My Parents Are Looking To Me For Their Retirement Plan

Summary

Summary of "My Parents Are Looking To Me For Their Retirement Plan" – The Ramsey Show Highlights

Release Date: December 10, 2024

In this episode of The Ramsey Show Highlights, hosted by the Ramsey Network, Megan reaches out with a heartfelt and pressing concern: her elderly parents are unexpectedly seeking her and her husband’s financial assistance for their retirement. The discussion, led by financial guru Dave Ramsey and co-host Chris, delves into the complexities of intergenerational financial support, boundary setting, and the broader societal implications of the so-called "silver squatters."

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Introduction to Megan's Situation

Megan’s Dilemma

• Timestamp [00:06]: Megan introduces her predicament, describing her marriage of seven years, lack of debt aside from a mortgage, and established emergency and retirement funds for her two young children.
• Key Concern: Her parents, particularly her 80-year-old father who still works full-time and her mother who has never worked, are struggling financially. They lack substantial retirement savings and are hinting at relying on Megan and her husband for support.
• Questions Posed by Megan:
  • Is it too late for her parents to start a retirement plan?
  • What options are available for them?
  • How can Megan and her husband set appropriate boundaries without jeopardizing their own financial stability?

Dave Ramsey’s Response: Addressing Financial Realities and Boundaries

Immediate Reaction

• Timestamp [01:32]: Dave expresses surprise and disbelief that Megan’s father, at 80, only now considers retirement planning. He questions the timing and feasibility of effective retirement planning at such an advanced age.

Honoring Parents Without Financial Entanglement

• Timestamp [02:53]: Dave clarifies that honoring parents, as taught by the Bible, pertains to respecting their roles rather than providing financial support.
  • Notable Quote: “We honor their position as mother...it doesn't require we give them money.”

Practical Steps for Conversation

• Timestamp [03:32]: Dave advises Megan to have a candid, in-person discussion with her parents, excluding other family members.
  • Key Points for the Conversation:
    1. Express love and concern.
    2. Inquire about their retirement plan.
    3. Assert that Megan and her husband cannot be their financial plan.
  • Notable Quote: “I'm not your plan. I will coach you, I will cheer for you...but not in the financial aspect.”

Encouraging Transparency

• Timestamp [05:30]: Emphasizes the importance of full disclosure from her parents regarding their financial situation to alleviate Megan’s anxiety and prevent assumptions.

Chris’s Tactical Advice: Concrete Steps to Assist Without Enabling

Budgeting and Financial Planning

• Timestamp [05:30]: Chris suggests practical measures Megan can take:
  • Collaborate with her parents to create a budget using tools like EveryDollar.
  • Connect them with financial advisors (e.g., SmartVestPro).
  • Review and manage their total debt.
  • Consider downsizing their home to reduce expenses.

Avoiding Financial Enabling

• Timestamp [05:53]: Chris warns against funding her parents’ past financial mismanagement, reinforcing that Megan has no moral or ethical obligation to provide financial support.
  • Notable Quote: “You do not have a moral, ethical obligation or moral or ethical or spiritual obligation to write them checks.”

The Concept of "Silver Squatters" and Societal Implications

Defining Silver Squatters

• Timestamp [07:38]: Dave introduces the term “silver squatters” to describe older adults who, due to lack of retirement planning, might end up relying on their adult children financially.
  • Notable Quote: “Silver squatters...relying on the kids.”

Generational Impact

• Timestamp [08:16]: Dave and Chris discuss how this situation pressures the younger generation—the “sandwich generation”—to care for both their children and aging parents, often at the expense of their own financial security.
  • Notable Quote: “Generation X...now being referred to as silver squatters...grappling with a looming financial crisis.”

Cycle of Dependence

• Timestamp [08:52]: Chris highlights the risk of perpetuating this cycle, where each generation becomes responsible for supporting multiple generations, hindering their ability to save for retirement.

Establishing Firm Boundaries: The Power of "No"

The Importance of Saying No

• Timestamp [09:12]: Dave introduces the “secret weapon” in boundary setting: the word “no.” He emphasizes that saying no is essential to protect one’s financial future and prevent enabling.
  • Notable Quote: “When you learn this magical word, it will set you free.”

Practical Application

• Timestamp [10:07]: Chris humorously acknowledges Dave’s tendency to say no, reinforcing its necessity.
• Timestamp [10:12]: Dave elaborates on the discipline required to say no to short-term comforts for long-term financial health.
  • Notable Quote: “Live like no one else so that later you can live like no one else.”

Emotional Challenges

• Timestamp [11:04]: Chris relates the difficulty of balancing love and financial boundaries, while Dave reiterates that saying no is not about being a killjoy but about fostering financial independence and righteousness.
  • Notable Quote: “No, really, seriously. I'll set you free.”

Conclusion: Empowering Through Discipline and Clarity

The episode underscores the critical balance between familial responsibility and personal financial stability. Dave Ramsey and Chris provide Megan—and listeners— with strategic advice on navigating financially dependent relationships with aging parents. They advocate for honest communication, practical financial planning, and the courage to establish firm boundaries by saying no when necessary. This approach not only safeguards the younger generation's financial health but also encourages older adults to take proactive steps toward their own retirement security.

For listeners seeking to implement these strategies, Dave concludes with a reminder to create and adhere to a free budget using the EveryDollar app, promoting disciplined financial management as the pathway to financial freedom.

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Notable Quotes with Timestamps:

• "We honor their position as mother...it doesn't require we give them money."
  — Dave Ramsey [02:53]

• "I'm not your plan. I will coach you, I will cheer for you...but not in the financial aspect."
  — Dave Ramsey [03:32]

• "You do not have a moral, ethical obligation or moral or ethical or spiritual obligation to write them checks."
  — Chris [05:53]

• "Silver squatters...relying on the kids."
  — Dave Ramsey [07:38]

• "When you learn this magical word, it will set you free."
  — Dave Ramsey [09:13]

• "Live like no one else so that later you can live like no one else."
  — Dave Ramsey [11:10]

This episode serves as a crucial guide for individuals facing the challenging intersection of family loyalty and financial responsibility, offering actionable insights to foster both personal and familial financial health.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Megan]

Okay, so I have a question. And just to paint a small picture, my husband and I, we've been married for seven years. We have no debt other than the mortgage on our house. And so we're very thankful and have worked very hard for that. We've got two young kids able to establish an emergency fund and retirement accounts and college savings for them. But with all of that said, my parents are really not on a same financial path as we are. My dad is in his 80s now and still works full time. My mom does not work and she hasn't worked before. But just recently, they've been bringing up to us kind of my husband and I, that they don't know what they're going to do for retirement. They have no retirement savings, very little in a savings account. They're not even really in a place to afford the house that they own with, with the money that they're making. And we're starting to get this feeling that they're. They're expecting us to take care of them at some point or to do something to help them. And without tapping into our own retirement or savings for our children's college and things like that, we're just really not in that type of space. And so my question is, is it too late for them to start putting together a retirement plan? What are some options for them? Or how best really, what kind of boundaries do we need to set as a young family in helping out that other generation in retirement?

[Dave Ramsey]

Wow. I mean, it sounds almost ludicrous to just say out loud, he's 80 and now he thought about retirement. Golly wow. Who's late to the party here? Like 20 years. Oh, my gosh. Oh, man. So he's working every day and he's 80?

[Megan]

Yes, every single day. And he's one of these people. He loves to work. So I think he always will. And at one point, if he can for. Right.

[Dave Ramsey]

But you can't always. You don't always have that as an option. I mean, his health. His health may fail him. What does he make?

[Megan]

So he's. I want to say he's making around right. At about $100,000 total, because he does have Social Security coming in as well, but around $100,000. But my mom has never worked. And so the question kind of is, if and when one of them passes before the other, what are they going to do? And that's where they're turning to us, is this younger generation and asking us that Question. And I don't really know what to say. And the Bible teaches us to honor our father and mother, but how does that translate into something like this?

[Dave Ramsey]

Well, let me address that before I forget it. Honoring your parents means you honor the position of fatherhood. It's like honoring the president. I may or may not agree with the president, but I honor the position of president. Does that make sense? And I can still disagree with the president because he might be wrong. You know, that kind of stuff. Right. So if mom's doing cocaine, we don't honor that. Okay. That's a misbehavior. But we honor her position as mother. Does that make sense? So we don't. We can honor them and it doesn't require we give them money. That scripture has nothing to do with giving them money.

[Chris]

So there's no financial obligation.

[Dave Ramsey]

Yeah, I mean, just honor them. But it's just like, gosh, okay. Whoo. Well, I think we got to head this off with the pass. And I think it's just time for a real, clear, in person talk the next time you're in town and the holidays are coming up. So here we go. Right? So we're going to sit down with them and leave your husband out of it and leave, you know, whoever else out of it and just sit down and go, mom and dad. Couple things. One is I love you and I'm worried about you. Two is, what's your plan? Three is I'm not your plan. Okay? And so since I'm not your plan, I will coach you, I will cheer for you. I will help you in any way I can. I don't have the financial mathematical bandwidth to be your plan. So if you've got this in your head that somehow I'm going to pick this up when one of you can't. We need to talk about what happens, dad, if you can't work anymore because your health fails. We need to talk about what happens, mom, if dad dies and $100,000 a year is not coming in anymore, how are you going to stay in this house? We need to talk about. Because I want to love you all well. And walk with you as you face what looks like some very difficult decisions to me that you're going to be making. And I hurt for you, and I want to help if I can in the coaching and sharing aspect, but not in the financial aspect. And I think you say all that out loud, what you might discover is that. That you know that they maybe have done something you don't even know about. Maybe they're further ahead than you think. Maybe they're worse off than you think. But knowing if they, if they open up the. If they put their cards on the table face up, knowing what's going on is going to be a lot better for you than just guessing, because guessing always makes us think it's worse than it is.

[Chris]

And some tactical pieces you can do, Megan, is sit down with them and go, let's make a budget together. We're gonna sit down. Use everydollar. Let me get you connected to a smartvestor pro. Let's get you investing some of this hundred thousand dollars while you still have it. Let's look at your total debt load. Do you need to downsize in home? What sacrifices must be made for you guys to retire with dignity? You can help them answer the questions, but I would not just start funding their misbehavior for the last 20 years.

[Dave Ramsey]

You do not have a moral, ethical obligation or moral or ethical or spiritual obligation to write them checks.

[Megan]

And that's what we've been worried about, you know, and we want to see them do well. And we've had some of these initial conversations saying we don't have that bandwidth.

[Dave Ramsey]

Okay, what do they say?

[Megan]

So they. It. I think it may be just some of their own nervousness coming and they kind of laugh it off a little bit and kind of joke saying, and this has been said by my mom, like, well, I'll just. I'll just move in with you guys and help take care of your children. And that's. That's not really gonna happen. That we want. Yeah.

[Dave Ramsey]

And just say, you know, mom, I love you, but I would kill you if you moved in here and you would kill me. And so we don't want any murders, so we need a different plan.

[Chris]

She might stop laughing. Oh, gosh. That was too real.

[Megan]

Right?

[Chris]

But that's. These are tough boundaries conversations.

[Dave Ramsey]

We're going to sell your house and we're going to buy you a condo that's one tenth the size of this house. You're going to pay cash for it and live on Social Security, Mom. That's what you're going to do. And that's going to be your best life now. And, you know, you just got to work. You got to push them on through it. And the problem is it's just very difficult. It's very difficult. But I don't want you to have. I don't want you to misinterpret that scripture and let that be turned into an enabling vibe. And that's what you're struggling with. You're like, I want to be a good daughter, I want to be a good spiritual person, but I don't want to be an enabler. And it feels like they've been not dealing with this and now they're going to want me to deal with it since they didn't deal with it. And that's most of America right now, by the way.

[Chris]

Yeah, this is an epidemic. They call them silver squatters, Dave. Relying on the kids.

[Dave Ramsey]

Silver squatters don't like it, but that's.

[Chris]

What they called it.

[Dave Ramsey]

Got little silver hair going and they just squatted right there in the old living room. Said, I'm going to take care of your kids. I'm going to take care of your kids. The silver squatters. Oh, that's awful. This is the Ramsey Show. Yahoo Finance. Generation X has gone by many names over the years. They started as the MTV generation, became known as the latchkey kids, were labeled America's forgotten middle child. But as retirement looms closer for Gen X, a new term is popping up in conversations that captures the anxiety and uncertainty many are feeling. Silver squatters.

[Chris]

There it is.

[Dave Ramsey]

There it is. It's a phrase that vividly paints a picture of a generation grappling with a looming financial crisis as they edge into their mid-50s without the cushion needed for a secure retirement. The silver nods to the graying hair squatters suggest where they might end up staying with their adult children. There it is.

[Chris]

Median retirement for 55 year olds, which.

[Dave Ramsey]

We call these adult children the sandwich generation. They're sandwiched between their kids, college and their parents. Lack of retirement planning and they're supposed to take care of people on both ends of the spectrum and in the middle you get squashed.

[Chris]

I feel like that would just create a cycle where they become the next silver squatters because they had to take care of the people on all sides and therefore couldn't invest in retirement because they were trying to fund mom and dad's retirement. Yeah, that's scary. I say you change your family tree and go, we're not doing that.

[Dave Ramsey]

Well, I think you have to institute. You have to bring out the secret weapon.

[Chris]

What's that?

[Dave Ramsey]

The ancient word. Uh oh, the word that no one is allowed to speak anymore. You're not allowed to utter it in American public.

[Chris]

Has it been canceled?

[Dave Ramsey]

You can't say it in any place, particularly around government or around entitled people. You want to hear the word?

[Chris]

I want to hear it. No, Dave, you can't say it on air. We're going to get Taken off.

[Dave Ramsey]

I know. You press your tongue towards the roof of your mouth, make a kissing motion with your lips. I know. You've not used it in a while. No. No, we're not going on vacation. We can't afford it. No, we can't keep this house. We haven't saved anything for retirement. No, you can't lease that car, bozo. You're broke. No, you can't afford a boat. No, you can't even afford the fish the boat would catch. No, you can't afford to put gas in the boat that the fish won't catch. But no, no, no, no, no, no. Dave, you're no fun. Yes, I am. I'm a lot of fun.

[Chris]

No, Dave loves saying no. It's one of your. It's how you got here today.

[Dave Ramsey]

It's a great. It's a great boundary exercise. No, mom, you're not moving in with us. No, I've just. I just found out today you're called a silver squatter. Who knew?

[Chris]

I want to know what they call it.

[Dave Ramsey]

Derogatory. I'm not sure that's honoring your parents, but yeah. No, no, no. I have to feed my kids. No, you. You're 80 years old. You just now woke up and realized there's retirement. Where the heck Was your brain 40 years ago? No, no, no, no. No, you can't afford to go on vacation. No, you can't afford to eat out every night. No, you're going to eat beans and rice. Rice and beans. No eating out. No, no, you're broke. People. Broke people don't do things like that. No. No, you can't have a cell phone. No, you're. No. It's the ancient word. It will set you free.

[Chris]

I want to make that a ringtone and sell it so badly. It's just Dave saying no. No.

[Dave Ramsey]

No. Well, it's not a killjoy thing because you're saying no so that you can say yes to living. It's live like no one else so that later you can live like no one else. It's no discipline. Seems pleasant at the time, but it yields a harvest of righteousness. If I want my belly to be smaller, I have to look at a donut and say no. Because my belly grows exponentially just by walking past donuts, much less eating them.

[Chris]

I didn't know. Smelling calories. Don't you?

[Dave Ramsey]

No, fat boy, no more donuts. No. No.

[Chris]

This could change America.

[Dave Ramsey]

I'm telling you. It's an amazing thing, but no one says it to each other or to themselves. And when you learn this magical word, it will set you free.

[Chris]

Because I want to be a good daughter, a good friend, a good wife. So I'm just going to say yes to it all.

[Dave Ramsey]

No, you're not an enabler. No, I love you too much to lie to you. No, really, seriously. I'll set you free. Create your free every dollar budget today. The simplest way to budget for your life.