W2R
Moderator Emeritus
This another expense I think should be cut. It is unrealistic for someone with her very small nest egg be paying 8% of her annual $20k income for this type of insurance.
I agree, and in fact I do not carry LTC insurance myself. But I waffled because some people feel it is essential. If she eliminates it, she could budget a much more liveable $3100 for miscellaneous spending money, instead of $1500.
Also, if she takes in 1-2 of her friends as renters/roommates, she might be able to keep her pets (which I would imagine might be a huge issue for her).
The budget needs to firmly cover food, shelter, medical, and utilities. I think she could live on a lot less for food, but wanted to generously fund it. A small steak (or whatever) once a week can go far in making someone on a tight budget feel less deprived.
I would imagine that her first reaction is going to be, "You just want to keep me from spending my money so that you will inherit it!" so the OP will probably have to somehow get her to accept the standard 4% SWR as reasonable in her own mind.
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