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Valued Social Butterfly

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

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Message 61 of 150

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

What I meant was that I don't think the actuary tables would justify the very high premiums for older people because while there may be more likely care need it won't last as long as that for a relatively young person stricken with a major dehabiliting disease. Just a logical assumption on my part.

Some insurers go to at least 77 or so, but you have to be in pretty good health and able to pass cognitive ability tests etc. Still not affordable though in our case.

Some retirement housing plans do offer LTC for a lot less than the premiums for a couple of years  as part of the initiation fee. Again you have to be in pretty good shape to qualify.

Karl

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Regular Social Butterfly

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

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Message 62 of 150

As anyone who has read my posts can tell you, sleepercell, I'm a retired executive assistant who worked in insurance, banking, consulting, and financial services. I don't work for anyone and don't need to. I spend my time gardening, cooking, reading, and writing (just posted some stories on one of the fiction sites).

Anyone can self-insure. Whether they SHOULD self-insure is another matter altogether.

That is not my determination to make for anyone else. Unlike you, I think people should be aware of options, research them, and evaluate what suits their own personal financial situation. What works for me does not work for you, and vice versa.

There is no one solution for everybody. Self-insurance is the "right" thing only for certain people. Astraea self-insures, as do many people I know who have sufficient assets to be able to do so.

Some people like to work on their own cars. I don't. I know how to, I just don't want to. Therefore I pay somebody to do it for me. Some people pay gardeners a monthly fee to keep their landscape neat and tidy; I prefer to do it myself because I enjoy it.

IOW, I assess how I spend my time. It's no different than assessing how we spend our money, except that it is more complicated. Saying "oh, it's simple to do investing/financial planning and anybody can do it themselves" is not only self-deluding, it is contemptuous and denigrating.

Because most people are not trained to analyze properly nor how to research what factors they do not know, which is far more important in financial planning than in gardening. Build your house on sand, and it can fall - as simple as that. It may not....or it may. But you have increased your risk factors, whereas better planning, more knowledge, and/or using a professional could have increased your chances of success and lowered your risks.

You are fortunate that you can just ignore an $81K/yr figure and say, "I can self-insure." I cannot, and I doubt your vaunted hypothetical $48K/yr middle class person cannot either. How long would it take most people to save up $81K? Are they to sell their houses? Where do the spouse and children live?

For you to attack Astraea and then me with snide remarks, merely weakens your own arguments.

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Silver Conversationalist

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

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Message 63 of 150

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

Are you selling LTC Insurance or do you work for AARP or both?

Corporations self insure and individuals and families can do the same thing.

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Valued Social Butterfly

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

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Message 64 of 150

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

Thank you...happy to share. ~ Mimi

“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
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Regular Social Butterfly

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

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Message 65 of 150

Peter Schiff would love not paying income taxes, since he's got money up the ying-yang and votes conservative all the way.

What people did before LTC insurance was....they died. If you got cancer, you died. If you had a heart attack, you died - if not from the first, definitely from the second one that happened soon after. If you were blown up by a shell in a war zone where the medics couldn't reach you, you died.

If you were lucky enough to live to 65 that made you an old geezer. In 1900 average life expectancy in the US was a ripe old 48. That wasn't so long ago; my grandmother (who lived with us for a time when I was 11) and grandfather had already emigrated from Japan and bought a farm in Washington state by 1910.

If you made it to old age, your family took care of you (I seem to remember making these points in earlier posts on this thread, actually). These days, however, many Boomers do not have large families to take care of them. And many are 'sandwiched' between elderly parents/in-laws and Millennial children.

Although it wasn't a popular thing to say, I remember reading about ten years ago that one highly respected financial planner said, "If you want to retire early, it's simple. Don't have children."

Harsh, but true. It's extremely hard to raise children and still save fully for retirement. There are several reasons we were able to retire early successfully, but one of the biggest is, indeed, we chose not to have children. We simply did not make enough money to live in an expensive area, raise children and also retire early.

In most regions of the US the one-wage earner household still reigns as the majority. On the West Coast, the opposite is true. In fact, I out-earned DH for more than half the 37 yrs we've been together. But twenty years ago, when we bought our home - our combined income on the mortgage application was $42K. It wasn't that much higher six years later when we bought our LTC policies.

So instead of quoting statistics, I am proof that middle-class people CAN buy LTC insurance and even after 11 yrs can still afford it. It is a personal decision of what to spend your money on.

I would rather give up an expensive vacation every year and take more modest ones, to ensure that if I become seriously disabled for years on end, it will not impoverish my DH....and vice versa.

Each of our LTC policies currently would pay over $81,000/yr. That's $162K/yr we don't have to save out of our fixed income retirement budget.

Those who can self-insure to those amounts are to be congratulated. We cannot. A modest monthly LTC premium is, when viewed holistically, is a small price to pay for our peace of mind.

THAT is what we consider a comfortable retirement.

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Silver Conversationalist

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

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Message 66 of 150

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

You can make all the assumptions you want as you've totally missed my past points--- I'll live where I want to live because I can afford too.

China may make a good home for you since you believe Capitalism trumps social responsibility.

Peter Schiff: U.S. Should Abolish Corporate and Personal Income Taxes

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Treasured Social Butterfly

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

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Message 67 of 150

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

I think you may be living in the wrong country, if you want to be totally supported by the government as a senior!


Registered on Online Community since 2007!
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Silver Conversationalist

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

2,648 Views
Message 68 of 150

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

I know I'm butting in just to say, No worries - you can disagree that is ok.

I think buying into LTC is a quandary for many Americans again based upon statistics that show the average American income (not disposable) around $48K per year. Then the liquidity that most Americans don't have opens up a question as to what to do.

Government has found more ways than any other to tax Americans and the more they tax us the greater the problems.

Still the key question is "Is this How America Should Treat Seniors?" Seniors income tax free as well as their homes--- would certainly pay great dividends in one Seniors could pay for LTC and would have the buying power to do so in the right climate.

LTC prices are not the same in all Jurisdictions either--- we priced it out in our mid forties and it was outrageously expensive and the policies were pay forever on the premiums.

For us we self insured meaning, we set aside a monthly amount for EMERGENCY FUNDS--- statistics say once you get placed in a nursing home your survival rate goes way down.

BEFORE LTC Insurance what did people do?

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Regular Social Butterfly

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

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Message 69 of 150

>> 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.

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Valued Social Butterfly

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

2,606 Views
Message 70 of 150

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.

Karl

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