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Tuesday, February 19, 2008

Retirement Revisited: Un-Jewish by Necessity

ProfK, my newest favorite blogger on the block, offers a perspective informed by maturity that is needed in the Orthonomic discussions. Months ago I wrote a post, Retirment: Goyish or Jewish?, which generated a fair amount of healthy discussion.

Prof K offers her own perspective and I think she is right on the money! The idea that retirement is "un-Jewish" is not an idea being floated by the older generations, it is an idea that is being floated by the younger generations our educational institutions and communal organizations. Why? Simple. They know from where the gravy flows are shaking in their boots that the gravy train could pull into station.

A scary, but true fact she brings forward is that many grandparents are broke, passing away with debt (no yerusha). No mystery to the budgeting experts. It just is impossible to pay for (or pitch in for) the major expenses of each family. And, yet, tuition assistance forms now insist on grandparents being asked before the school. I've been reading more and more in general publications about young families on their own two feet scared by their own parents financial habits and if/whether they should be planning a contingency plan for if/when their own parents go belly up. This subject, which I believe could also be of interest to frum families, takes on a different angle if the parents have been providing money for tuition, contributing to debt issues.

Another related discussion is the highly valuable services being provided by parents or expected to be provided by young people. A quote from ProfK's post:
One woman, older then I am, spoke many years ago about the things she and her husband would do when they retired. She doesn't speak of retirement any more. As she put it "Sure, my kids can't wait for me to retire. That way they won't have to pay a baby sitter any more if the wife is working. I can rotate going between all their houses, watching the kids, cleaning up, doing the laundry and the shopping and all the other things they are "too busy" to do. No thanks."

This is another discussion on the topic of dependence that needs to be addressed, and I hope to open up a forum for it very soon. In the meantime, head on over to ProfK's blog. If you like good blog reading, that is a place to find it.

28 comments:

ProfK said...

Sephardilady,
I'm overwhelmed by your generosity in allowing what I wrote to take center stage on your blog. The thanks are truly heartfelt.

The blog world is strange in how "relationships" are formed. I read a comment by sephardilady on someone else's blog and followed the link back to your blog. I liked what I saw so I visit often and link to your blog. We are in agreement in so many areas. I would imagine you found my blog in much the same way.

Keep up the good blogging, and thanks once again.

thegameiam said...

The current approach to Jewish life and family is leading to a surprising situation: children are less affluent than their parents. We need to think about what is going on with us such that our decisions are leading to this outcome.

SephardiLady said...

ProfK-It is my pleasure to feature your words of wisdom. I love that fact that I've been able to find like minded individuals here in blogsphere. I hope our blogging is part of the solution.

Gameiam-I think it is pretty obvious why children are less affluent. . . .unless one believes a magic wand can change the rules. Late to save, early to debt, a receipe for disaster.

twinsmommy said...

ok, we're $200,000 in debt and in a BETTER financial situation than my husband's parents--- my mother in law's health insurance is having a heart attack over the number of hospital stays she's having lately, sadly. My parents disowned me years ago (actually from time to time they write me harassing letters but that's beside the point).

I HOPE AND PRAY that our kids' school doesn't have us prove that we asked the grandparents before they can offer financial aid. ugh.

After working many years, one DESERVES retirement--- not to be treated like a babysitting maid by her children.

My in laws can't afford for my mother in law to retire (or go on disability) and my father in law went on early disability years ago. Meanwhile she's in the hospital every time she turns around.

We don't see our elders retiring and we don't expect to be able to retire. Period. I joke with my husband that he better still enjoy working when he's 85!

Abbi said...

twinsmommy, you bring up a good point. Why would schools all assume that everyone is on speaking terms with the grandparents (and enough to ask for tuition assistance!? )? What a chutzpadik assumption.

Anonymous said...

maybe fathers should consider getting real jobs, instead of learning in kollel for a few years.

or are we all waiting for
Hashem ( in the guise of government aide, donations/support from rich individuals, or some other deus ex machina) to send the checks.

ProfK said...

It's like that old joke that was around years ago. A father meets a friend on the street and the friend asks him how the meeting turned out with his future son in law. The father smiled and said: "He worships me and thinks me right up there with our Creator." The friend asked "How do you know that?" The father answered: "Because every time I asked him who would provide the rent money and the food money and all the other money he told me that "God will provide."

miriamp said...

My kids' school never said anything about asking the grandparents first... which is good, because for all that we're on really good terms with them, they didn't even help with our wedding, and have made it pretty clear not to ask them for help with tuition. They do give donations to the school, but those aren't targeted to our tuition specifically, just to the general scholarship/operating costs funds.

While my parents are retired (Daddy was a county employee and receives a pension), they live far enough away to make sure I can't hit them up for babysitting help... although my mother would be willing if we were closer, she isn't moving to facilitate it. And my IL's aren't retired, and MIL doesn't babysit, except that she came and watched some of them when I was in the hospital to have another... but I had to first make arrangements for the ones in school, and she had the 3 youngest.

JS said...

"I've been reading more and more in general publications about young families on their own two feet scared by their own parents financial habits and if/whether they should be planning a contingency plan for if/when their own parents go belly up."

My wife and I fall into this category. We're only married a little over 2 years and there aren't any children yet - but we're completely self-sufficient, planning for our future (house, kids, retirement, etc) and wouldn't even think of asking our parents for money.

However, my wife's parents are deep in debt. To compound the problem, her mother in particular goes completely loses it whenever the subject of money is even brought up. To give an example to show how extreme her attitude is, when we were married my wife wanted to change her joint account with her mother over to our names. Just bringing the subject up made her freak out. So, we don't even understand how bad the problem is.

To compound the problem, they continue to live as if there is no problem. She makes frequent trips to visit her mother by plane and despite my wife's vociferous objections insisted on us having an expensive and lavish wedding. Along the way we've heard of incredible credit card debt (no idea how much) and taking money out of retirement accounts (no idea how much was taken out or how much, if any, is left). She stopped working when she had kids and never returned to her job. Even now with every kid long out of the house she would never consider working. My father in law is a doctor with his own practice. His practive is very small, doesn't bring in much money, and he's had to supplement his income by doing reports for insurance companies. As we understand it, nearly all their income goes to paying off interest on debt (no idea if they're paying principle).

To top it all off, they don't own a home. They've been renting the same home for over 25 years. They moved to this home to be close to an ailing relative in the hospital shortly after getting married and just never moved. And now it's too late they'd never be able to get the credit to buy. And their pride would never lead to them just renting a smaller, cheaper apartment closer to where he works (he currently commutes about 2+ hours each day).

Clearly they'll never be able to retire and the problem continues to get worse as they don't change their lifestyle to even try to get out of debt. Neither one of them is in great health and it's unreasonable to think he'll be able to keep working into his 70's or 80's. Furthermore, with 3 more kids to get married, it's just gonna get worse.

Aside from all these problems, because they live as if nothing is wrong and NEVER discuss finances, these 3 other siblings have TERRIBLE attitudes towards money and finances. None know how to save or how to plan. They just think money grows on trees because whenever they asked for anything it was provided (even though it shouldn't have been) - even today with all these problems they are oblivious and ask for money. These siblings are not yet married (most are in school) and on their own but the trend is not good and I hope they'll listen to my wife and become financially responsible even though their parents aren't.

As the only married sibling so far and the fact that we're doing well and self-sufficient we often have discussions about what will happen when the bubble bursts - when maybe her father takes ill and can't work, or maybe the credit will just run out or the debt become too large to pay. All the while we're just trying to save as much as possible to plan for OUR future - it's too much to try to plan for theirs.

I don't know if there are any solutions to this problem, but I'd love to hear if anyone out there is dealing with a similar issue. My wife has told me she'd have a HUGE blow out fight with her mom about money if she thought it would help but her mother just refuses to even hear the word the word money (I truly think there might be a psychological issue, that talking about it would just be too painful).

Abbi said...

Wow, js, that sounds like a really terrible situation.

And I can see why you are worried, because chances are, judging by the rest of the siblings, you two will literally be the ones left holding the bag when the time comes that your in laws will need help.

You've made it clear that you can't talk to your MIL. Is there anyway you can talk to your FIL about these issues?

Your story sounds very similar to extended family members in my own family- massive financial and debt problems, but even with all the kids out of the house, the wife still refuses to get a job and refuses to stop living an upper middle class lifestyle (including all the shopping/weddings/vacations that go with it). Very sad. :(. There are no answers, but you and your wife should find a way to set boundaries or at least delineate expectations so you won't be walloped in the future.

JS said...

Abbi, thanks. Day to day, it doesn't affect us; it's just the worrying for the seemingly inevitable that does. Hopefully, if and when it does happen, her siblings will be in a position to help out as well.

In terms of my father-in-law, he never confronts her or argues with her directly - if he does, it's always in a passive aggressive manner. What I didn't mention, but should be obvious I suppose, is that this debt and her attitude in particular towards money really strains my in-laws relationship. Especially because only he is working (the debt though it due to poor decision-making and not trying to fix things on both of their parts). So, it was her idea to do the insurance reports to supplement income, but he is resentful since he hates these reports and she is consantly nudging him to do more. So, the most he'll do is simply "forget" to call for a new report to do and other passive aggressive things.

My father-in-law talks to everyone about the issue but his wife. Occassionally he'll talk to my wife about their debt in general (he never goes into specifics) or his own parents. For example, we just visited his parents and my wife's grandfather approached her about the problem. Ironically, her grandfather is well in his 80's and still works - but, only because he wants to. They're well-off and helped her parents pay yeshiva tuition and such in the past but don't see it as their responsibility to fix their son's financial problems. All the suggestions I made above (get a small apartment, she should go and work, they should see a financial counselor, etc) he apparently made to his son as well (or at least I assume this since he said this to my wife).

So, my father-in-law at least in theory knows what should be done but he is other unwilling to try, unwilling to speak to his wife, or most likely, both. Unfortunately, they're not only non-communicative about finances with their children but between themselves as well. On the other hand, I don't know if their relationship is strong enough to handle the massive fights that would surely occur if they did discuss it. As I said above, my mother-in-law is completely irrational and crazy about money issues. When my wife suggested doing our wedding in brooklyn because it would be cheaper she literally threw a temper tantrum and started jumping up and down, screaming, and hitting herself. After that my wife let her do whatever she wanted.

ProfK said...

JS,
The money problems sound really terrible but one thing you said worries me even more, and makes me think your MIL has underlying problems for which the spending may only be symptoms.

You said "she literally threw a temper tantrum and started jumping up and down, screaming, and hitting herself." This is not the behavior of someone who is rational or mentally/emotionally healthy. I'd be far more concerned with getting her in for a full physical/mental check up then getting her to a financial counselor.

ALG said...

I'm 28 and single and I don't know if I'll ever be able to retire. I don't have any debt, but I also don't have that much retirement savings because I've been working in the non-profit field and paying a lot of rent in Manhattan. If I plan to live a long time (say, to age 80 or 85, which is reasonable considering how long my grandparents lived), I definitely won't have enough money to just up and retire at 65.

Of course, a lot depends on what I do with my life for the next 37 years (hopefully marry and have children, but also possibly switch careers, buy a house that appreciates a lot or continue to rent), as well as what happens to the broader work world and the health insurance world. It's going to be interesting to see what happens when the baby boomers retire.

mlevin said...

I always wanted to know, so may be someone here would be able to answer my question.

A husband and wife a deeply in debt. They are both in their 60s and no longer able to work. There are no family or friends that will bail them out. What happens then? In the old days they would have ended up in the debtors' prison, but what about today?

JS said...

profk,

Yes, I agree with you. I've discussed this difficult topic with my wife. It's hard for her to admit it, but she does think her mom would benefit from seeing a psychologist or other therapist. However, there's no talking to her mom about this so I don't know what the solution is. Also, most of what she spend money on is for family so many family members either don't think it's a problem, wouldn't want her to not do X, or don't even know there is a problem at all because they're so secretive about their debt. If her father was stronger and willing to stand up more it would really help in many areas.

In terms of helping them when and if that day comes, I have to admit that I feel very resentful. Not just because my wife and I are planning so hard for our future by scrimping and saving, but because they know these problems exist and don't even try to do anything about them. If anything, they continue to make things worse and worse and due to her irrational and scary reactions, no one even bothers to say or do anything.

As the latest example, her other daughter is part of a performance with multiple shows, the first being on a Saturday night. Instead of attending another showing or staying with her daughter she's going to spend 2 nights in a high-end hotel in manhattan at a few hundred a night. Sadly, she's done this multiple times before for other events.

twinsmommy said...

mlevin, GREAT question--- let me know if there's an answer-- that's going to be my in laws soon. They're even worse in debt than we are, and I would think she'll no longer be able to work within the next few years.

PLEASE GOD that won't be us----- we'll be out of debt by the time we're 60. I HOPE. PLEASE.

Lion of Zion said...

JS:

"hen we were married my wife wanted to change her joint account with her mother over to our names."

i hope your wife was able to do this

regularcommenter said...

mlevin's question kind of happened to my grandparents- my grandfather lost the factory he had been managing for around 35 years when he was in his early sixties. They declared bankruptcy and he continued to work till his late seventies, first selling insurance over the phone and then doing telemarketing.

They sold their house eventually, which was also a big help (and too big with too many stairs, in too cold of a climate anyway.) In their much later years, their sons were able to help them keep steady, in addition to some yerusha that came in.

Most people are still capable of working in their sixties, so internet/telephone jobs make this a viable option. It would be nicer just to be able to retire, but sometimes that's just not in the cards.

In any case, the short answer is declaring bankruptcy and taking another job.

(since I'm talking about other family members, i wanted to remain somewhat more anon.)

mlevin said...

So, let me get it straight. You declair bankruptsy, start with a fresh slate? At that age it would mean going on government social programs, medicate, foodstamps, section 8 and etc.

What happens to all the money owned? Creditors still need to get paid. Right? So, basiacally, these people are ganovs. They borrowed and borrowed, but they never repaid their loans. And now they are living off the goverment. Basically stealing from the working people, again.

Or did I get a situation wrong, and there are real repercussions for going into debt?

Anonymous said...

Education is a must. "Personal" finance is "personal" until that person starts using public monies (loans, etc). However, there is an unfortunate lack of interest in these topics. I organized a Personal Finance Series last fall on 3 relevant topics: mortgages, savings, and investment vehicles. 4 ppl showed for the first event, and 2 each for the last two events. This was publicized to two shuls. Of course, the people this was targeted did not show up.

**Is this only in my town, but I am now hearing stories how there are ppl in the community who do not pay their kids' tuition in the schools...rabbis, etc - can this be???**

Anonymous said...

Big oops - this comment was supposed to be in the post above...

SephardiLady said...

ALG-It is tough to see those little retirment savings adding up at your age and single. G-d willing, you will see them starting to add up as time goes by. Also, married couples have a distinct advantage saving for retirement. Iy"h you will soon see that advantage too.

Anon above-Great comment. Hope you can repost in the other forum!

MLevin-Bankruptcy certainly does not offer a "clean slate" even where there is relief. And taxes and student loans will still continue to be outstanding.

regularcommenter said...

mlevin- sorry to disappoint but there's no more debtor's prison. I'm not sure what you'd like to happen- for people to be chained up in the public square with a big D on their heads? For pple to be marched out of their homes and shown to the nearest cardboard box? I'm not clear on what you expect should happen to people who go bankrupt. (btw, my grandparents got nothing more from the gov't then the SS checks that they were due, as they were over 65. I guess you failed to read the second half of my post where I said my grandfather worked well into his late 70's)

On the flip side, pple (banks especially) who extend credit and make loans take a risk of not getting their money back. That's part of the deal of lending. (and it's part of the stupidity that created the subprime mortgage mess right now- who thought it was a really good idea to lend gobs of money to people who most likely couldn't pay it back?)


Sometimes it doesn't work out. That's the risk of extending credit. So, no, debtors are not anything like thieves who rob a house or a store.

Anonymous said...

Alg - sometimes (almost always), the choices you make when young have a great effect as you grow older. I am definitely not meaning to criticize, but some choices you described will almost definitely have negative effects. Living in Manhattan and paying "a lot of rent" is one of those things, working for a non-profit is probably another.

mlevin said...

SL- I am aware that bankruptcy is not a clean slate, but it might as well be one, when one is elderly and government pays for all of their expenses regardless how much they accrued in debts.

Regular commentator- My point is not how to punish them, my point is that once people realize that there are no real repercussions for getting deep into debt, they see no reason why they should not do it.

My second point was ethical. Going into debt without a real plan to repay that debt is tantamount to stealing. A thief is a thief, whether he stole by breaking into people’s houses or by using a legal loophole. The end result is the same. And sub-prime mortgage institutions are irrelevant to my point. One is a thief if he steals something from a Tzadik, just like one is a thief if he steals something from a Rasha.

SephardiLady said...

MLevin-I assume you are referring to social security benefits. I don't know how much social security is paying these days, but I wouldn't say it "all" the expenses. And, like I said before bankruptcy won't wipe away student loan or tax debts, amongst others. How much of a home (equity in the home) you can or can't keep depends on the state you live in.

Anyways, I agree with you completely that going into debt with no plan to pay it bad is wrong.

regularcommenter said...

Who says all debt is a planned, foreseen circumstance? A person who needs emergency heart surgery but doesn't have the insurance to cover it (because she didn't have a job that offers benefits and doesn't have the money to pay for insurance,but doesn't qualify for Medicare; happens many times a day in the U.S.); should this person just refuse to have it because she has no way of paying back the expenses, and it would be "unethical" to have the surgery?

Katrina victims that couldn't afford insurance? Tough luck on them too?


I assume your response to these people would be "You should have understood the repercussions of living on a low income before you deigned to keep breathing?"

What seems to escape you when you make these neat equations (declaring bankruptcy = stealing) is that many people might have the means to pay back their debt when they take alone, but these "means" (i.e. their jobs) might evaporate in an instant due to many UNFORESEEN circumstances. (That's why they're called "unforeseen".)

SephardiLady said...

Agreed that most bankruptcy triggers are unforseen circumstances. I think MLevin and others (myself included) are tired of getting letters in the mail about someone's overwhelming debt that the klal should now pay off.

Going into debt to make a wedding one can't afford and know they can't pay back the debt vs. going in for a surgery one can't afford are FAR different issues.

We should definitely be more clear (myself included) when using the word theft for debt.