90 plus lifestyle & spending

[Aus_E_Expat]

We are all told to make sure our retirement nest egg does not run out and that many of us now have a good chance of living well into our 90s (in my case, based on genetics, it seems to be a good probability), however, have any of us actually planned for a 90s lifestyle?

If we live to our 90s, it does seem that for all but a very small number, our spending will be greatly reduced and our lifestyle will largely consist of sitting at our home (whether our own home or a nursing home).

Should our financial model recognise a substantial decrease in spending as we get to 90? Or should we continue to assume we will continue to spend and consume?

Also, has anyone given serious thought to what their lifestyle will be like in their 90s (maybe some contributors are already there).

Be interested to hear people's thoughts.

 

[Katsmeow]

Yes, I have thought about it. My mother died at 94 so I saw how she lived. And, yes, she didn't spend a lot of money in her later years. In her last 10 years of life she saved about $50,000 and her income was around under $25k a year. She just didn't have that much she wanted to spend. Yes, she did spend for some things she didn't spend money for when younger. My father died almost 20 years before her. She hired someone to take care of the yard and the last few years hired someone to occasionally come in and clean her house.

Healthcare was not really a huge problem for her. She had original Medicare and a supplement and Part D coverage. Her biggest later life medical cost was dental since there was no insurance for that.

But, she didn't go out much in her 90s and rarely spent much. She was relatively healthy until 2 months before she died. She had chronic conditions but didn't need long term care. She lived on her own.

I do think my life will be somewhat different. My mother grew up in the Depression and was frugal her entire life. And, she never learned how to use the internet. So if she couldn't go to a store to buy something she didn't buy it. She didn't have cable TV, etc. I think people of our generation are much more used to spending money online so I think we may have more things we might want to spend money on than she did.

That said, I definitely think spending will go down. Just this year has shown that. That is, being home most of the time due to the pandemic we are spending less money. Some things haven't changed much such as groceries. Dining out is down a little since it is only take out now. Clothes? I have bought some but stuff to wear around the house mostly so not that expensive. Gasoline? That is down more than half since we only drive places we really need to go to. No travel. We don't travel much usually, anyway, but now it is non-existent. I could go on. The point is that I think it is an example of how things might be in another 20 years or so.

 

[DrRoy]

I'm thinking less hiking and more cruises.

 

[Dtail]

Agree except for potential higher medical costs, I would think spending would go down in one's 90's. If healthy though, possibly more cruises.
Bernicke's retirement spending calculations uses this decreasing spending concept, as one ages into their 70's and later.

 

[RetireBy90]

Mom passed at 88, close to 90 and her spending was never that high. Lived most of retirement by herself in her house but last 8 or 9 years she had to move to assisted living center. She didn't spend much out of pocket there, no utilities and I paid her cell phone bill. No car so no payments, gas or insurance. However, much of the difference between her spending in her 60's and 70's were offset with the cost of the assisted living. For her, monthly outflow was slightly higher in 80s.

 

[braumeister]

much of the difference between her spending in her 60's and 70's were offset with the cost of the assisted living.

This is a big deal. My mother's expenses in her 90s were many times her highest expenses during the rest of her life. Assisted living costs and later memory care costs were enormous.

 

[folivier]

DMIL just passed at 90 and have an aunt IL at 98. Both of their greatest expenses were paying for sitters 24/7/365. Other than that they each had house expenses and very small food expenses.

 

[pb4uski]

DM will turn 90 this week. She barely spends what she receives in SS.

 

[RunningBum]

In their mid 80s, my parents' spending has just soared to more than double any other time in their life, because my mother is now in memory care. Medicaid, you say? Those options look considerably inferior and farther away from the rest of the family.

It's a big unknown. Some will spend a lot less in their 80s and 90s, and some will spend a lot more. Out of the likely cases to happen, do you plan for your best case, or worst?

 

[tmitchell]

I've got an uncle who just turned 89. Hasn't driven in 3 years and mostly watches tv and eats pie. He's pretty content but can't be spending much at all.

My grandmother lived to 99. Last 7 years after massive heart attack were spent hanging out with cognitive decline/dementia. She was lucky to have a daughter who took care of her, so not a ton of medical care. Also wasn't spending anything beyond basics.

My other relatives who lived into their late 80's were similar. Lots of longevity but the final decade was not about making purchases or traveling, that's for sure.

Curious how much nursing homes have cost folks here? And memory care? @braumeister would you be willing to share?

 

[RunningBum]

Curious how much nursing homes have cost folks here? And memory care?

My mother is paying $6400/month ($76K/yr) for memory care in the midwest, which is probably a lot cheaper than people on either coast would pay for a similar facility. My father pays $2900/month ($35K/yr) for an independent living studio in the same retirement community. All meals included for both. $111K/yr total. They were living pretty steadily on $40-50K since retiring at 62 before this. As other expenses dropped, their retirement community costs rose.

 

[garyt]

This is a big deal. My mother's expenses in her 90s were many times her highest expenses during the rest of her life. Assisted living costs and later memory care costs were enormous.

Yes, if you're unlucky enough to need assisted living and memory care things get crazy quickly. My MIL pays $92K a year for memory care. My FIL had to move in with his son. And it's still a bleed on their savings and won't last much longer.

 

[flyingaway]

My father will be 90 in the coming January. He has some problem in walking. We hired someone to help him. He is very frugal and spends very little money.
I cannot think of going on cruise in my 90s on a wheelchair. Lots of things can happen, falling, breaking bones, medical emergency, etc. I will probably be satisfied if I can and have the money to play slots in casinos in my 90s.

 

[CyclingInvestor]

Curious how much nursing homes have cost folks here? And memory care? @braumeister would you be willing to share?

Memory care for my mother in Oregon cost $5500/month in 2017 for a single room in a nice facility.

 

[braumeister]

My mother is paying $6400/month ($76K/yr) for memory care in the midwest, which is probably a lot cheaper than people on either coast would pay for a similar facility.

My MIL pays $92K a year for memory care.

Just to add a data point, when my mother died in 2012, her memory care cost was over $5,600 a month ($67,000/year) in a low COL area (not including medications, etc.). That would be equivalent to $75,000/year today, so roughly the same as RunningBum.

 

[Car-Guy]

I had planned for 100 but now realize that 85 to 90 is much more likely.. (At best) So I'm not concerned with the money aspect even if a quality LTC facility is in the cards for me or the DW... However, quality of life does concern me a lot... Not sure how I'll handle that!

 

[tb001]

Agree with others that say expenses in your 90s can be much higher due to medical costs. My MIL has a fantastic pension, SS and supplemental insurance, so never really needed her savings, that were substantial. She’s now in her mid 90s and burning through those savings quickly because she needs in home care. Failing memory and just help with daily living tasks.

My step father is also in his mid 90s and so far healthy, but their spend has gone up as they need to hire more help around the house/outside. He’s at an age where transitioning to a new home with less maintenance would be a monumental task, but so is the upkeep on his current home.

It’s a good reminder to not count on any inheritance! The dollars can go fast at that age. It’s also a good reminder to be mindful of this if there’s a decent age or health gap between spouses. My mother is 14 yrs younger than her husband and Though she’s slowing down a bit at 80, is still going strong. If her DH needed significant medical care, her retirement funds would be drastically cut.

 

[W2R]

This is a big deal. My mother's expenses in her 90s were many times her highest expenses during the rest of her life. Assisted living costs and later memory care costs were enormous.

Same here with my mother, who lived to 98. She didn't need memory care, but she needed skilled nursing care much of the time. Most of her nest egg went towards these and similar end of life expenses.

Basically, should I be fortunate enough to live into my 90's, it's fine if I spend less than before but I don't want to be in a position where I *have* to spend less. So, I'm planning for higher expenses in old age.

 

[chris2008]

DM, 92, in assisted living still saves from her pensions/SS.
I try to make her buy some nice things to replace worn out stuff like sofa, chair.
But "who will take the old things?"
Habits die hard.

 

[tb001]

Same here with my mother, who lived to 98. She didn't need memory care, but she needed skilled nursing care much of the time. Most of her nest egg went towards these and similar end of life expenses.

Basically, should I be fortunate enough to live into my 90's, it's fine if I spend less than before but I don't want to be in a position where I *have* to spend less. So, I'm planning for higher expenses in old age.

Yes, but expenses can get SO high! And I didn’t want to wait until we were at 120% success—we’re at about 95% success rate, though have decent fat to cut if necessary. Our home is a significant % of our net worth and requires a significant amount of annual spending, so we’re using that as our ‘elder care‘ funds if we hit a bad sequence. My assumption is that at some point we’ll downsize if needed, which will cut expenses and add to the liquid asset pile. But I can already see that leaving our family home will be very hard for DH.

 

[pacergal]

I am figuring what I don't spend on travel or other "fun", will probably be spent with assistance, either in a medical facility if ill or frail, or with home care/yard care/personal care if able to live at home.
Parents/Grandparents mostly lived into mid 80's-100, so some longevity there.

 

[harllee]

My mother, age 89, is still in great shape. She lives in an independent living apt in a CCRC. She still drives her car and pre Covid still traveled (bus tours and cruises) and ate out in restaurants, etc. I would say her expenses in the last 10 years have remained about the same. Now if she has to go into assisted living or skilled nursing her expenses would drastically increase but she does have LTC insurance . At this point mother has paid more in premiums on the LTCI than she could ever get out of it so the insurance company has made a lot of money on her.

 

[MichaelB]

This is a big deal. My mother's expenses in her 90s were many times her highest expenses during the rest of her life. Assisted living costs and later memory care costs were enormous.

In their mid 80s, my parents' spending has just soared to more than double any other time in their life, because my mother is now in memory care. Medicaid, you say? Those options look considerably inferior and farther away from the rest of the family.

It's a big unknown. Some will spend a lot less in their 80s and 90s, and some will spend a lot more. Out of the likely cases to happen, do you plan for your best case, or worst?

I agree with these. Discretionary spending may fall as one ages, but total spending is likely to rise due to uninsured health care needs. Even if one stays healthy enough to avoid a senior care facility and stays at home, the cost of in-home health care support can be just as high.

Lots of research points to a decline in discretionary spending, much of which is based on Census Bureau data. The same data sets also shows similar declines in income. It’s not clear if the decline in spending is a choice or a response.

 

[braumeister]

I agree with these. Discretionary spending may fall as one ages, but total spending is likely to rise due to uninsured health care needs.

And yet a few inspirational counterexamples keep me hoping for the best.

We had a neighbor a couple of decades ago who still put on a suit and took the bus to his downtown office every day at the age of 101. He didn't do anything but read the paper once he got there, since he had sold the business long before, but he kept his office just to have a place to go. Sharp of mind and OK of body, he was lucky enough to go quickly when he finally went.

People like that give me great hope, despite the sobering statistics about "most" elderly.

 

[Livefree]

My Dad is 93 and lives in an Assisted Living facility that's really nice. The cost is enormous! $7500 per month. ($90k). He has income streams, pension, dividends, social security that pay for more than half the total. I take care of his bills, finances etc. but it still kills me to write that check!