Depressing Thoughts about Retirement

[pjigar]

Yes, exactly! Very good explanation, pb4uski. I made a graph of my spending for the past 13 years since I retired, and attached it below. I spend pretty much whatever I want to spend. Still, as you can see, it goes up and down but I don't really see any scary trends. I have enough.

So you are practically spending 'less' in retirement if you account for inflation. Is that correct or did you account for inflation in your chart? Just curious.

 

[Markola]

The original FIRE Bible called “Your Money or Your Life” advised that one should “save enough, plus a little more.” I thought that was wise.

 

[5Miler]

That's a lot of experience!
Can you share your favorite tour companies?

We don't use many tour groups other than for bus tours and for those we use Caravan Tours. We have toured the Grand Canyon, Bryce Canyon and Zion with them several times with a group of friends and again on our own. You typically need to plan a year or two in advance to get lodging in the parks and the tour provides good rooms, right on the rim of the Grand Canyon and in the lodge in Zyon.

For cruises and other trips, DGF is a part time Travel Agent so we do our own planning and booking, usually with a TA discount. Of the four 7 day cruises we took last year, two were completely free, the third one free for DGF and steeply discounted for me as a training seminar and the fourth one we actually paid full price minus her TA discount of 10%.

DGF used to use a travel agency in Florida to book our travel and the travel of many friends and family. The agency owner finally told her she books so much she should just become an agent so she did. She doesn't work with outside customers, only us, family and friends traveling with us. We get discounts for travel and she earns just enough commission to booger up her taxes with a schedule C each year and make it more interesting to keep her income in line for maximum ACA subsidies which I work through every year. We get access to FAM trips for travel agents and Seminar at Sea trips with discounts up to 70%.

We are enrolled in the Travel Rewards program for each cruise line so we get a lot of free perks at our level. We favor Norwegian Cruise Lines as the itineraries and travel rewards are more to our liking but Royal Caribbean is a close second. We cruised many years usually in a suite on the SS Norway until the boiler exploded in port and it was eventually scrapped. Suites always double your reward nights. Did Carnival once on a free 5 day as a training reward and won't be back. Costa and others are fine but NCL meets our needs better.

Cruising actually was the reason we started diving 20 years ago. We had cruised so often in the Caribbean that we were getting tired of visiting the same ports. I got a wild hair to learn to dive, which we both did, and we started diving at most ports. It was suddenly a whole new ball game. From there we started destination trips just for diving which led to us forming friendships in Bonaire. That's why we go there for 5 weeks every year to meet up with friends.

Most of our cruises we travel with a rotating group of friends from our Atlanta area and other people we have met on previous cruises. Several are from Jackson, Mississippi and even a couple from Wallasey, UK. We have met up with our friends from Wallesy in Las Vegas before and will meet them in Liverpool on our upcoming UK cruise. Just an aside, although Wallasey is just across the Mersey river from Liverpool, we found during a shipboard Beatles trivia contest that our friends knew absolutely nothing about the Beatles. And we thought we had it in the bag with two ringers.

Holy crap! I can ramble on.

 

[Koolau]

Have direct experience from dealing with parents' LTC issues in the past.

1) A live-in CNA (Certified Nursing Assistant) is around $90K/year. This is a trained eldercare specialist from a professional agency (so, no issues around you being an employer, insurance, taxes, etc.). Budget another $30K/year for medical equipment/supplies/etc.

By comparison:

2) A premium assisted living facility: $80K to $120K (dementia care at the high end), plus ~$60K in other medical services/equipment/supplies/etc.

3) A premium skilled nursing home: $160K to $200K, plus ~$60K extras

This is for a HCOL region. Maybe differs from what folks may have read/heard. I've lived these scenarios and managed expenses more than once. Figures might be a little stale but reflect direct experience.

If there is any good news I could give you all, its that the typical life expectancy once any of this is needed is around ~2 years. So, the numbers are shockingly huge, but it all goes south quickly - usually.

EDIT: Oh, and beware, LTC insurance, if you have it, will play a nice game of cat and mouse, dribbling benefits out as slowly as possible, well because after all their not really in the business of letting $$$ go.

These figures are truly devastating. Those of us who think we have saved "too much" might just be wrong if we live long enough.

 

[NW-Bound]

Have direct experience from dealing with parents' LTC issues in the past.

1) A live-in CNA (Certified Nursing Assistant) is around $90K/year. This is a trained eldercare specialist from a professional agency (so, no issues around you being an employer, insurance, taxes, etc.). Budget another $30K/year for medical equipment/supplies/etc.

By comparison:

2) A premium assisted living facility: $80K to $120K (dementia care at the high end), plus ~$60K in other medical services/equipment/supplies/etc.

3) A premium skilled nursing home: $160K to $200K, plus ~$60K extras

This is for a HCOL region. Maybe differs from what folks may have read/heard. I've lived these scenarios and managed expenses more than once. Figures might be a little stale but reflect direct experience.

If there is any good news I could give you all, its that the typical life expectancy once any of this is needed is around ~2 years. So, the numbers are shockingly huge, but it all goes south quickly - usually...

Thanks. It's less depressing to know this.

So, my kids would inherit $500K less if I will linger that long. They still get a lot.

But I hope I will go more quickly, for my own sake.

 

[mickeyd]

When working, save as much as possible. When retired, use simple arithmetic and Bogle to distribute the pot of gold. It has worked for me so far.

 

[Koolau]

When working, save as much as possible. When retired, use simple arithmetic and Bogle to distribute the pot of gold. It has worked for me so far.

Simple is usually best!

 

[LateToFIRE]

Thanks. It's less depressing to know this.

So, my kids would inherit $500K less if I will linger that long. They still get a lot.

But I hope I will go more quickly, for my own sake.

Yes, that was the upshot of my point. Once somebody needs this level of care, the end is clearly in sight, most likely a matter of months, not years. Morbid, but comforting all the same.

 

[LateToFIRE]

These figures are truly devastating. Those of us who think we have saved "too much" might just be wrong if we live long enough.

Yes and no, I mean nobody wants to depend on govt aid, but if you run out of doe, I have to say, the govt can provide a decent situation - provided you have strong, knowledgeable advocates with the time and energy.

Have hands-on managed two situations and was very close to one other: In two of the cases, little to no savings (like less than $20K), and one case 7-figure NW. We hired eldercare consultants to help us manage all this - these folks know all the ins and outs and have connections, often former nurses or administrators - its like getting into the best facilities can be like getting into a country club, everybody wants in and you need connections. The cases with no savings were taken care of just about as well as the one with big savings. Eye opening. $$$ matter, but not nearly as much as knowledge.

EDIT: Would add, in all three cases, 80-something year olds, with distinctly differing illnesses, from time of needing 24/7 care to end, less than one year, also very eye opening. Apparently, what tends to happen is that one significant illness sets off a cascade of other underlying conditions like a domino effect and it sort of compounds alarmingly fast - faster than can be treated. If there isn't a book on this stuff, needs to be written.

 

[djsander]

Have direct experience from dealing with parents' LTC issues in the past.

1) A live-in CNA (Certified Nursing Assistant) is around $90K/year. This is a trained eldercare specialist from a professional agency (so, no issues around you being an employer, insurance, taxes, etc.). Budget another $30K/year for medical equipment/supplies/etc.

By comparison:

2) A premium assisted living facility: $80K to $120K (dementia care at the high end), plus ~$60K in other medical services/equipment/supplies/etc.

3) A premium skilled nursing home: $160K to $200K, plus ~$60K extras

This is for a HCOL region. Maybe differs from what folks may have read/heard. I've lived these scenarios and managed expenses more than once. Figures might be a little stale but reflect direct experience.

If there is any good news I could give you all, its that the typical life expectancy once any of this is needed is around ~2 years. So, the numbers are shockingly huge, but it all goes south quickly - usually.

EDIT: Oh, and beware, LTC insurance, if you have it, will play a nice game of cat and mouse, dribbling benefits out as slowly as possible, well because after all their not really in the business of letting $$$ go.

2 years is about how long my dad lived in a memory care facility for those with dementia and Alzheimer’s. I think I have the term correct. He didn’t need home care prior to that.

 

[NoiseBoy]

Thanks. It's less depressing to know this.

So, my kids would inherit $500K less if I will linger that long. They still get a lot.

But I hope I will go more quickly, for my own sake.

The annual cost for a 1BDRM apartment in assisted living in our LCOL area is roughly $50k. If I'm reading their cost structure correctly, moving from assisted living to the memory care area of the facility doesn't directly increase the costs. What does is the level of care that the you require which can add up to another $1000 per month.

Note that, once you move into a facility, most of your old, regular expenses drop to zero. No grocery bills. No rent/property tax bills. No utilities etc. I'm not trying to under represent the costs of skilled care, but it's not like you go for paying $0 to live every month to paying $6000. It does cost more, but the "more" is the increase over what you currently spend per month, not the total cost.

 

[W2R]

So you are practically spending 'less' in retirement if you account for inflation. Is that correct or did you account for inflation in your chart? Just curious.

Just saw your post! Sorry to take so long to respond. No, I didn't account for inflation. Those are just actual dollars spent. The chart just covers my retirement years.

 

[NW-Bound]

The annual cost for a 1BDRM apartment in assisted living in our LCOL area is roughly $50k. If I'm reading their cost structure correctly, moving from assisted living to the memory care area of the facility doesn't directly increase the costs. What does is the level of care that the you require which can add up to another $1000 per month.

Note that, once you move into a facility, most of your old, regular expenses drop to zero. No grocery bills. No rent/property tax bills. No utilities etc. I'm not trying to under represent the costs of skilled care, but it's not like you go for paying $0 to live every month to paying $6000. It does cost more, but the "more" is the increase over what you currently spend per month, not the total cost.

Good point, although for a couple, the first who needs care will drive up the cost that much. Of course the healthier one of the couple may want to move in too, to help take care of the weaker one. Ah, he/she may not want to.

Is it possible that they give volume discount for a couple?

I dunno. Too depressing to think about this.

But wait! That's the topic of this thread.

 

[LateToFIRE]

The annual cost for a 1BDRM apartment in assisted living in our LCOL area is roughly $50k. If I'm reading their cost structure correctly, moving from assisted living to the memory care area of the facility doesn't directly increase the costs...

I find that hard to believe that memory care wouldn't cost more - that's not my experience though there are varied levels of care at different facilities. But, always, dementia care carries an added cost - more personnel required, added security measures as patients are always looking for the exit (wandering/escaping compulsion often comes with the condition).

Would add: You really can't know the whole cost picture until you sit down with someone at the facility - online fee schedules don't tell the whole story, especially in the realm of cost of added physical/medical/personal care needs above and beyond lodging and food.

 

[NoiseBoy]

I find that hard to believe that memory care wouldn't cost more - that's not my experience though there are varied levels of care at different facilities. But, always, dementia care carries an added cost - more personnel required, added security measures as patients are always looking for the exit (wandering/escaping compulsion often comes with the condition).

Would add: You really can't know the whole cost picture until you sit down with someone at the facility - online fee schedules don't tell the whole story, especially in the realm of cost of added physical/medical/personal care needs above and beyond lodging and food.

These are real numbers for a newer facility in a small city in the Midwest. I have copy of their current prices in front of me and my father spent a little over two years in one of their facilities so I absolutely know what their non-memory care costs are. A friend just placed his mother in memory care in their facility that is located about 30 miles from me and he sent me their latest costs. I too was surprised that memory care wasn't more expensive so it's possible that I mis-understood his response to my question. These facilities are nice, but not fancy. When we toured assisted living options, most had dining rooms with menus and table service. This company uses a buffet to serve meals in the dining room. Also, they do not offer skilled nursing care, just assisted living apartments and the memory care wing.

FYI - A two BDRM apartment with two residents at Level I care costs about $7,000 per month. These apartments are on the small side, but they have little kitchens and balconies (2nd floor) or patios.

 

[LateToFIRE]

These are real numbers for a newer facility in a small city in the Midwest. I have copy of their current prices in front of me and my father spent a little over two years in one of their facilities so I absolutely know what their non-memory care costs are. A friend just placed his mother in memory care in their facility that is located about 30 miles from me and he sent me their latest costs. I too was surprised that memory care wasn't more expensive so it's possible that I mis-understood his response to my question. These facilities are nice, but not fancy. When we toured assisted living options, most had dining rooms with menus and table service. This company uses a buffet to serve meals in the dining room. Also, they do not offer skilled nursing care, just assisted living apartments and the memory care wing.

FYI - A two BDRM apartment with two residents at Level I care costs about $7,000 per month. These apartments are on the small side, but they have little kitchens and balconies (2nd floor) or patios.

Thanks for the added notes. Interesting. Seems that the differences in regional costs are significant. For example, I have noticed that Florida (where some of family is located) is significantly discounted to the North East. I'm always surprised by the differential in pricing for Assisted living, skilled nursing, etc.

 

[Koolau]

I find that hard to believe that memory care wouldn't cost more - that's not my experience though there are varied levels of care at different facilities. But, always, dementia care carries an added cost - more personnel required, added security measures as patients are always looking for the exit (wandering/escaping compulsion often comes with the condition).

Would add: You really can't know the whole cost picture until you sit down with someone at the facility - online fee schedules don't tell the whole story, especially in the realm of cost of added physical/medical/personal care needs above and beyond lodging and food.

My mom's care in a memory unit often cost twice the "base price" for the room. There are all sorts of extras (from meds to therapy to Depends, etc.) These add up and there are no discounts as if you were living at home and getting your drugs from Walmart.

 

[NoiseBoy]

Thanks for the added notes. Interesting. Seems that the differences in regional costs are significant. For example, I have noticed that Florida (where some of family is located) is significantly discounted to the North East. I'm always surprised by the differential in pricing for Assisted living, skilled nursing, etc.

The figures I gave come from a "new player" in the market here. Their facilities are not fancy, but they are new and nicely finished. They are also not CCRC facilities which we still have only two of in the area. The costs at either one of those are considerably higher and they have waiting lists. One of them has a dozen or so small ranch homes that you can "buy" where you can live pretty independently until you, or your spouse, needs to move to assisted living. They are the most expensive facility in town. Perhaps as much as 1/3 more.

 

[Route246]

We saved and saved and saved. It is the only way of life we know since we married. We started out struggling and remain with that mindset but while we live well below are means we also have adequate income to live very comfortably, to have nice vehicles, nice small home furnished high-end. We pay cash for everything and the only loan we ever had is our mortgage which was paid off 20 years ago.

We don't have a wish list as we pretty much do whatever we want without worrying about cost. We have many high-end branded luxury items, almost all of it stealth so it doesn't show to neighbors, friends or family unless they come in the house. What is amusing about this is we live like drug dealers or cash business owners who are hiding income from the IRS or something. The difference is we pay a ton of taxes, both state and federal, returns prepared by a premium CPA firm and due to tax simplification we can pass any audit as there is not much left to cheat on anymore.

We have a high cash balance in our checking account and have fielded the calls from bankers offering "high yield" alternatives. I explain to them it would be easy to drain those accounts by transferring the funds to Vanguard and that shuts them up in a hurry. I told them I don't care that the money is not earning efficiently as it is there for other reasons.

That said, I feel a little bit depressed that there is not much out there available to splurge on in retirement. We already have income from my day job capable of funding any wish list item. We are simple and more important we are also unpretentious like many here who mow their own lawn and do their own yard work because we like doing it, not because we can't afford professional landscaping services. I park a supercar in the garage and the garage door is mostly closed unless I'm washing the cars or working in the front yard. Most people don't even realize the value of that car as it is white and not flashy looking at it from the rear.

I have received great solace from comments here in these forums that just having the option to work or retire is something to appreciate and covet. Thank you all for those words of wisdom. I'm certainly getting more inspiration to retire but need to work on an escape plan as I am vested in my projects at work, a few of which are disruptive, transformational and part of a megatrend. I still have a few things to finish before hanging it up.

 

[Koolau]

I have received great solace from comments here in these forums that just having the option to work or retire is something to appreciate and covet. Thank you all for those words of wisdom. I'm certainly getting more inspiration to retire but need to work on an escape plan as I am vested in my projects at work, a few of which are disruptive, transformational and part of a megatrend. I still have a few things to finish before hanging it up.

FIRE is about freedom to do what you want. It sounds like you are enjoying what you are doing while empl*yed. For you - at least for now - your freedom may be to finish up your projects. It's not about retirement for its own sake. It's about freedom. You have that if you are financially independent. You can stay or you can leave. THAT'S freedom. Congratulations.

 

[Toddtheformeraccountant]

I think what you plan to do in retirement needs to be baked into your retirement cost estimate and how that converges with your savings estimate and FIRE reaching estimate. Then it becomes a matter of tradeoffs....you then decide if working a few extra years to allow you to travel more or more expensively is worth it, or if you can live with less travel less stuff and retire early.

 

[SecondCor521]

We also rejiggered some of our investments to generate regular cash flow so our withdrawal rate is under 1%.

It might not matter in your situation, but it sounds like the way you use the term "withdrawal rate" differs from the way FIREcalc uses it.

If your portfolio has 5% income and you spend all that 5% income and then an additional 1% from the principal, then FIREcalc would consider your withdrawal rate to be 6%, not 1%.

It would matter if you were comparing your 1% "withdrawal rate" to the 4% rule and thinking you're very safe; if it's actually 6% then you might be in an unsustainable situation.

 

[SecondCor521]

Have direct experience from dealing with parents' LTC issues in the past.

1) A live-in CNA (Certified Nursing Assistant) is around $90K/year. This is a trained eldercare specialist from a professional agency (so, no issues around you being an employer, insurance, taxes, etc.). Budget another $30K/year for medical equipment/supplies/etc.

By comparison:

2) A premium assisted living facility: $80K to $120K (dementia care at the high end), plus ~$60K in other medical services/equipment/supplies/etc.

3) A premium skilled nursing home: $160K to $200K, plus ~$60K extras

This is for a HCOL region. Maybe differs from what folks may have read/heard. I've lived these scenarios and managed expenses more than once. Figures might be a little stale but reflect direct experience.

If there is any good news I could give you all, its that the typical life expectancy once any of this is needed is around ~2 years. So, the numbers are shockingly huge, but it all goes south quickly - usually.

EDIT: Oh, and beware, LTC insurance, if you have it, will play a nice game of cat and mouse, dribbling benefits out as slowly as possible, well because after all their not really in the business of letting $$$ go.

Two other things that help:

1. Taxes are usually a lot less, because of large Schedule A itemized deductions. My Dad moved from independent living to assisted living in February this year, and even though his monthly rent went up (about 50% or so IIRC), his overall expenses are down because his taxes will drop by about 2/3.

2. Once you're in assisted living, you don't spend much on anything else. My Dad wants to travel but can't. Insurance covers most medical stuff. His credit card is mostly copays and the occasional supplemental bottle of wine or groceries. (ETA: I noticed someone else already pointed this one out up-thread.)

 

[SecondCor521]

Good point, although for a couple, the first who needs care will drive up the cost that much. Of course the healthier one of the couple may want to move in too, to help take care of the weaker one. Ah, he/she may not want to.

Is it possible that they give volume discount for a couple?

I dunno. Too depressing to think about this.

But wait! That's the topic of this thread.

At my Dad's CCRC, there is the base rent which assumes one person, and then there is a second person fee of about $500 a month, mostly to cover their food.

When the first of a couple gets sick, there are a variety of responses. The healthier spouse often becomes the first line of defense caretaker, or hires in help of various kinds if they can afford it.

I've seen the healthier spouse move into assisted living with the sicker spouse, then return to an independent living apartment when the sicker spouse passes away.

My Mom had hospice so she and my Dad were able to stay together in their independent living apartment until she passed away.

As far as I know, there is no discount if one spouse wants to stay in independent living and the other spouse needs assisted living or memory care. And that gets quite expensive, so most of the time the couples find some way to stay together.

 

[brett]

The reality for many is simple. They do not have enough money to retire to a life that they envisioned.

Retirement saving are down, way down. Ditto for the percentage of home owners who now retire mortage free. The last stats I saw showed that the fastest growing consumer debt was the 55 and over age group.

So...if you do not save for retirement until you are 60 plus, and are premier members of the consumer class then the chance of you attaining your vision of retirement is highly unlikely.

My daughter called yesterday. Her in laws were visiting. They commented that we were really lucky that we retired early and that we could afford to travel.

Her reply to them.....nothing to do with luck. It was the result of hard work and making good life choices.