Dad’s health declined. He needed more care. The senior living community couldn’t provide the level of medical support he required. They moved him to a nursing facility, $12,000 a month. Insurance covered some of it, but not enough. Mom stayed in the senior living apartment at $4,500 a month.
Total monthly expenses for their housing and care: $16,500.
Their retirement savings had been invested, but the market dropped in 2022. Their portfolio took a hit. They were withdrawing more than they should have been to cover expenses.
At Thanksgiving 2022, Mom pulled me aside.
“Rebecca, we need to talk.”
“What’s wrong?”
“Money is tight. Your father’s care is expensive, more than we planned for.”
“I’m sorry. That’s stressful.”
“Caroline and James have been helping, sending money monthly to help cover costs. We were wondering if you could contribute too.”
“How much?”
“Maybe $1,000 a month. We know you don’t make as much as your siblings, but every bit helps.”
I did the math in my head. I was making $240,000 a year now as a principal engineer. My rental property was generating $74,400 annually. My investment portfolio was worth $4.2 million.
“I can do that,” I said.
“Really, Rebecca? Thank you. You’re such a good daughter.”
I started sending $1,000 a month by direct deposit into their account.
What they didn’t know was that Caroline was sending $3,000 a month. James was sending $2,500 a month. My contribution was the smallest because I was already supporting them in a way they couldn’t see. The house they’d sold, the one funding their retirement, I had bought it. I owned it. The sale proceeds they were living on came from me.
But they didn’t know that. So they saw my $1,000 monthly contribution as generosity, while seeing Caroline and James’s larger contributions as the real support.
At Christmas dinner, Mom made a toast to Caroline and James, who have been so generous in helping us through this difficult time.
I raised my glass and said nothing.
In May 2023, Mom called me crying.
“Rebecca, we have a problem.”
“What happened?”
“Your father’s care is getting more expensive. He needs specialized treatment. The costs are—we can’t keep up.”
“How much do you need?”
“It’s not just about needing more money. It’s about sustainability. We’re depleting our savings. The money from the house sale, it’s not going to last as long as we thought.”
“What are you going to do?”
“We’ve been talking to a financial adviser. He suggested we look at our assets.”
“Okay.”
“The thing is, when we sold the house, we didn’t structure the sale to minimize taxes properly. We took a big capital gains hit. It was a mistake.”
I knew that. I’d structured my purchase through the trust specifically to avoid that kind of mistake when I eventually sold.
“That’s unfortunate,” I said.
“Our adviser said we should have kept the house, put it in a trust, used it as a revenue-generating asset while protecting it from taxes and creditors.”
“That would have been smart.”
“But we sold it. And now that money is just sitting in investments that are losing value.”
I waited.
“Rebecca, we’re thinking about buying another property, a rental, something that can generate income.”
“With what money?”
“We still have about $1.8 million in savings. We could buy a smaller property, rent it out, use the income to offset your father’s care costs.”
“That could work.”
“We’ve been looking at properties. There’s a townhouse in Ballard, $1.2 million. We could rent it for $4,000 a month.”
I did the math. $4,000 monthly rent minus property taxes, insurance, maintenance, and property management fees. They’d net maybe $2,500 a month. It would help, but it wouldn’t solve their problem.
“Have you talked to Caroline and James about this?” I asked.
“James thinks it’s a good idea. Caroline is worried about us taking on property management at our age.”
“That’s valid.”
“We’re going to use a property management company like people do.”
Like I did, I thought.
“When are you buying?”
“We’re making an offer next week.”
They bought the Ballard townhouse in June 2023 for $1.2 million. It took four months to find tenants. By the time they did, they’d spent $35,000 on updates and repairs the property management company said were necessary to command market rent. The tenants moved in October 2023 at $3,800 a month. After expenses, my parents netted about $2,100 monthly.
It helped, but it wasn’t enough.