no ties after that? Those are pretty gray areas that I'm grateful I wouldn't have to address personally. But it makes me more cognizant than ever that I never want my kids to bear any kind of financial burden because of me.
I’m assuming $0 in OPP or CAS. It’ll be nice if there is something but I am not ‘banking’ on it. (Har har..)
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