Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Difficult Delicate Situation
Old 10-29-2019, 07:14 PM   #1
Full time employment: Posting here.
urn2bfree's Avatar
 
Join Date: Feb 2011
Posts: 793
Difficult Delicate Situation

In order to protect the identities I am going to be vague and change the details a bit in this story but it is real.

A spouse of a friend was recently diagnosed with incurable cancer. The cancer is responding to treatment and the spouse feels good. Outlook in this situation on average is that the cancer will stay away for a while 2-4 years then come back. Maybe it will respond to more treatments. If it does it will stay away a bit less of a time. And eventually it wonít be controlled. So life expectancy is a few years to maybe a few more years with lots of years of great health unlikely.
They already decided to file early for Social Security. But the spouse Also has a life insurance policy. They would like to spend some money on bucket list stuff while they can but have to also think long term for the surviving spouse who also cannot afford to stop working yet either.
I was thinking they could ďspendĒ the life insurance money now knowing it will be reimbursed to the surviving spouse when the time comes. But how to do that?
Ratchet up spending by 5-10% of the value of the life insurance payout over the next several years? Or a higher percent? Turn off all reinvested dividends
And cap gains for now to generate the money without incurring too many extra taxable events?
__________________

urn2bfree is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-29-2019, 07:27 PM   #2
Thinks s/he gets paid by the post
Scrapr's Avatar
 
Join Date: May 2005
Location: Bend
Posts: 1,084
I would be careful about spending (early) payouts. The medical out of pockets are going to take a bite too. In a year & a half we hit the max 3x's

But I would do as much traveling as i could
__________________

Scrapr is offline   Reply With Quote
Old 10-29-2019, 07:43 PM   #3
Moderator
Aerides's Avatar
 
Join Date: Nov 2015
Posts: 3,857
I would not be even thinking of bringing up financials with this friend, especially not usage of life insurance. "you know, you could tap into some of that life insurance money now since...eventually..." - nope, no way to make that sound good. And despite the likely reality of their situation, hey, maybe it's not actually as dire. Maybe the spouse falls onto the edge of the curve and has many more years than it looks like right now.

Unless your friend specifically asks you about ways to get access to money now, I would stay well clear.

Just be a friend in every other way.
Aerides is offline   Reply With Quote
Old 10-29-2019, 07:55 PM   #4
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 10,246
No advice about the financials.... But when my mom got her cancer DX she and my dad accelerated their travel plans - They'd already done one round-the-world trip, and managed to get in 2 more before the cancer made it impossible. The first was after the first round of chemo was done and the cancer was in remission, and the second was after the second round of chemo - didn't obtain remission that time, but cancer was under control and she could travel.

I hope your friends are able to enjoy their time together to the fullest possible extent...
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
rodi is offline   Reply With Quote
Old 10-29-2019, 08:00 PM   #5
Thinks s/he gets paid by the post
Calico's Avatar
 
Join Date: Apr 2012
Posts: 1,221
Quote:
Originally Posted by Aerides View Post
I would not be even thinking of bringing up financials with this friend, especially not usage of life insurance. "you know, you could tap into some of that life insurance money now since...eventually..." - nope, no way to make that sound good. And despite the likely reality of their situation, hey, maybe it's not actually as dire. Maybe the spouse falls onto the edge of the curve and has many more years than it looks like right now.

Unless your friend specifically asks you about ways to get access to money now, I would stay well clear.

Just be a friend in every other way.
+100

People are not statistics. The doctors and your friend may think they "know" what will happen to your friend's spouse, and what the "likely" outcome will be, but one thing I learned from several people I met last year when I was treated for cancer is that cancer is unpredictable, and you cannot know what will happen. Your friend's spouse may recover. They may have many more years than they anticipate (I hope this is the case). Or, the worst case scenario may indeed come to pass. But no one knows. Not even the doctors.
__________________
"Let America be the dream the dreamers dreamed, Let it be that great strong land of love, Where never kings connive nor tyrants scheme, That any man be crushed by one above." - Langston Hughes
Calico is offline   Reply With Quote
Old 10-29-2019, 08:06 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Aug 2014
Posts: 1,133
Quote:
the surviving spouse who also cannot afford to stop working yet
I'm a bit more conservative. If spouse needs to work then he/she, they are not ready to raid the insurance value from their savings to do the bucket list. potentially the spouse may have 40 years with unknown health expenses of their own. I would imagine it would be a tough time in these situations making financial decisions. With the limited info, it would seem selfish on the sick spouse's part to leave his SO in this situation. Not something I would leave for DW.
CRLLS is online now   Reply With Quote
Old 10-29-2019, 08:41 PM   #7
Thinks s/he gets paid by the post
Teacher Terry's Avatar
 
Join Date: Jun 2014
Posts: 4,233
2 of my friends were given 6 months to live. One lived 20 years and the other is still alive after 25 years. If they have savings I would take a few trips.
Teacher Terry is offline   Reply With Quote
Old 10-29-2019, 09:30 PM   #8
Recycles dryer sheets
 
Join Date: Jun 2016
Location: Kaneohe
Posts: 143
+1

I'm still kicking, 10 years after my first cancer diagnosis, & have had 4 more since then. You just never know.
catii is offline   Reply With Quote
Old 10-29-2019, 09:33 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 23,395
Quote:
Originally Posted by urn2bfree View Post
....They would like to spend some money on bucket list stuff while they can but have to also think long term for the surviving spouse who also cannot afford to stop working yet either. ...
If it is cash value policy (whole life, universal life, etc.) they could take out policy loans to spend on bucket list stuff.... the surviving spouse will eventually get the death benefit less any policy loans.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...60/35/5 AA
pb4uski is online now   Reply With Quote
Old 10-29-2019, 11:13 PM   #10
Full time employment: Posting here.
urn2bfree's Avatar
 
Join Date: Feb 2011
Posts: 793
Number one- my friend did ask me about this.
Number two - this is not a cancer diagnosis. This is a Metastatic cancer diagnosis. It is in bones and organs. It still may go into remission for a while. In that time maybe they invent a new cure or blockbuster treatment. But there are no do overs.
I am not sure what type of policy it is.
The basic idea behind the question is rather than being a "windfall" if/when the life insurance pays, but spend more of savings now knowing that the amount spent will be replaced as a lump sum. It is borrowing against the insurance in a way where the policy holder is both borrower and lender. Example, say it is a million dollar policy. So spend $50,000 a year more than normal now for the next few years. If things are going better than expected, which will be obvious well before even half of the value of the insurance payout comes. You still get that $$$ back and more. This assumes the full value of the insurance is no longer crucial as an addition to their savings. Which I was led to believe is the case.
urn2bfree is offline   Reply With Quote
Old 10-29-2019, 11:17 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 23,395
Another strategy if policy loans are not possible and they have a lot of home equity would be to do a cash-out refi... use the proceeds to make the mortgage payments and bucket list spending... then use part of the life insurance death benefit to pay off the mortgage.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...60/35/5 AA
pb4uski is online now   Reply With Quote
Old 10-29-2019, 11:40 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 25,599
Quote:
Originally Posted by urn2bfree View Post
Number one- my friend did ask me about this.
Number two - this is not a cancer diagnosis. This is a Metastatic cancer diagnosis. It is in bones and organs. It still may go into remission for a while. In that time maybe they invent a new cure or blockbuster treatment. But there are no do overs...
I remember that you are a retired oncologist, and you would know that your friend's situation is indeed bleak.

It appears that your friends have assets to draw on for that extra spending, but the problem is that they would incur more taxes, while the eventual life insurance payout is not taxable.

I would just pay any additional tax.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 10-30-2019, 12:48 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 7,442
Quote:
Originally Posted by pb4uski View Post
Another strategy if policy loans are not possible and they have a lot of home equity would be to do a cash-out refi... use the proceeds to make the mortgage payments and bucket list spending... then use part of the life insurance death benefit to pay off the mortgage.
How about doing a cash-out refi, and taking the mortgage insurance offered by the lender (which is payable on death of mortgage holder).

Collect on 2 insurance policies.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 10-30-2019, 10:29 AM   #14
Thinks s/he gets paid by the post
 
Join Date: Apr 2010
Posts: 2,980
Danger.

MYOB
brett is offline   Reply With Quote
Old 10-30-2019, 10:37 AM   #15
Thinks s/he gets paid by the post
Rianne's Avatar
 
Join Date: Aug 2017
Location: Champaign
Posts: 2,153
Quote:
Originally Posted by Calico View Post
+100

People are not statistics. The doctors and your friend may think they "know" what will happen to your friend's spouse, and what the "likely" outcome will be, but one thing I learned from several people I met last year when I was treated for cancer is that cancer is unpredictable, and you cannot know what will happen. Your friend's spouse may recover. They may have many more years than they anticipate (I hope this is the case). Or, the worst case scenario may indeed come to pass. But no one knows. Not even the doctors.
+1. I was diagnosed twice with cancer, once at 36 yrs. old and 53 yrs. old. I'm still kicking, feel great, no sign of cancer. 62 yrs. old now.
__________________
"If you want to go fast, go alone. If you want to go far, go together.
Rianne is offline   Reply With Quote
Old 10-30-2019, 11:20 PM   #16
Full time employment: Posting here.
urn2bfree's Avatar
 
Join Date: Feb 2011
Posts: 793
Quote:
Originally Posted by Rianne View Post
+1. I was diagnosed twice with cancer, once at 36 yrs. old and 53 yrs. old. I'm still kicking, feel great, no sign of cancer. 62 yrs. old now.
Thatís great for you and has nothing to do with my friendís situation. This is METASTATIC CANCER THAT HAS NEVER BEEN CURED. EVER. It may be controlled but it has so far - in Millions of cases - NEVER been cured. All cancers are not alike.
urn2bfree is offline   Reply With Quote
Old 10-31-2019, 12:02 AM   #17
Recycles dryer sheets
 
Join Date: Mar 2004
Posts: 440
My father’s pancreatic cancer was in remission, I think, for about six months. They tried traveling but he was weak, underweight, and had poor balance. He fell and broke his arm the first night.

They loved traveling but it wasn’t in the cards.

Best wishes for your friends.
trumpeting_angel is offline   Reply With Quote
Old 10-31-2019, 12:13 AM   #18
Full time employment: Posting here.
FlaGator's Avatar
 
Join Date: Aug 2008
Location: The 850
Posts: 571
Quote:
Originally Posted by Rianne View Post
+1. I was diagnosed twice with cancer, once at 36 yrs. old and 53 yrs. old. I'm still kicking, feel great, no sign of cancer. 62 yrs. old now.
Quote:
Originally Posted by urn2bfree View Post
Thatís great for you and has nothing to do with my friendís situation. This is METASTATIC CANCER THAT HAS NEVER BEEN CURED. EVER. It may be controlled but it has so far - in Millions of cases - NEVER been cured. All cancers are not alike.
From my experience, they should spend it now.

Late DW's diagnosis was "inoperable", "incurable", "on chemo the rest of her life". Died a year later. Metastasized by the time it was discovered-liver, lungs, abdominal lining-typical pancreatic. Chemo bought her a year and we made the best of it. Would have traveled and done more if we could, but the few things we did were all she was capable of.

Trying to "spend it" after she was gone didn't work - just didn't feel like it.

Do it now and make some memories
__________________
Stay at home slacker dad since 2015
FlaGator is offline   Reply With Quote
Old 10-31-2019, 06:43 AM   #19
Recycles dryer sheets
 
Join Date: Dec 2016
Posts: 92
Quote:
Originally Posted by FlaGator View Post
From my experience, they should spend it now.

Late DW's diagnosis was "inoperable", "incurable", "on chemo the rest of her life". Died a year later. Metastasized by the time it was discovered-liver, lungs, abdominal lining-typical pancreatic. Chemo bought her a year and we made the best of it. Would have traveled and done more if we could, but the few things we did were all she was capable of.

Trying to "spend it" after she was gone didn't work - just didn't feel like it.

Do it now and make some memories
+1
Carol1862 is offline   Reply With Quote
Old 10-31-2019, 07:02 AM   #20
Full time employment: Posting here.
 
Join Date: Jan 2019
Location: NW Ohio
Posts: 661
Quote:
Originally Posted by catii View Post
+1

I'm still kicking, 10 years after my first cancer diagnosis, & have had 4 more since then. You just never know.
This sounds like my life for the last 30 years dealing with side effects of chemo, and radiation. I now have a new pace maker, bad teeth, and no working salivary glands....but I appear completely healthy, and fit despite the 3 specialists I see every 4 months.

Luckily, I had Hodgkins desease which is somewhat curable/manageable, so these life ending financial decisions never came into play. We did however, decide to not wait to buy a newer truck/camper, so we can enjoy what time I do have left here on earth....still hoping to live past 80.
__________________

ckelly78z is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Help with difficult family situation NeedAdvice Other topics 18 08-13-2009 05:09 AM
Need Help with Delicate Matter............ FinanceDude Other topics 23 01-18-2007 10:38 PM
A bit difficult to register... Leveret Forum Admin 2 01-18-2007 02:08 PM
Wow! Quitting a Job is Difficult BunsGettingFirm Young Dreamers 24 04-28-2006 07:25 PM
Are the last 8 months the most difficult? dex Other topics 1 08-29-2005 12:46 PM

» Quick Links

 
All times are GMT -6. The time now is 08:25 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
×