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Parent's retirement revisited

January 21st, 2010 at 08:20 am

Just out of curiosity, I played around with firecalc again, you know, just to get a rough idea of where my parents stand. The results... does not look good. At all.

Most simulations show that their money will run out as early as 10 years time, 20 if they're lucky. And that's assuming a liquid portfolio of $350k, which they don't have.

So, something like a reverse mortgage, annuity, or down-sizing their house is NOT optional. They must leverage their house somehow. According to AARP's reverse mortgage calculator, it looks like they can get about $600 a month, which is just enough to pay for home expenses such as insurance, tax, and utility. Ugh.

I mean, I still think they can pull this off. They are very frugal, and expenses is apparently one of, if not THE biggest factor in making your retirement money last.

Still, it'd be ridiculously tight. This is no joke. I'd be sweating bullets if I were them. I'm already sweating bullets about myself, but at least I'm still youngish you know?

8 Responses to “Parent's retirement revisited”

  1. gamecock43 Says:

    I thought your family was all very good with money? Are you sure you know all their asstts?

  2. Joan.of.the.Arch Says:

    Have you considered whether they will have any Social Security?

  3. Tabs Says:

    Well, they are. You see, I'm Asian, and my parents work in my native country for most of their lives. If you look at the amount they've accumulated in terms of Asian dollars, they actually have quite a sizable fortune.

    HOWEVER, if you convert the money back to US dollars here, and factor in the fact that it's much more expensive to live here in the US than it is back there, then... well, here we are.

    But yes, my parents might have more money than this, but frankly, I don't want to count on it. As far as my mom knows, this is the bulk of their nest egg.

  4. Tabs Says:

    Joan, yes. They ran a restaurant for about 5 years when I was in high school. I don't know how much they can claim on that if any, but I suspect it would not be much at all.

  5. miclason Says:

    Perhaps they had originally planned to go back to Asia? I know a lot of people think about that, going back to their countries, if the cost of living is lower, so they figure they don't need as much as if they were staying in the US (of course, a lot of the time the problem is that "going back" is not that easy!)

  6. ceejay74 Says:

    Gosh, could they rent the house and live somewhere cheaper than what they make? Other than that or having part-time jobs, I'm kind of stumped.

    Just a reminder that the Kiplinger's free advice days are coming up--Jan. 22 and 26. Maybe they could offer some insight!

  7. Joan.of.the.Arch Says:

    BA, my Dad only qualified for SS by the skin of his teeth, but with the other little bit he had, he could own a used car, a 5 room apartment and enough play money to satiate his desire for 2nd hand books and frequent trips to the thrift stores where he would buy little items, both decorative & useful, to add to his kids' households. At one time he had even been able to stretch it and do some car traveling & camping. That was when he hiked the Grand Canyon, explored unmapped dirt roads through the desert, panned for gold, and picked up odd jobs doing things like painting barns and transporting artifacts between museums! Um during this period, he did not even have any rent to pay; he just lived on the road. To some people his might look like a rough existence, but he always has gotten a lot of enjoyment out of simple things. There were a couple times in recent years when he did need financial help, but only very modestly so. Basically, I have never really needed to worry about him. He now shares a house with my sister, her daughter and great granddaughter--four generations in one house. I do admire and hope to emulate his attitude about getting by in the later years. If one isn't really poor, it is lemons--->lemonade thing.

  8. -Jerry- Says:

    I think that retiring overseas is becoming the insurance policy for a lot of people who don't have the money to afford it in North America. For example, here in SE Europe we see loads of ex-pats from the UK coming here because their pound simply buys a ton more here, and this leads them to afford a more comfortable retirement. Sad if they have grandkids, I suppose, but certainly an option.

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