Corporate techie considering retirement/transition

[someguy]

I never said or even suggested that Medicaid LTC planning was illegal so I'm not sure why in the world you are bringing it up. It is legal. Whether it is ethical to as you state, "shift cost from a household that can technically bear that cost to taxpayers at large" is a different question and I think not.

My point was both LTC planning and ACA subsidy planning are similar as I originally opined because they share a number of major commonalities: 1) both are indisputable legal 2) both shift an individual burden onto the greater taxpayer population and 3) both are sources of potential ethical debate.

As OP said, in his situation I would be giving 100% consideration to my SO and me and 0% consideration to taxpayers at large. That could be a tragedy of the commons/moral hazard failure on my part, but that's where I am.

I agree with you that LTC policies don't make sense.

 

[Philip12]

@someguy Yes, the possible part time employment options make sense. I work at home now, but my company is asking everyone to come back to the office (at least 3 days/week) starting early next year. I submitted a request for an exception, so I'll find out soon if that was granted or not.

If I don't get the exception, I could still have a health care person or social worker to help DW during the days when I'm commuting to the office. If that works, I could keep working longer and build the savings up. I could increase savings by 200K to 300K per year depending on market conditions.

If I do get the exception, I can work at home longer and probably keep that going for long enough to have a LTC fund.

Part-time work at my company is possible. That could be a contract/vendor situation as well as a part-time salaried employee (if approved).

The other options I mentioned are also still out there if the numbers start to get low enough to be a risk. Selling some of the land, but keeping my primary residence, could make a lot of sense in certain LTC scenarios. Eventually, for my own LTC, I won't need or be able to manage land, so selling the primary residence could help cover my care needs.

 

[livingalmostlarge]

If you suffered health problems that required expenses that were multiples of your planned spending, would you want all your joint NW to be spent and your SO to live potentially decades of their remaining retirement with $30K total NW (or whatever Medicaid's current spend-down requirement is)?

This is mostly a situation that occurs in a married couple when one experiences an "early" AND drawn-out medical problem that creates a large life expectancy gap. Obviously, greater differences in age can exacerbate this.

Most people are not going to run through everything because people don't live decades in a nursing. Average length of stay 2-5 years. Average cost $10k/month = $120k/year. That is and often be covered by the RMD of the person and SS covering a portion. So not all of it is from their savings. Also many people don't want to touch it, but isn't the HOUSE that they live in a saving account? I do have a problem with tax payers footing the bill for people living in paid for homes and they aren't willing to tap their equity.

But that aside, and having seen my grandmother in medicaid facility, it was not nice compared to what you get when you private pay. But she never owned a home and her SS was less than $1k/month. She was on medicaid for years. And my mom would have footed more but her siblings were not in the same financial circumstances and had i had the money i have no a year ago, no questions asked i would have footed the bill 100%. TBH i asked my DH and he said offer. And last year I DID. i told my aunts and uncles and mom I would foot the bill to somewhere nicer and suck it up. I said MOVE her. But they couldn't do it and find a place that would take her at the time with her having bounced back and forth between the acute and IC level care. Once you leave you have to take a space that there is and if you go back and forth you lose your spot. But my mom was there pretty much 24/7 at her beside changing her, feeding her, etc.

So no I would certainly not want to be in a medicaid facility unless there was no choice. I would absolutely use my home equity. I would probably want to be at home which cost less and often extends someone's life.

Also many people who are retirement age now still have pensions and still have defined benefit plans. The amount they get are substantial. There will be a bigger problem for Gen Xers who depend on 401ks. This is why people are concerned about end of life care.

So you have money in the bank and a paid for house and acreage (using the OP for example). Why should the tax payers pay for them to keep the acreage and house? If it provides a solid million? Why should it be only in the OP name and either used for wife's care or his? OP i know you will provide for your wife, i just want to point out why does it have to be "protected" against medicaid? Against paying for care?

 

[RetiredHappy]

Another point to note is OP's wife is considered to have early onset dementia, in which progression is faster than at later age. If she were to move into a LTC facility, it is unlikely to be prolonged, which means we are looking at less than 3 years of care. At $12k and month, total of 3 years will cost $432k.

 

[Philip12]

I've just been approved to WAH, so now I can continue working full-time as long as circumstances allow. That means I can build up a LTC fund and self-fund for DW to be in the place I wanted, which we're both familiar with since my father was there.

A few years should be possible in this configuration, with part-time options beyond that. That should enable me to expand the current portfolio of 1.85M enough to cover LTC even for more than 3 years.

The next phase is me shifting to full-time caregiving at home, maybe with some home modifications to help with safety.

Final phase is the memory care facility at 12K per month (or whatever it is in 5 or so years). It actually feels doable, and I'd hope for some good times along with the challenges ahead. Thanks for your perspectives.

 

[Koolau]

I've just been approved to WAH, so now I can continue working full-time as long as circumstances allow. That means I can build up a LTC fund and self-fund for DW to be in the place I wanted, which we're both familiar with since my father was there.

A few years should be possible in this configuration, with part-time options beyond that. That should enable me to expand the current portfolio of 1.85M enough to cover LTC even for more than 3 years.

The next phase is me shifting to full-time caregiving at home, maybe with some home modifications to help with safety.

Final phase is the memory care facility at 12K per month (or whatever it is in 5 or so years). It actually feels doable, and I'd hope for some good times along with the challenges ahead. Thanks for your perspectives.

Sounds like you are moving toward a solution for care AND Early Retirement.

In many areas, there are NGOs or other types of organizations (sometimes called things like "Council on Aging" or similar). You might run your plans past someone like that to be certain your aren't missing something in your plan with DW in mind.

All the best to both of you.

 

[someguy]

I've just been approved to WAH, so now I can continue working full-time as long as circumstances allow. That means I can build up a LTC fund and self-fund for DW to be in the place I wanted, which we're both familiar with since my father was there.

A few years should be possible in this configuration, with part-time options beyond that. That should enable me to expand the current portfolio of 1.85M enough to cover LTC even for more than 3 years.

The next phase is me shifting to full-time caregiving at home, maybe with some home modifications to help with safety.

Final phase is the memory care facility at 12K per month (or whatever it is in 5 or so years). It actually feels doable, and I'd hope for some good times along with the challenges ahead. Thanks for your perspectives.

Sounds great! I'm sure you've already done this and I may have missed it, but make sure you and your wife get wills/POA/DPOA/healthcare directives/etc completely squared away ASAP. Best wishes to you and your DW.

 

[Philip12]

Yes, we did all that a long time ago, but I do need to go over it again and see if anything needs adjusting.

 

[Philip12]

UPDATE

I have a firm retirement date now, because my company offered a retirement benefit package, and I accepted it. I leave the company on July 1.

RECAP. I am 55, a corporate employee for 28 years, and I was considering retiring last fall, but I wasn't sure about LTC costs, because my DW has early-onset dementia, so I continued working. Meanwhile, I felt increasing tension between corporate life and caregiving responsibilities. While FIRECalc showed I could retire then, adding LTC costs at a private facility broke the plan. While I have the intention to take care of DW at home as long as possible, at some point the reality is, her needs would likely exceed my capacity. I have a place in mind that my father was in that we both like, and I know what it costs. Using that data, I have a plan now that funds LTC for multiple years, as well as early retirement.

I was working on a plan for retiring in September of 2026, but then another twist of fortune arrived, a "golden parachute" if you will, a retirement incentive package. This is like severance pay, and is a generous enough lump sum payment that I was able to accept the package and the closer retirement date. That is really the best outcome, since the lump sum helps with the LTC funding (along with other sources), and the timing is much preferred as with each month that passes, DW's condition requires more adjustments and greater responsibility.

More details on LTC funding. I do not have LTC insurance (and do not want it in its current form). Now with Health Savings Account, after-tax brokerage account, severance/retirement lump sum cash, DW's social security, DW's pension from the state govt, and HELOC, I have a total of 30 months of LTC debt-free, plus another 25 months with HELOC, without even touching my own retirement accounts, or selling property. That is enough for my peace of mind. We also made adjustments and have increased the rent income stream.

None of this would have been possible if I hadn't had FIRE on my radar for decades. I started off with a "free by 40" spreadsheet. LOL. Marriage, buying land, building a house for my mother-in-law, building a super-awesome greenhouse for my plant projects, lifestyle creep (moderate), all happened along the way, but I kept maxing out 401k year by year and I had age 55 on the radar for retirement (instead of 40!). Since I will still be 55 on July 1, it appears my goal will still be met, even despite everything.

I'm feeling fortunate (blessed even), and grateful for everything right now. TBH - being a caregiver for DW, as well as doing my gardening and greenhouse work, and being a landlord, is all I feel like doing and all I think I should be doing now.

I just have the next two months to ensure a smooth transition of my responsibilities and train my AI replacement (not even joking!). Meanwhile, my financial attention is shifting to smaller optimizations, like ensuring I capture remaining 401k matching contributions for the year, and figuring out how to minimize my tax bill for a high-income year.

 

[Koolau]

UPDATE

I have a firm retirement date now, because my company offered a retirement benefit package, and I accepted it. I leave the company on July 1.

RECAP. I am 55, a corporate employee for 28 years, and I was considering retiring last fall, but I wasn't sure about LTC costs, because my DW has early-onset dementia, so I continued working. Meanwhile, I felt increasing tension between corporate life and caregiving responsibilities. While FIRECalc showed I could retire then, adding LTC costs at a private facility broke the plan. While I have the intention to take care of DW at home as long as possible, at some point the reality is, her needs would likely exceed my capacity. I have a place in mind that my father was in that we both like, and I know what it costs. Using that data, I have a plan now that funds LTC for multiple years, as well as early retirement.

I was working on a plan for retiring in September of 2026, but then another twist of fortune arrived, a "golden parachute" if you will, a retirement incentive package. This is like severance pay, and is a generous enough lump sum payment that I was able to accept the package and the closer retirement date. That is really the best outcome, since the lump sum helps with the LTC funding (along with other sources), and the timing is much preferred as with each month that passes, DW's condition requires more adjustments and greater responsibility.

More details on LTC funding. I do not have LTC insurance (and do not want it in its current form). Now with Health Savings Account, after-tax brokerage account, severance/retirement lump sum cash, DW's social security, DW's pension from the state govt, and HELOC, I have a total of 30 months of LTC debt-free, plus another 25 months with HELOC, without even touching my own retirement accounts, or selling property. That is enough for my peace of mind. We also made adjustments and have increased the rent income stream.

None of this would have been possible if I hadn't had FIRE on my radar for decades. I started off with a "free by 40" spreadsheet. LOL. Marriage, buying land, building a house for my mother-in-law, building a super-awesome greenhouse for my plant projects, lifestyle creep (moderate), all happened along the way, but I kept maxing out 401k year by year and I had age 55 on the radar for retirement (instead of 40!). Since I will still be 55 on July 1, it appears my goal will still be met, even despite everything.

I'm feeling fortunate (blessed even), and grateful for everything right now. TBH - being a caregiver for DW, as well as doing my gardening and greenhouse work, and being a landlord, is all I feel like doing and all I think I should be doing now.

I just have the next two months to ensure a smooth transition of my responsibilities and train my AI replacement (not even joking!). Meanwhile, my financial attention is shifting to smaller optimizations, like ensuring I capture remaining 401k matching contributions for the year, and figuring out how to minimize my tax bill for a high-income year.

I'm sorry you're DW and you are going through this phase in your partnership. But how blessed you are indeed to have figured a way through, financially! Blessings to you and DW.