need a pat on the head or a newspaper on the nose

[Craigy]

Hank wrote:

Muaddib wrote:

thanks for the encouraging words all, I appreciate it.  Still wish I could go back in time and smack my intern face with a WCI book and make this all a little easier.  we might ease up on the family loan repayments which are kind of the ” no you don’t need to pay us back it is our gift to you but we’ll still hold it over you for the rest of your life and it was kind of our retirement money” kind of thing.

Click to expand…

“Kids can get a loan for college, parents can’t get a loan for retirement.”

While it’s great that your parents helped you with the considerable costs of getting into and through medical school, they should not have done so at the expense of being responsible for their own lives after they stop working.

You really need to pay back your parents ASAP (with interest) so they are responsible for their own future in retirement.  Don’t write a blank check, and don’t let them hang however much guilt over your head that they aren’t living as luxuriously in retirement as they might wish.

There are some poor slobs out there who owe $400 to $500 thousand dollars for graduate school (law, medicine, dentistry, or god forbid vet school).  Just the same, these folks have containment on their costs.  If parents claim that you denied them the retirement that they feel they deserve, then the amount you might “owe” them is limitless.  Far better to pay back your parents the $170K promptly and let them live off of however much that might generate if they invest that sum prudently.  (Assume $200K with interest and apply the 4% safe withdrawal rule and you’ll find it’s only $8,000 per annum or $667 per month before taxes.)

You are more than free to support your parents, allow them to move in with you, give them gifts, encourage your other siblings to help support them, etc.  You shouldn’t be made to feel guilty for keeping them from being responsible for their own retirement or made to feel that you owe them an ever increasing, limitless amount of funding.

Let’s get real.  If $170K was their entire retirement savings, then they had no business whatsoever giving you any of that money.  Pay it back with interest pronto and then support them if you want to out of the true kindness of your heart (and out of an excess of funds after being responsible for your own retirement, housing, and funding college for your kids).  The same $50-$150K per year to mom and dad as a voluntary act versus as an attempt to assuage guilt will feel far better for you and hopefully for them.

Click to expand...

I can't speak for Muad'dib's parents exact situation, but I have a feeling you're overreacting here.

Which dollars you have saved aren't for retirement?  It's all retirement, aka some portion of wealth they have saved.  I doubt they have their own defined benefit plan that they have to true up every year with an actuarially computed amount.

[Hank]

Muaddib wrote:

thanks for the encouraging words all, I appreciate it.  Still wish I could go back in time and smack my intern face with a WCI book and make this all a little easier.  we might ease up on the family loan repayments which are kind of the ” no you don’t need to pay us back it is our gift to you but we’ll still hold it over you for the rest of your life and it was kind of our retirement money” kind of thing.

Click to expand...

"Kids can get a loan for college, parents can't get a loan for retirement."

While it's great that your parents helped you with the considerable costs of getting into and through medical school, they should not have done so at the expense of being responsible for their own lives after they stop working.

You really need to pay back your parents ASAP (with interest) so they are responsible for their own future in retirement.  Don't write a blank check, and don't let them hang however much guilt over your head that they aren't living as luxuriously in retirement as they might wish.

There are some poor slobs out there who owe $400 to $500 thousand dollars for graduate school (law, medicine, dentistry, or god forbid vet school).  Just the same, these folks have containment on their costs.  If parents claim that you denied them the retirement that they feel they deserve, then the amount you might "owe" them is limitless.  Far better to pay back your parents the $170K promptly and let them live off of however much that might generate if they invest that sum prudently.  (Assume $200K with interest and apply the 4% safe withdrawal rule and you'll find it's only $8,000 per annum or $667 per month before taxes.)

You are more than free to support your parents, allow them to move in with you, give them gifts, encourage your other siblings to help support them, etc.  You shouldn't be made to feel guilty for keeping them from being responsible for their own retirement or made to feel that you owe them an ever increasing, limitless amount of funding.

Let's get real.  If $170K was their entire retirement savings, then they had no business whatsoever giving you any of that money.  Pay it back with interest pronto and then support them if you want to out of the true kindness of your heart (and out of an excess of funds after being responsible for your own retirement, housing, and funding college for your kids).  The same $50-$150K per year to mom and dad as a voluntary act versus as an attempt to assuage guilt will feel far better for you and hopefully for them.

[Dru]

Not intimidating in a bad way. More like when you're in junior high and you go to open gym at the high school and all the guys playing are bigger and faster, but that's really because they're just more developed than you.

Don't get me wrong, I've learned an incredible amount from the WCI blog then bogleheads then books and now the forum. I can't even think of all the terrible mistakes I would have made without this site. I am in primary care and had just about a 2:1 debt to income ratio when I finished training. That's bad enough as is but would have been ruinous without what I've learned here. We just have to delay gratification a little longer than many others but it will be worth it.

[Craigy]

Muaddib wrote:

thanks for the encouraging words all, I appreciate it.  Still wish I could go back in time and smack my intern face with a WCI book and make this all a little easier.  we might ease up on the family loan repayments which are kind of the ” no you don’t need to pay us back it is our gift to you but we’ll still hold it over you for the rest of your life and it was kind of our retirement money” kind of thing.

Click to expand...

:lol:

Yeah you have to pay this off, no doubt about it.

If they're not hitting you with interest, you could definitely just set the autopay on the current amount or less and just let it run its course.  But I'd still be eager to get rid of it, and as soon as I had a little pile of cash I'd be asking to settle somehow for a lump sum, just like they were a debt collector.  

Either way, in all seriousness, one thing that you should absolutely do for your own sake and sanity, is to make and keep a file of all of the records.  In addition to keeping a copy of each check (which might eventually be hundreds of copied checks), you should find and keep records of all the amounts that were loaned to you or spent on your behalf in the first place if it's at all possible.

After it's been paid, you want the satisfaction of it being over and done with.  The last thing you want to find out, after paying back $170,000 over several years, is that oh that was just part of it.  I don't know your family's situation, and hopefully they hardly even notice the money coming in and it really makes no difference.  But someone, especially someone in retirement, may start to count on those checks, and be surprised when it comes to a stop.  Especially as they become elderly, this confusion only grows.  Even if your parents don't care about it, some aunt or cousin or sibling might come asking one day hey doesn't Paul owe you some money, why did he stop paying you, you need that money, that's not fair.  There should be zero confusion on your end.   

[Craigy]

Kamban wrote:

Craigy wrote:

Second, I had a small loan from my dad that I was paying him back on. After making a few payments, he tells me don’t worry about it, I’ll let you know when to pay me back. Fast forward several months and he gives me a bill for all the interest I owe him. Next day I wrote him a check for the whole balance in full discharge of the debt. 

Click to expand…

Not a criticism directed towards you or your dad but I am surprised a parent calculates interest on a loan given to a child. Something that would never have entered my mind if I give any money to my daughter.

Click to expand...

Well the big difference is loan vs. give.

The loan or interest part didn't bug me, but the mixed signals did.

[Kamban]

jfoxcpacfp wrote:

Interest on family loans is not uncommon, especially when there are multiple siblings involved and the siblings who aren’t borrowing money perceive it as a gift to the “favored” sibling. Since you mention only one child, this is possibly an issue you haven’t experienced

Click to expand...

I learn something new every day. Part of this is due to cultural differences, and hence a new perspective does not occur in my mind until I read something like this. 

[jfoxcpacfp]

Kamban wrote:

Craigy wrote:

Second, I had a small loan from my dad that I was paying him back on. After making a few payments, he tells me don’t worry about it, I’ll let you know when to pay me back. Fast forward several months and he gives me a bill for all the interest I owe him. Next day I wrote him a check for the whole balance in full discharge of the debt.

Click to expand…

Not a criticism directed towards you or your dad but I am surprised a parent calculates interest on a loan given to a child. Something that would never have entered my mind if I give any money to my daughter.

Click to expand...

Interest on family loans is not uncommon, especially when there are multiple siblings involved and the siblings who aren't borrowing money perceive it as a gift to the "favored" sibling. Since you mention only one child, this is possibly an issue you haven't experienced

Also, some parents, business owners in particular, want to teach their children financial responsibility, even if the repayments will eventually be recycled back as a gift.

My mom has loaned money several times to one of her grandchildren (my son, who invests in real estate) and my sister (an attorney) and I have always insisted on interest a little above market rate. Same principle and there are 8 grandchildren. He has always been grateful for the resource and has been honorable with the repayments.

[DMFA]

Do we really intimidate? I'm genuinely sorry to hear that. I've had a positive net worth for about six months now, and let me tell you, just getting to being broke was a rush.

[Kamban]

Craigy wrote:

Second, I had a small loan from my dad that I was paying him back on. After making a few payments, he tells me don’t worry about it, I’ll let you know when to pay me back. Fast forward several months and he gives me a bill for all the interest I owe him. Next day I wrote him a check for the whole balance in full discharge of the debt.

Click to expand...

Not a criticism directed towards you or your dad but I am surprised a parent calculates interest on a loan given to a child. Something that would never have entered my mind if I give any money to my daughter.

[jfoxcpacfp]

OUSOONERDOC wrote:

@muaddib Here is another pat on the back! You are doing great! I am in similar situation but just 2.5yrs out of FM residency. Working hard to pay off student loans, Just passed the $100,000 mark on my 401K and have also paid off just over $100,000 on student loans. Debt free other then House and Student loans. Set to have student loans paid off by Beginning of 2019. Then can start maxing out 457, HSA, and both Roths. We are keeping a tight budget but still finding ways to enjoy life.  Future is bright for all of us interested enough to be on this website. Keep up the good work!

 

Click to expand...

Sounds like you deserve a pat on the back, too, OUSOONERDOC, good work.

[OUSOONERDOC]

@muaddib Here is another pat on the back! You are doing great! I am in similar situation but just 2.5yrs out of FM residency. Working hard to pay off student loans, Just passed the $100,000 mark on my 401K and have also paid off just over $100,000 on student loans. Debt free other then House and Student loans. Set to have student loans paid off by Beginning of 2019. Then can start maxing out 457, HSA, and both Roths. We are keeping a tight budget but still finding ways to enjoy life.  Future is bright for all of us interested enough to be on this website. Keep up the good work!

 

[Hatton]

Dru wrote:

@muaddib – I’m intimidated most days I log on to WCI as well, and I’ve been following about 5 years. Same age as you, primary care, 2.5 years out of training, 2 kids. Last year 33% of our gross income went to retirement savings or loan repayment. So I won’t be commenting on the Tesla thread anytime soon, but so many of my cohort who I talk to with blended 7.4+% med school loan rates haven’t refinanced and just really have no idea. So I think we’re doing ok for now. But this site inspires me to always try to do just a little better.

Click to expand...

I am sorry if you feel intimidated.  I think the purpose of many of the docs who share net worth numbers is not to make others feel bad.  Many docs who post are not high income specialties.  I would just recognize that everyone makes some mistakes along the way.  You can make some non ideal choices and use them as a learning experience and end up just fine.  Compound interest is your friend.

[Dru]

@muaddib - I'm intimidated most days I log on to WCI as well, and I've been following about 5 years. Same age as you, primary care, 2.5 years out of training, 2 kids. Last year 33% of our gross income went to retirement savings or loan repayment. So I won't be commenting on the Tesla thread anytime soon, but so many of my cohort who I talk to with blended 7.4+% med school loan rates haven't refinanced and just really have no idea. So I think we're doing ok for now. But this site inspires me to always try to do just a little better.

[Dicast]

I'm with everyone else on this one.  I think you're doing great.  I've been out for nearly 5 years come July (2 years academic EM, 2.5 years and counting private) and I've amassed 225k in retirement funds which feels pretty good to me...and you're right there.  While some people may be ahead of us, I don't think it is that many.  You owe less than a years salary on your house, no car debt, no credit cards.  What would you really do right now if you retired anyway?  Work is stressful, boredom is deadly.  If you just figure out the "student loan" so you quit stressing I think you'll be just fine.

[Muaddib]

we've been averaging about 1-2k a month for the payments. it's definitely one of those gifts that we will sleep easier at night when it's paid off no matter what the 'rents say