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Old 03-01-2014, 10:22 AM   #21
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Great article, thanks. After the experience I had with my dad, who got more and more aggressive with his financial decisions as he felt his control over life slipping away, I have concluded that we become our own worst enemies as we age, and that we need to learn how to protect ourselves from our self. Dad threw hundreds of thousands of dollars away, and we could not stop him. Expressing concern and trying to get him to think through his actions rendered him paranoid that we were out to get him, and pushed him into the arms, so to speak, of "his friends" the young couple that wined and dined this old couple right into buying a risky variable annuity, which he later abandoned at the market crash when told he needed to put more money into it. He cancelled his long term health care policy just when he was likely to need it most, saying he had already paid $70,000 in premiums for the "worthless" policy and was not going to pay one cent more. Worse yet, had he been destitute at the end, we kids could have been tapped for his expenses depending on what state we lived in, due to Filial Responsibility laws. The state we live in currently is one of the most aggressive in going after the kids to pay their parent's bills.

Do not assume you will be rational in later years. Figure out a solution now. I am not a huge fan of paying for an annuity, but perhaps it could be considered stupidity insurance. Lord knows many of us will benefit from such a thing.
Thank you for sharing a very painful experience. While the details are somewhat different, your story is so very similar to my late DF.

Yes he lived in that state too. He had a gifting addiction, 50% of his pension, SS, any investment gains went to the church. We knew the 5 year lookback would mean my 2 DSs and I would be liable for his expenses. He couldn't understand what we were talking about. Oh yes the POA my DS had was practicly useless.

When he passed, he still had some assets, managed by a 3rd party. He was in a 90% equity 10% bond portfolio. Now we're waiting on that state for 4-6 months to finish the paperwork saying his 4.5% inheritance tax has been paid.

I joke, saying to save a bullet for me. The reality is even if that happened, I'd probably think it was a special suppository.
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Old 03-01-2014, 12:17 PM   #22
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Thank you for sharing a very painful experience. While the details are somewhat different, your story is so very similar to my late DF.

Yes he lived in that state too. He had a gifting addiction, 50% of his pension, SS, any investment gains went to the church. We knew the 5 year lookback would mean my 2 DSs and I would be liable for his expenses. He couldn't understand what we were talking about. Oh yes the POA my DS had was practicly useless.

When he passed, he still had some assets, managed by a 3rd party. He was in a 90% equity 10% bond portfolio. Now we're waiting on that state for 4-6 months to finish the paperwork saying his 4.5% inheritance tax has been paid.

I joke, saying to save a bullet for me. The reality is even if that happened, I'd probably think it was a special suppository.
MRG
Dad was still 100% invested in stocks. I think the adrenaline kept him going until the market crashed and paralysis set in....thankfully. If he had followed through on cashing in at lows, he would have had so little left to live on.

I tell my son that when the time comes, put me in my kayak and push me toward the open sea, telling me to paddle for the horizon. Strap an electric motor on if you need to. DH finds the joke a bit too morbid, but there is no way I want to put our kids through what my sibs and I went through.
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Old 03-01-2014, 12:38 PM   #23
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Nobody in my family has had Alzheimer's, thank heavens, so my genes are good. But then one never knows. For planning purposes I am assuming that at some time in my 80's (should I live that long), I will no longer be able to carefully manage my investments.

So, I am putting off SS to age 70 to make it larger, and that plus my mini-pension plus my RMD's should give me enough to live on or slightly less.

If necessary I will supplement that amount by buying a small SPIA after age 80. The objective is to bring up the total predictable automatic bank deposits to equal more than my living expenses, whatever they may be at that time.

I also plan to review my Vanguard situation at that time and could possibly start having my dividends or more sent to me from my taxable accounts each month.

All my bills except one or two are already paid by automatic deduction from my bank account, and I eventually I will get around to having all of them paid that way.

I can't imagine being so non compis mentis as to be unable to do my own taxes with TurboTax. To me that equates to mental vegetable status. Maybe a CPA at that point? Maybe my daughter? Aargh. Maybe Frank would take care of this stuff for me, assuming that he is not worse off than I am .
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Old 03-01-2014, 12:47 PM   #24
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It doesn't seem that managing the types of investments and returns would be a big problem its getting the bills paid with the money you receive from them.

A monthly debit from investment account to checking account with all bills automatically debited from checking should make it easier.
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Old 03-01-2014, 02:29 PM   #25
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In my (limited) experience 1) the decline in cognitive function begins far sooner and is well underway before people become aware, 2) others, mostly friends and family, are aware before the affected individual is, and 3) all the early symptoms are easily mistaken for other conditions, most commonly confused with "just getting older. This makes planning for this condition a real challenge, as once it is diagnosed, rational thought and behaviour can't be counted on.

I never got around to doing the "23 and me" test, now it's too late, but cognitive decline is a real possibility. My plan (not yet implemented) is to prepare a set of instructions, similar to the one when I kick the bucket, that sets the stage for someone else to manage the financials and other important stuff, with specific instructions on what to do with me. Over the past few years, as I have dealt family members I have tried to involve my own children, in part to teach, and in part to communicate with them and set the stage when it's their turn. The one thing I am absolutely clear on is the time to prepare and plan is now, not then, and a lot of communication before it happens is needed for things to work out well.
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Old 03-01-2014, 02:47 PM   #26
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Nobody in my family has had Alzheimer's, thank heavens, so my genes are good. But then one never knows. For planning purposes I am assuming that at some time in my 80's (should I live that long), I will no longer be able to carefully manage my investments.
Same with me. Just keep that blood sugar under control:

Above-normal blood sugar linked to dementia - Harvard Health Blog - Harvard Health Publications
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Old 03-01-2014, 03:14 PM   #27
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I think it depends. With DM, it was very apparent. Her memory just went over time. At the end she just looped, telling you the same 15 things she remembered. She always knew her kids, somehow she became sweeter and more loving, the sicker she got.

DF hid his condition for at least 5 years. He tried so hard to be normal. Sometimes we would think that's odd, but he's 90 something, maybe it's OK. His last year he couldn't hide it anymore. I still remember the tearful phone call when he admitted how sick he had been. Poor guy was so afraid of being put in a nursing home. He managed to remain in assisted living, until Hospice.
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Old 03-01-2014, 04:15 PM   #28
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My plan is to shift control over to the kids (with substantial written directives) if I see things going south. But....
Please don't leave it as just a plan. Do it now (write those substantial instructions, I mean). And make sure they know how to find it.

I keep an encrypted file prominently on the desktop of my computer (DW knows the password) named "Open on my death" that contains a wealth of information that would be immediately useful at that time. I update it at least twice a year.
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Old 03-01-2014, 04:17 PM   #29
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Have a close friend who has been diagnosed with dementia. He is in his mid 60s. He has been prescribed some medicine. I don't know what it is, but it is supposed to be quite effective in arresting the dementia and in some cases the patient actually improves. There is some hope and a very good reason to get loved ones in to see a doctor about the issue.
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Old 03-01-2014, 04:47 PM   #30
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This article does address my concerns. I don't need an annuity but I worry about becoming befuddled and doing stupid things. It doesn't run in my family so I may dodge that bullet but if I don't will I ever realize it hit me? My plan is to shift control over to the kids (with substantial written directives) if I see things going south. But....
If the kids are too busy or whatever, I'd be glad to help out. I'll just need full POA and your mind to be mushy enough to no longer have a clue what's going on.
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Old 03-01-2014, 05:05 PM   #31
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My plan when I get near the age of incompetence is to put it all in PSSSSSST....Wellesly, and collect a monthly check.
The more I think about it, I will be deferring SS to 70 and I have a reasonably well funded pension (No Illinois nonsense here). And the total stock market pays about a 1.6% dividend after expenses. So..... I could just keep it all in stocks, add the dividend payout to my SS and pension and be a happy if somewhat demented camper.
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