Question 

My parents have recently retired and they are living it up. They are traveling about once a month or so and some of the trips seem to be rather expensive. 

I have been reluctant to bring up the cost of their traveling. What worries me is that my mother made a comment that “we are spending it all.” I did not ask her to elaborate but her comment is troubling me. These are two people in their late 60s and in good health. I am wondering if they spend it all now, what happens in ten years if they run out of money. They do not have a pension, just their 401k plans and social security. 

My parents were working class folks. Hard-working I might add. They were not known as savers though. I do not know how much they have and I do know that they are not going to inherit money. I am worried that they are being foolhardy with all of this spending. What is reasonable to expect? Do I interfere? 

Answer 

You have described a situation that could be problematic. It all depends on what their asset level is and how much of it they are planning to spend. 

It is not unusual for someone to make a comment that they are planning to "spend it all." It is one approach to what seems like a large pot of money for the taking. One has to hope that they are not really planning to spend to zero and risk running out of money when they need it for care. 

Unfortunately, not everyone is a good saver or wise when it comes to spending. Your parents need to consult with a good financial planner to help them evaluate where they are now and how they are spending may impact their future. Your biggest challenge is going to be how you approach the subject with them. Your parents may feel that you are interfering and possibly concerned about losing an inheritance. 

You have history with your parents, so this is the time to trust your gut. Rather than bringing up the travel and the spending, I recommend that you talk about the comment that your mother made about spending it all. Ask your mother how one spends it all and still has enough for a nursing home if needed later. Do not be accusatory when you ask the question. Simply ask about the formula that they are using to spend it all. You could say that you a curious about how much to save for retirement and are wondering what their strategy was. It is one way to approach it a bit less directly than coming out and asking why they are planning on spending all their money. You might wait until your mother makes the comment about spending it all again and interject at that time. You could say then, “Does your financial planner think that is wise?”

You are risking creating a rift between you and your parents by questioning their spending, even with the slightly less direct approaches I suggested. I know of no adult that appreciates someone challenging how they spend the money they earned. So do tread lightly on this subject.   

How other people spend their money can puzzle individuals with a different philosophy on money and savings. You are in a tough situation with your parents. They are adults and what they do with their money is up to them. If you decide to bring it up, do so carefully.