Mother is 64 & decided it might be worth trying to save for retirement...

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SmokeyAbe
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Mother is 64 & decided it might be worth trying to save for retirement...

Post by SmokeyAbe »

As the title says, my mother is 64 & decided it might be worth trying to save for retirement... :oops:

Considering that she likely has at most 5 years of human capital left, would the best thing for her to be to put as much as humanly possible into HYSA, I Bonds, or a "stable value" fund? This forum is all about "time in the market" & she has very little left so I'm not sure. She lives with me so I can at least guarantee that she'll have food, clothing, & shelter. I have no idea how healthcare works in retirement as its about 30 years premature for me. Thanks!
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by Sandtrap »

SmokeyAbe wrote: Sun May 09, 2021 9:07 am As the title says, my mother is 64 & decided it might be worth trying to save for retirement... :oops:

Considering that she likely has at most 5 years of human capital left, would the best thing for her to be to put as much as humanly possible into HYSA, I Bonds, or a "stable value" fund? This forum is all about "time in the market" & she has very little left so I'm not sure. She lives with me so I can at least guarantee that she'll have food, clothing, & shelter. I have no idea how healthcare works in retirement as its about 30 years premature for me. Thanks!
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by 9-5 Suited »

What are the expenses that mom’s money needs to cover outside of the basics you are very kindly providing? And how do those monthly expenses compare to her projected social security or other pension income? And what is her current income and employment sector? That will help you (and responding Bogleheads) calculate how much savings she needs and how it should be invested.
Last edited by 9-5 Suited on Sun May 09, 2021 9:20 am, edited 1 time in total.
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JoeRetire
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by JoeRetire »

SmokeyAbe wrote: Sun May 09, 2021 9:07 am As the title says, my mother is 64 & decided it might be worth trying to save for retirement... :oops:

Considering that she likely has at most 5 years of human capital left
Why at most 5 years?
would the best thing for her to be to put as much as humanly possible into HYSA, I Bonds, or a "stable value" fund?
It's hard to say.

Has she estimated her expenses in retirement?
Where is her money going now? She has nothing at all saved for the future? Any idea what kind of risk tolerance she has?
As I'm sure you know, there are no magic bullets. She'll likely just have to save what she can.
She lives with me so I can at least guarantee that she'll have food, clothing, & shelter. I have no idea how healthcare works in retirement as its about 30 years premature for me. Thanks!
She should be reading about Medicare now for her upcoming healthcare.
Does she have Long Term Care insurance?

She should also be looking at her Social Security estimates using SSA.gov and checking out https://opensocialsecurity.com/
Just remember: it's not a lie if you believe it.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by SmokeyAbe »

9-5 Suited wrote: Sun May 09, 2021 9:18 am What are the expenses that mom’s money needs to cover outside of the basics you are very kindly providing? And how do those monthly expenses compare to her projected social security or other pension income? That will help you (and responding Bogleheads) calculate how much savings she needs and how it should be invested.
My mom is a flower-power "Hey man, you can't tell me what to do!" type so she would never share any of that with me. To my knowledge, she might have a very modest FERS pension. My expectation of how much savings she needs is "way more than she can save now" & since she doesn't have much time, she likely can't tolerate a large dip in the market. My question would be moot if CDs & other traditionally safe assets had meaningful returns. Thanks!
Mike Scott
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by Mike Scott »

Assuming she is relativley low income... Save some cash, work on basic budget literacy and planning, research medicare and social security as well as any other social support programs that may apply as well as age and income based tax credits etc. If she has enough income to support her immediate needs, she may be OK. Any debt or excessive spending at this point could be big trouble though.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by Mike Scott »

My mom is a flower-power "Hey man, you can't tell me what to do!" type so she would never share any of that with me.
If this statement is true, there may not be much you can do to help.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by Ivygirl »

SmokeyAbe wrote: Sun May 09, 2021 9:07 am As the title says, my mother is 64 & decided it might be worth trying to save for retirement... :oops:

Considering that she likely has at most 5 years of human capital left, would the best thing for her to be to put as much as humanly possible into HYSA, I Bonds, or a "stable value" fund? This forum is all about "time in the market" & she has very little left so I'm not sure. She lives with me so I can at least guarantee that she'll have food, clothing, & shelter. I have no idea how healthcare works in retirement as its about 30 years premature for me. Thanks!
Age 65 it is time to sign up for Medicare. Get a book along the lines of "Medicare for Dummies" (or 3 or 4 books) and she should decide whether traditional Medicare with additional Parts, or a Medicare Advantage plan, is the best fit. Dental, eye care, and hearing care expenses should all be considered, how they will be paid for.

Look into long-term care insurance. It might be cost-prohibitive but you never know until you check.

Get the estate planning done - will, power of attorney, healthcare power of attorney, documentation of all assets and liabilities, title bank accounts and name beneficiaries properly. Prepay funeral expenses and buy a cemetery plot if applicable.

Now you've paid for all the big stuff that might come along with aging. Even if this was all she did it would be a lot. As you said she is not going to have to solve housing, food, or clothing problems with her savings. She just needs to pay for the above and then list out the fun things she would like to do with her money and decide how to pay for those. Half of her cash should be put in a high yield savings account as she earns it, and half in a conservative stock/bond fund (Vanguard Wellesley maybe) to grow and fund her wants in the next 25 years. Likely she will spend more on wants early on, and less later.

Pen and paper and a plan are what she needs IMO.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by 9-5 Suited »

SmokeyAbe wrote: Sun May 09, 2021 9:25 am
9-5 Suited wrote: Sun May 09, 2021 9:18 am What are the expenses that mom’s money needs to cover outside of the basics you are very kindly providing? And how do those monthly expenses compare to her projected social security or other pension income? That will help you (and responding Bogleheads) calculate how much savings she needs and how it should be invested.
My mom is a flower-power "Hey man, you can't tell me what to do!" type so she would never share any of that with me. To my knowledge, she might have a very modest FERS pension. My expectation of how much savings she needs is "way more than she can save now" & since she doesn't have much time, she likely can't tolerate a large dip in the market. My question would be moot if CDs & other traditionally safe assets had meaningful returns. Thanks!
I can relate to how difficult family situations can be. It’s not fun that she is receiving so much charity from you but would consider it nosy of you to ask these questions. But I do know the type.

I will say for sure that you shouldn’t be the one to recommend the stock market to her. Mom doesn’t understand it well enough. So at the first big drop, you could become the villain and develop relationship problems. Until she shares more info, I think all you can do is encourage her to save as much she can and keep on working as long as she can. Those safe investments are not going to be awful as % return isn’t her big problem with such a small amount of money and time to let it grow.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by bob60014 »

SmokeyAbe wrote: Sun May 09, 2021 9:07 am As the title says, my mother is 64 & decided it might be worth trying to save for retirement... :oops:
"My mom is a flower-power "Hey man, you can't tell me what to do!" type...."

So did she mention retirement savings as a aside or is she asking for your help?
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by SmokeyAbe »

JoeRetire wrote: Sun May 09, 2021 9:19 am Why at most 5 years?
She's a respiratory therapist & based on her physical decline the last few years, I can't imagine her working to 70.
JoeRetire wrote: Sun May 09, 2021 9:19 am She should be reading about Medicare now for her upcoming healthcare.
Does she have Long Term Care insurance?
I can't fathom that she thought that far ahead & considering this is the first crack in my repeated warnings of "maybe you should try saving something...", I doubt I'll have much luck in convincing her that she should read up on Medicare.
JoeRetire wrote: Sun May 09, 2021 9:19 am She should also be looking at her Social Security estimates using SSA.gov and checking out https://opensocialsecurity.com/
This is an excellent suggestion. I'll also point out that she's a widow & I don't know if that matters for things like Social Security.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by RickBoglehead »

Get What's Yours for Medicare : : Maximize Your Coverage, Minimize Your Costs by Philip Moeller is good. I read it a few years back, and plan on reading it again in the next year as we soon become eligible.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by SmokeyAbe »

bob60014 wrote: Sun May 09, 2021 9:32 am
SmokeyAbe wrote: Sun May 09, 2021 9:07 am As the title says, my mother is 64 & decided it might be worth trying to save for retirement... :oops:
"My mom is a flower-power "Hey man, you can't tell me what to do!" type...."

So did she mention retirement savings as a aside or is she asking for your help?
She switched departments this week & it came with a considerable (as a %) pay bump. She asked if I thought she should save the difference since she was already living on the smaller amount & if so, do what with it.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by dukeblue219 »

Definitely need to find out more about her FERS. Can you explain why you think it will be very modest? Who worked for the feds and for how long?

A social security + FERS retirement with housing covered by you can be quite comfortable. She's not going to own a yacht and a helicopter, but it's not going to be a struggle to eat, either.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by RickBoglehead »

SmokeyAbe wrote: Sun May 09, 2021 9:32 am This is an excellent suggestion. I'll also point out that she's a widow & I don't know if that matters for things like Social Security.
Yes, that does matter. If her former spouse was a high earner, she'll get a larger payout. Go get Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less by Mike Piper, who is the created of Open Social Security referenced already. You can read this in a few hours.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by Watty »

SmokeyAbe wrote: Sun May 09, 2021 9:07 am I have no idea how healthcare works in retirement as its about 30 years premature for me.
If she has any employer provided healthcare benefits they likely become some sort of supplement to Medicare when she turns 65 and gets on Medicare.

To figure that out the book "Medicare for Dummies" it is very good despite the title. If you get that be sure that you get the most recent edition that has been updated. The sign up period starts 3 months before she turns 65 and it is critical that she gets signed up on time. If she is still working and getting work provided health insurance that is a special situation that you will need to research.
SmokeyAbe wrote: Sun May 09, 2021 9:07 am She lives with me so I can at least guarantee that she'll have food, clothing, & shelter.
It would be good to consider if you should get life insurance on yourself to take care of her if you get hit by the proverbial Mack truck.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by Nestegg_User »

RickBoglehead wrote: Sun May 09, 2021 9:36 am
SmokeyAbe wrote: Sun May 09, 2021 9:32 am This is an excellent suggestion. I'll also point out that she's a widow & I don't know if that matters for things like Social Security.
Yes, that does matter. If her former spouse was a high earner, she'll get a larger payout. Go get Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less by Mike Piper, who is the created of Open Social Security referenced already. You can read this in a few hours.

Indeed... she should immediately apply for a "survivors" SS (not her own) as at age 64 she would be fully eligible (as is beyond the age where it would have been reduced for surviving spouse).... every bit would help.
{ see: https://www.ssa.gov/benefits/survivors/ifyou.html#h6 }
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by jimkinny »

SmokeyAbe wrote: Sun May 09, 2021 9:32 am
JoeRetire wrote: Sun May 09, 2021 9:19 am Why at most 5 years?
She's a respiratory therapist & based on her physical decline the last few years, I can't imagine her working to 70.
JoeRetire wrote: Sun May 09, 2021 9:19 am She should be reading about Medicare now for her upcoming healthcare.
Does she have Long Term Care insurance?
I can't fathom that she thought that far ahead & considering this is the first crack in my repeated warnings of "maybe you should try saving something...", I doubt I'll have much luck in convincing her that she should read up on Medicare.
JoeRetire wrote: Sun May 09, 2021 9:19 am She should also be looking at her Social Security estimates using SSA.gov and checking out https://opensocialsecurity.com/
This is an excellent suggestion. I'll also point out that she's a widow & I don't know if that matters for things like Social Security.
I do not know how SS survivor benefits affect taking SS at retirement. For single people, the best strategy as far as longetivity insurance is concerned is to delayed taking SS as long as possible. Each year the monthly benefit will increase by about 7-8% and SS is inflation adjusted yearly also. It is the best posible solution for a single person. How someone's survivor benefits affect that is just something I don't know but you should be able to find that out. Maybe the information is in this article
https://www.bogleheads.org/wiki/Social_Security



There is also one other option that might apply and that is buying an immediate annuity later in life, not now. This is an insurance product and has some benefits and some drawbacks. https://www.bogleheads.org/wiki/Immedia ... mediately.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by WillRetire »

SmokeyAbe wrote: Sun May 09, 2021 9:07 am As the title says, my mother is 64 & decided it might be worth trying to save for retirement... :oops:

Considering that she likely has at most 5 years of human capital left, would the best thing for her to be to put as much as humanly possible into HYSA, I Bonds, or a "stable value" fund? This forum is all about "time in the market" & she has very little left so I'm not sure. She lives with me so I can at least guarantee that she'll have food, clothing, & shelter. I have no idea how healthcare works in retirement as its about 30 years premature for me. Thanks!
Good of you to try & help your mother. She will have decisions to make regarding medical coverage, and depending on where she lives, some decisions may be difficult to undo. At age 65 she will be eligible for medicare. Find out (on this forum & elsewhere) how her government retirement benefits work with medicare. OPM.gov should have some good information. Govt retirees generally have excellent healthcare options.

Non-government retirees generally pay $150/month for medicare part B (part A is free). Plus another $50-$300/month for a supplement plan + a prescription drug plan (Part D). Some supplement plans raise premiums by age. But the good news is many medigap supplement plans cover most/all of out-of-pocket costs. A novel concept to those not yet on medicare.

Vision & dental expenses are not covered by medicare.

She'll also have to decide on when to take Social Security. She probably shouldn't take it before her Soc. Security's FRA (full retirement age) if she is still working.

I would say those 2 items, healthcare & social security plans, need to be nailed down first. Then she can figure out if there's a shortfall with her retirement income.

Lastly, her HR office probably offers seminars to help her plan for retirement. Suggest she attend some, and ask to review the material with her.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by lostinjersey »

How long was she married? She may be eligible for SS survivor benefits now.

SS is probably going to be her biggest income stream in retirement. You should set up a phone appt for her to talk to the local SS office and figure out an optimal claiming strategy. That might mean taking survivor now and her own benefit later, but it’s complicated and she needs to talk to an expert about her specifics. Do this now because she could be leaving money on the table every month.
Last edited by lostinjersey on Sun May 09, 2021 11:54 am, edited 1 time in total.
retiredjg
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by retiredjg »

Your mother's "time in the market" does not end the day she retires. She may have many more than just 5 years to invest.

If she does not have some cash savings (an emergency fund) that is the first thing to build. After that she could invest in any kind of account (including the TSP). Since she is near retirement, the money should be invested rather conservatively.

There is not enough information to consider whether she should be using traditional or Roth accounts.

She will have both a pension and SS so she may be more secure than you think.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by finite_difference »

SmokeyAbe wrote: Sun May 09, 2021 9:25 am
9-5 Suited wrote: Sun May 09, 2021 9:18 am What are the expenses that mom’s money needs to cover outside of the basics you are very kindly providing? And how do those monthly expenses compare to her projected social security or other pension income? That will help you (and responding Bogleheads) calculate how much savings she needs and how it should be invested.
My mom is a flower-power "Hey man, you can't tell me what to do!" type so she would never share any of that with me. To my knowledge, she might have a very modest FERS pension. My expectation of how much savings she needs is "way more than she can save now" & since she doesn't have much time, she likely can't tolerate a large dip in the market. My question would be moot if CDs & other traditionally safe assets had meaningful returns. Thanks!
What? I thought for flower-power types sharing information was completely on the table. Otherwise I’d argue it’s not flower-power, maybe silent generation type. Anyway my parents are boomers and flower-power and they shared everything with me.

-Max out IRA and 401k including catch-up contributions.
-Consolidate 401ks into the Thrift Savings Plan (get the details) or Vanguard.
-Consolidate IRAs at Vanguard.
-I’d go 50/50 Stocks & Bonds. It’s the optimal conservative portfolio.
-If she has FERS pension, get the details on that.
-Defer Social Security until 70.

I think with Medicare at 65, you taking care of her, 5 years of catch-up contributions maxed out (invested wisely) plus SS and maybe small FERS pension could go a long way.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by ResearchMed »

SmokeyAbe wrote: Sun May 09, 2021 9:07 am As the title says, my mother is 64 & decided it might be worth trying to save for retirement... :oops:

Considering that she likely has at most 5 years of human capital left, would the best thing for her to be to put as much as humanly possible into HYSA, I Bonds, or a "stable value" fund? This forum is all about "time in the market" & she has very little left so I'm not sure. She lives with me so I can at least guarantee that she'll have food, clothing, & shelter. I have no idea how healthcare works in retirement as its about 30 years premature for me. Thanks!
She is still working, right? (that "human capital left", etc.)
If so, does she have health insurance through her employment?
Depending upon employment and health insurance, she may or may not need to start Medicare when she turns 65. If she does need to do so, but doesn't, there will be $$ penalties for Medicare premiums for the rest of her life. Not a good thing!
But if her employer still covers health insurance once she turns 65 and is still employed, then she might not need to sign up for Medicare yet.

Medicare A is free, but Medicare B has the sliding scale costs, and these would have the penalties in the future if someone doesn't sign up "on time". "On time" would mean at retirement for those who do have health care coverage at work and didn't need to sign up at age 65.

Yes, a bit complicated, but very important, given that you want her to have health coverage one way of the other, and you don't want to have those penalties.

RM
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by RetiredCSProf »

To quote Mary Kay (cosmetic entrepreneur):

"To the age of 14, a woman needs good parents and good health. And then from 14 to 40, she needs good looks. From 40 to 60, she needs personality. And after 60, I’m here to tell you what you need is cash! "
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by Doctor Rhythm »

Happy Mothers Day!

Given the limited information available, I don’t see the problem. She’s still working as a respiratory therapist - a job that earns an upper middle class salary, and she just got a raise. This type of job is typically unionized and often comes with a pension. She’s also getting some income from a federal pension. She’ll have SS, possibly at a higher surviving spouse rate. That’s potentially 3 income streams during retirement. Furthermore, we don’t actually know what her savings/retirement accounts look like, other than some vague statements she’s made. Finally, she has great family support. Doesn’t sound too bad by most standards.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by SmokeyAbe »

dukeblue219 wrote: Sun May 09, 2021 9:35 am Definitely need to find out more about her FERS. Can you explain why you think it will be very modest? Who worked for the feds and for how long?

A social security + FERS retirement with housing covered by you can be quite comfortable. She's not going to own a yacht and a helicopter, but it's not going to be a struggle to eat, either.
She worked for 12 years with a max salary of $40k, so by my math that's an annuity of <$500/month. I should clarify that she left the fed job 15 years ago.
Last edited by SmokeyAbe on Sun May 09, 2021 1:43 pm, edited 1 time in total.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by lazynovice »

Use this calculator:

https://opensocialsecurity.com/

Make sure at the top, you choose the “certain situations” and choose “still working” and possibly the pension not covered by social security.

She should be eligible for survivor’s benefits but since she is working and not full retirement age, her benefits would be reduced. Once she reaches full retirement age, the job should not be held against her and it likely makes sense to claim survivor’s benefits until she decides to claim her own.

Between survivor’s benefits, pension, your support and working, she might be able to push claiming her own benefit to 70.

She should file for Medicare as soon as she is eligible.

If she is dependent upon you for support and you can afford it, you should make sure you have life insurance on yourself that can help her in case you predecease her.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by pennywise »

SmokeyAbe wrote: Sun May 09, 2021 9:25 am
9-5 Suited wrote: Sun May 09, 2021 9:18 am What are the expenses that mom’s money needs to cover outside of the basics you are very kindly providing? And how do those monthly expenses compare to her projected social security or other pension income? That will help you (and responding Bogleheads) calculate how much savings she needs and how it should be invested.
My mom is a flower-power "Hey man, you can't tell me what to do!" type so she would never share any of that with me. To my knowledge, she might have a very modest FERS pension. My expectation of how much savings she needs is "way more than she can save now" & since she doesn't have much time, she likely can't tolerate a large dip in the market. My question would be moot if CDs & other traditionally safe assets had meaningful returns. Thanks!
OP, given this follow up explanation to your original post, the question might be better posed as 'it might be worth trying to plan for how I will fund my mother's retirement'.

Not being flippant; this is a sadly familiar query on the forum about parents who for various reasons have mismanaged or never managed their financial life to support their retirement and senior years.

OP you mentioned she is already living with you. Are you currently supporting her financially completely, partially or not at all? And is she going to be willing to get over her attitude and give you access to withdraw and/or manage whatever resources she does or will have? If not, are you going to be willing to tell her sorry mom, you're on your own...or will you be resentfully yoked to her financial mess for the rest of her life?

At this point as you acknowledged, realistically there isn't much to be done to turn an aging hippie into a fiscally prudent saver :?
delamer
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by delamer »

If she gets health insurance through her federal job and does so the 5 years prior to her retirement, then she can continue the insurance (at the same cost) through retirement. This can either be in addition to Medicare Part B, or in lieu of it.

Check Consumers Checkbook on FEHB plans (not same as Consumer Reports).
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mptfan
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by mptfan »

Did your mother ask for your advice? Unsolicited advice is rarely well received, especially about money.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by Tdubs »

dukeblue219 wrote: Sun May 09, 2021 9:35 am Definitely need to find out more about her FERS. Can you explain why you think it will be very modest? Who worked for the feds and for how long?

A social security + FERS retirement with housing covered by you can be quite comfortable. She's not going to own a yacht and a helicopter, but it's not going to be a struggle to eat, either.
Um, yeah. When I saw that she has a FERS pension, even a small one, it means she is set in a lot of ways. She has an extra layer of guaranteed income on top of SS. If she retired at 65, she can get wall-to-wall medical coverage for less than about $150/mo including Part B Medicare--no deductibles, copays, co-anything except prescriptions. If she is living with you, she needs to be clear what her income is like. You don't need to provide her with charity. She is much better off than most.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by dukeblue219 »

delamer wrote: Sun May 09, 2021 3:07 pm If she gets health insurance through her federal job and does so the 5 years prior to her retirement, then she can continue the insurance (at the same cost) through retirement. This can either be in addition to Medicare Part B, or in lieu of it.

Check Consumers Checkbook on FEHB plans (not same as Consumer Reports).
Tdubs wrote: Sun May 09, 2021 3:18 pm Um, yeah. When I saw that she has a FERS pension, even a small one, it means she is set in a lot of ways. She has an extra layer of guaranteed income on top of SS. If she retired at 65, she can get wall-to-wall medical coverage for less than about $150/mo including Part B Medicare--no deductibles, copays, co-anything except prescriptions. If she is living with you, she needs to be clear what her income is like. You don't need to provide her with charity. She is much better off than most.
OP has since indicated she's been separated from federal service for 15 years. No access to FEHB health unless she gets back in for another 5 years.
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celia
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by celia »

Watty wrote: Sun May 09, 2021 9:36 am If she has any employer provided healthcare benefits they likely become some sort of supplement to Medicare when she turns 65 and gets on Medicare.
No. As long as she is working, her employer insurance will be primary and Medicare is second. But she still needs to enroll in Medicare at 65. The biggest decision is if she wants an HMO or go-anywhere PPO. If finances are limited, the least expensive is the HMO Medicare Advantage plans.

When she retires, Medicare becomes primary and her employer plan or a Medigap plan (if PPO is desired) become secondary.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by CrossOverGuy »

If you've retained her (and possibly your late father's) tax returns for any number of years, you should check them against the Earnings Records Social Security has to make sure their numbers match what you have. They make mistakes, and any errors they may have in under-reporting what your folks made will lead to a lower payment than she is entitled to. Supporting papers like W-2s, etc. also help. Just another possibility in seeing if she is entitled to a bigger monthly check. However that might turn out, Social Security is very complicated as far as married people, widows, etc. and there are quite a few avenues to claiming it. So do a lot of research and talk to people at SS, but do it soon, as she may already be entitled to a monthly survivor's benefit.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by MishkaWorries »

Mike Scott wrote: Sun May 09, 2021 9:29 am
My mom is a flower-power "Hey man, you can't tell me what to do!" type so she would never share any of that with me.
If this statement is true, there may not be much you can do to help.
I would make it clear to her that she is a guest in my house and I will not modify my life to accommodate her not will I jeopardize my retirement for her.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by ResearchMed »

celia wrote: Sun May 09, 2021 3:53 pm
Watty wrote: Sun May 09, 2021 9:36 am If she has any employer provided healthcare benefits they likely become some sort of supplement to Medicare when she turns 65 and gets on Medicare.
No. As long as she is working, her employer insurance will be primary and Medicare is second. But she still needs to enroll in Medicare at 65. The biggest decision is if she wants an HMO or go-anywhere PPO. If finances are limited, the least expensive is the HMO Medicare Advantage plans.

When she retires, Medicare becomes primary and her employer plan or a Medigap plan (if PPO is desired) become secondary.
At least for larger employers, one does *not* need to sign up for Medicare B while having health insurance through work.
Whether one gets Medicare A, which is free, depends in part on the employer and plan. (There is apparently a downside to having Medicare A if one has a high deductible plan at work, but I'm not familiar with that.)

As long as one has "creditable" health care coverage through an Employer plan, there will be no Medicare penalty for signing up after age 65, as long as it is done when one retires.

With larger employers, once one retires, then yes, one must get Medicare (or face penalties for all future premiums). Any employer retirement health care plan would become the supplement at that point.

I *think* (but not entirely sure) that with smaller employers, at 65, Medicare would become primary and the employer plan the supplement type (?).

I'm not sure what Medicare A actually would cover/pay for while someone is still employed and has employer health care coverage.


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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by retire2022 »

Mike Scott wrote: Sun May 09, 2021 9:29 am
My mom is a flower-power "Hey man, you can't tell me what to do!" type so she would never share any of that with me.
If this statement is true, there may not be much you can do to help.
+1 Ignorance is bliss, god save flower-power hippies, drop in and drop out.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

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Mike Scott wrote: Sun May 09, 2021 9:29 am
My mom is a flower-power "Hey man, you can't tell me what to do!" type so she would never share any of that with me.
If this statement is true, there may not be much you can do to help.
Here’s what I would do. Start talking about your own retirement plans. What does your employer offer and what options do you have to choose from. Then ask for her opinion. If you start to throw out a few some numbers or percentages, that makes it more specific and math estimates can be done.

This does two things, hopefully. You will get a sense if she even understands any retirement planning concepts and terminology. It will also show that you think it’s ok to talk about it with family or co-workers. Let her know of other retirement conversations you’ve had with others.

I wouldn’t be surprised if she voluntarily says: I don’t know about that but my pension plan is different...
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by spencer99 »

OP,

A lot of good suggestions in this thread but none of this is as straightforward as represented (and of course not intended - just the nature of the discussion board beast). There is no alternative to some serious research.

Social Security - The interrelation between claiming of your mom's own benefit and a possible survivor benefit can be complicated. The book by Mike Piper mentioned earlier in this thread and running Piper's Opensocialsecurity calculator are essential. First steps: Get mom's historical SS information and projected PIA from Socialsecurity.gov and get her husband's PIA by calling (or writing) SS. You cannot begin to make good decisions without that information. Do it now because as a widow she is eligible to begin benefits (reduced) as soon as age 60 although - CAUTION - it is not necessarily a good idea to begin benefits early. Understand that Survivor/Own benefits can be sort of coordinated - start one now, then switch to the other later. The choices/order chosen can result in meaningful financial outcomes.

Medicare - I disagree that mom should rush to enroll in Medicare immediately at age 65. That may be the case but maybe not if she currently has qualified employer health insurance. You asked about saving/investing money. As you look into this you may find that your mom is eligible to contribute to a HSA (Health Savings Account). That is amongst the options to be considered as a retirement "investment." If she enrolls in Medicare she will not be eligible to contribute to a HSA. Although there is no charge for Part A it very well may add no value to your mom's employer plan and Part B (as someone else mentioned) is secondary while receiving employer coverage. Don't pay for Part B coverage if employer is already providing the equivalent coverage. Note: My experience was to work past 65 staying on qualified employer health plan, and file for Medicare immediately upon retirement. There is an open enrollment option for Medicare for those who do this. (verification of qualified employer health care is required - explained in the aforementioned excellent Medicare for Dummies)

FERS pension - I don't know about this program but get the information now. If benefit isn't increasing as she gets older could she claim now?

Long Term care insurance - If you do some reading about this you'll notice that experts think people often fall into one of three categories. 1) Those who cannot afford it (probably headed for Medicaid-funded care), 2) Those who probably should buy it, and 3) Those who should self-insure. It sure sounds as if you mom falls into category 1. Put this way on the back burner.

Good luck,

S
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by JoeRetire »

SmokeyAbe wrote: Sun May 09, 2021 9:32 am
JoeRetire wrote: Sun May 09, 2021 9:19 am Why at most 5 years?
She's a respiratory therapist & based on her physical decline the last few years, I can't imagine her working to 70.
Other jobs exist.
JoeRetire wrote: Sun May 09, 2021 9:19 am She should be reading about Medicare now for her upcoming healthcare.
Does she have Long Term Care insurance?
I can't fathom that she thought that far ahead & considering this is the first crack in my repeated warnings of "maybe you should try saving something...", I doubt I'll have much luck in convincing her that she should read up on Medicare.
Okay. Then you should read up on Medicare.
JoeRetire wrote: Sun May 09, 2021 9:19 am She should also be looking at her Social Security estimates using SSA.gov and checking out https://opensocialsecurity.com/
This is an excellent suggestion. I'll also point out that she's a widow & I don't know if that matters for things like Social Security.
It might matter. She could be eligible for survivor benefits as well as her own benefits.
She (or you) should read up on Social Security benefits as well.
Just remember: it's not a lie if you believe it.
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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by abuss368 »

SmokeyAbe wrote: Sun May 09, 2021 9:07 am As the title says, my mother is 64 & decided it might be worth trying to save for retirement... :oops:

Considering that she likely has at most 5 years of human capital left, would the best thing for her to be to put as much as humanly possible into HYSA, I Bonds, or a "stable value" fund? This forum is all about "time in the market" & she has very little left so I'm not sure. She lives with me so I can at least guarantee that she'll have food, clothing, & shelter. I have no idea how healthcare works in retirement as its about 30 years premature for me. Thanks!
Maybe work part time.

Build cash.

Single premium immediate annuity.

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Re: Mother is 64 & decided it might be worth trying to save for retirement...

Post by PartIrish »

Your mom is my age, and given that she is a widow, she should look into widow's benefits straightaway. Depending on which benefit is larger, she could choose to take her own benefit now if it is smaller than her deceased husband's, and then take survivor's benefits at full retirement age, which for people born in 1957, is 66 and 2 months. Note that full retirement age for survivor's benefits is 4 months earlier than FRA for regular benefits. If her own SS benefit will be larger, she could elect to take survivor's benefits now and allow her benefit to grow.

If she elects to take one of the two SS benefits and continues to work, and if her earnings are over the $18,980 limit for this year, Social Security will deduct $1.00 of benefits for every $2 earned over the limit. Still, it would be extra income she could tuck away for the two years until she reaches full retirement age (66 and 6 months for our year). More about these options from Social Security:

https://www.ssa.gov/benefits/survivors/

https://www.ssa.gov/benefits/retirement ... nt%20limit.
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