Going broke at 81

[Sheryl]

Yrs and CT, I'm with you, planning to live well into my 90's (although if I go by family history I won't even get close).
CT and Sheryl, I'm with you that DW and I feel free to spend every dime we have, we've given our kids guidance, strength, solid family and spiritual backing and a good education, the money's for us.
CT, one small difference.  While we probably won't be spending as much after 85, we still plan to enjoy it just as much if not more -- the sorta "we've pulled one over on you by still being here" idea.  
Uncledrz

If I had kids I would probably want to leave them a little something.  I would also probably be "helping" them now, as my dad has done with my brother and I.   We were both stubbornly independent and resisted him supporting us -  I had a serious chip on my shoulder about "making it on my own."

I don't know what my SO's feeling will be about leaving his son and possible future grandchilden something - but generally he's of the  mindset that he "launched" his son well with support and education now it's up to him.  

As far as spending in the '80's I've assumed less travel budget after 85.  I see my parents and others have generally lost the enthusiasm for traveling too much, howver 78 yr old dad and his 80 yr old wife are going to China and Japan for 2 weeks next year...  

I assume my travel will no longer involve expensive activities like SCUBA diving, but I would probably enjoy some nice cruises, which are not cheap either.

I also figure on some increased costs, like paying someone else to do lawn work, home repairs and heavy cleaning if I'm still in my own home. Prescription meds?  Other health costs??  

My Grandmother lived alone until 94, and then only went to assisted living, so I make my plans based on her case.  Now at 101 her only expenses are the nursing home, books, and chocolate.

Bottom line is I figure the spending at 80 to be about the same as prior years.  

My mantra:  All I can really know about my costs for the next 50 years, is that I don't know.   When we ER this young, we will need to remain extremely flexible and if the first few years (or any others) provide surprises, adjust accordingly.  

As to LOL!'s question - if I still have half my capital at 90:
a)  I will regret it
b) it will be time to spend like there's no tomorrow!  (literally)

Without major charitable contributions or a very fancy nursing home which (hopefully) will be paid for by LTC anyway,  I don't know how a 90 yr. old could spend that much!    

 

[Martha]

I remember visiting my in-laws in Florida when they were still living. They lived in one of those mobile home parks for the retired. There was a club house, dancing, other events, a pool, etc. When my inlaws were younger, they really enjoyed the activities. My MIL used to go out on day bus trips with her girl friends in the park, to the beach or flea market, and hang out at the pool She loved it there. FIL would go to the dog track with his buddies.

But people who moved into the park in the 1970s grew older. It was getting pretty quiet around there the last few years we visited . FIL called it "God's vestibule." I know plenty people there were trying to get by on just social security and it was tough. Others maybe had pensions that disappeared when the spouse with the pension died. You would see a spouse die, some time go by, and after a while the kids would come by and pick up mom or dad and bring them back home to live.

After my MIL died, my FIL was a single man with a pension. He was very desirable to women in the park and I dislike saying it, but I think a lot of the attractiveness came from the fact that he could "loan" out bits of money here and and there, and treat the ladies to dinner on occasion. One woman was his "sorta" girl friend. She finally couldn't get along on just SS and her son moved in with her to help with the costs and the caregiving. Her family wanted her to move north and live with them. She just refused. It gets tough to move when you are old. Her son finally just got a job in Florida.

My FIL as he grew older needed more and more care. He didn't want to move back north either. Greg made lots of trips to Florida to deal with issues as they came up. I can't emphasize enough how difficult it is to deal with aging and struggling parents long distance.

If I give thought to old age, I worry most about loneliness, fears, and struggles with health problems.

Sorry, I don't even remember if I am on topic any more. I am just getting over a bout of some horrible stomach thing and am sitting here at home feeling a bit like I might when I am 90 years old.

 

[brewer12345]

My FIL as he grew older needed more and more care.  He didn't want to move back north either.  Greg made lots of trips to Florida to deal with issues as they came up.  I can't emphasize enough how difficult it is to deal with aging and struggling parents long distance. 

Hmmm, that definately reinforces my feeling that moving closer to my parents was a good idea. I can't say that I love the idea of the future liability, but I am geographically the closest to my parents and I am also the one most likely to have the resources to help down the road. I suspect that being 45 minutes away will prove to be a lot better than being 1000+ miles away, just as it is preferable now while they are still in reasonably good shape. Now if I can just get one of my siblings to move down here...

 

[Martha]

I have a better old age story. My grandfather was a chicken farmer. He and my family lived together for all but a very few years. He was just part of the family. I loved his stories about the old days. When he collected SS it was like we all got rich. He lived to 99 years old. My dad once told me he was somewhat frustrated at times when his 90 plus year old father would treat him like a child. He ended that problem by one day starting to call his father by his first name, rather than dad.

We all had our family duties. When my grandfather got very old and blind, he sometimes would wander in the night, not knowing if it was night or day. My father made a mat that grandpa would step on when he got out of bed in the night. The mat would send out an alarm. We all took turns being on night grandpa watch. Even the little kids. Usually you just had to guide him to the bathroom and then back to bed. Or sometimes make a lttle snack.

Assisted living in rural America.

 

[brewer12345]

Interresting, Martha. I sometimes think that we as a society have lost out on a lot of good stuff by dissolving the extended family as a household. No doubt I am overlooking lots of negatives, but still...

 

[Martha]

Brewer, I read an article in the WSJ a few days ago about families blending together, with more than one generation under one roof. The purpose was to save money and get more house for the buck. The whole tone of the article was not that there was now one big extended happy family, but two very separate families in the same house. One woman commented on how nice it was that her 90 year old mother preferred not to eat dinner with them so that they could have some "family time." That thought would never in a million years crossed the mind of anyone in my family. We were all the family. Not just mommy, daddy and the kids.

But who am I to talk. We never had children.

 

[SteveR]

Brewer, I read an article in the WSJ a few days ago about families blending together, with more than one generation under one roof.  The purpose was to save money and get more house for the buck.  The  whole tone of the article was not that there was now one big extended happy family, but two very separate families in the same house. 

My mother's parents shared their house with her grandfather. It was for financial reasons more than anything. My greatgrandfather owned a used furniture store and worked in it up to the day he died. None of them had much money and very few personal items beyond the basics to keep a house going.

My MIL from my second marriage lived with us for several months right after we got married in our 40's. She was alone and thought it would be best to move from FL to IL and live with us while she found a place of her own. Long story but she eventually moved back to FL. It was very tough on all of us with her living there. Sometimes it is just better to live apart and be happy than to try to live under one room but at each other's throats all the time.

 

[Outtahere]

I have the best of both worlds. I own the home next to my parents, we come and go as we please but spend lots of time at both houses. Grampi (91 yrs young) drives down every day for lunch, one sister lives 6 houses away, the rest are within a 10 minute drive. Makes it incredibly easy to travel and leave the granddog at home but I'm sure the tables will turn at some point and I'll end up the caregiver. We never had much money but somehow always got by.

Martha I never had children either and with DH being 12 yrs older I worry about what will happen after he's gone. He has one daughter and 2 stepchildren he raised from the time they were 6 and 4 but I don't think I'll see much of them after he's gone... unless of course I have a sizeable nestegg they think they may end up with.

Cj

 

[ProfHaroldHill]

Maybe I am unusual in this regard, but I don't plan on leaving my kids huge sums of money, barring one of them having developmental disabilities.  I've seen too many people whose lives were pretty much ruined by having a trust fund.  These folks basically never really had a real need to do anything, and tend to lead rootless lives.

Something about the timing here . . . by the time I leave my kids anything, they will be at least 40 years old (God willing), which is the age some of the ER wannabes who post here have picked to retire. This kind of inheritance is not the same as a from-birth trust fund. I hope to leave my kids ten tons of money. It's one way that prosperous families are built over generations. I don't want them dumpster diving, and I don't want them to be wage slaves. Also, I would like to pay my grandkids tuitions, like my parents have paid for my kids (who, I might add, have turned out damned well).

HH

 

[Sheryl]

I would have liked to be closer to my mom in her last years.  I moved 2,000 mi away, and it started to become a serious problem, with her health issues, and frequent emergency hospitalizations.  We had started to develop plans for her to live with my brother, which probably would have been disaster.  But she didn't make it that far.    After 4  frantic cross-country flights with "she's not gonna make it" type calls from the ER, and about 6 months of missed work over three years, she finally passed away without me anyhow,  because she was doing much better and I went home.

You just never know.  But if you choose to live far from parents, you have to be comfortable with the decision and the potential consequesces.

Is this thread officially hijacked

 

[brewer12345]

  Something about the timing here . . . by the time I leave my kids anything, they will be at least 40 years old (God willing), which is the age some of the ER wannabes who post here have picked to retire.  This kind of inheritance is not the same as a from-birth trust fund.  I hope to leave my kids ten tons of money.  It's one way that prosperous families are built over generations.  I don't want them dumpster diving, and I don't want them to be wage slaves.  Also, I would like to pay my grandkids tuitions, like my parents have paid for my kids (who, I might add, have turned out damned well).

HH

OK fair enough. In that set of circumstances, I suppose I will have had time to see how things turnn out with my kids. If they don't live in expectation of a big windfall, maybe it won't affect them when it happens. We'll all have passed a lot of water by the time my kids are in their 40s anyway, so things can change an awful lot by then.

 

[TargaDave]

I think it's a very different mindset for those who have kids versus those who don't. Not better or worse, just very different.

Maybe I am unusual in this regard, but I don't plan on leaving my kids huge sums of money, barring one of them having developmental disabilities. I've seen too many people whose lives were pretty much ruined by having a trust fund. These folks basically never really had a real need to do anything, and tend to lead rootless lives.

I certainly wasn't implying huge sums of money, just the idea that there is something decent left for them. In our case DW and I both have modest (past and future) inheritances to deal with from each of our families. We would feel hypocritical spending it as opposed to setting it aside for our kids and grandkids as our parents did for us. Also forms a cushion if things get ulta nasty. I suppose if our kids turn into, or marry spend-junkies (god forbid) then we might set up a trust to make it last. I accept that there are very different opinions on this (no right or wrong).

 

[SteveR]

I suppose if our kids turn into, or marry spend-junkies (god forbid) then we might set up a trust to make it last. I accept that there are very different opinions on this (no right or wrong).

This is always the hard part of estate planning. People change and marriages fall apart; new partners can be very thrifty or spend-thrifts. You cannot predict it so you have to plan around it if you can. My estate planning has everything except a token payment go to my wife. When she dies, the estate goes to whoever is left standing in the family. But, my wife is in control while she is still alive and if she spends it all then so be it. I started with nothing and it won't hurt my kids to do the same thing. If I manage to live to a ripe old age, then I will adjust my planning to address family changes or just spend it all before I die.

All kidding aside, if things go anywhere near my plan, the extended family will get a nice addition to their retirement or to bank accounts. Tax planning is a major concern (not goint to start that discussion again :) but one needs to keep Uncle Sam out of your estate aand appropriate planning can help to transfer what you have worked all your life to build with the least amount of tax.

 

[Gearhead Jim]

Just a thought about Cutthroat's comments on spending principal:

If you keep your principal constant in dollars, it's actually decreasing by about 3% per year from inflation.  After 30 years your principal has decreased by about 50% even if the numbers look identical.

So, most of us will be spending principal even if we don't realise it.

(edit)
Using the period 1974-2003, it looks like the decrease would be more like 70%

 

[haha]

My estate planning has everything except a token payment go to my wife.  When she dies, the estate goes to whoever is left standing in the family.  But, my wife is in control while she is still alive and if she spends it all then so be it.

What if on her widow cruise she meets a charming man that you would immediately recognize as a bounder. But you are gone, and she is in new situation all alone.

So she marries this guy, and one way or another he or his children wind up with your blood sweat and tears.

For me, this would not be an acceptable outcome.

Ha

 

[Cut-Throat]

Just a thought about Cutthroat's comments on spending principal:

If you keep your principal constant in dollars, it's actually decreasing by about 3% per year from inflation.  After 30 years your principal has decreased by about 50% even if the numbers look identical.

So, most of us will be spending principal even if we don't realise it.

(edit)
Using the period 1974-2003, it looks like the decrease would be more like 70%

Yup, that is another way of saying it. Remember our money today is nothing more than a number in a computer, It's not really physical piles of cash. So in the end, it's all about purchasing power! And in the end if you have the same number as you did 30 years before, but it's worth 70% less, then you have consumed 70% of principal.

Most all retirement planners factor in inflation and increase your withdrawels to keep up with it.
If your pile is shrinking in purchasing power after withdrawels, inflation and portfolio return, then you are consuming principal.

 

[SteveR]

What if on her widow cruise she meets a charming man that you would immediately recognize as a bounder. But you are gone, and she is in new situation all alone.

So she marries this guy, and one way or another he or his children wind up with your blood sweat and tears.

For me, this would not be an acceptable outcome.

Ha

That is why I plan on spending as much of it as I can while I am still around.  

My kids are provided for in my trust and once I am dead, it cannot be changed.  The "bounder" would be SOL as outlined in my trust.  

 

[ESRBob]

Providing you've got a paid for house and a paid for car (if you're even still driving), and you dont have an expensive taste for travel or gambling, i'm gonna bet your need for cash in your 80's and beyond will be pretty nominal. My dad has no debt and while he still buys himself a new car every 3-4 years and likes good food and wine, he's spending under $20k a year. He could easily get by on his social security and a few extra bucks. Ten years from now I doubt his needs are going to run much past a bowl of soup and something good on television.

The only gotcha here is nursing care, if you don't have other arrangements for that. Dad is now in a nursing home in Fla that is costing us an extra 60k a year, and I think that is considered pretty good value. He's a tough old nut and may be in there for 10 years (he's 90 now). Or he may be in for the average, 2-3 years, I believe.

Anyway, it's something you don't want to ignore -- the lower-end nursing homes (maybe for people who have outlasted their assets and are on some sort of public assistance?) that I have seen involve a pretty dismal array of poorly-tended (smelly diapers) old folks sitting parked in wheelchairs in windowless hallways staring off into space and making yawping noises at each other with food all over their bibs...

My own approach is to ignore the issue and hope the markets are kind in the interim. I don't trust long term care insurers to be there for me when I need them, maybe just a bias. Instead, I try to cover this in my planning by keeping assets equal or slightly up in real terms each year, in other words, not spending down assets for normal living expenses in the years ahead. Then you will have those assets to spend down in your 90s or whenever you go into a nuring home if need be.

 

[73ss454]

Bob,

One thing I learned is to stay as far away as possible from insurance companies.

Since I have been reading this board I have grown to dislike brokers and insurance agents. When I think back to all the poor choices I have made with investing and whole life insurance I get the shakes. Hope it's not too late to correct these mistakes and get on the right track.

 

[TargaDave]

I don't trust long term care insurers to be there for me when I need them, maybe just a bias.

DW had long term care insurance for her mom who lasted one year in assisted living and just 3 months in a home. One of those plans where you needed to loose 4 out of 5 functions. Wasn't all that expensive. We were sort of surprised it actually paid out but then it wasn't a long stay either (payout 3X of what was paid in if you're curious). Even with the positive insurance outcome we're also skeptical about these policies remaining viable with the boomer bulge growing older and care costs escalating.

 

[brewer12345]

DW had long term care insurance for her mom who lasted one year in assisted living and just 3 months in a home. One of those  plans where you needed to loose 4 out of 5 functions. Wasn't all that expensive.  We were sort of surprised it actually paid out but then it wasn't a long stay either (payout 3X of what was paid in if you're curious).  Even with the positive insurance outcome we're also skeptical about these policies remaining viable with the boomer bulge growing older and care costs escalating.   

The better companes writing this business will be and will pay. The wrinkle is that a lot of companies have been burned by this product and have stopped writing it, so the remaining ones have been able to jack up prices. I think that you are better off self-funding.

 

[Sheryl]

The better companes writing this business will be and will pay.  The wrinkle is that a lot of companies have been burned by this product and have stopped writing it, so the remaining ones have been able to jack up prices.  I think that you are better off self-funding.

I guess I'm not convinced that even the best companies will be certain to be there and to pay. We thought that pensions were for sure too, just a few short years ago.

My inclination is not to rely on a product being there for me 50 years from now, when the concept has not even been around for 20 yet.

This is the best reason I've heard yet for preservation of capital if you have no heirs.

 

[SteveR]

C-T,
My mother is in Assisted Living which is contained in a larger facility that has a full nursing home and "Memory Loss" unit. I am with you. Some nice "recreational drugs" will be my salvation from that "life". I have spent many hours there and while her area is light years ahead of the others, it still sucks to be there. She is in decent health other than being blind and some other stuff that is not life-threatening so she may live for many more years. While she enjoys not being alone she hates dealing with all the "weirdos" and misfits that are in various stages of social de-evolution. The food suck and the help is few and far between.

My dad was lucky a heart attack took him out so he would not have to endure that kind of place. I know he would have gone "over the hill" if put there and would have found a way to do himself in rather than endure "living" in a place lie that.

Disclaimer: This is a very nice place relative to others we visited before putting her in there. This is in fact the best in town and while it is clean and generally progressive, it still sucks to be in there. She is happy and that is what counts. I would not be that is just me. Different strokes for different folks.

 

[Zipper]

I agree Cut. Mrs. Zipper's mother was in a home for 2 years and it is NOT a pretty sight. In fact, she fell, through their negligence, broke a hip, and died within a week.

On a lighter note , you could garage yourself and let the car run all day.

With modern pollution control you would run out of gas before you killed yourself!

 

[Sheryl]

Sheryl,

Have you been in a long term care facility or nursing home lately?  - I have, and my biggest fear is not paying for it! - It's going there in the first place!  - I have spent the last couple of months with my FIL there, and I'd rather change places with a death row inmate scheduled for the morning execution. 

This is really scary stuff, and I have made up my mind. I'm not going there. I gonna call Smith, Wesson or Kervorkian. If we, as a society have not figured out how to die gracefully by the time my time comes, at the very least I will buy a $200 bottle of Cabernet and listen to my stereo in the garage with the car running.

I'm not kidding! - There is no way the religious right is going to get a hold of my wife's and my carcasses.  I have always been pro-choice in everything in my life!

Cut Throat:  I have been inside about 7 or 8 different nursing homes, I think.

I totally and completely agree with you.  Right now, I would say the same thing.   I NEVER want to be there.

But.     My grandmother is in a VERY nice nursing home.  I am very impressed with how good it looks and the care she gets.  It's still a nursing home, and I wouldn't want to be there.   However, her mental capacity is gone, by the time she was moved from assisted living to this facility she did not have the ability to make the decision to take hereself out.  When we visit, she often asks how long she's going to be able to stay in this nice hotel.  It doesn't matter what we tell her, because she forgets the answer within ten minutes anyway.

I faced a much more heartwrenching decision with my mother. 
She was violently adamant that she never ever ever wanted to end up in one of "those places" no matter what.

She was only 73 when she had major lung and heart issues which eventually killed her.  I have to say it was probably good that they did.

She was on and off of a respirator, in and out of consciousness, totally unable to care for herself, or to take herself out, which I think she would have wanted.  We were in a position were we could have directed the respirator to be removed, based on her living will, but it wouldn't have killed her.  She probably would have been a vegetable, maybe for months or years.  She was in the worst kind of limbo, and we would either have had to put her in the home she dreaded or move her several thousand miles to one of our homes with round the clock care, which she also would have hated. She dreaded being a burden almost as much as she dreaded a nursing home.

I guess the point of my very long story is that sometimes you just don't have the option.  Something quick like heart attack or stroke incapacitates you with no warning.  You need to have a pact with a spouse to smuggle you drugs, I think, but you still need to be strong enough to take them.