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Regular Social Butterfly
Posts: 370
Registered: ‎03-29-2010

RE: How much do you need for a comfortable retirement?

Message 61 of 142 (2,234 Views)

>> I don't think the LTC premiums reflect that fact.>>

I'm not sure what you mean? It's impossible to buy an LTC policy after age 79, or it was when I was pulling quotes on behalf of an advisor's clients.

One thing I dislike about articles that quote an "average" price for LTC premiums is that such a quote is useless. It seldom includes the two most important options: home healthcare (in some states this is mandated to be included, but not all) and automatic compounded inflation protection.

Including those two options doubles the premium. For example, five years ago I pulled a quote for a 60-yr old female in good health, no medications, no illnesses. A $200/daily benefit, 90 day elimination, home healthcare and 5% inflation compounded, was $6K/yr.

By comparison, we got policies in our late 40's, were not in the best of health (rated Std instead of Preferred). My policy was $1K/yr and DH's was $850/yr.

Even with two premium increases over the last decade, our total premiums remain very affordable, especially compared to the cost of licensed facility care or home healthcare.

Neither DH or I would qualify for similar policies at rates anywhere near what we pay now.

Waiting achieves nothing except to increase your risk that you will not be able to afford LTC insurance when you finally get scared enough to think about needing it.

If you can't buy it before you're 60, I wouldn't buy it at all. Too many people want to ignore financial reality and 'play chicken' with their risk mitigation, morbidity and mortality.

It's a free country. But that's not how I want to manage our financial future. That's why I keep emphasizing (as others have) that a 'comfortable' retirement IS NOT A NUMBER.

It is a thorough assessment of your short, medium, and long-term goals. It includes your health and health risks. It includes your assets, your debts, your risk profile, and what risk mitigation you want and can afford.

If you have the interest and time to educate yourself on all aspects of comprehensive financial planning, it is perfectly possible to do all this yourself. I did it, with nothing more than 37 years in various industries as an Executive Assistant with an interest in how business really works. I have done a good enough job that professional independent advisors have congratulated me on the thoroughness of our planning.

Admittedly most people do not have the time, the energy, or the interest to accomplish this. But planning for retirement is not done six months before retiring, it is at the very least a mid-term strategy.

Contrary to assertions by many that all you need do is save as much as you can and limit your use of credit, we behaved exactly the opposite for decades. We did not get serious about debt and retirement planning until we were in our mid-40's. But we did get interested, and for the next 15 yrs made some serious financial decisions about our future - including buying the LTC insurance while it was still affordable.

Sorry to disagree with sleepercell, but there are many people who COULD have afforded LTC, but chose instead not to apply. Those people included my sister, my brother, my friends. I know darn well they could have afforded it if they had tried, when we were a decade younger.

Their decision vs ours. Who made the right one? Only time will tell.

Valued Social Butterfly
Posts: 10,667
Registered: ‎01-24-2008

RE: How much do you need for a comfortable retirement?

Message 62 of 142 (2,234 Views)

In Response to RE: How much do you need for a comfortable retirement? by kom2010

Your point about LTC is well taken. It really is unaffordable after about 65  and may not even be available or sensible in most cases because the chances you'll last a long time in LT Care after advanced age are less. I don't think the LTC premiums reflect that fact.


Silver Conversationalist
Posts: 2,581
Registered: ‎12-06-2010

RE: How much do you need for a comfortable retirement?

Message 63 of 142 (2,041 Views)

In Response to RE: How much do you need for a comfortable retirement? by kom2010

You spent a lot of energy but offered no viable solution and you assert that LTC is affordable. It is NOT affordable to more than half of the US population. 

" In fact, the Employee Benefit Research Institute found the majority of American workers had put away less than $25,000 for their golden years."

A Homeowner With No Savings, but Some Options

Regular Social Butterfly
Posts: 370
Registered: ‎03-29-2010

RE: How much do you need for a comfortable retirement?

Message 64 of 142 (1,988 Views)

Whether Boomers want to face the facts or not, study after study has shown that people are living longer with serious, degenerative illnesses than ever before. The rise in mortality over the last 50 yrs has occurred at a statistically meteoric rate compared to the previous 2000 yrs.

What was 'true' for previous generations is not necessarily going to work for our, or the Millennials', generation.

I have watched elderly relatives slowly decline from congestive heart failure, that forty or fifty years ago would have killed them outright the first time they suffered cardiac arrest. Instead, they lived on....and on.....and on, getting weaker and feebler with each passing day. Each lived a decade longer than their parents/grandparents might have. But the quality of life was irreparably affected.

I took care of my father for a time. He had Parkinson's disease. I learned how difficult it is to lift someone who can't get up; who can't speak clearly because his facial muscles are frozen. Parkinson's is like living death; your mind is intact but your body becomes useless. It doesn't kill you, though - you can live five, six, or more decades with it. Not a scenario anyone likes to face.

I'm not sure any longer what sleepercell's point is. This discussion has gone a bit OT and there's been so many postings. Should there be no government assistance to the elderly? Should we just throw them on their family's goodwill, even if they have none? There's been a lot of 'this is wrong' but no solutions offered.

People make choices in life. We bought LTC insurance over a decade ago. When you're young (48 is young for this type of policy), it's affordable. Rate increases have been easily managed. To this day the LTC total premium for DH and I, is less than it costs us for earthquake insurance. It's one-third what we pay for groceries every month. It isn't that much more than the monthly overhead on our two cars (which are paid for).

IOW, we manage it just fine. Any premium increases we can still manage because we budgeted for it, just as we did for all our necessary expenses.

Over the years we have given family the chance to get their own LTC policies, as our carrier extended the availability of our favorable group rates/type of policy to any family member of an employee, no matter how distantly related.

Not one person took us up on the offer, although I know they could have afforded if - IF they had thought it was important. They didn't, and now, every one of them regrets it. Age at application trumps the cost of a long-standing policy.

Wait until you're 60, and you need to be very well off to afford an LTC policy. Even then, if your health has declined, you may find it unaffordable.

LTC underwriting is no different than health or disability underwriting. All are 'tight' because there is no consistent, level playing field. If everyone were covered for a basic list of preventive healthcare and elderly services - and I mean everyone, from young to old - it would be easier for carriers to 'plug the holes' and offer packages of 'enhanced' and 'premium' care.

Instead, US eldercare is a makeshift, awkward, clumsy beast that serves us all poorly when it is needed most.

Some may look at what I live upon and say, "Well, that's a ridiculous amount, you have far more than anyone needs."

We planned for an early retirement with full awareness that we needed to plan if something went very, very wrong. Because we don't have much of a safety net - few family, a small circle of friends who would find it difficult to pitch in consistently (they have their own family/health issues to deal with).

If we want to have choices about our disability/old age, we had to budget for them. We had to think about every stage of physical competence.

We had to assume, then, that there might be a time when friends and family COULD NOT care for us. Indeed, when I broke my leg a few years ago, everybody rushed to help - but a week later, it was down to once a week from a few people. Others cannot just drop their lives to help care for someone else, even if you're just in the town next to theirs. Modern life places a lot of demands on working people; it's unfair to place burdens unnecessarily on others.

By planning a comprehensive financial strategy that included a wide range of insurance needs to mitigate risk to our financial stability, we are able to enjoy a 'comfortable retirement' that is not dependent upon what house we live in or what the stock market is doing.

We have friends who thought they planned well, always made more money than we did, saved more money, but made lousy financial decisions - including not buying LTC. If the husband is lucky and doesn't suffer any serious illness before he is eligible for Medicare, they may even make it through retirement without having to declare bankruptcy or move overseas.

Again, my point is that 'comfortable' is a nebulous emotion. More important is, how well have you planned for what might go wrong? Our friends mentioned above planned but did so poorly. They spend a lot of energy adjusting their expectations/lifestyle downwards, with a constant low-level worry that their once-comfortable budget was, in fact, a house built upon sand.

The question for this discussion might be better expressed as, "What factors need to be considered for creating your retirement lifestyle?"

Any discussion of this that does not include recognition of increasing physical frailty and disability, will not be helpful to those who are still working. For those who are already retired, there are solutions but they may be unpalatable - but you may not have a choice eventually, and you need to recognize that.

Sometimes making small changes can help; sometimes it won't. Some people are lucky as they go through life, and others are not. We can't force anyone to plan, let alone plan well. What we can do is give them the tools they need, the encouragement and support possible, and perhaps someday that 'level playing field' so that it will be easier for people to figure out what they are planning for.

Silver Conversationalist
Posts: 35
Registered: ‎10-01-2008

RE: How much do you need for a comfortable retirement?

Message 65 of 142 (1,981 Views)

In Response to RE: How much do you need for a comfortable retirement? by SLEEPERCELL

Ever one needs a differ rent amount. It depends on what your life style training has led you to expect.

So some of us are  in for a very rude awakening.

Does this tell you how much you really need for a comfortable retirement

It tells you as much as i have read in the post.


Silver Conversationalist
Posts: 2,581
Registered: ‎12-06-2010

RE: How much do you need for a comfortable retirement?

Message 66 of 142 (1,980 Views)

In Response to RE: How much do you need for a comfortable retirement? by Mimi1921

Your scenario is correct and well taken.

Let me also convey that my view on how America treats senior citizens is appalling. When I was growing up, I was admonished, ALWAYS RESPECT YOUR ELDERS. It was not an option. No disrespect or any ill treatment towards any ELDER.  Whatever one's religious views, this too (Respecting elders) is admonished in Christianity.

I understand the GIFT situation and that is usually with a limitation of $10,000 annually with no strings or reporting, taxing by any government. 

LTC is not affordable for more than half of the nation simply because more than half the nation does not have the buying power to afford LTC insurance.  LTC insurance is a lifetime of contributions in most cases and this too is disheartening. 

BTW-- I like your ideas because as a kid living in Florida at a young age, most of my neighbors were elderly. They lived in homes-- boarding houses that they shared with the owner who usually cooked or paid someone to cook at the meals.  There really weren't LTC facilities as we know them today except for the very wealthy. In some of these former homes rented the abuse was rampant too. Living conditions varied and the images I will never forget.

We've volunteered in the past to our local LTC facility and it is one the hardest things to do. I'm not on par with the system or belief that the US has good LTC facilities - they are only as good as you can afford but the caveat is you usually don't get what you pay for. 

Current time - one of my neighbors did exactly what you mentioned and his mother in law lives in the addition, comes and goes as she pleases and it did add value to the home.

Maybe part of the solution is for families to take more active roles. 

Personally, my Mother is too stubborn to be dependent and I guess I am too. When we built out our basement a few years ago, it has a full bath, kitchen and plenty of finished space etc.  The idea was my office could easily be converted into a bedroom suite if either my Mother or still living Father-in-law needed to live with us.

There are some folks that have no financial constraint as to be able to afford LTC insurance but the higher percentage of Americans cannot. 

Lastly, my Grandmother left the house my Great Grandfather built and moved to a Government "apartment" as they were called back then. She received $75 monthly social security check and she always had food, money, clothing, etc. The residents of the "apartments" were looking after one another and this was in West Virginia. My wife's Grandfather in Illinois-- same thing!  They both passed years ago with no LTC facility or any assisted living other than family, friends and neighbor residents looking out for them.

Thank you, I like your ideas.

Silver Conversationalist
Posts: 2,581
Registered: ‎12-06-2010

RE: How much do you need for a comfortable retirement?

Message 67 of 142 (1,948 Views)

In Response to RE: How much do you need for a comfortable retirement? by kom2010

Are you saying that the people currently in nursing homes on Medicaid assistance have cheated the taxpayers by hiding assets?



I'm not saying I have the answers but clearly this is immoral and it is wrong for the seniors that must do it. My point to ASTRAEA is this practice is the norm and the Medicaid/care outlines the length of look back time they will review for the individual's assets.

Treasured Social Butterfly
Posts: 19,551
Registered: ‎12-25-2011

RE: How much do you need for a comfortable retirement?

Message 68 of 142 (1,948 Views)

In Response to RE: How much do you need for a comfortable retirement? by Mimi1921

Sometimes I think people need to be more realistic, both about their own children's ethics, and doing things in a more business-like manner. My relatives had no qualms about trusting me with their money, but apparently some children grow up more focused about themselves, than their parents .. and maybe that's even the parents' doing!

Maybe people should make it a loan or have their names put on a deed, if they give a large sum of money to children, to put an addition on the house for themselves to live there. That would ensure they have a legal claim to funds, if they had to go to a nursing home or other facility .. and the children didn't feel the obiligation to help pay for it.

Registered on Online Community since 2007!
Valued Social Butterfly
Posts: 4,221
Registered: ‎07-31-2010

RE: How much do you need for a comfortable retirement?

Message 69 of 142 (1,948 Views)

In Response to RE: How much do you need for a comfortable retirement? by SLEEPERCELL

What about the folks who move in with children for five or more years with no intent to defraud and continue to spend money as they see fit, perhaps thinking that this is now their "forever" home?  

They may contribute to the household, make monetary "gifts" to children and grandchildren and before you know it, their nest egg has dwindled down to a very small amount.  

They continue to live with children until old age and infirmity take over.  In spite of everyone's wish that Mother or Father not spend the last of their "golden years" in a nursing home or LTF, the amount of time and energy required to care for them is no longer feasible for the household and the parent must be moved into different quarters for care and to maintain everyone's (parents & children) quality of life.

Can you justify a scenario like this as an attempt to conceal assets since the children and grandchildren obtained some material gain?  I don't think so. They probably thought LTC insurance wasn't necessary because the parent was "always" going to live in the home.

Good intentions, but it backfired on them.  I've seen this happen in a number of cases. Perhaps Mother or Father even footed the bill for an "add-on" apartment or bedroom suite and all went well until age/infirmity problems became the dominant reality and had to be addressed.  That definitely was a monetary gain for the children as it increased the value of their home.

Just tossing this scenario into the mix...


“The third-rate mind is only happy when it is thinking with the majority. The second-rate mind is only happy when it is thinking with the minority. The first-rate mind is only happy when it is thinking."
War With Honour, 1940 ~ A.A. Milne
Regular Social Butterfly
Posts: 370
Registered: ‎03-29-2010

RE: How much do you need for a comfortable retirement?

Message 70 of 142 (1,948 Views)

>>The practice that I mentioned is the "norm" and that's not an endorsement from me either. The system is broken.  >>

Sleepercell, you have posted so often that I want to make sure what you are referring to in the above sentence.

Are you saying that the people currently in nursing homes on Medicaid assistance have cheated the taxpayers by hiding assets?

Because I doubt that's true. What happens is that people begin paying, but if they eventually run out of money, AND THEY ARE ALREADY BEING CARED FOR, no licensed facility is allowed to just kick them out on the street unless the facility is being closed down completely.

Patients can be transferred or asked to go elsewhere if they develop a need for more intensive care than the facility is licensed to provide.

It isn't as easy to 'game' the system as you seem to think it is. The 'look back' period has changed to five years, so any assets transferred recently can be legally recovered and used to pay for a patient's LTC.

As far as what is needed for retirement, this is an interesting article that just appeared in SmartMoney magazine:

Living Longer: The Good News and Bad 

SmartMoney, March 25, 2011
.....A 65-year-old healthy man has a 50% chance of living to age 85 and a 25% chance of living to 92, according to the Society of Actuaries.
For a healthy 65-year-old woman, there's a 50% chance she'll see 88 and a 25% chance to reach 94. If those two people are married, there's a one-in-two chance one of them will celebrate a 92nd birthday.
Longer life spans also mean longer retirements. A couple in its 60s needs its nest egg to stretch 30 years or more.
 ......This also means preparing clients – who may have had relatively low out-of-pocket medical costs while employed – for significant health care expenses, especially at the end of that long retirement.
And those costs can really kick in as we age, says Anthony Webb, a research economist at the Center for Retirement Research at Boston College. "Bad health catches up with all of us," he says. And despite recent changes in Medicare, retirees – especially women – have significant out-of-pocket medical costs, according to a December 2010 report by the non-profit Employee Benefit Research Institute.
Men retiring at 65 in 2010 will need an estimated $124,000 to $211,000 saved up to cover health insurance premiums and out-of-pocket medical costs – and there's still a 10% chance they'll run out of savings, the report said. Women, who typically live longer, need $143,000 to $242,000.
And those figures don't include the costs of a nursing home or assisted-living facility. About 70% of those over 65 will end up living in a long-term-care facility, according to the U.S. Department of Health And Human Services. In 2009, the average cost for a room in an assisted living facility was $3,131 a month; a semi-private room in a nursing home was roughly double that rate."