First Person: Supporting My Mother While Planning My Retirement

Health Issues and Adjustable Rate Mortgage Create Financial Disaster

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For many years, I never considered I would have to take care of my parents until my father passed away. Now, I'm caring for my cash-strapped mother and trying to plan my retirement. It's tough financially to do both.

In 1996, my father suffered a debilitating stroke that forced him to leave his job as an automotive parts inspector and my mother to leave hers as an international shipping clerk to care for him.

They had little savings of and, although they both had 401(k) plans, they started late in life. The total of their vested plans was about $30,000. Social Security and pensions my father had accumulated would not be enough to cover the debt they had. They had never been good at saving money, and health issues sent them spiraling. They were forced to sell their home and move in with my sister where they remained for three years until my father's death at 59 from a heart attack.

After a year of living with my sister, my mother decided to try living on her own for the first time in her life at 61. She moved from the Chicago area to Creal Springs, Ill., to be near me and my family in a country setting like the one she had grown up in. We found her an older home she could afford. Using the last of my father's 401(k) account, she put down $10,000 and bought a small two-bedroom house with an affordable mortgage payment of $340 a month.

Tragedy struck a year later when an electrical fire burnt her home to the ground. She moved in with me and my family while we settled the insurance and waited for a new house to be built. The new house was built and she carried a mortgage. Unknown to any of us, it was an adjustable rate mortgage. After the first year, the rate started fluctuating, always in an upward arc. She was living on her Social Security of $1,124 and three small pension payments that she and my father had earned. Those came to an additional $200. With utilities and modest living expenses, she was, at first, getting by.

As the payments began to rise, she continued trying to make the payments without saying anything to anyone and before long, she was living without utilities and skimping on her groceries to make the payments. When she began to talk about looking for a job, I started asking questions and I finally learned what she had been trying to deal with without becoming a burden to anyone. Late fees were compounding the problem.

When I discovered what had happened, I attempted to work things out with her bank. She had fallen so far behind and made so many late payments, they were unwilling to refinance her loan. I tried several banks on her behalf. Finally, my husband and I took over her mortgage. We refinanced her house under our names. She pays us a modest rent, but it doesn't cover the mortgage payment or the taxes and insurance. We end up paying about $170 a month to cover those expenses.

Within a couple of years she had to give up her car and driving altogether. I took on the responsibility of driving her where she needed to go. She doesn't ask for much because she is so worried about becoming a burden to her children. Her once- or twice-a-week trips to town to shop are not much to ask and in terms of added expense; it barely comes to $10 a week in gas. With my own family and home to care for and my career as a freelance writer to squeeze in, it is often more a cost in time than money.

We also have to provide lawn mowing, tree-trimming and the occasional repair services. Most of these we can do or my brother-in-law helps with. Without his handyman skills, the expenses would be much higher.

The impact on my family's finances is substantial. We live on one full-time income and whatever I can make from writing assignments. The $200-plus a month we spend helping support her could be going into a retirement account for us, something I've learned the hard way everyone should have. I am 49 and had hopes of retiring at 62 to 65. I have a small pension from which I will receive of about $500 to 600 each month.

My projected Social Security income, if I retire at 62, is about $1,200 a month. In 13 years, $1,800 a month will not be enough to maintain my home, pay my real estate taxes and keep a car running. I cannot afford to contribute to a retirement plan right now. The $200 we spend each month on helping my mother would have amounted to more than $20,000 plus interest if I had been able to save it.

There were signs of trouble, though my youthful naivete kept me from recognizing them. My father was always overweight, had diabetes and smoked. My mother didn't eat a healthy diet and also smoked. Their money to went to bills and what ever was left went into material goods -- crafts, movies and pets. They made no effort to save. In spite of their outwardly healthy appearances, they were a pair of ticking time-bombs. Had they forgone the weekly fast food and cigarettes and saved that money, my father might well be alive and certainly their financial situation would have dramatically improved.

While there isn't much I can do right now to save for my own retirement, I have learned the importance of taking better care of myself and my husband. Perhaps when our children are grown and out of the house, we will be able to start saving something for our retirement. But with things the way they are now, there is no way we can.

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