LTC - I have none. Betting on an alternative.

[bingybear]

Just a caution about CCRCs

+1
I looked up a very highly regarded CCRC locally. Looked at there "financial position" statement. Their bonds are rated BBB-.

I would think handing over your savings to cover end of life care would be done in a place you thought was safe. Do you invest your safe money in assets rated BBB-?

 

[Huston55]

To me, the problem with long term care insurance is that it is a prepayment plan, rather than an insurance policy. What I'd be interested in is something that has only a 10 or 20% chance of paying out, to take away the largest financial risk.

We can probably afford $150,000 in combined long term care out of pocket, which probably has a 30 or 40% chance of happening. What I'd like to insure against is the unlikely, but devastating, possibility of $10,000 a month in care for 5-10 years.

Exactly! This is the reason we chose to NOT buy LTCI.

The link below is to the first in a short series of excellent posts by Darrow Kirkpatrick @ "CanIRetireYet", where he analyzes LTCI. Links to subsequent LTCI posts can be found on the site.

Long-Term Care Insurance: Beyond the Sales Pitch - Can I Retire Yet?

 

[LARS]

+1

I looked up a very highly regarded CCRC locally. Looked at there "financial position" statement. Their bonds are rated BBB-.



I would think handing over your savings to cover end of life care would be done in a place you thought was safe. Do you invest your safe money in assets rated BBB-?

My this thread has taken a depressing turn. But what's a rich boy to do (poor is easy)?

 

[marko]

We recently ran the cost of nursing homes for both of us through FireCalc and were surprised that we'd be good for an unlikely 20 years. Our current spending gets cancelled out of course so the actual cost is about 1.5X of what we spend now.

 

[wmc1000]

No LTC for us either. We will self-insure and have at least enough in "unneeded" assets to cover 1 of us for up to 3 years so as long as those assets appreciate at a rate close to the escalating costs of NH care we will hopefully be A-OK. Genes seem to be on our side as DW's parents lived a long life without NH care, my Mom went at 80 within a week of going into a hospital for care and my Dad, while weaker is still in his own home at 90.

 

[athena53]

We recently ran the cost of nursing homes for both of us through FireCalc and were surprised that we'd be good for an unlikely 20 years. Our current spending gets cancelled out of course so the actual cost is about 1.5X of what we spend now.

Yeah, you save a lot when travel, car expenses, most charitable donations, home maintenance, etc. are cut to zero, either because they're no longer part of your life or they're included in the cost of the nursing home.

 

[Huston55]

We recently ran the cost of nursing homes for both of us through FireCalc and were surprised that we'd be good for an unlikely 20 years. Our current spending gets cancelled out of course so the actual cost is about 1.5X of what we spend now.

Interesting that you arrived @ 1.5 X your current expenses. One of the CCRC guides I've recently read says to us 1.6 X current income as the factor (rule of thumb) to determine if you will qualify for entry into the CCRC.

That likely means that 1.5 +/- is a good rule of thumb to evaluate your ability to comfortably live in (qualify for) a CCRC.

 

[marko]

Interesting that you arrived @ 1.5 X your current expenses. One of the CCRC guides I've recently read says to us 1.6 X current income as the factor (rule of thumb) to determine if you will qualify for entry into the CCRC.

That likely means that 1.5 +/- is a good rule of thumb to evaluate your ability to comfortably live in (qualify for) a CCRC.

It was just a ballpark number I used but I also factored in both of us for 20 years which I think is highly unlikely.

We're both in good health now (age 65 and 59) so the likelihood of us both needing NH care in the next 10-15 years is pretty low. In 15 years I'd be 80 and a 20 year NH stay from that point would be a real long-shot. (I could imagine one of our heirs coming in one afternoon and ummm....'accelerating' their inheritance! aka 'pillow time')

Our attorney who specializes in "elder law" told us that most NH stays (yes, there's always exceptions) is 3-4 months.

 

[NW-Bound]

I have two aunts. Let's call them Aunt Ant and Ant grasshopper.

Aunt Ant: married, stayed married, worked, and invested for retirement. Husband long gone, she lives in a high-cotton retirement community. One bedroom apartment that has all kinds of social programs and well trained personnel available at her beckon call. To give you an idea of the place, her neighbors are an ex-governor and several other prominent citizens in Florida. But, its still a retirement home/community. Its just dressed up nicely and is quiet and peaceful. She has a LTC policy that will last 5 years and allow her to spend her final years in this nice facility with excellent care.

Aunt Grasshopper: married, divorced, and partied most of her life, jumping from short term job to short term job. Never remarried. Never saved for retirement. She now lives in a retirement facility on government financial support. She has nothing. She is 100% dependent on the government. The facility is a POS. Its a room, with a roommate that is noisy. The climate control is never set right. There are other residents constantly standing or sitting in the hall ways. The door alarms go off constantly (memory care patients set them off when they walk through them). The workers are unskilled and low wage workers that could careless about the residents or even keeping the place clean. The place is an absolute nightmare. She has no LTC policy. This nightmare of a facility is the last place she will live when the light go dim for her. Depressing.

My problem: I don't like either situation. Yeah, Aunt Ant is in a nicer place with first class support; and, Aunt Grasshopper reaped what she failed to sow. Neither are the way I want to spend my final years...

As others have pointed out, it is not possible to live alone when you are that weak.

I hope that when I get to that stage, I become so sad that I would not last long, no matter how nice the surrounding is. My FIL spent more than 2 years in a nursing home, and many of his room mates much younger lasted a few months. When my body deteriorates so badly, I think my will to live will shrivel up.

 

[Marita40]

I am saving and have LTC mainly to avoid the room with the roommate that Aunt Grasshopper has. My idea of hell...
Honestly I'd have no problem with Aunt Ant's CCRC when the time comes that I can no longer live alone in my house!!

 

[redduck]

Aunt Ant: married, stayed married, worked, and invested for retirement. Husband long gone, she lives in a high-cotton retirement community. One bedroom apartment that has all kinds of social programs and well trained personnel available at her beckon call. To give you an idea of the place, her neighbors are an ex-governor and several other prominent citizens in Florida. But, its still a retirement home/community. Its just dressed up nicely and is quiet and peaceful. She has a LTC policy that will last 5 years and allow her to spend her final years in this nice facility with excellent care.

This is a better living situation than I have right now.

 

[NW-Bound]

But Redduck, your house is larger than a 1-bedroom apartment. And do you want to rub shoulder with an ex-governor?

Sorry for my prejudice against politicians.

 

[Chuckanut]

When they offer a LTC policy that starts after 6 - 12 months in a care facility, I will strongly consider buying one. Right now they are just to expensive and have no guarantee that they will not price me out of the market just as I approach the time I may need it the most.

 

[redduck]

But Redduck, your house is larger than a 1-bedroom apartment. And do you want to rub shoulder with an ex-governor?

Sorry for my prejudice against politicians.

Well, if the ex-governor were a genuine babe, it might be OK.

 

[Chuckanut]

Well, if the ex-governor were a genuine babe, it might be OK.

Ex governor's know a lot of wealthy widows. Don't sell them short.

 

[Teacher Terry]

When my Mom was dying of cancer just short of 90 she still made her meals, cleaned etc up to a week before she died. Her sister at 92 still does the same and lives alone. So I don't think it is inevitable that we can't do these things as we age.

 

[Fedup]

I think the more you do the longer you can do these things. That's one reason I like to push myself to do things.

 

[NW-Bound]

When my Mom was dying of cancer just short of 90 she still made her meals, cleaned etc up to a week before she died. Her sister at 92 still does the same and lives alone. So I don't think it is inevitable that we can't do these things as we age.

This was not the case with my late father, late father-in-law, and now my mother-in-law. All three were active, and reasonably fit. About 4 years before my FIL's death, people meeting him complimented on how well he looked. He declined quickly, and lingered on for about 2.5 years.

Some people deteriorate quickly before passing. Some can linger for a couple of years. It's hard to predict.

 

[NYEXPAT]

I think the more you do the longer you can do these things. That's one reason I like to push myself to do things.

I just showed this to my young wife.

 

[audreyh1]

When my Mom was dying of cancer just short of 90 she still made her meals, cleaned etc up to a week before she died. Her sister at 92 still does the same and lives alone. So I don't think it is inevitable that we can't do these things as we age.

That may be your experience. It was past my Dad once he reached 85, even though he was able to drive a little longer. Thank goodness he had a monthly cleaning lady that kept the house up, and he had places in town to take his meals.

Personally, I don't want to be doing those things when if I reach my 80s.

 

[Huston55]

Here's a link to an article citing data which shows, on average:

- People who reach age 65 have a 50-70% probability of needing some form of long term care.

- Of those who need long term care, the average period of care is 4-5 yrs

What are the Odds of Needing Assisted Living?

 

[Fedup]

I just showed this to my young wife.

That's what I told my young husband too. He's being vacuuming when I'm in my art class.

 

[Scuba]

+1

I looked up a very highly regarded CCRC locally. Looked at there "financial position" statement. Their bonds are rated BBB-.



I would think handing over your savings to cover end of life care would be done in a place you thought was safe. Do you invest your safe money in assets rated BBB-?

Very important to feel confident about a CCRC's financial health. Two thirds of CCRC's in the US don't even have an investment grade credit rating (i.e., BBB- or better); most are non-rated.

 

[Amethyst]

OP didn't answer my question, but I'll bet the problem was some form of "eewww, having to be around all those OLD PEOPLE!"

Old people. We don't even like 'em when we are 'em....

But Redduck, your house is larger than a 1-bedroom apartment. And do you want to rub shoulder with an ex-governor?

Sorry for my prejudice against politicians.

 

[tn3sport]

May I ask what you specifically don't like about Aunt Ant's situation? I realize you prefer your home by the lake - everybody would rather be in their own home than any facility - but are there specific things about her facility that turn you off (other than the mere fact that it is a retirement community)? Is the facility "institutional" or depressing somehow, is Aunt a virtual prisoner, things like that?

Just wondering, since I'd think people of means would have the desire, and the ability, to purchase residence options that almost anybody would like.

Yeah, first off, I openly admit its all me and my opinion, observation, and personal desires.
Aunt Ant had to work low-wage jobs until she was 80. The low wages combined with no spouse made it nearly impossible to save for retirement. Her last couple jobs were pure charity by her employer. A security guard. Picture an petite 80 year old security guard with nothing more than a whistle. At any rate, when she became unable to work due to the physical, schedule, and beginning onset of memory issues, she moved from a subsidized apartment to a fully funded government provided health facility.

I visited her at that facility. Judging by the asbestos tile floors used in supermarkets in the 1970's, I knew about how old the building was. All the tenants shared rooms. Some tenants shouted constantly asking for help or attention. (Almost like extreme variations of Turrets Syndrome) To escape this, roommates would hang out in the halls. Walking the narrow halls meant weaving through wheelchairs and gurneys. Noisy, echoing hallways. Due to the age of the building, floors, drafty windows, nothing ever looked clean. As I sat and talked to my Aunt, we reminisced about the old days. But, were constantly interrupted by door alarms that went off anytime a "memory" patient got too close to the door. Fire alarm volumes. This happened about every 10 minutes. The staff had to investigate every alarm, which meant you heard the piercing noise until they validated it was a false alarm and then, reset the door. I don't how people could work in that environment, much less live in that environment.

In a nut shell, this was my sampling of what you get when you don't plan and are 100% relying on the government to care for you.

So, now that I'm still working and in my early 50's, I want to plan for something better than what I observed. That's why I'm not ruling out any options (except maybe buying a Metlife plan....), but investigating everything.