My mom is on asocial security and gets around $900/mo. Her mortgage is low, about half that amount and still owes about $85k. I could pay her mortgage instead of contributing to my 403B. If I don’t she may need to sell due to inflation then use that money to rent a place, hoping it’s enough to support her. Selling would net her at least $300k. I feel if she sells any inheritance I would get would be diminished over time through her living expenses. If I make her payments I’m practically guaranteeing the inheritance at the expense of contributing to my own retirement. We live in the Bay Area and housing/real estate is expensive. Selfish question: will her home be more valuable than retirement contributions over a 10 year period?
Thanks in advance for the helpful comments.
She should fight to keep the house IMO. Would she be able to find a place to rent that’s as cheap as her mortgage?
If you want to take over the payments speak to a lawyer who specializes in estate planning to see how you can accomplish that in a way that protects you both. Perhaps a life waste.
No one can really say where the market will be in ten years.
You may find these links helpful:
– [401(k) Fund Selection Guide](/r/personalfinance/wiki/401k_funds)
– [401(k) FAQs](/r/personalfinance/wiki/401k)
– [“How to handle $”](/r/personalfinance/wiki/commontopics)
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In general i wouldn’t bet against real estate in the Bay Area but money you put into your retirement account is 100% yours, money you put into your mothers mortgage, is 100% hers. You are taking something of a gamble in thinking that you will inherit it. What happens if it’s leveled by an earthquake, you and your mother, have a nasty falling out, your mom gets sued by some slip and fall jag off or has an unfortunate and expensive turn of health and loses the house. Your retirement account is tax advantaged, judgement proof and unlikely to be subject to the whims of an earthquake or capricious family members. If you decide to pay your mothers mortgage, don’t think of it as an investment, because it isn’t one, it is a charitable gift to a family member you believe will make a best effort to pay you back.
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