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Regular Social Butterfly

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

Message 81 of 166

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?

Message 82 of 166

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?

Message 83 of 166

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?

Message 84 of 166

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?

Message 85 of 166

>> 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?

Message 86 of 166

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.


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Silver Conversationalist

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

Message 87 of 166

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

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Regular Social Butterfly

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

Message 88 of 166

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.

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Silver Conversationalist

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

Message 89 of 166

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.


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Silver Conversationalist

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

Message 90 of 166

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.

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