Long Term Care strategies...?

[Kauai bound]

I'm new to this wonderful Forum site with wealth of invaluable information and friendly members. I think I'm going to be hanging out on this site for a very long time.. so thanks admins, moderators, and participating members!

I'm 53 making plans for my future. What is everyone doing for Long Term Care issues in regards to planning? I think I read a few people are buying LTC insurance at my age to lock in low insurance premiums. My parents in their 80's are well off (financially and health) but they do not buy LTC insurance. - not sure how to plan for this issue

[gauss]

At this point, I am planning to self-insure.

My impression is that only a small part of the population requires an extended (ie lifelong) stay in LTC.

-gauss

[Ally]

We tried to buy for both of us, but I was turned down. The only reason we got it for my husband is seeing my mom's Alzheimer's drain my parents' savings to nothing. It was eye opening. We can afford for one of us to have self financed care, but not both.


Sent from my iPad using Early Retirement Forum

[Kauai bound]

Quote:

Originally Posted by gauss At this point, I am planning to self-insure. My impression is that only a small part of the population requires an extended (ie lifelong) stay in LTC. -gauss

I guess we can Google what percentage of people need LTC services, average cost and duration... but I think it is very common and extremely costly. The duration of LTC is surprising long.

[Kauai bound]

Quote:

Originally Posted by Ally We tried to buy for both of us, but I was turned down. The only reason we got it for my husband is seeing my mom's Alzheimer's drain my parents' savings to nothing. It was eye opening. We can afford for one of us to have self financed care, but not both. Sent from my iPad using Early Retirement Forum

I think LTC costs can wipe out big chunks of our lifetime savings and anything that we want to pass on to our kids as inheritance.

[youbet]

Paying premiums for LTCI can wipe out big chunks of our lifetime savings and anything that we want to pass on to our kids as inheritance. It's well known that the public, on average, will pay more for long term care premiums that the amount the insurance companies pay to provide them with LTC.

[gauss]

What about if you keep the property in Hawaii until you possibly need LTC? Would the value in that be a sufficient hedge against the possible LTC costs?

Just thinking out loud here...

-gauss

[Kauai bound]

6 tips for averting America's looming long-term care crisis | The Rundown | PBS NewsHour

This link gives a quick look and odds of us who will need LTC. I do know LTC insurance is too high right now as well, but it is a major crisis that us old folks have to factor in our our retirement planning.

[youbet]

Quote:

Originally Posted by Kauai bound - not sure how to plan for this issue

Few people are sure Kauai......... For most, it's just a guess at what course will work out best for them and the eventual results may or may not be what they expected.

There are recent threads on this subject you should search for and read. Just probing for yet another general rehash of the subject here won't lead to anything new.

Whether you should buy LTCI, like any insurance policy, depends on your current and anticipated personal circumstances. Why don't you lay out your plans? For example, your anticipated FIRE finances, the state you live in and whether that state has a "partnership" program or not, and importantly whether you have a spouse you want to protect from impoverishment.

FWIW, my circumstances clearly call for me to self-insure and I'm comfortable with that.

[Kauai bound]

Quote:

Originally Posted by gauss What about if you keep the property in Hawaii until you possibly need LTC? Would the value in that be a sufficient hedge against the possible LTC costs? Just thinking out loud here... -gauss

I know many of us who have assets can use them to pay for LTC and other medical costs (co-pay). I think the purpose of insurance in general is to insure against major life events that would wipe out our assets. It's a major problem for us baby boomers for sure. Most people in my generation have not even planned for retirement sufficiently... so combined that with healthcare expenses and LTC issues, we could be in for a crisis. I really have no answers, but wondered if people on here have done anything to reduce the risk of LTC expenses that many of us will go through.

[Kauai bound]

Quote:

Originally Posted by youbet Few people are sure Kauai......... For most, it's just a guess at what course will work out best for them and the eventual results may or may not be what they expected. There are recent threads on this subject you should search for and read. Just probing for yet another general rehash of the subject here won't lead to anything new. Whether you should buy LTCI, like any insurance policy, depends on your current and anticipated personal circumstances. Why don't you lay out your plans? For example, your anticipated FIRE finances, the state you live in and whether that state has a "partnership" program or not, and importantly whether you have a spouse you want to protect from impoverishment. FWIW, my circumstances clearly call for me to self-insure and I'm comfortable with that.

Thanks... I would love to read the old threads on LTC. I'm new to the forum and tried to look for an old LTC thread, but couldn't locate one.

[youbet]

Quote:

Originally Posted by Kauai bound Thanks... I would love to read the old threads on LTC. I'm new to the forum and tried to look for an old LTC thread, but couldn't locate one.

If you would like this thread to cover some new ground, why not give us some detail of your personal circumstances so we can comment on actions you might take?

There is no one right way for everyone to prepare for LTC needs.

[travelover]

Quote:

Originally Posted by Kauai bound Thanks... I would love to read the old threads on LTC. I'm new to the forum and tried to look for an old LTC thread, but couldn't locate one.

Just a tip on searching here. Set the view to v2.0 at the bottom left of the page (format should be green not blue), then type searches in the Google box at the top. This uses a more comprehensive search mode.

[Kauai bound]

Quote:

Originally Posted by youbet If you would like this thread to cover some new ground, why not give us some detail of your personal circumstances so we can comment on actions you might take? There is no one right way for everyone to prepare for LTC needs.

Thanks youbet!

I don't think I have an immediate need for LTC insurance at my age and current health (wife 54, I'm 53). Longevity runs in my side of the family. I'm just impressed by everybody on this forum site; I have been obsessed for the last several years to plan for early retirement, and have been reading tons of books on the subject. It seems most people including my parents in their 80's pass on LTC insurance because the cost of LTC insurance is not worth it. I guess when LTC insurance become more affordable, we can reconsider that option at that point.

[gauss]

Kauai did post some high level financials at this other thread.
http://www.early-retirement.org/foru...sed-74244.html

Not knowing the expenses in $, size of the potential inheritance (and the family situation) left some gaps however.

-gauss

p.s. Here is a thread on LTC that includes a Poll
http://www.early-retirement.org/foru...icy-60464.html

[youbet]

Quote:

Originally Posted by Kauai bound Thanks youbet! I don't think I have an immediate need for LTC insurance at my age and current health (wife 54, I'm 53).

Some posters on this site have made a compelling argument that the time you really need LTCI is when you're younger. If you had a totally disabling stroke today, what would your DW's finances look like if she was paying a $80k LTC bill for you for the next 5 or 6 years? EOL LTC, while more probable, can actually be easier to manage financially.

Quote:

It seems most people including my parents in their 80's pass on LTC insurance because the cost of LTC insurance is not worth it.

For the insurance companies to stay in business, premiums collected must exceed LTC bills paid. Folks who need LTC shortly after beginning their policies make out financially. Folks who pay in for decades and then need LTC for only a few months or perhaps never don't experience a financial bonanza. I have an older friend (77) who has been paying LTCI premiums for almost 20 years. At breakfast with him Friday, I calculated roughly what his premiums, if invested in the market over that time, might be worth today. My "math on a napkin" calculation showed that he'd have almost as much as the maximum payout of his policy. That happens. It's "insurance" and that's how it works. Had he needed to use the policy a few years after he started it, it would have been a huge financial benefit.

Quote:

I guess when LTC insurance become more affordable, we can reconsider that option at that point.

Some of us here wish insurance companies would offer high deductible LTCI with correspondingly lower premiums. I could be interested in a policy that did not pay a penny for the first two years of LTC and then paid for the next 8 if needed. I can easily afford for one or both of us to need 2 years of LTC. It's the small probability of needing a decade of care that concerns me. I'm assuming that a policy like this would be cheap since few folks need over 2 years of institutionalized care. That is, many people paying in a small premium and few collecting. So far, insurance companies don't offer such a thing.

[rodi]

Quote:

Originally Posted by Kauai bound I'm new to this wonderful Forum site with wealth of invaluable information and friendly members. I think I'm going to be hanging out on this site for a very long time.. so thanks admins, moderators, and participating members! I'm 53 making plans for my future. What is everyone doing for Long Term Care issues in regards to planning? I think I read a few people are buying LTC insurance at my age to lock in low insurance premiums. My parents in their 80's are well off (financially and health) but they do not buy LTC insurance. - not sure how to plan for this issue

This is my big issue with LTC - there is no "locking in" low rates - they can raise the rates, significantly even to the point of making it unaffordable. There are posts here from a few years ago where people had rate increases of 20% plus.

Here are some threads.
http://www.early-retirement.org/foru...ase-72090.html

http://www.early-retirement.org/foru...1-a-61985.html

[Live And Learn]

Quote:

Originally Posted by youbet Some of us here wish insurance companies would offer high deductible LTCI with correspondingly lower premiums. I could be interested in a policy that did not pay a penny for the first two years of LTC and then paid for the next 8 if needed. I can easily afford for one or both of us to need 2 years of LTC. It's the small probability of needing a decade of care that concerns me.

Amen to that !

[Walt34]

We did carefully consider LTCI and decided not to buy but instead to self-insure. However, there is sort of a workaround in buying into a CCRC but I wouldn't claim that it is cheaper or better than LTCI.

Sometime in the next five to eight, ten at most, DW and I will move to a CCRC and pay an entrance fee that is well into six figures. We have seen how well a CCRC worked out for my mother and what happened with FIL in his refusal to face the reality that no, you almost certainly cannot stay in your house until you die. And we are not going to have the help available that they did so we're going to make this happen well before it becomes a crisis. One of the bennies of many (but not all) CCRCs is that while you have to have enough money to be a good financial bet for them, many realize that a few will outlive their assets and they promise that they will eat the difference and not throw you out if you do. So in effect part of the entrance fee becomes almost a prepaid LTCI policy assuming of course that the CCRC lives up to it's end of the deal. That is admittedly a risk and for that reason we will pay to have someone go over their assets as well or better than they go over ours. But frankly I think it is a better bet than an insurance company that may raise rates to an unaffordable level before we even use the policy. As with so many other things "You pays your money and takes your chances".

If the worst-case scenario happens and I stroke out, consume all of my and joint assets before Medicaid picks up, then DW still has a decent place to live, no mad scramble to find one, no home maintenance to deal with, and a decent although not luxurious standard of living.

Leaving an inheritance is not a concern for us. Nice to do but not a priority so obviously this doesn't work for everyone.

[braumeister]

Walt34's approach is pretty much what we're planning as well. Probably in the 10-15 years out range, rather than his 5-10 year range, but basically that idea.