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Old 08-15-2011, 03:11 PM   #21
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Have you seen a state-run nursing home? Would you like to live in one of them? Life expectancy drops significantly when one moves to a nursing home.

I find most seniors prefer to live out their lives in the comfort of their own homes. And they prefer to be independent. Even if she qualified for Medicaid or some sort of home care, with all the budget cuts, it is quite limited. At 74, what is she "saving" her home for - to give to her husband who doesn't contribute much or regularly, or to the kids who are already settled, but she doesn't trust?
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Old 08-15-2011, 03:12 PM   #22
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Have you seen a state-run nursing home? Would you like to live in one of them? Life expectancy drops significantly when one moves to a nursing home.

I find most seniors prefer to live out their lives in the comfort of their own homes. And they prefer to be independent. Even if she qualified for Medicaid or some sort of home care, with all the budget cuts, it is quite limited. At 74, what is she "saving" her home for - to give to her husband who doesn't contribute much or regularly, or to the kids who are already settled, but she doesn't trust?
How do you suggest that she pay for LTC?
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Old 08-15-2011, 03:13 PM   #23
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Welcome to the site Mtxu. Feel free to introduce yourself on the "Hi, I am" forum. Let us know what brings you here
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Old 08-15-2011, 03:17 PM   #24
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And if at some time in the future you fail these conditions, you could be out on the street.
As she would be now if she didn't pay her taxes or insure her home. Her county would foreclose on her for unpaid taxes and all lenders require insurance and maintenance as a condition of any loan, reverse or otherwise. The difference is that now she has 2 loans and if she misses those monthly mortgage payments as well, the lenders will foreclose on her. A reverse mortgage does not require monthly mortgage payments.
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Old 08-15-2011, 03:34 PM   #25
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I am not a financial adviser but it appears she has options. Without knowing more of her details (e.g. if she even has enough equity to do a reverse mortgage or the condition of her health to qualify for a LTC policy), she could use the funds from the reverse. Or perhaps her $100k savings. Or perhaps the money that will free up once she pays of her two mortgages. At the very least, it is something she should get estimates on as she plans long term.
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Old 08-15-2011, 03:36 PM   #26
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The difference is that now she has 2 loans and if she misses those monthly mortgage payments as well, the lenders will foreclose on her.
I missed the mention of her two mortgages. Maybe a good use for the $100k she has gotten would be to pay off part of those mortgages.
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Old 08-15-2011, 03:47 PM   #27
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Well she referred to her 2nd mortgage, so that assumes she has a first as well. Paying it down with cash is always an option, but personally, especially right now, I prefer to hang on to cash. But the good thing is that she has some options.
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Old 08-15-2011, 04:02 PM   #28
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In your situation, I would still keep the CDs. Yes, I know they don't earn anything right now, but your financial education needs to come before you make financial decisions that are hard to "undo".

Don't even consider anything as financially "tricky" as annuities or reverse mortgages until you've done a ton of research and talked to people you *trust* who are financially savvy and don't have a vested interest in your buying something or not.

Sometimes just having the peace of mind that your money is in something safe like a CD can give you the peace of mind to learn about other options. My own mother in law keeps her money in a savings account that pays a bit more than a CD, and she's content with that.

I'd also not advise you even attempt to purchase Long Term Care insurance at your age. It will be exorbitantly expense and you may not even wind up using it.

Take care of yourself and move very slowly with your decision-making. It is okay not to do anything, sometimes. Better than being hustled into some "product" that makes a commission for the salesperson.
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Old 08-15-2011, 04:14 PM   #29
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I am not a financial adviser but it appears she has options. Without knowing more of her details (e.g. if she even has enough equity to do a reverse mortgage or the condition of her health to qualify for a LTC policy), she could use the funds from the reverse. Or perhaps her $100k savings. Or perhaps the money that will free up once she pays of her two mortgages. At the very least, it is something she should get estimates on as she plans long term.
Well, using a SWR of 4% this would give her 4K a year. Add this amount to SS and maybe she is making 15k a year. So at 74 YO she should investigate LTC ins.. Please....
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Old 08-15-2011, 04:59 PM   #30
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Moving slowly but surely as you educate yourself is definitely the best advice. But to not even "attempt" something, if that includes getting estimates to see what all your options are, is not.

Both my parents bought LTC policies while in their early to mid 80s (they are both now almost 89 y.o.), and it cost them together under $400 a month. We didn't buy it as a cure-all, but as one tool to help with their goal of staying at home until they died. My mother started tapping into it in late 2009 (about 5 years into it), so she no longer pays premiums; she has a few months left to go before she caps at $78,000, her lifetime benefit. Together, with a combination of state funds and private funds, it has helped us get 24/7 care with 3 caregivers around the clock for both of them. My father still pays $131 a month for his policy (his policy pays $100 a day). So it is possible and doable. I wouldn't have mentioned it if I didn't have personal knowledge. Yes, it is insurance like fire and car and medical; and yes, you have to pay for it; and for however much you paid for it, you always hope you never end up using it but are sure glad to have it when you need it.

I don't know if Jean will qualify for it based on her health, and she may want more than $100 a day which will increase the cost, but I would think home care would be a lot cheaper in Baton Rouge. Perhaps her children will step in and take care of her; or perhaps she decides to move in with them. It's her choice if she wants to "gamble" on that kind of insurance; but the point is that she should know her choices.

Don't say "No" until you "Know" what you are declining, whether a LTC policy or reverse mortgage or annuity or investment or whatever. That is the point of education. Once you have all your options, you can decide which is good and bad, which is better and best for you. It will be different for someone else.
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Old 08-15-2011, 05:08 PM   #31
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Nothing wrong with LTC if you can afford it. With an income of about 15K a year I think the OP would be better off eating. One can only do what one can do.
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Old 08-15-2011, 05:15 PM   #32
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what is OP?
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Old 08-15-2011, 05:16 PM   #33
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what is OP?
Original Poster...
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Old 08-15-2011, 06:22 PM   #34
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My Monthly expenses is 1000.00 and my s/s is 1346.00 I have a 2nd mortage on my home, the 1000 a month encludes everything taxes,insurance,utilities,charge cards etc. I remarried and my husband is supposed to give me 500.00 a month tward expenses but I can't count on that, I'm lucky if I get 200.00 or 300.00 everything is in my name. We have seperate accounts.
Jean, since your expenses are $1000/month and your SS is $1346 a month, I think you should just put the money from your sister's estate and the IRA that's left into a few CDs at your bank. You don't need it for your expenses and you can always cash one in if you have an emergency. No need for a reverse mortgage or long-term care policy or an annuity. Keep it simple.

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Old 08-15-2011, 06:38 PM   #35
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Jean, since your expenses are $1000/month and your SS is $1346 a month, I think you should just put the money from your sister's estate and the IRA that's left into a few CDs at your bank. You don't need it for your expenses and you can always cash one in if you have an emergency. No need for a reverse mortgage or long-term care policy or an annuity. Keep it simple.
This is some very good advice. No need to complicate things with a reverse mortgage if your current income exceeds your expenses. The LTC policy is something I definitely would not recommend. Split the money into three or four different bank CD's so you won't take much of a hit if you have to cash one in early.
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Old 08-15-2011, 06:43 PM   #36
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Just a clarifying note: When folks talked about annuities, did they mean SPIAs (single premium immediate annuities) or did they mean some other kind of annuity?

There are all kinds of annuities --- many of which should be avoided.
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Old 08-15-2011, 07:12 PM   #37
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Life expectancy drops significantly when one moves to a nursing home.
I'd like to see the link to the study on that. Someone seems to be confusing correlation with causation.

I suspect that people are entering nursing homes because they already have significantly reduced life expectancies. I doubt that nursing homes in general are responsible for dropping life expectancies, although one bad apple could certainly impact the average.
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Old 08-15-2011, 07:49 PM   #38
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You don't have enough assets to need LTCi and I wouldn't buy a CD or an annuity here. I don't want to be a downer, but you absolutely need some growth on your money to have a respectable retirement. Somewhere between 40/60 bond/stock or 60/40 in no-load funds (if you're capable and confident in doing so), otherwise use an Advisor and ask for a wrap or managed account so you don't pay loads on the front-end or back-end charges if you want to leave. Figure out your aptitude for risk and be prudent.
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Old 08-15-2011, 08:19 PM   #39
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You don't have enough assets to need LTCi and I wouldn't buy a CD or an annuity here. I don't want to be a downer, but you absolutely need some growth on your money to have a respectable retirement. Somewhere between 40/60 bond/stock or 60/40 in no-load funds (if you're capable and confident in doing so), otherwise use an Advisor and ask for a wrap or managed account so you don't pay loads on the front-end or back-end charges if you want to leave. Figure out your aptitude for risk and be prudent.
That wins the brewer cup for worst advice given here today.

Jean, leave the money in CDs and start reading. Forum members can give you some book titles. Go slow and make sure you understand every aspect of any given action you consider. Bounce ideas here. Do not talk to any brokers, salesmen, etc.
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Old 08-15-2011, 08:36 PM   #40
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That wins the brewer cup for worst advice given here today.

Jean, leave the money in CDs and start reading. Forum members can give you some book titles. Go slow and make sure you understand every aspect of any given action you consider. Bounce ideas here. Do not talk to any brokers, salesmen, etc.
Good advice. From Jean's posting, she does not seem to have much knowledge in the various financial products including stocks and I would certainly recommend self-education first before deciding further investments other than the boring safe ones. And don't talk to those
so-called financial advisers - they don't know much except to sell sell sell.
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