Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 03-04-2017, 10:19 AM   #41
Gone but not forgotten
imoldernu's Avatar
 
Join Date: Jul 2012
Location: Peru
Posts: 6,335
To the subject of planning for long term care. This article gives average costs for differing types of care, as well as ranges for CCRC expenses.

Obviously the numbers will vary greatly depending on the level of care and the location of the facility.

Do not miss the part about "Contracts" (continuing care), as this can make a very big difference in cost, and long term security. I am aware of upfront continuing care costs that have been as high as $300K.

The study was from 2015.

https://www.payingforseniorcare.com/...are/costs.html

For assisted living costs near to you...
http://www.assistedliving.com/
__________________
If you want others to be happy, practice compassion. If you want to be happy, practice compassion.
--Dalai Lama XIV
imoldernu is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-04-2017, 11:21 AM   #42
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 17,338
Quote:
Originally Posted by Lsbcal View Post
It sounded somewhat conservative (like only 1 week in Italy?)
The young wife is a teacher, so we are currently limited by the school vacation calendar and one week in the spring is all we can get. In the past, we've been there for longer in the summer, but found it too hot for our comfort. I expect we'll take longer trips there after retirement.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 03-04-2017, 11:29 AM   #43
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Chicagoland again!
Posts: 35,267
Quote:
Originally Posted by Gumby View Post
The young wife is a teacher, so we are currently limited by the school vacation calendar and one week in the spring is all we can get. In the past, we've been there for longer in the summer, but found it too hot for our comfort. I expect we'll take longer trips there after retirement.
Not being subject to the school year made traveling much more enjoyable for us, and also easier to arrange. Early fall has been particularly good, with many options and good climate.
MichaelB is online now   Reply With Quote
Old 03-04-2017, 11:44 AM   #44
gone traveling
 
Join Date: Mar 2015
Posts: 3,508
Quote:
Originally Posted by DawgMan View Post
First, I acknowledge the answer is personal and depends on numerous factors, but this continues to have an affect on my willingness to launch into RE (targeting 3 yrs at age 55). My personal dilemma has been heightened by my dad's past 12 month battle with cancer, his recent death (age 77), and as Executor of his estate being exposed more specifically how he held/used his assets. Observations...
Sorry to hear about your Dad.

But you haven't indicated the most important point of all - Was your Dad happy with his life and his frugality?

We often focus on things like return on investment, breakeven points, maximizing returns, etc. But we forget to talk about the whole point of savings. Money is a means to an end, not an end by itself.

If your Dad was happy, it should be a lesson to you. If not, it's a different lesson.

For me, my grandfather died at 72. My parents are still around in their mid-80s. When I plan my finances and consider longevity, I use an age of 95.

I will not be collecting social security until 70. I withdraw what I need and want, which still projects to have plenty left over when both my wife and I are gone. I am very happy with my situation.
joeea is offline   Reply With Quote
Old 03-04-2017, 11:53 AM   #45
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
calmloki's Avatar
 
Join Date: Jan 2007
Location: Independence
Posts: 6,722
Just BTW - planning-wise, what do you all use as an inflation factor? I've been using 3%, but am curious about other's thoughts.
calmloki is offline   Reply With Quote
Old 03-04-2017, 03:01 PM   #46
Recycles dryer sheets
 
Join Date: Jul 2012
Posts: 281
If you are drawing 2% to be conservative and are ok to live on that amount. All that means is you might have worked a decade longer then you needed to. After all, work was fun and what would you have done with that decade anyway? You were probably too young to appreciate it anyway.
Shanky is offline   Reply With Quote
Old 03-04-2017, 07:05 PM   #47
Recycles dryer sheets
 
Join Date: Jan 2016
Location: Central Illinois
Posts: 186
At our last FA meeting, we were advised that if we didn't want to leave a large inheritance for our kids we should start spending. We've been giving our granddaughter $1K per month for college expenses the last two years & haven't missed the $$$. She will graduate this summer so that expense will end. We now feel confident to purchase a winter home in AZ and will close on it in two weeks! I just made sure the expenses of owning didn't go over $1K per month. We're cashing in some non-IRA investments and taking out a small mortgage.
calico1597 is offline   Reply With Quote
Old 03-05-2017, 07:32 AM   #48
Full time employment: Posting here.
 
Join Date: Oct 2015
Posts: 631
Quote:
Originally Posted by joeea View Post
Sorry to hear about your Dad.

But you haven't indicated the most important point of all - Was your Dad happy with his life and his frugality?

We often focus on things like return on investment, breakeven points, maximizing returns, etc. But we forget to talk about the whole point of savings. Money is a means to an end, not an end by itself.

If your Dad was happy, it should be a lesson to you. If not, it's a different lesson.

For me, my grandfather died at 72. My parents are still around in their mid-80s. When I plan my finances and consider longevity, I use an age of 95.

I will not be collecting social security until 70. I withdraw what I need and want, which still projects to have plenty left over when both my wife and I are gone. I am very happy with my situation.
I don't necessarily think he had any regrets at the end of the day, but I think his frugal nature conflicted with some things that he would say publicly he wanted to do, but just never pulled the trigger. As mentioned earlier, I get that we all put some tangible value/$$$$ on peace of mind and it is probably more difficult for some, despite what the calculators and FA say, to perhaps spend/use/give away more when we can (and maybe would want to if we could get over some mental barriers). My question really comes from the premise of 1) want to RE early, 2) believe in 1 or more formulas/calculators/advice as to what the number needs to be, 3) have RE plans/wants that require some use of $$... are our fears/conservative natures/OMY syndroms keeping us from maximizing our plans?
DawgMan is offline   Reply With Quote
Old 03-05-2017, 07:58 AM   #49
gone traveling
 
Join Date: Mar 2015
Posts: 3,508
Quote:
Originally Posted by DawgMan View Post
I don't necessarily think he had any regrets at the end of the day...

My question really comes from the premise of 1) want to RE early, 2) believe in 1 or more formulas/calculators/advice as to what the number needs to be, 3) have RE plans/wants that require some use of $$... are our fears/conservative natures/OMY syndroms keeping us from maximizing our plans?
I think your premise is somewhat correct. Some folks get so caught up in calculators and numbers that they forget to live their life. And some are so fearful that they live a miserly and miserable life.

That doesn't mean that one should live a YOLO life and avoid planning for the future. It's not hard to fully enjoy your life now while at the same time doing intelligent and informed preparation for retirement.

For my wife and I, our careful planning and live-below-your-means lifestyle is paying off as we enter our early retirement years. We both come from frugal backgrounds and learned how to be happy without feeling compelled to keep up with the Joneses. We spent where it made sense, but never wasted money. We paid for our sons' college educations and helped make sure their adult life got off to a good start. We've enjoyed our life so far and expect to enjoy our future years.

Retiring early is a luxury. It's simply not possible for some due to the current lifestyle they wish to live. For others, it's possible if and only if the appropriate preparations are done. Few of us can "have it all".

Sounds like your Dad was at peace with his lifestyle. I think that's a good lesson.
joeea is offline   Reply With Quote
Old 03-06-2017, 09:33 PM   #50
Full time employment: Posting here.
 
Join Date: Sep 2007
Posts: 959
Quote:
Originally Posted by imoldernu View Post
To the subject of planning for long term care. This article gives average costs for differing types of care, as well as ranges for CCRC expenses.

...
Do not miss the part about "Contracts" (continuing care), as this can make a very big difference in cost, and long term security. I am aware of upfront continuing care costs that have been as high as $300K.
/
We live aways out from the nearest large town where we do most of our shopping. On the drive to town, we pass a large building that was an extended care facility.
Operative word: WAS.

It was closed down several years ago and is now abandoned. All the contracts in the world won't help you if the facility goes bankrupt.

I always wonder what happened to the people who were living there.
rayvt is offline   Reply With Quote
Old 03-07-2017, 02:39 AM   #51
Thinks s/he gets paid by the post
 
Join Date: Oct 2012
Location: Reno
Posts: 1,058
Part of this depends on whether you plan to leave a legacy to children or charity or family, etc.
I'm still working online parttime for half of my former salary, and can set my own hours, so it's a perfect ease into retirement. I semiretired 20 months ago tp Reno, DW is still working (although for less than half her salary in Houston), I was renewed for another 2 years (I'm 58). I feel very lucky (fortunate?) That context down

  • in two years (at 60 with DW at 56), I plan to draw 5-5.5%
  • I plan to see what happens; in the event of a stock crash I would consider taking SS early and letting DW wait until either full retirement or later.
  • At the point I draw SS, I intend to cut back withdrawals to 4-4.5% (or less)
  • When DW draws SS, I probably will cut back further to 3.5-4%.
  • We have a great deal of slack in the budget, with about 30% targeted to vacation, some money to the sons and the new grandbaby. That can be cut, if needed.
  • At 70.5, I will consider increasing withdrawal %, certainly at 75.
  • I've considered some withdrawals for Roth in a few years after I am no longer working, but not a lot. The variables are too high.
  • The above is flexible; the known unknowns are bear markets, duration, etc.
  • FIRECalc gives me a 100% success factor, assuming we continue working for a few years. If not, I'll dial down the withdrawal number and the European vacations every year may go. Upping the planned withdrawal/amount 10% makes it dicier, but with a 93% success rate, which I would take.
  • We don't intend to leave a lot of money to the kids, but FIRE indicates that's likely anyway. I'd prefer to increase withdrawals and give most to them while we're alive.
I'm going skiing tomorrow morning, if I-80 west is still open.


Quote:
Originally Posted by DawgMan View Post
..

- Are we (most people on this site who have a RE strategy) being too conservative in our earlier years SWR?

- Are you factoring in SS in your future income projections and at what age are you planning to take it? This question is primarily for those of you in your 50's or less.

- Other than Roth conversions and managing your tax rate, how are you looking at the impact of RMDs at 70 1/2? Should we be taking more $$ sooner?

It seems to me that most people on this site are planners and probably more conservative by nature as am I. I also know peace of mind and the "sleep factor" weigh into at least my strategy along with planning for "what ifs". None the less, particularly after seeing my dad's situation play out, there is a part of me that says go bigger in the early years while more physically able and then perhaps scale down in the later years. Thoughts?
RobLJ is offline   Reply With Quote
Old 03-07-2017, 07:08 AM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2011
Posts: 6,476
The first question- "Are we (most people on this site who have a RE strategy) being too conservative in our earlier years SWR?" is one that everyone worries about I think.

My mom is 87, quite spry and alert, still drives etc but she's lucky to spend a tenth of what she used to spend. She mostly goes out to breakfast and then spends the rest of the day reading and watching TV.

I know she wished she'd had had a better time when she was able (in her case, that's hard to imagine how much more of a better time, but...)

I often tell the story of a guy who asked me my age at the time (60). He said: "You do realize that even if you live to be 90, you only have 15 or 18 good summers left, right? 20 at the max!"

Having said all that, one of the fundamental issues discussed on this forum is the longevity vs spending vs quality of life issue.

We all know someone who died or became disabled right before or after RE (my brother for instance). Then we all know someone who'd lived to be 96 and is in a nursing home drooling.

In my brother's case, our consolation is in the knowledge that when he was able, he had a good time, lived well and did all the things he wanted to do. "At least he had a good time when he could" is what we say.

On this forum, I often malign my grandfather who had a NW of mid 8 figures but never spent a dime in his old age; sat in the dark watching TV. On second thought however, he did have a great time as a young man...like his daughter, perhaps too much of a good time.

Personally, (maybe genetics) I'm for spending a bit more now and scaling back as time goes on. You never know. If I'm 95 years old, I'm not sure I'll care how my LTC is getting covered.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 03-07-2017, 07:15 AM   #53
Full time employment: Posting here.
FIREmenow's Avatar
 
Join Date: May 2013
Posts: 756
I think this is just risk management. you can't have it both ways. You want the money there if needed at the end, but there is a probability of some number that you won't need it. You can't know.

How best to manage the risk? It comes down to longevity insurance, right? Doesn't buying an SPIA or similar with some LTC and other coverages move this risk management out of one's own financial domain into the insurance company's world?
__________________
Believe me, my young friend, there is nothing - absolutely nothing - half so much worth doing as simply messing about in boats. ― Kenneth Grahame, The Wind in the Willows
FIREmenow is offline   Reply With Quote
Old 03-07-2017, 10:54 AM   #54
Thinks s/he gets paid by the post
kaudrey's Avatar
 
Join Date: Feb 2006
Location: Alexandria, Va
Posts: 1,042
Sorry for your loss. My thinking lately has adapted a little due to my family's experiences. Parents both alive at 80; mom starting to suffer from Alzheimer's (and her mother lived to 94 in a nursing home for 13 years with it); dad healthy; other grandparents lived mostly healthily until their mid-80s.


I expect to spend a bit more when I first retire at 57 (I am 48 now). I want to travel while I am hopefully healthy and very mobile. Then I expect some middle years with lower WRs as I slow down but hopefully don't face too many health issues. Then in the later years plan for retirement community or nursing home. So that's the "U" shaped spending curved linked to earlier by others.


I do plan on SS; my spreadsheet has it at 75% of what I would get if nothing changes. And my retirement #s are conservative, because I'd retire earlier if I wasn't handcuffed by my desire to keep my Federal health benefits, which I lose if I retire before I turn 57. I'm not willing to do that (at least right now).
__________________
Two roads diverged in a wood, and I - I took the one less travelled by...
kaudrey is offline   Reply With Quote
Old 03-07-2017, 10:56 AM   #55
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,687
https://www.advisorperspectives.com/...ement-expenses

"Research has shown that individual and household spending declines in real-dollar terms upon and following retirement. Yet most financial advisors still use traditional retirement planning approaches that target constant real-dollar spending for the client’s planning period. This targeting of constant dollar spending in retirement has more to do with following traditional practice and software limitations rather any specific desire to meet client needs."

this should probably be in its own thread
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Old 03-07-2017, 06:57 PM   #56
Thinks s/he gets paid by the post
 
Join Date: Jul 2015
Posts: 1,059
Quote:
Originally Posted by travelover View Post
I've said it before, but I have no idea what the last years of my and DW's life will cost. We could both die quickly (and cheaply) or live for years in an extremely expensive Alzheimer's ward. The worst case would be one of us bankrupting the other. My solution is to continue to live well, but not extravagantly. If we leave money on the table, so be it.
Yep, that's the rub. If I were single, I would be far more aggressive living it up while still younger. In reality, I'm concerned that one of us could develop an expensive illness that could bankrupt the other. I'm also very concerned about the future of ACA and the rising cost of healthcare, regardless of the outcome. These are just the "known unknowns", who knows about the "unknown, unknowns".

In all fairness though, we are spending 15% below budget after 2 yrs of FIRE. Now that I'm not compelled to go to w*rk everyday, I'm just plain happy hanging out at home or with club and church friends.

DW and I can't seem to agree on how to best spend this "extra 15%". One of us would propose something like travel or home remodeling, but the other thinks it's too much of a bother. So we end up not spending, but this is fine with me since a lower SWR helps me sleep better.
__________________
Living the dream...
FreeBear is offline   Reply With Quote
Old 03-07-2017, 07:55 PM   #57
Thinks s/he gets paid by the post
jollystomper's Avatar
 
Join Date: Apr 2012
Posts: 3,882
My guess is that most folks are being conservative with their SWR due to the vast unknown of future health care costs. It was much more predictable when retiree health benefits were common, but are much more unpredictable these days. I know of many at my Megacorp who can retire with a pension, but hope to keep working until they are eligible for Medicare because of this. Even though I have factored in a large amount for healthcare costs, it is probably the major reason keeping me from being totally "all-in" on retirement.

At 59 we have factored in SS, but are not planning to take it early unless we really need it. It will more be a question of our desired lifestyle and financial situation at the time.

RMDs are definitely a consideration.. with a pension, cash, and investments outside of our retirement accounts, we are not forced to withdraw form them, but that would mean a very large RMD hit if we wait. SO our planning does take into account drawing down retirement accounts to reduce the forecasted RMD.

Just from observing my mom, who lived to 86 (Dad died at 72 so did not have a lot of years to enjoy his retirement), her spending definitely slowed down in her last several years. She did not get Alzheimers or cancer, her body just sort of wore down. But she did a lot for traveling and activities up through her early 80s, and was very content with taking things easy and enjoying more "time with family and friends" than time with things, or going to see things, her last few years.
__________________
FIREd date: June 26, 2018 - wwwwwwhat a rush!
jollystomper is offline   Reply With Quote
Old 03-08-2017, 06:14 AM   #58
Full time employment: Posting here.
 
Join Date: Sep 2007
Posts: 959
Quote:
Originally Posted by FIREmenow View Post
Doesn't buying an SPIA or similar with some LTC and other coverages move this risk management out of one's own financial domain into the insurance company's world?
No it does not. It just changes the specific risk. You have simply changed the risk to a counter-party risk.
rayvt is offline   Reply With Quote
Old 03-08-2017, 06:48 AM   #59
Thinks s/he gets paid by the post
 
Join Date: Dec 2009
Location: Alberta/Ontario/ Arizona
Posts: 3,393
Quote:
Originally Posted by rayvt View Post
No it does not. It just changes the specific risk. You have simply changed the risk to a counter-party risk.
Yes, but surely this is a much lower risk?
Danmar is offline   Reply With Quote
Old 03-08-2017, 08:10 AM   #60
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,463
Send a message via Skype™ to kcowan
Quote:
Originally Posted by calmloki View Post
Just BTW - planning-wise, what do you all use as an inflation factor? I've been using 3%, but am curious about other's thoughts.
I use 4% mostly because much of our costs are in Mexico and it is being hit by peso deflation. I also distrust government figures as not being representative of retired people.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Should have moved annuity over sooner dtbach FIRE and Money 5 01-13-2017 04:49 PM
Power of compounding...start sooner, save more often kgtest Young Dreamers 4 04-13-2016 01:36 PM
What was I waiting for. I should have .... sooner! easysurfer Other topics 35 12-12-2012 01:47 AM
Anyone withdrawing more than 4%....? tkp FIRE and Money 46 08-03-2007 06:02 PM
Earning Income vs. Withdrawing savings renferme FIRE and Money 18 08-18-2004 07:09 PM

» Quick Links

 
All times are GMT -6. The time now is 07:30 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.