It’s less common in the United States in the 21st century. But in many parts of the world, and in past generations, multi-generational family homes are and were common.
With modern medicine, the chances of living to 90 or longer have mostly gotten better as time presses forward.
However, longevity often comes with serious medical or assisted living costs. As such, some families are starting to reconsider old traditions, inviting their elderly parents to move into their houses.
That brings up some sticky financial questions, such as how much rent is appropriate to charge to these older family members. That’s what a listener of the Clark Howard Podcast recently asked.
Can I Raise the Rent on My 90-Year-Old Mother-in-Law?
My elderly mother-in-law lives with us for $300 a month. I want to raise her rent price but I also want to be fair. What should I do?
That’s the question a listener posed to Clark on the May 22 podcast episode.
Asked Greg in Florida: “My 90-year-old mother-in-law is still mobile with a walker and a pleasure to have in the house. We set up a joint bank account that her Social Security goes into. We transfer $300 for expenses out of her $1,100 in monthly income.
“We pretty much pay for everything else except for her life insurance policy and Lifeline necklace, and she’ll buy takeout a couple of nights a month.
“She had a bad fall last year and became 100% dependent, but we got her independence back after about six months of home care. [Family] helped to cover the costs.
“We are considering raising the amount she pays us, but don’t know what’s fair. She has no assets [other than] what she’s saved since living with us, (about $8,000).”
Clark referenced that Greg and his family are following a pattern in the United States right now. Most care and financial support for older loved ones, Clark says, is being provided by younger loved ones.
“First of all, how wonderful, Greg. You two are doing a labor of love [by] providing a place and care for your mother-in-law,” Clark says. “Just so there’s no misunderstanding, your wife should have a conversation with her siblings.
“You just want their buy-in. You never want there to be any feeling that the two of you are in any way taking advantage.
“It’s just a conversation she should have with them about how you’re handling the Social Security money. And as long as they’re aware, they should be completely supportive. It’s what people don’t know, what’s not communicated to them, that causes distrust later.”
Greg’s Mother-in-Law Is Getting a Deal on Her Rent
Family dynamics can be tricky. Especially when it comes to finances.
But according to Rent.com, the median monthly rent in the United States is $1,967 per month. That number balloons to $4,500 per month for assisted living in the United States according to the latest Genworth Cost of Care Survey.
Greg described his mother-in-law’s presence in their home as “pleasant.” That’s a great bonus because that isn’t the case in every family.
Still, Greg’s mother-in-law is getting quite the deal. Not many people in her position would be able to put aside hundreds of dollars a month.
Is It Fair for Greg and His Wife To Raise the Mother-in-Law’s Rent?
Considering that Greg’s family is taking the majority of the burden when it comes to housing and caring for his mother-in-law, one could make a cogent argument for taking the entire $1,100 monthly benefit and offering to pay for anything that the mother-in-law needs.
After all, Greg, his wife and their immediate family are the ones housing the mother-in-law, not Greg’s wife’s siblings.
In any case, I think in terms of financial fairness, it’s totally appropriate to ask for an extra $100 or $200 a month. That’s likely still well below what Greg’s family would charge a non-family rental tenant.
Clark offers some good wisdom in his response to Greg.
In this case, it seems more about keeping the family peace and making sure that, at minimum, the siblings know and understand the increase you plan to institute and why you’ve decided to do it.
Figuring out what to do when elderly family members need housing and some level of care can be stressful. Costs for outside help are prohibitively expensive for some families.
Clark offers smart advice. The best thing you can do in that situation, especially if you’re the one taking responsibility for the elderly person, is to be upfront and transparent about your financial plans with all close family members.
As long as you’re being fair and reasonable, just make sure they’re aware and that they aren’t in for any surprises in the future.