My parents are in their early 60s with no savings, a mortgage, and $2,400 in Social Security – where can they afford to live?

A Reddit poster recently turned to the Internet to get some advice about his mom and dad. The poster is concerned about their retirement prospects as they have very little savings and are barely making it.

He’s trying to figure out where they can live and what they should do in order to be able to have some semblance of security in retirement.  Here’s what the original poster (OP) had to say, along wih some tips for his mom and dad to salvage a retirement with few assets. 

A disabling injury and a lack of investments have left parents in trouble

According to the OP, his parents had little education, and his dad damaged his back at his farming job and had to quit work. He got a $100K settlement, which wasn’t really enough, and he and his wife lived off that money while they waited to become eligible for Social Security.

They’re now bringing in a combined $2,200 per month from Social Security, and his mom makes a small amount of extra income with babysitting but isn’t in a position to earn much since they live in a small rural town and she was home wih the kids without a career. They didn’t understand retirement savings, so they have none, and no pension funds are available from Dad’s job. 

His parents have a mortgage that costs $1,500 per month, a $300 car payment, and can’t make the bills with their $2,200 monthly checks or the amount Mom earns babysitting, so they have to figure out another solution.  The poster is wondering if they should sell their home, and where they should live to stretch their limited income enough. 

How to salvage retirement without investments

The OP believes his parents should sell their house, and that’s probably the right move as a starting point, since he said they have around $500K in equity in the property and have an expensive mortgage. If they sell and get $500,000, they could invest the funds. This could produce around $18,500 in extra monthly income at a safe 3.7% withdrawal rate. That would provide a lot more wiggle room in their budget — especially if they could find a place to live for under the $1,500 a month they are currently paying.

Many posters advised the OP that his parents should try to move somewhere close to him or his siblings, so the kids can help take care of the parents as they age — especially given that Dad already has a disability due to his work injury.  If they moved to a walkable area, they might also be able to eliminate the $300 monthly car payment if they are still struggling — especially if they live close enough for the kids to help them out. 

Some Redditors also suggested that mom might want to get a W2 job if she’s able, perhaps by using her babysitting experience to work in a daycare or as a camp counselor or teacher’s aide. This could help the couple preserve their savings, increase their income, and potentially increase future Social Security benefits if the mom’s pay can boost her average wage. 

A financial advisor can also provide some good advice on their options, including whether they should buy a small house with low or no payments or rent after downsizing, and where to put their money when they have sold and collected equity in their home. The couple is lucky that they do have equity to help make up for their lack of retirement assets, and should get the professional help they need to make that money stretch as far as possible, given that they’re still not quite as prepared for retirement as they should be. 

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