How do you account for assisted living and nursing home costs

[engr]

hello,

Many people use firecalc to estimate their SWR percentage given different income streams such as pensions, soc security, investment savings, etc. To account for future assist living and nursing home expenses do you use the lump sum entries of firecalc to enter inflation adjusted estimates of current costs? Or do you use another method such as assuming a reverse mortgage, put a large sum into a safe investment and lose the potential growth, selling the primary residence, etc. Anyone suggest the approach you used or plan on using. thanks.

 

[VanWinkle]

My plan is to use home equity(sale of primary residence) and low 2% withdrawal rate to have enough to self pay for nursing home care. I no longer have a spouse at home(widower) so this is more important with no one to care for me at home. Not sure it is the best plan, but at least it is a plan.

 

[audreyh1]

I am simply aware that a chunk of our retirement investments may be needed for a down payment, and given the size of our portfolio and the likelihood of being much older when we need to make this move (knock on wood!!!), I am leaving needed funds invested in what I consider to be a reasonably conservative 50/50 allocation. We may reduce equity exposure as we age. We may let more short term funds build. We will have some assets to sell that will help cover the initial costs, and we will also have the annual withdrawals as planned that may well cover ongoing expenses. Plus SS maybe .

 

[rk911]

we have zero debt. i have a LTC policy. my wife can’t get one but we have a large nest egg and steady pension income. the nest egg is sufficient should the pension stream fail unless the market takes a HUGE dump. much, much, much larger than the current hiccup.

 

[FI_RElater]

I'm guessing that if the virus stays with us that we wouldn't need a full two years of benefits

(only in sixties now.... but with pension, SS (when we finally start it), paid off house, and a very good portfolio.... we should be good. Unfortunately, my side doesn't have very good numbers for longevity (I'm already past both of my parents ages when they passed) but spouses side is longer, so we further expect that it will not be for me (my estimate is 83-4 with the latest of 92 (which is longer than all but one in all of my side))

 

[rodi]

Plan A is to just pay as we go from our retirement savings.
Plan B is to sell our primary home in our ridiculously overpriced market and use that to pay for nursing home/assisted living.
Plan B' is if one of us needs assistance and the other is still viable on their own. (Dementia for one of us?) In that case we sell the primary home, buy a condo for the spouse outside the facility, and use the balance to pay for the assisted living/nursing home.

As mentioned - our home equity is high (paid for house in SoCal)... so we can fund quite a long time in a facility.

 

[Jerry1]

Kind of like others have said. I look at my potential ending years portfolio and my house and plan on using that. It should be enough unless something really long term happens and if that happens, probably screwed anyway. Unfortunately, a little bit of hoping for the best.

 

[RobbieB]

I don't. Odds are you don't last 6 months there. Three if male and nine if female.

 

[rk911]

average length of stay in a nursing home is ~ 3-yrs. my mom-in-law was in assisted living for 10-yrs. thankfully her late husband built a sufficent portfolio to support her.

 

[athena53]

I'm widowed so I don't have the scary scenario of one spouse in LTC and one at home. Selling the house would raise a decent chunk of money but what's more important to me is that right now my annual spending is close to what memory care costs in my area, and my spending appears sustainable (retired in 2014). The more intensive care I need, the less I'll be spending on everything else- housing, travel, car, charitable... so pretty much everything I'm spending now could go to care, with some additional out-of-pocket for dental care, glasses, etc.

I just have to be careful not to remarry unless he's loaded.

 

[Pellice]

LTC policy. It increases 5% per year - it could increase more than that, but so far, hasn't. The costs are built into my budget.

 

[pb4uski]

We self-insure. We have almost six-figures in HSAs that would cover a year. The rest wou come from our assets and Plan Z is a reverse mortgage.

 

[Koolau]

Belt-suspenders-elastic waist band here. LTC insurance, primary real estate value, savings. Oh, and then there's the 9mm solution if I'm still rational

 

[Hermit]

I'm widowed so I don't have the scary scenario of one spouse in LTC and one at home. Selling the house would raise a decent chunk of money but what's more important to me is that right now my annual spending is close to what memory care costs in my area, and my spending appears sustainable (retired in 2014). The more intensive care I need, the less I'll be spending on everything else- housing, travel, car, charitable... so pretty much everything I'm spending now could go to care, with some additional out-of-pocket for dental care, glasses, etc.

I just have to be careful not to remarry unless he's loaded.

I'm in pretty much the same boat. No house to sell, but my pension and SS will about cover LTC in my area. I can double my annual income from investments if costs are higher or I decide to go a real fancy route. Currently basing my plans on a facility that is about 40 years old, fairly near DD and close to a church I attended years ago.