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Old 06-05-2009, 07:10 PM   #161
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Sam and jdw,

This is what I wrote:

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Ideally, I would like her to live on SS + dividends from her portfolio + whatever she can pry out of FIL's hands for a few more years. Waiting a few years before annuitizing her portfolio could help increase the monthly pay out (she will be older + interest rates might be higher).
What I meant was that I would only postpone annuitizing her portfolio if, for the next few years, she was able to cover all of her expenses without drawing on her portfolio's principal. If she can pull it off for just a few more years, then she might be looking at a substantially higher annuity payout down the road (older age, probably higher interest rates, and possibly a larger porfolio due to market recovery). If it becomes clear that she won't be able to bridge the income gap without drawing on her portfolio's principal however, then I agree, annuitizing sooner rather than later would be the best option.

My fear is that if inflation really picks up, even a COLA'd annuity might suffer a permanent loss of purchasing power (the COLA on the annuity will probably be capped). So I would like to avoid annuitizing her portfolio too soon if at all possible.
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Old 06-05-2009, 08:42 PM   #162
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Firedreamer. you do not want to be the smuck to encourage your MIL to throw away her LTCI. It may very well be the only smart thing she did in planning for her future. I can't believe how cavalier so many people are here about throwing away this valuable retirement tool with so little information and I can't believe the flimsy excuses they give for not having LTCI and their misguided belief that the government will take good care of them for not planning for their own care. But that should be in a separate thread.

I would check her policy. I just checked my ten year old policy with CalPERS and my coverage amount has increased 48% although my premiums have only increased a little over inflation. If I were to buy the same coverage today it would cost me $360 a month. I pay about $131 a month. Break even point isn't very long and I've been able to wake up for 3650 mornings thanking God I'm not in a nursing home and knowing I'd be getting $192 tax free each and every day if I was. I'd take a low interest 30 year mortgage to pay the long term care if needed if she has a good policy. I'd rather die with 25 years left on a mortgage than spending down the property in 3 and being in a medicaid bed. When my father spent 5 months in a SNF he paid $5,000 a month. When he had medical care through medicare they physically moved him to a medicare bed even though they held his paid for bed. Even in the nice facility I found for him there was a noticeable difference in beds (location, location, location). I can only imagine what a medicaid bed would be like in a lesser facility.

YMMV IMHO Wake up and smell the coffee!
She has had the opportunity to visit someone in a Medicaid facility and she is determined to keep the LTC policy. She doesn't want to end her life in one of those. Her policy's premium has not increased significantly for some time now but I haven't looked at it yet to see what kind of coverage she has.
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Old 06-05-2009, 09:08 PM   #163
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As usual, I come late to the thread, after everything has been said. Am I the only one who pities this "gentlewoman in distressed circumstances," as the Victorians might have put it? OK, so she is used to certain uncommon luxuries. This was the life she lived for decades, so naturally she clings to it.

I'd like to give her a pat on the back for cutting back in the first instance. I realize she HAD to do it; it must still have been hard, coming on the heels of getting dumped by her husband. I noticed that many of the budget items are about caring for someone other than herself (charity, gifts for friends, caring for her menagerie). Those things give meaning to life (sort of like how important grandkids are, to those who have them). It is often harder to give up things you do for others, than luxuries for yourself. I really hope she finds a way to earn some extra bucks so she can hang on to some of those things.

(Hey, I know, easy for me to say, I'm not the one who's been balancing her checkbook while she wrings her hands and looks helpless!) A 21-gun salute is due to FD and his wife for the care, time, effort and sheer patience they have been providing this slightly spoiled, but apparently rather decent lady for a long time (I noticed in an earlier thread that FD foresaw the train wreck coming more than a year ago).

On a practical note, what's the chance that she can learn home economics at the community college: it sounds like she has never learned the careful shopping, meal preparation and storage techniques that would let her eat well on less than 1/2 of what she is laying out now.

Best of luck to everyone involved.
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Old 06-05-2009, 09:36 PM   #164
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Am I the only one who pities this "gentlewoman in distressed circumstances," ....

While some pity might help (or maybe hurt?) emotionally, it isn't going to change the math.

You can pity me all you want for not having the physique to be an NBA star, but it won't change anything, I still won't be an NBA star.

I was never very good at the "pity" thing anyhow, so I will leave it to others .

But I do recognize this is emotionally draining for those involved, it is a tough problem to deal with. Personally, when I'm facing a problem, I prefer solutions to sympathy. This problem has a solution (she needs to live within her means), it "just" needs to be implemented. Someone needs motivation. Not sure pity will provide motivation, but I dunno.

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Old 06-05-2009, 09:47 PM   #165
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Personally, when I'm facing a problem, I prefer solutions to sympathy.

Personally, I like it when someone expresses sympathy or empathy, whether or not they have a practical solution to offer. We're just different that way

I just figured I'd stick up for the MIL a little bit, since nobody else was.
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Old 06-05-2009, 10:13 PM   #166
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Amethyst, I find it interesting that I mentioned a class for her "money handling" - and no one picked up on it.

"Deal with it" is a lot easier when you are shown how to do that - and often people hear non-relatives better than family.

I do have sympathy for her - but, alas, naive won't feed the kitties!

ta,
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Old 06-05-2009, 10:25 PM   #167
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Originally Posted by Amethyst View Post
As usual, I come late to the thread, after everything has been said. Am I the only one who pities this "gentlewoman in distressed circumstances," as the Victorians might have put it? OK, so she is used to certain uncommon luxuries. This was the life she lived for decades, so naturally she clings to it.

I'd like to give her a pat on the back for cutting back in the first instance. I realize she HAD to do it; it must still have been hard, coming on the heels of getting dumped by her husband. I noticed that many of the budget items are about caring for someone other than herself (charity, gifts for friends, caring for her menagerie). Those things give meaning to life (sort of like how important grandkids are, to those who have them). It is often harder to give up things you do for others, than luxuries for yourself. I really hope she finds a way to earn some extra bucks so she can hang on to some of those things.

(Hey, I know, easy for me to say, I'm not the one who's been balancing her checkbook while she wrings her hands and looks helpless!) A 21-gun salute is due to FD and his wife for the care, time, effort and sheer patience they have been providing this slightly spoiled, but apparently rather decent lady for a long time (I noticed in an earlier thread that FD foresaw the train wreck coming more than a year ago).

On a practical note, what's the chance that she can learn home economics at the community college: it sounds like she has never learned the careful shopping, meal preparation and storage techniques that would let her eat well on less than 1/2 of what she is laying out now.

Best of luck to everyone involved.
She is a very decent lady, very generous too. But I had to show her that she is too generous for her own good. Perhaps, she can learn how to give her time rather than her money and still feel fulfilled.
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Old 06-05-2009, 10:34 PM   #168
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Amethyst, I find it interesting that I mentioned a class for her "money handling" - and no one picked up on it.

"Deal with it" is a lot easier when you are shown how to do that - and often people hear non-relatives better than family.
I am sorry if I didn't acknowledge your suggestion. When I start a thread I try to keep up with it but sometimes there are just too many new posts for me to address them all.

But that's a great idea. I will look into it as the local college offers continuing education classes. Thanks.
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Old 06-05-2009, 10:56 PM   #169
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Originally Posted by Amethyst View Post
Personally, when I'm facing a problem, I prefer solutions to sympathy.

Personally, I like it when someone expresses sympathy or empathy, whether or not they have a practical solution to offer. We're just different that way
Which is why we each posted what we did. It'd be a boring, boring world if we all were exactly the same.

I'm sure that FD can make use of both forms of input. It's all good.


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