27F here concerned about my parents’ finances. My mom and dad are in their early 60s and plan to work at least another 10 years.
They both have a history of spending beyond their means, have weaved in and out of credit card debt, and have pillaged their 401K a few times to bail themselves out.
I’m concerned they won’t be comfortable/don’t have enough for retirement as their finances currently stand. That being said, I’m anxious and risk-averse, so may be overreacting. I’d love a gut check on whether I can chill the f out, or if my fears are warranted.
Here’s the breakdown:
- Current household income: $250k
- Estimated home value: $1.5 million (they still owe $150k and have to pay $24k annually in real estate taxes — don’t ask)
- 401K: $450,000 combined
- Pensions: $35k each
- Projected social security: $33k each
My mom is currently maxing out her 401K, as it took a hit when me and my siblings went to college (she drew around $250k from it). It should hopefully rebound quite a bit before they retire. My dad never contributed to a 401K (I know, I know…).
They could always sell the house, but that’s not ideal, as they’ve lived there for 30 years and bought it at a fraction of the current value. It’s also extremely sentimental to all of us.
Recently they’ve floated the idea of using some of their 401K to buy a second house (which I guess they would rent out part of the year). But I think this is an awful idea? Lmk.
Will my parents be comfortable in retirement? What should they do before they retire to ensure they’re okay financially? Thank you!!!!!
original posted by BrooklynOrca to r/personalfinance on Sun, 03 Mar 2024 07:06:04 GMT.