How long will your savings last and does it account for Assisted Living?

[BBQ-Nut]

Yet another humble request for fellow members to share their thoughts and experiences.

When using Firecalc, other on-line estimators or my own spreadsheet - I plug in different ages for 'end game' to see if I am going to fall short or have anything left to pass on as a legacy.

And - I've read about one approach to expenses in that they decrease with age (aka the Bernicke option in Firecalc).

But, I'm watching my own parents get older and at some point neither will be able to drive and will not be independent - maybe even needing to move to a 'retirement community'.

Looking at some rough estimates for this - it is darn expensive - which would increase annual expenses from the 'dip' many describe.

So - how have you estimated how long your savings will last? And do you account for any need for 'retirement community' or even 'assisted living' expenses?

 

[Fermion]

No I have not accounted for assisted living...that is what the government is for.

Savings will last from age 45 to age 75.

 

[BBQ-Nut]

No I have not accounted for assisted living...that is what the government is for.

Savings will last from age 45 to age 75.

So if/when you require assisted living - that will be via Medicaid and what ever you get in SS?

 

[Ally]

We have a good pension with survivor benefits, including health insurance, and two social securities. We will have more from those than we have been living on in the past few years. For this reason, we probably won't need to get into our savings, except for my care needs. My husband had long term care insurance. So yes we took it into account after watching my parents needing care for Alzheimer's and cancer.

 

[Alan]

Yes, we have allocated funds in a couple of IRA's for assisted living. They are "fire-walled off" and not counted in our retirement accounts for calculation of SWR.

 

[brewer12345]

If you are looking at a 30+ year retirement planning horizon, it is hard to estimate what the tail end will look like with any confidence. You pays your money and you takes your chances.

 

[Fermion]

So if/when you require assisted living - that will be via Medicaid and what ever you get in SS?

Yes, pretty much. We paid an extra $63 this year to Medicaid on our income due to the new 0.8% adder so I am confident the program will be there for us if we need it.

edit: Oh I meant Medicare.

At our current saving rate and current high tax bracket/high cost of living area, we would need to work for 3 to 5 more years to be confident we would have enough to cover 3 to 5 years of assisted care living for the both of us. I would rather enjoy the 3 to 5 years in my 40s and just be miserable in my 80s when I probably will forget the next day how bad the previous day was.

 

[REWahoo]

How long will our savings last? FIRECalc indicates it will last to age 95 but I doubt either of us will be around to find out.

Does it account for assisted living? Partially, but we also have LTC policies covering three years of assisted care.

 

[W2R]

So - how have you estimated how long your savings will last? And do you account for any need for 'retirement community' or even 'assisted living' expenses?

Yes, my savings are supposed to last sufficiently long at my present rate of spending, that I can afford to self-insure instead of (and beyond) buying an LTC policy, and to cover all of the expenses of growing old for a very long time.

I have already identified and priced a few good continual care communities. At present rates, plus some inflation, I can afford them.

Heaven knows what we are facing in the future once the baby boom generation floods these retirement places. Frank and I think we would prefer to care for one another for as long as we can at home, if that is possible, as a lifestyle choice more than as a financial choice. But honestly, that is so far away. Too many variables, too many unknowns, to make any decisions so soon.

 

[NYEXPAT]

Income/savings designed to last until I am 96 and my DW turns 100 (32 additional years). No LTC for me, as I plan to die at home and No#1 Son (now 8) is being trained to take over planning,finances and care for my Wife when I am gone.

 

[Bikerdude]

Assisted living yes. Nursing home living no.

 

[clifp]

If you are looking at a 30+ year retirement planning horizon, it is hard to estimate what the tail end will look like with any confidence. You pays your money and you takes your chances.

+1

One of the reason I have such a high equity allocation is I want to have enough money so that can feel comfortable spending for a [-]Cadillac [/-]Tesla level assisted living. No overworked, underpaid, poorly trained, with minimal English skills health care aid for me. No I want an LN or RN to empty my bed pans and give me sponge baths..

Especially one who looks like my very distant cousin a recent RN...

 

[shotgunner]

I don't include the value of my house in my retirement planning. I need it as a place to live, and I will not need it should I have to move into assisted living. My house is small and paid off, it costs me around $825 a month to cover all expenses of living in it; taxes, utilities etc. It would sell in the current market for about $175K. Assisted living is about $4K a month (this not only includes all your housing expenses but food as well). If I had to move into assisted living next month I figure my out of pocket beyond what I am paying now to live indoors and eat would be the $4K minus current expenses $825 and minus food $400, $2800 a month. Even without any interest the sale of my house (which should help offset inflation of cost of A/L) would fund about 5 years of assisted living. This does not take into account income from Social Security or from my portfolio above what used in this example for current home expenses and food. As it looks today I think I will be fine, I consider my home to be my LTC insurance should I need such a living arrangement.

 

[Ed_The_Gypsy]

Assisted living or a nursing home in the US will bankrupt us.

 

[MichaelB]

We have non-portfolio assets that can be converted to cash and enough budget flexibility to pay for assisted living if needed. After spending time in different facilities, with relatives and also volunteering, moving into one is not my preferred option, but we don't always get to choose.

Staying physically fit is probably the single best thing one can do to minimize the likelihood they will need to move into assisted living care.

 

[imoldernu]

Our plan for the later years is detailed in this thread, beginning at post #115.

http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251-2.html

 

[Fermion]

I did forget to mention the backup plan if we need assisted living:

 

[jerome len]

Boy! what do we do if we need assisted living!

Elder abuse is a challenge when heirs have to decide between a good life for their elder, usually, parents or do it on the "cheap" to create a larger inheritance. I'm lucky, I have great kids and my DW has great parents and all their kids would make sure they are well taken care of. My suggestion and my will and trusts address this issue since many have written about elder abuse. Most of us write about "early retirement"....this is an issue that really relates to "late" retirement. We looked into one assisted living home and the entry cost was in the hundreds of thousands of dollars with monthly charges in the thousands. Now, this home was absolutely 1st class but I was shocked at the prices. On the other hand, I'd probably prefer a little apartment with my kids visiting most days and driving me to the Doctor's office when needed. Whew! heavy issue.......I think I'll keep saving and quit worrying since I've got enough money and a great family.

 

[foxfirev5]

If you are looking at a 30+ year retirement planning horizon, it is hard to estimate what the tail end will look like with any confidence. You pays your money and you takes your chances.

Absolutely correct. We all want to calculate and control our future but the variables are infinite. Much as I would like an ironclad plan for 30+ years I realize it will require numerous adjustments as the situation changes.

 

[kaudrey]

The latest research I saw says the average couple retiring at age 65 today will spend $240K in medical bills, not including nursing homes/LTC. We plan to retire at 57 and will have FEHB (fed bennies), but I added $400K in expenses, spread out from 57 to 95, as an estimate of our potential medical costs.

I figure if one of us passes before the other, and the survivor needs LTC, he/she can let Medicare/Medicaid pick it up if he/she runs out of money. That's what happened with my grandmother.

 

[rodi]

My plan B for expensive LTC is our home. It will be paid for by the end of the year, and the zillow estimate puts it at 62% of our investible assets. (We don't count it in our retirement assets - just the investible assets.) If one of us needs to move to LTC - we'll sell the home, by a smaller condo for the surviving spouse - and use the remaining equity to pay the LTC bills.

We've dealt up close with elder care issues. Our plan A is to hire nursing aids to help us in home - much cheaper than assisted living or nursing homes, at least in our area. Most care in nursing homes does *not* require an RN degree - it's hygiene, toileting, and supervision... Home health aids are typically paid more by the agency than nurses aids in a nursing home - so they are probably happier.

 

[daylatedollarshort]

We are considering living outside the U.S. for retirement. Problem solved. That leaves us with all the other countries on the planet that will have us to choose from. Health care and nursing home care wouldn't potentially bankrupt us anywhere but the U.S.

Plan B is continuing to living below our means in retirement and studying up on medicaid asset testing.

I have wondered about what Rodi said as well and just hiring in house help. Look at what live in nannies make who get room and board and care for babies. They don't make $80K a year.

 

[Live And Learn]

I 100k set aside for LTC which I do not include the value of my portfolio for retirement calculations. That should cover 15 months of care. The average stay is 7 months; if you stay longer than 7 months you tend to be there for 3 years. I'm thinking the first spouse gets the 7 months care. The second is the lifer and would use the value of the home. Including SSI the second person would be covered for 34 months. Should work.

 

[audreyh1]

+1

One of the reason I have such a high equity allocation is I want to have enough money so that can feel comfortable spending for a [-]Cadillac [/-]Tesla level assisted living. No overworked, underpaid, poorly trained, with minimal English skills health care aid for me. No I want an LN or RN to empty my bed pans and give me sponge baths..

Especially one who looks like my very distant cousin a recent RN...

Which one is the RN?

 

[clifp]

Which one is the RN?

For you and the other woman on the forum the guy.. For the males the girl.