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View Poll Results: LTC - how do you plan to manage/cover this risk?
purchase LTCI 31 18.24%
Purchase Life insurance with LTC rider 1 0.59%
Self Insure -- how are you doing this? 81 47.65%
Purchase annuity that could be used for LTC, distributed other wise 1 0.59%
Other 7 4.12%
Roll the dice -- no real plan (yet) 49 28.82%
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Old 08-13-2015, 07:54 AM   #61
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So I assume you have a partnership plan with unlimited asset protection, correct?
This is one of the types of plans I would seriously consider.
I was wondering the same thing.
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Old 08-13-2015, 08:03 AM   #62
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Yes we have both total asset protection as well as unlimited spousal income allowed once extended medicare picks up the tab when the 3 years insurance ends.

At this point medicaid requests that the stay at home spouse contributes 25% of the income towards the spouse's care but it is not mandatory..

Even if it is , keeping 75% of the income over the medicaid typical limits is a great deal.

Compared to the fact even if you shift assets during the 5 years the spouse is still limited to what she or he can get from those assets.

So as you see the 3 years insurance coverage is the tiniest part of the deal. It is all the perks after the insurance is up that is worth paying for
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Old 08-13-2015, 08:37 AM   #63
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Yes we have both total asset protection as well as unlimited spousal income allowed once extended medicare picks up the tab when the 3 years insurance ends.

At this point medicaid requests that the stay at home spouse contributes 25% of the income towards the spouse's care but it is not mandatory..

Even if it is , keeping 75% of the income over the medicaid typical limits is a great deal.

Compared to the fact even if you shift assets during the 5 years the spouse is still limited to what she or he can get from those assets.

So as you see the 3 years insurance coverage is the tiniest part of the deal. It is all the perks after the insurance is up that is worth paying for
But as I read it, at medicaid qualification and beyond, you would need to stay in the 2 states that offer total asset protection or the benefit drops to $4$. That may not be an issue for you. People living in the other 48 states do not have total asset protection as an option. So most others do not have access to the LTC choice you had... myself included.

If you only had the choice of $4$ protection, would you still find LTC as palatable?

With the financial issues IL is having, I would wonder if they will be able to honor total asset protection in the future.
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Old 08-13-2015, 08:47 AM   #64
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Just curious how you invested that money you set a side ?

If in the general investment pool and not liquid non volatile assets what if we have an extended down turn and you need the money?
We have a conservative portfolio without a lot of ups or downs. We would also eventually sell our house.

Like mickeyd posted, our plan also is to continue a LBYMs lifestyle and keep saving / investing.
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Old 08-13-2015, 09:13 AM   #65
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Another option when faced with extreme LTC is to just go to Vegas and make one or a couple big bets. If you win, pay for the LTC yourself, if you lose, declare bankruptcy.

Seems about the same gamble as paying $$$ every month for insurance which may or may not even be any good when you need it.
Yeah, IMHO both methods equate to "roll the dice" which was my choice. The only reason I selected that is because after looking into LTC insurance several years ago, I saw the caps/exclusions made it a gamble even with insurance. Self insure? Gamble there too, if it goes on for much more than a year for one of us, the other is stuck between a rock and a hard place. Chances are good in such a situation the home would need to be sold anyway as it would be far too much of a burden to take care of when dealing with severe enough medical issues of the one requiring the LTC.

Several years ago I had discussed LTC with DM, she proffered that the potential need for LTC was actually declining due to pharm advances that make dealing with once debilitating medical issues far less so. I tend to take stock in that thought, as future medical advances can have a huge impact on our future lives. In that scenario, costs are transferred from LTC as we know it today, to a more standard medical expense as we are all well to familiar with. FYI, according to Wikipedia, the probability of rolling two 6-sided dice 25 times gives a probability of 0.505532 that at least once, Boxcars will appear.
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Old 08-13-2015, 09:34 AM   #66
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You might find this poll and thread that I started two years ago interesting:

LTC Poll

There were over 100 replies to it which really helped to clarify my own thoughts.

We are self insuring. We are really in the sort of in the middle group that I referred to in that thread. That is, enough assets to want to protect them, but not so many that it is easy to self insure. We are in that group of people that is the theoretical market for long term care insurance.

However, the flaws with the insurance product just make it unappealing. A really big factor is that most policies (at this time) cover only a few years of expenses. That is the risk we are able to cover. The bigger risk is someone being in a nursing home for years. That is not very unlikely, but does happen (DH's mother was in a nursing home for about 8 years). However, most current policies won't cover many years of care.

Again, I would like to like long term care insurance, but just find the product flawed.

Kat, your above points is where I keep coming back to. With about a 4% chance of winding up in a home and lasting more than 5 years I am not even going to put another thought into it. Though I do enjoy reading the thread.


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Old 08-13-2015, 09:38 AM   #67
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Yeah, IMHO both methods equate to "roll the dice" which was my choice. The only reason I selected that is because after looking into LTC insurance several years ago, I saw the caps/exclusions made it a gamble even with insurance. Self insure? Gamble there too, if it goes on for much more than a year for one of us, the other is stuck between a rock and a hard place. Chances are good in such a situation the home would need to be sold anyway as it would be far too much of a burden to take care of when dealing with severe enough medical issues of the one requiring the LTC.

Several years ago I had discussed LTC with DM, she proffered that the potential need for LTC was actually declining due to pharm advances that make dealing with once debilitating medical issues far less so. I tend to take stock in that thought, as future medical advances can have a huge impact on our future lives. In that scenario, costs are transferred from LTC as we know it today, to a more standard medical expense as we are all well to familiar with. FYI, according to Wikipedia, the probability of rolling two 6-sided dice 25 times gives a probability of 0.505532 that at least once, Boxcars will appear.
While there are some risks with this, a medicaid compatible annuity may help with the funding of the community spouse. Also there have been some legal cases in NY and CT that have sided with not impoverishing the community spouse. These cases may lead to more friendly treatment for the community spouse in the future.
Just some things to consider.
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Old 08-13-2015, 09:50 AM   #68
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My biggest concern is being mentally or physically incapable of getting to the nembutol.
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Old 08-13-2015, 09:55 AM   #69
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Yes, have enjoyed this thread. Although the envireonment in Canada is different. My widowed mother turns 90 tomorrow. Has been in an assisted living home for over 2 years and is doing quite well. It is expensive, costing about $100k per year. No gov't assistance at this point but could be some in the future if her health deteriorates. She has enough assets for about 8 more years, ie to 98. This includes the sale of her condo on entering the home. I have promised to support her if she runs out of money.
These late life health expenses/issues really are the elephant in the room for retirees. My DW's parents are both alive and approaching 90 as well. They have plenty of assets to fund any kind of situation, but don't have any type of plan. Seems like they are simply waiting for one to die, then will sell the house and the survivor will relocate to assisted living. Not much of a life in the meantime. Getting really old sucks but I'm not hot on the alternative either.
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Old 08-13-2015, 09:56 AM   #70
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My biggest concern is being mentally or physically incapable of getting to the nembutol.
Or forgetting I'm supposed to take some.
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Old 08-13-2015, 10:02 AM   #71
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While there are some risks with this, a medicaid compatible annuity may help with the funding of the community spouse. Also there have been some legal cases in NY and CT that have sided with not impoverishing the community spouse. These cases may lead to more friendly treatment for the community spouse in the future.
Just some things to consider.
Even with "annuity=bad" having been the mantra I've been exposed to for many years (even before frequenting this site), I'd agree this is a scenario where an annuity makes sense as an income preservation tool. As has been offered in previous posts, the individual needing care will be taken care of one way or the other, how the spouse is able to live going forward is the real financial issue.
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Old 08-13-2015, 12:21 PM   #72
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For those of us with ~20+ years (knock on wood) to go before LTC even becomes an issue, I've got one word:

robots

(only half joking)

Might be cheaper than LTC. Need to figure out how to set up the Uber of LTC robots and then I can really FIRE.
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Old 08-13-2015, 01:13 PM   #73
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Just curious how you invested that money you set a side ?

If in the general investment pool and not liquid non volatile assets what if we have an extended down turn and you need the money?

You may very well have it safe and isolated but most folks do not. It is just in their portfolios and they hope they don't need it at a bad point in time for their investments.

When you self insure one really needs to consider this fact.

That is a point i never thought about until money magazine did a story on us years a go and i said we would self insure
Interesting points to ponder. No? If I had to go into a LTC situation today and/or if DW had to do the same, all of our assets would be in play to pay as much as it costs since we have no LTCi. Our accumulated assets, as well as all future SS and DB income, would be devoted to LTC.

That's the reality of it I believe.
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Old 08-13-2015, 01:39 PM   #74
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Just curious how you invested that money you set a side ?

If in the general investment pool and not liquid non volatile assets what if we have an extended down turn and you need the money?

You may very well have it safe and isolated but most folks do not. It is just in their portfolios and they hope they don't need it at a bad point in time for their investments.

When you self insure one really needs to consider this fact.

That is a point i never thought about until money magazine did a story on us years a go and i said we would self insure
I'm not really one that segregates my LTC monies verse everything else. I do have $200k in banks savings and CDs to help buffer the need so withdraw during down markets... not just LTC, but living expenses. For us this would cover more than 3 years that would include health care (insurance + max out of pocket), couple international vacations, and normal living. We obviously could tighten up.
In addition I still have some brokerage $ waiting to be deployed and the rest is in a 63/35 allocation (not counting cash in the allocation.
Just started working on this. I'll sort it out eventually. Lots of time to learn.
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Old 08-13-2015, 01:47 PM   #75
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We are just into our 60's and have pensions and ss that cover our basic needs and then some. We also have about 450k in retirement and taxable accounts. So I would safely assume that we can self insure.
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Old 08-13-2015, 01:49 PM   #76
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Originally Posted by mathjak107 View Post
Just curious how you invested that money you set a side ?

If in the general investment pool and not liquid non volatile assets what if we have an extended down turn and you need the money?

You may very well have it safe and isolated but most folks do not. It is just in their portfolios and they hope they don't need it at a bad point in time for their investments.

When you self insure one really needs to consider this fact.

That is a point i never thought about until money magazine did a story on us years a go and i said we would self insure
Overall I have 10% of my portfolio in Cash/CD's/iBonds which I totally exclude from calculations of my portfolio value and WR. This money would cover LTC or cash reserves during a downturn. It's also supposed to cover 4 bucket list vacations that are well beyond my normal travel budget (I doubt I'll actually take the trips - I'm not much of a traveler).

I'm betting that I don't need LTC at the same time there is a downturn. If it happens, it happens and my portfolio will deplete. I have a 3% WR at age 52. Is it enough ? I sure do hope so. The alternative is to go back to w*rk for "more cushion". You have to draw that line somewhere.
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Old 08-13-2015, 01:55 PM   #77
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I read every LTC thread with interest. We don't have LTC insurance so we are in the self insurance crowd...and probably more into the hoping for good luck, roll the dice crowd than I care to admit. My one concern is that one of us could end up needing extensive LTC and impoverish the other. I am not so concerned if the last to die blows through all the assets....don't have a desire to leave a large estate.

Given my concerns, why don't I got for LTC insurance? At this point I just don't feel good about any of the plans offered.


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Old 08-13-2015, 02:15 PM   #78
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Years ago family members took care of the seniors. My mother and my aunts took care of my grandmother for her last couple of years. Nowadays people feel that they don't want to be a burden to their families and it seems like the younger generation nowadays don't want to be bothered with old people. I get lukewarm responses when I talk to my kids about us in our older age needing help. I guess it is the kind of society we live in nowadays.
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Old 08-13-2015, 02:40 PM   #79
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I am single and I plan to self insure. First, by working until I am 55 to help increase the value of my megacorp pension. Second, if things are looking promising for a long life in my 60s, I plan to delay SS until 70. About 3/5 of my annuity income, once I do start SS, will have a COLA and a rough estimate is that it will be about $7,000 per month when I am 70. I should have a 7 figure portfolio too, so I feel like I can cover about 10 years worth of nursing home costs.

I think I have some market risk in my plan, but the highest risk appears to be from age 55 - 62 before I can start SS and a second DB pension from a previous employer. Is there any reason to consider buying an LTC policy for those years, with a plan to drop it later on? Do people buy disability insurance for when they are no longer working?
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Old 08-13-2015, 03:13 PM   #80
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We are currently self-insuring, or rolling the dice, depending how you look at it. We do not have funds specifically ear-marked and conservatively invested for LTC, but our logic follows the lines of:
• We are both 60, and will both be retired by the end of this year, so our timeline is not as long as some others here.
• Expected WR (about 3.5%) in retirement gives 100% success per Firecalc, not counting the future benefits from social security. No pensions involved.
• 100% success means there is a high probability our funds will grow in retirement, not be depleted, and we will leave a nice sum of money to our son, or it could be available for LTC.
• Once we collect SS (@70), our WR will drop to less than 2%, virtually assuring our funds will continue to grow.
• We also have a cash cushion of about $300k not used in the retirement calcs. above.
• If I run Firecalc, include all cash and SS, and add a $70k off-chart spend starting in 10 years, we still get 100%. ($70k is the current median cost for Nursing home care in our area).

So, being an engineer, I look at this and wonder how many more levels of redundancy should we implement?

Like others here we would be interested in a reasonably priced catastrophic policy, but that does not seem to be available. And, if we could get a deal like Mathjak107, with total asset protection and unlimited spousal income allowance, that could also be a game changer. But for the time being we will take the risk that the market will not tank, and not recover, and at the same time we both are admitted to nursing homes, and we both require 10+ years of care.
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