Retiring w/Stage 4 cancer take high monthly payments or PLS w/lower monthly

[AngelicEnergy]

Good Morning,

I need some advice...please

My husband is ill and is ready to retiree today! but ive been stalling him in order to research and make the best decision for our future

He is 55 years old with Stage 4 cancer diagnosis. kidney w/2 infected lymph nodes. Diagnosed in April 2017. Cancer is currently stabilized. The oncologist does not concentrate or give a diagnosis on longevity of life. that is playing a part in the retirement option decision. Currently he is undergoing chemo pill treatment.

Our little family consists of myself, husband and our 7 year old.

My husband has "chemo brain" and wants me to make the majority of the decision. However my issue is he is concentrating on strictly the survivor benefits after his death. But what if he lives another 30 years and I die before him. He would basically be screwed by taking 100% survivor plan and then he would receive the less monthly payments.....

He could live another 40 years or 6 months...who knows but its something that needs to be discussed and included on this decision NOT just basing it on survivor benefits.

That is why this decision is so hard.

Since he is a state employee his medical benefits are given to him for life at $0 charge. Our 7 year old we will get pay out private insurance for her. My benefits are covered. He was just GRANTED SSDI payments monthly since stage 4 kidney cancer is on the compassionate list. so we have that income coming in as well starting November. He wants to make the decision asap to retire October 31st.

He is considering taking Partial Lump Sum which will lower monthly payments. We have NOTHING that needs to be paid with this lump sum. we owe $60,000 on the house so that wont be paid off with it. Basically I think he wants it for a small vacation or something like that and a small savings.
He also has NO 401K.....

Here is the grid breakdown

Option 1 - Survivor gets 100% for life
$2164 Monthly pay for retiree life with NO PLS taken
$1700 Monthly pay for retiree life with PLS taken $50,000

Option 2 - Survivor gets 75% for life
$2,222 Monthly pay for retiree life with NO PLS taken
$1,800 Monthly pay for retiree life with PLS taken $50,000

Option 3 - Survivor gets 50% for life
$2285 Monthly pay for retiree life with NO PLS taken
$1800 Monthly pay for retiree life with PLS taken $50,000

Im sure when some of yall look at this its a easy decision but we are just back n forth on it. partial lump sum or no or larger monthly pay or no...on and on....any comments, advice would be greatly appreciated

 

[Sunset]

What a tough situation to work though.

Is he eligible for disability benefits from work instead of retirement ? Generally this will pay until age 65, while he still accrues employment credits, and often depending upon who paid for it, be tax free as well.

Besides my DF that went this route, I worked with a woman who told the boss she had to quit because her MS was too severe, the boss told her, don't quit instead apply for the company disability.

 

[FI_RElater]

First, sorry for your family

From your breakdown: I'd have to say that the 100% survivor is optimum ( the extra payment for the reductions don't make sense financially for you)
The breakeven for the reduction for the partial lump sum is about 9 years.

Since you say you have ~60k left on the mortgage, you still need income over and above the pension (about 26k without partial or 21.6k with partial), although you should still get some SSI for the child.
( I would say go 100% survivor, whether to get PLS depends on your age, as if I remember SS survivor benefits don't start until 60 --- if the PLS along with reduced pension gets you to 60 then that is the way to go/ if it doesn't- then likely best to forgo the PLS and get the higher pension)

(Edit: if, as suggested by previous poster, that he is eligible for company disability pension that may be better)

 

[AngelicEnergy]

What a tough situation to work though.

Is he eligible for disability benefits from work instead of retirement ? Generally this will pay until age 65, while he still accrues employment credits, and often depending upon who paid for it, be tax free as well.

Besides my DF that went this route, I worked with a woman who told the boss she had to quit because her MS was too severe, the boss told her, don't quit instead apply for the company disability.

Thank you so much for responding! Yes is is eligible but its not a option because it will reduce his monthly income to $900.00 So it would be better to retire. He was planning on retiring in 2 years before he got sick.

 

[Brat]

I appears that he also has something on his bucket list he wants to do. Here is a list of charities along the line of Make A Wish. He will need referral so discuss this with his physician. Wish Fulfillment Organizations for People With Cancer | Cancer.Net

You will want to do that before he gets sicker.

Also read On Being Mortal.

 

[AngelicEnergy]

First, sorry for your family

From your breakdown: I'd have to say that the 100% survivor is optimum ( the extra payment for the reductions don't make sense financially for you)
The breakeven for the reduction for the partial lump sum is about 9 years.

Since you say you have ~60k left on the mortgage, you still need income over and above the pension (about 26k without partial or 21.6k with partial), although you should still get some SSI for the child.
( I would say go 100% survivor, whether to get PLS depends on your age, as if I remember SS survivor benefits don't start until 60 --- if the PLS along with reduced pension gets you to 60 then that is the way to go/ if it doesn't- then likely best to forgo the PLS and get the higher pension)

(Edit: if, as suggested by previous poster, that he is eligible for company disability pension that may be better)

Thank you so much for responding! I think the survivor option is where we are at a stand still Because his longevity of life. He is fighting this AND if he was to pass soon or within couple of year financially I would be ok as I have other resources.

this decision is very hard because we dont know the outcome of the illness and life span. As with anyone you dont know their life span ha ha but it plays a role in the decision because people with Stage 4 cancer can live a long time. fought the cancer and its gone. Thats the ideal situation here So if we pick the lower monthly pay out due to 100% survivor benefits he wouldnt really benefit if i pass before.

am I making sense? I guess I am trying to make a decision where it is beneficial to both of us. not just beneficial to me in the end.

honestly im not in agreement for the 100% survivor benefits BUT that is why i posted because I want to hear opinions plus I research everything. and just because im thinking it i could be missing something. love to reach out to people to get their point of view

 

[AngelicEnergy]

I appears that he also has something on his bucket list he wants to do. Here is a list of charities along the line of Make A Wish. He will need referral so discuss this with his physician. Wish Fulfillment Organizations for People With Cancer | Cancer.Net

You will want to do that before he gets sicker.

Also read On Being Mortal.

Thank you Brat for the response. My husband is VERY selfless. He doesnt have anything he wants to do at all. That makes me sad. He wants to take our child to disney world so that would be the vacation. Yes I have read about the bucket list thing you posted maybe it is somehting i will bring up to the oncologist thank you again

 

[Brat]

I agree with others that he should choose the 100% survivor option. The odds of you dying before your husband are small if you are healthy.

Since you are concerned that he may outlive you it is time to make sure that your affairs are in order. Have you planned for someone to care for your daughter if she is orphaned? Could your husband, given his current state of health, care for her?

Do not hesitate to pull your daughter out of school to spend time with her father.

 

[googily]

I don't have advice, but I just want to say I'm really sorry you are going through this--having been there, I know how hard it is. Hang in there.

 

[AngelicEnergy]

Yes. All affairs on both sides are in order, except for this retirement issue. We actually took care of our wills years and years ago. And yes we do everything together. He takes her to school daily and picks her up. He walks everyday and rides his bike with her. So everything is ok from that stand point. I agree with you if necessary I will pull her out of school!

 

[Travelfreek]

I'm so sorry to hear this, AngelicEnergy!

Definitely I suggest 100% survivor benefit. The other option with partial lump sum will be a big mistake since you would lose $1000 a month for the long term.

Of course, you'll receive the
Social Security Survivor benefit also until your child is 18.

I would definitely reach out to make a wish type organizations for a bucket list type trip also.

Also as a state retiree, there's often a lump sum payment after death to help with final arrangements. In my case, it's $2000 and in my husband's case. It's $7000 (I'm a CA state retiree and he's a UC Calif retiree).

 

[AngelicEnergy]

I don't have advice, but I just want to say I'm really sorry you are going through this--having been there, I know how hard it is. Hang in there.

Thank you so so so so much! This is very difficult! I'm sorry you had to go through it!

 

[DJRR]

Thank you so much for responding! I think the survivor option is where we are at a stand still Because his longevity of life. He is fighting this AND if he was to pass soon or within couple of year financially I would be ok as I have other resources.

I am sorry about your husband's illness. It is never easy to make these decisions, especially under stress.

However, I am a little confused. Typically you would take the survivor benefit to ensure that your loved ones are taken care of financially if you were to die. It sounds like you believe you will be taken care of regardless because you have other resources that your husband does not have?

From what you posted, giving up 50% of the survivor income for an extra $121 per month seems like a bad idea. Would that money make a significant difference to your husband's enjoyment of life? If not, it would seem the wiser choice is the 100% survivor benefit.

The partial lump sum is a harder call. The biggest question in my mind is can you live on the reduced amount or does that create a hardship? After that, as others have said, is their some wish list item - fancy car, vacation, etc. that would give your husband great enjoyment without compromising your future financial security then I would consider it.

Best wishes to you and your family.

 

[Sunset]

Thank you so much for responding! Yes is is eligible but its not a option because it will reduce his monthly income to $900.00 So it would be better to retire. He was planning on retiring in 2 years before he got sick.

Assuming the $900 is accurate, which it might be if he didn't/couldn't sign up for extra LTD coverage.
If it is tax free that makes comparable to $1,035 if you are in the 15% tax rate.

Suppose he took the DI, what would happen to the payout benefit of his pension during that time, would it increase significantly ? Perhaps he is very close to a big jump in benefits and could then switch to retirement once the threshold is past ?

 

[Sunset]

OP - you don't mention your age, and do you work? Are you eligible for large SS based on your work experience ?

I really think you should take the survivor 100% choice, as someone already pointed out, the monthly difference is not going amount to much, and you are likely to live longer (women do).

 

[AngelicEnergy]

Thank you everyone. I can't respond now individually because it's harder to see on my phone ha ha

But I'm 45. I actually don't work out in the "work field" but take care of my parents who are elderly so I'm financially secure that way. It's to much to get into but I'm "ok" and can contribute to the household income and finances.

I can totally see the 100% survivorship option coming into play now and why he wants that. See that is why I like posting because I get other points of view!

The partial lump sum is the next decision. We have no savings. And I'm assuming he wants it for that. For a small savings as we don't have one at all.

 

[Meadbh]

I’m so sorry you are facing this.

The partial lump sum is the next decision. We have no savings. And I'm assuming he wants it for that. For a small savings as we don't have one at all.

It’s most unfortunate that you have no savings. That makes it doubly important that you secure your future income. It appears that your DH’s objective is to build an emergency fund. But if he passes away in the near future, your needs would be best met by having an income that exceeds your expenses. You can then save the surplus to build an emergency fund.

 

[Sunset]

.......
It’s most unfortunate that you have no savings. That makes it doubly important that you secure your future income. It appears that your DH’s objective is to build an emergency fund. But if he passes away in the near future, your needs would be best met by having an income that exceeds your expenses. You can then save the surplus to build an emergency fund.

+ 1
Having the extra $464/mo forever is better than taking the lump sum of $50K, which I think will get frittered away on this and that within a couple of years.

Why I think it will get frittered away is because you have zero savings, so it makes me think (and I could be wrong) that you spend paycheck to paycheck.

Yes you don't have lots of debt, so that is good, but at age 45 & 55, to not have savings is not good.

 

[Travelfreek]

I guess it comes down to what your house payment is and your interest rate on the mortgage? If it's reasonably low, then it sounds like you might be okay. $60k to refinance over a longer time frame to lower the payments? Not sure it's worth doing. Depends on the cost. I heard that the 30 year rate edged up to close to 4% this week on mortgages (still very low, however). If you do need to refinance, probably better to do now. I guess that could count as another option for you (refi with a little cash out to put in the bank). That's fantastic that your medical will be covered with your husband's retirement! A huge plus in today's world.

My sister just lost her husband to cancer (Multiple Myeloma - he was 64) and found a huge support system with Hospice care. He fought the cancer for 22 mos from diagnosis till death and they didn't get hospice until 3 weeks before he died. They tried every possible treatment but he still lost his battle. What was great about the Hospice Care resources was that they connected my sister to several other agencies and educated her and supported her emotionally (hospice counselors). She also learned about cremation and burial options which saved her a lot of $$$.

 

[Brat]

While you are looking at income take a look at your spending. You and your husband should develop a budget, consider where you can maximize the value of your income to the point that you can set some money aside as savings.

 

[mystang52]

My best wishes for you and your husband. Echoing others, the 100% survivor option is your best approach. I don't have Stage 4, but I am living with cancer. As my wife and I did, out of necessity you must look at this from a cold and hard perspective.
You are 10 years younger than your husband. For that reason alone you are far more likely to outlive him. Factor in his cancer, and the odds increase more for you to outlive him. No one has a crystal ball, hence my comment about the "cold and hard" perspective.
Again, I wish you and your family the best.

 

[MBAustin]

AngelicEnergy - We're so glad that you joined and posted and are getting helpful information from other members, and we're all so sorry that you are here for such a difficult reason.

I think mystang52 hit the nail on the head - even without the cancer, you are statistically likely to outlive your DH by quite a few years, so that's why the 100% survivor benefit is financially the right call.

It might be helpful for the two of you to have some heart-to-heart discussions over the next several months about what is most important, what your hopes and fears are, etc. You both might benefit from cancer support groups of one kind or another as well.

We wish you both all the best!

 

[MarieIG]

100 percent survivor

No lump sum, you have not only yourself but the child to consider. DH is going to get SSDI to add to his income now.

If you are worried about DH living for 40 years and you predeceasing him, take out a cheap term policy on yourself to cover the difference.

 

[Travelfreek]

Plan for the worst but hope for the best! - great words to live by! Prayers for you all!