I wasn't always so comfortable candidly sharing a detailed report of my quarterly net worth with the world, so I can certainly understand my parents' hesitancy in openly revealing a complete picture of their financial situation to my sister and I.
We were raised to keep the cards of our personal finances close to the vest, and I suspect that my parents' upbringing was similar. They were both raised in frugal Catholic families who lived simply, frowning upon large financial splurges, especially for oneself. That's why I was so shocked when my father recently revealed their excessive monthly expenses.
I mentioned in January that I had recently had “the talk” with my parents. After my father's 60th birthday, he began giving serious consideration to the possibility of retiring at the age of 62. He explained that despite the fact that my parents hadn't saved a lot of money, between social security and a small pension, a financial planner believed that 62 might be a realistic retirement age for him.
“What do you mean, might?” I inquired, somewhat irritated, demanding to know how this conclusion had been reached.
“We put together a rough estimate of monthly expenses with him…” He began and I interrupted.
“Have you kept up with your monthly budget? How accurate do you feel these estimates are?”
“We've never really needed to keep a budget. We live frugally, don't have expensive hobbies…” He defended himself.
“So, can you really be sure that you'll be ready to retire at 62?”
He didn't really have an answer. I felt bad for getting agitated and being so critical, but it seemed like they were making estimates somewhat loosely with a financial planner who knew very little about them. After all, if my parents had never had a budget, how would they even know where to start?
My father agreed that he would feel more comfortable with his decision if his estimates were a bit more accurate, so I sent him a basic budget spreadsheet to get them started. He was initially secretive about some of the expense category names, but eased up once he realized I could more quickly make the necessary changes for him in Excel.
Then came the crazy realization: my parents were spending nearly four times the amount of money per month than I do. Whaaaaaa?
How is this possible? Not sure exactly. Should it bother me? My parents are hardworking individuals who supported themselves through four degrees, eventually obtaining well-paying jobs in healthcare. If they want to spend a large portion of their hard earned dollars, should I be concerned?
I'd love for my father to retire at 62. He's worked an extremely stressful job for his entire career, and he's expressed a desire to leave that job as soon as possible. He absolutely deserves a little rest and relaxation, as well as the time to pursue some of his other interests. I just want make sure he's making this important decision with the most accurate information.
Readers: Have you made your parents' finances your business? Am I wrong to be concerned?