Planning for retirement usually centers on having enough money... getting it, and keeping it. Being "safe" often is discussed in terms of extending the number of years that one may be expected to live. The question that is often asked of those who have shared their economic status, is... "But what if you live 'til you're 95". Basically the chances of FIRECalc success.
While this is a good check on financial health, I would suggest there might be another consideration... that covers the matter of just how much money one plans and saves for to feel comfortable. Maybe a two level consideration, based on whether one is retiring on $500K or $3 Million.
Leading up to... understanding Medicaid.
Let me explain... It has to do with the unthinkable. A case where, for whatever reason, the assets may be depleted. Catastrophe! In any one of hundreds of possibilities. More serious for couples than for singles.
What happens if:
-Losing a lawsuit for a million dollars
-Alzheimers with 8 years in a nursing home @ 90K/yr
-12K/mo. cancer medicine
-Cannot continue planned part time consulting (etc.)
-Forced to take on cost of a family responsibility of any kind...
-Become disabled requiring home care
-Loss of assets
Not necessarily an instant loss, but a continuing cost that may deplete assets.
Cut to the chase: Medicaid can help, but how many people know when, and how much?
Just a few questions:
Where does medicaid aid come from? As in where does the money come from?
What laws apply? State? Federal?
Will Medicaid pay for medications?
Will Medicaid pay for home care?
Does Medicaid pay for food?
How much money can you keep to pay for living expenses?
Will Medicaid pay for out patient care? For how long?
What kinds of disability qualify for Medicaid?
Which Nursing Homes take Medicaid Payments?
Are there other government programs to consider, besides Medicaid?
What kind of Spousal shelters are available... home?, car?, pension? Social Security for self or Medicaid recipient? Annuity?
Spend down limits?
100 day Nursing home limit?
Pay relative for home care?
Effect of divorce?
5 year lookback?
Protected non-money assets?
You knew the answers? You've done your homework!
Just a partial list of questions that could require decisions. Many of these questions could have an effect on what you do, before any need occurs.
Worth of... your home, your car... how much to pay, and how many years in advance of medicaid needs to avoid lookback. ie. an $85K Tesla, vs. a 2003 Toyota... a $800K house vs a rental.
So... What retirees wish they had known? Maybe more like what did you know and when did you know it? It's very possible to find out too late, what you should
have done. So it's not a matter of dealing with the problem IF and WHEN it crops up. Much has to happen in advance.
"It's not likely to happen to me"... Probably... but that's what 66 Million other Americans thought, too... but that's the current enrollment.