DISCLAIMER 1:
This is a long post. This is also not AI-generated, and I am not a bot, but I did use ChatGPT to do some light copy-editing and to fix grammar. Apologies for all the em dashes. I’m using a throwaway account because I don’t want my real-life friends and acquaintances—who know my primary username—to know about my family’s sensitive situation. I’ll keep things somewhat vague and non–personally identifiable. I’m more than happy to share information to prove I am real and will be as responsive as possible in the comments. I’m simply seeking help for my family and looking to this community for opinions on the options in front of me, or to recommend options I haven’t considered.

DISCLAIMER 2:
This may be more appropriate for r/personalfinance, but I’d like to start here because r/financialindependence is my “home” on Reddit, and I trust this community’s opinions. I’m also personally pursuing FI, so decisions I make for my family could impact my own ability to retire early — so this is at least tangentially related. If mods or the community disagree, I’m happy to repost elsewhere.

Here’s what’s going on

Two weeks ago, my dad's brother (my uncle) passed away. It wasn't sudden, but still a shock to the system. However, that’s not the problem I’m here to discuss, but we think it was the catalyst that finally exposed the situation we’re in. Everyone in the family is grieving, but my 72-year-old retired father is taking it particularly hard.

One week ago, my 68-year-old retired mother called me in a panic. She said Dad was not himself, acting erratic, talking about things that didn’t make sense, and I needed to talk to him immediately. She put him on the phone with me.

Background context

One thing to know about my dad and our family finances is that Dad has always been “on top of everything.” He's also a very private individual. He was a high-earning line and middle manager at a tech company for 40 years, well compensated, and recently retired at 70 to live on his well-earned pension and what he portrayed as a sizeable nest egg.

My brother and I had many great vacations growing up. Dad always fought to be the one to pay the bill when we went out to dinner, even though both of us (me, 41, brother, 38) are well established and often offered to cover things. My mom left all financial decisions to my dad. He gave her credit cards, told her what to charge where, and handled everything else. We had no reason to believe anything was wrong.

You can guess where this is going.

On the phone, Dad said things like: “We’re fucked. We’re out of cash. I waited too long. I screwed our family. I’m sorry. I’ll miss you.”

My brother and I flew home that day. Dad was in a panic — sweating, repeating that he couldn’t buy groceries, that we were losing the house tomorrow, we’d be out in the snow, etc.

We checked his bank accounts. He has a safe cash cushion in checking. He hasn’t missed any payments. No imminent disaster. But there is truth to what he’s saying.

Dad has about $650,000 of debt, $90,000 of which is high-interest credit card debt. He has been spending roughly twice what his pension + Social Security can support. Their guaranteed after-tax income is $9,500/month. His spending is $18,000/month.

He does not have millions invested. Despite years of "saving", he started retirement with only about $600,000 combined between his 401(k) and my mom’s 403(b). This overspending is not a new problem — we've learned that Dad has tapped his 401(k) several times over the years to pay for vacations, pay off credit cards, or buy useless shit he couldn't afford. And in just a couple of years after retiring, that $600k is now $400k after two years of withdrawals.

Two intertwined issues

1. My dad is in a mental health crisis.

We took him to the ER the day we arrived. After a night in the ER, a series of tests, and a few follow-up appointments with various doctors and psychiatrists, he's been diagnosed with extreme anxiety, severe depression, and acute psychosis. He’s now on a short-term antipsychotic and long-term antidepressant, plus a short-term lorazepam prescription to help with anxiety flare ups and potential panic attacks. The antidepressant and antipsychotic meds haven't really kicked in yet (will take a couple of weeks for full effects) so we're trying to keep him comfortable for the time being. In the meantime he's still largely inconsolable. We can’t talk to him logically. He looks at $24,000 in his checking account and insists we can’t afford groceries.

I’m not asking for medical guidance here, but that’s the context.

2. The financial crisis

Here are my parents' numbers:

Assets

• Brokerage: $400,000
• Checking: $24,000
• Home Value: ~$750,000

Debts

• Credit cards (18–23%): –$90,000
• Other loans (mortgage, HELOC, student loan, life insurance loan ~6%): –$540,000

Income/Spending

• Guaranteed pension/SS income (after tax): $9,500/month
• Current average monthly spending: –$18,500/month

Monthly breakdown:

• –$6,800 | debt repayment
• –$3,700 | travel (flights, hotels, dining, entertainment, incidentals)
• –$1,700 | leisure shopping (clothing, home goods)
• –$1,500 | groceries
• –$800 | takeout / local dining
• –$500 | misc cash transactions
• –$3,500 | utilities, insurance, cell, cable, streaming, gym, haircuts, manicures, etc.

I’ve imported and categorized every 2025 transaction and can answer specifics if helpful.

My own financial context

I'm 41 years old. I have an investment portfolio of ~$2.4M. About $50k is in cash, and $600k is in a taxable account. The rest is in retirement accounts. I've been aggressively pursuing FIRE for the past 15 years. I have a wife and one young child.

My initial reaction was gratitude that I can help my parents if I choose to. A 1–2 year hit on my own FI date is survivable. But obviously, I don’t want to apply a financial band-aid if the core issue is dysfunctional spending. My mom is aware of the financial situation now and is willing to make sacrifices, and depending on Dad’s long-term mental state, he may not be managing money at all going forward.

The house

They still live in the home my brother and I grew up in. It’s too big for them, but they’re attached to it and the town/social circle. For years they’ve discussed downsizing and relocating to be closer to family but have never taken action. Now feels like the time to push this. Selling the home would wipe out their debt outright and leave a bit of cash leftover to establish new housing.

They don't live near my brother or I, so the obvious thought here is relocate them closer to one of us. My brother and I live in two different locations but each are significantly lower cost of living than where my parents live now, so we believe geographic arbitrage could play in our favor, even though most of the proceeds from the house sale would first and foremost go to repaying debt.

Options I’m considering

Scenario 1

Provide immediate financial aid to my parents to stop the bleeding.

In this scenario, my brother and I pay off the credit card debt (total $90k; I’d cover ~$70k). We’d use our own cash and a small investment sale. This eliminates high-interest debt immediately. Then we put my parents on a strict budget until they sell the house. No travel, no leisure spending, limited takeout, cheaper groceries, and line-by-line cost cutting. I already drafted a budget that gets them under $9,500/month. We make them stick to it.

Once the house sells, they use proceeds to pay off all remaining debt. Maybe they repay us; maybe not. We’re okay either way.

This gives us time to prepare the house, plan, pack, and choose a new destination and living situation they actually like. Winter in New England is not ideal for selling or moving.

Scenario 2

Convince them to sell the house ASAP. Contact a realtor and list it immediately. Use proceeds to zero out all debt. Parents start fresh somewhere cheaper, living on $9,500/month.

Pros:

• My brother and I don’t provide financial aid in the form of debt repayment
• My parents solve the issue using their own asset

Cons:

• Rushed sale in winter in New England
• Rushed move
• Making major decisions in the middle of Dad’s mental health crisis
• Higher chance of ending up in a compromised or unwanted living situation

After the house is sold:

A. Parents buy a new house

Somewhere lower cost, close to my brother or I. Use sale proceeds and/or help from us for a down payment. Only debt would be the new mortgage.

B. Parents rent instead of own

Straightforward. Probably simplest. Would still locate close to my brother or I, but just rent instead of buy.

C. I buy a second house and rent it to them

They live there; I become their landlord. When they pass or if they move to assisted living, I can keep renting it or choose to sell the property down the road once they no longer live in it.

Where I’m at

I haven’t made any financial decisions yet. I’m still speaking with my advisor and my dad’s advisor and trying to put more options on the table. But I want to know what you would do in this situation.

I will mention we are aware that bankruptcy is an option, but we are trying to find a solution that is less humiliating for them and lets them save face. By getting them on board with selling the house now or soon, they can better control the narrative with friends and family – that they are selling now that they are retired in order to downsize and move closer to their family. No one needs to know it's financially motivated.

Happy to answer questions in the comments (though replies may be delayed for obvious reasons as I am busy managing my dad and his finances).

Thank you.