Reluctantly planning to retire

[Time2re]

I went through this in 2015, deciding to RE before DH’s auto immune disease progressed to his brain and motor skills. He has issues with walking and balance, but we did a few dream trips in the past few years. Last year’s Rhine Riverboat Cruise was very stressful for me. He is ready for more adventure, but I just can’t do it, and he won’t even consider having someone travel with us to help. So just a few road trips planned for the next year.

My best advise, which has already been said, is please take care of yourself! It’s not selfish (what I used to think) it just makes you so much better to help your DW. For me, it was important to find a good counselor...that was difficult, and took quite awhile to find that fit. She has helped me in so many ways, and as this progresses, I am thankful to have someone who understands what I go through....

I admire your commitment to your DW, and wish you the best in whatever path you choose. You have a bunch of people here to help you, including me.

 

[ut2sua]

OP, I am rooting for you. You are in a difficult situation, but you are very courageous in your thinking for both DW and yourself. If I were you, I would choose to cut expense if possible (to further increase margin for an even more successful FIRE), but spend time to take care of DW. While still working, get the best out of your work benefit (dental, medical checkup, max out on 401K/match etc.). May be asking/volunteering for a separation package to add to your $ account. Finally, you would never know, miracle does happen every day. Wishing you all the best.

OP, I discussed your situation with my DW, and she suggested keeping your job and hire a care-giver full time (assuming your pay would cover that cost + more). I reread your post, and since you love your job, that would not be a bad choice since, as many has suggested, you can always stop work and care for DW full time later. You need not feel guilty about this decision because you are still there for her. Also, if part of your AA is in stock, please don't sell now as part of your preparation going forward. The market will most likely recover after a year or so if not sooner, so don't lock in the loss now just to get ready. Quoting myself here since I did suggest that you go the other way earlier. Good things will happen to wonderful people. Hang in there.

 

[pb4uski]

.... Also, if part of your AA is in stock, please don't sell now as part of your preparation going forward. The market will most likely recover after a year or so if not sooner, so don't lock in the loss now just to get ready. Quoting myself here since I did suggest that you go the other way earlier. Good things will happen to wonderful people. Hang in there.

Before people hit the panic button, keep in mind that we ended February 2020 at about the same level as we ended September 2019, and that is after monthly withdrawals at a 4% annual WR.... IOW, just a hiccup. And for the 12 months ended Feb 2020 one would still be up 4.86% after withdrawals... so all is good. BTW, above is for a 60/40 AA.

 

[Sunset]

OP - I wish the best for the both of you.

In terms of money, there is currently a gap between your age and penalty free withdrawals from IRA , unless there are some special circumstance rules I'm not aware.

While still working, I'd put the minimum in 401K to get company matching, and save the rest in regular accounts, or roth. This way that cash will be available in the years before you are 59.5

 

[Dogpeace]

Please know that if you want to continue to work, there are services that you can access and /or hire. There are hourly "Senior Helpers", respite care services, transport services, housecleaning services and many others. It is a big job to find these services but they do exist.

I believe that. Finding the services can be a challenge. The neuropsychologist who diagnosed my wife recommended a nearby Adult Day Care, but the phone was disconnected. Same for the second facility I called... disconnected. There are many senior facilities but my wife is not elderly and does not fit the typical profile.

On the third attempt I located a place open from 7:30 am - 5:30 pm, with available spots, and specializing in Dementia Care. Nice part of town, near one of our daughter's work. In fact, they currently have a 51 year old lady with the same illness... Primary Progressive Aphasia. The average is 75 but apparently the younger folks fit right in.

I have scheduled a visit with our daughter next week to find out more. It sounds good, and they would allow us to purchase anywhere from 2 to 5 days per week. I am hopeful this could be the answer to covering for my wife when I occasionally travel and would give her a new dimension of daily life to enjoy.

 

[Dtail]

I believe that. Finding the services can be a challenge. The neuropsychologist who diagnosed my wife recommended a nearby Adult Day Care, but the phone was disconnected. Same for the second facility I called... disconnected. There are many senior facilities but my wife is not elderly and does not fit the typical profile.

On the third attempt I located a place open from 7:30 am - 5:30 pm, with available spots, and specializing in Dementia Care. Nice part of town, near one of our daughter's work. In fact, they currently have a 51 year old lady with the same illness... Primary Progressive Aphasia. The average is 75 but apparently the younger folks fit right in.

I have scheduled a visit with our daughter next week to find out more. It sounds good, and they would allow us to purchase anywhere from 2 to 5 days per week. I am hopeful this could be the answer to covering for my wife when I occasionally travel and would give her a new dimension of daily life to enjoy.

That sounds like a very good plan. My heart goes out to you and your wife.

 

[Dogpeace]

Dogpeace; Sorry you and your DW are facing these challenges. Have you considered a facility that functions as a Day Care for those with Alzheimers? Your DW would attend the facility during the day only and I imagine that the pricing is flexible if you don't need 5 days a week. That would enable you to continue to work, and also be a bit of a respite for you and would place her in an environment where she interacts with others during the day, a good safe environment for her, and she would be with you at home during non work hours?

Yes, exactly! I just posted a reply about that. Seems like that may be a good choice... we are investigating.

We're very lucky to live in a metro area which has a facility like this nearby.

 

[Dogpeace]

In terms of money, there is currently a gap between your age and penalty free withdrawals from IRA , unless there are some special circumstance rules I'm not aware.

Yes, there actually is a special rule for that... if someone is totally and permanently disabled, the penalty for early withdrawal is waived. Apparently all that is needed is a statement to this effect from a doctor, and only if the IRS asks for it.

So, for the next two years or so, if we need to tap her IRA we can do so penalty-free. After that we'll both be over 59 1/2 so no issues.

Good point to mention, thanks!

 

[Dogpeace]

Before people hit the panic button, keep in mind that we ended February 2020 at about the same level as we ended September 2019, and that is after monthly withdrawals at a 4% annual WR.... IOW, just a hiccup. And for the 12 months ended Feb 2020 one would still be up 4.86% after withdrawals... so all is good. BTW, above is for a 60/40 AA.

I do want to discuss saving and investing, as this is critical to any retirement, whether I retire sooner or later.

I have been looking at an article on Morningstar about "an aggressive retirement portfolio in 3 buckets"... I'd post a link but I am not sure that is allowed here. The idea is to have the stock/risk investments in a "bucket" that is earmarked for use over 10 years away, so it does not matter too much if the market crashes today, since there is 10+ years to recover before any of it will be used. I should probably pick another forum other than "Hi, I am..." to kick off that topic.

 

[Dogpeace]

A good friend of mine had early Alzheimer’s in her 50’s. Her husband kept working but if he was away overnight she stayed with us. We took vacations with them and rented a house so really there were 3 of us to help with her and we had a lot of fun. Unfortunately he got terminal cancer and we were retired so helped them both stay together home for 2 years. By then neither of them could care for themselves so his son took him in while he was dying and I put her in a home. It’s hard at times to be patient so be good to yourself.

Wow, so very sad for that couple. I do remind myself when I start to feel sorry for my situation, that actually I am blessed with health and it could be a lot worse. If I were not so healthy our care options would be much more limited.

 

[YakGrl]

I am glad you are investigating an Adult Day Care. It could be very good for your wife to have others to interact with, and perhaps she can think of herself as helping others at the facility and finding friends and activities. It helps to remember that she is undergoing isolation as well as you. I know my sister enjoyed the interaction at the nursing facilities she was in and it was an improvement from her isolation at home.
At the facility the staff and other family members often share other resources in the area. Staff is often willing to do private care if needed though they will tell you this privately as the facility doesn't approve.

 

[Paulz]

Dogpeace: First, I'm really sorry you have to go through this. I admire what you are doing. I hope I have half you attitude if confronted with the same.

I read most of the responses and don't remember this being asked (and apologize if it was and I missed it). Is your health care being provided through your employer? This is one of the reasons I am still working and have to until I am 62. Right now I pay 30% and my employer pays 70% of the premiums. If I stay until 62 that carries into retirement. If I leave earlier then they cover zero of the premiums. Just wanted to ensure you considered that aspect.

Best wishes

 

[Dogpeace]

Is your health care being provided through your employer? This is one of the reasons I am still working and have to until I am 62. Right now I pay 30% and my employer pays 70% of the premiums. If I stay until 62 that carries into retirement. If I leave earlier then they cover zero of the premiums. Just wanted to ensure you considered that aspect.

Yes, very good point. My insurance is indeed being covered by my employer, and also currently for my wife. She has her disability hearing next week (after a 2.5 year wait) and is certain to be approved, so she should qualify for Medicare soon, assuming the judge sets her onset date more than 2 years in the past. There is a 2 year wait after becoming disabled before Medicare starts, if under age 65.

I priced out a single person premium through Healthcare.gov and it came out to $585 a month. This is with no subsidy, since we would be withdrawing more than the max to get a subsidy from taxable IRAs. This amount is factored into my retirement budget.

I am really healthy so I am not budgeting a whole lot for out of pocket but if my health changes so would my budget!

 

[indiajust]

Recently read on Georgia Tech website about stimulative technique to slow aging/dementia process via light and sound exposure to 40 Hz oscillation via LED's and earphones. Frequency matching to brainwave oscillation is key.

 

[Dogpeace]

Recently read on Georgia Tech website about stimulative technique to slow aging/dementia process via light and sound exposure to 40 Hz oscillation via LED's and earphones. Frequency matching to brainwave oscillation is key.

That sounds like maybe a research study, considering it is at a University. I actually wrote to a research study today on Primary Progressive Aphasia at Northwestern university but the study is no longer enrolling new subjects.

It is good to know there is work being done because this is a disease without any treatment options and always terminal.

 

[steveark]

You are a good man. My dad was in much the same place with my mom. My wife and I have a dear friend in the same situation we help out. My suggestion is retire, but also hire help for at least two or three days a week. Full time caregiving will kill you. All our prayers, friend.

 

[DonnaZ28]

So sorry to learn about your wife. You can find on-line help at www.alz.org. Many tips and information as well as forums dedicated to husbands and wives dealing with this disease. It provides a safe place to vent with people who understand.

 

[Dogpeace]

My suggestion is retire, but also hire help for at least two or three days a week. Full time caregiving will kill you. All our prayers, friend.

You may be right. I went to a support group Sunday for caregivers of people with this illness. Three gentlemen are regular attendees. Their wives passed away years ago but they still attend to help others along the journey. They are saints.

One point they asked me to write down was "when the time comes", which means, there will come a time when I have to make a change. Retiring, or at least scaling back is one change. Getting a paid caregiver to help is another step. For some people, finding a care facility is another step but I honestly don't see us needing that step in our case because I plan to do the job. Still, I have to be prepared for anything.

A big part of early retirement seems to be planning for expenses, and matching those expense to retirement savings. We've done a pretty good job of that, but the expense of assisted living or nursing home care is NOT in the plan (at least until we are past the retirement stage in life and don't need money for anything else - would self-fund the end-of-life care, and if we go broke at that point then Medicaid steps in and pays. Not that we are ever planning to go broke, no way, but many people do and they end up just fine.) There is long term care insurance out there but less than 5% of people have it due to the extremely high cost...

A dementia care facility could run $80 K - $100 K a year and if funding from a pretax IRA, we would need to withdraw even more for taxes.

Of course, if the ill spouse is being cared for 24/7 in a facility I could continue to work and there would not be any retirement expenses for me, but I still have the mortgage, etc. and would be going in the hole financially paying for a facility. So less and less retirement funds over time, rather than more. Since she's pretty young and strong, she probably has many more years ahead and I'd rather not be on the hook for an indefinite stay in a facility. It's hard to fathom that financially.

Let me tell you what though, care facilities are big business. They advertise like crazy. They know people have retirement savings, and they want it!!

So we've pretty much excluded a full time care facility from the list of options, at least at this point. I've read about dementia patients who live out the remainder of their lives at home, and that sounds like the best option for everyone. I will be ready "when the time comes" to hire some help around the house.

 

[Dtail]

I know many on this site are against it, but perhaps set up an irrevocable trust with some monies in it, which after 5 years, these monies would be protected from being extracted by a LTC facility and Medicaid would step in.
Just another thought, if taking care of her full time becomes a bit much.

 

[Dogpeace]

I know many on this site are against it, but perhaps set up an irrevocable trust with some monies in it, which after 5 years, these monies would be protected from being extracted by a LTC facility and Medicaid would step in.
Just another thought, if taking care of her full time becomes a bit much.

I don't know why anyone would be against Medicaid planning, any more than they would be against Tax planning. The law is there for all of us, so use it where you can!

I talked EXTENSIVELY with several elder law attorneys. First, each state has its own flavor of the law, and I am in NC, so your mileage may vary.

The irrevocable trust route has two drawbacks:
1) You have to use a trustee, typically a trusted child, who then has the burden of managing the assets

2) The trust can NEVER disburse principal money back to you, under any possible circumstance. It can disburse income, which is counted, but the principal is not counted because you don't control it and can never get at it. If the trust could disburse principal to you, the assets are countable for Medicaid. This means the trustee can withdraw funds for themselves (they own it and can do whatever they want with it) and one of the things they can do is "gift" it back to you. That just puts too much burden on the kids, in my opinion.

This is a fine way to pass along money to your heirs that you never want to see again, and you don't want Medicaid to touch. We do not have such an estate.

There is another trust, which is created after a spouse dies, called a Testamentary Trust. This type of trust CAN disburse principal and income money back to you, and only the money you receive is counted as income, but again, the kids have the burden of managing and disbursing the money. You have no say in how it is invested, how much if any is disbursed, etc. The kids have all the control over your money. This is not for us.

PLUS - in order for an asset to be in a trust it has to come out of your IRA or 401K... which means you pay taxes everything you withdraw and there is no more tax shelter.

 

[pb4uski]

.... A dementia care facility could run $80 K - $100 K a year and if funding from a pretax IRA, we would need to withdraw even more for taxes....

While it only helps a little, I believe that the cost is tax deductible to the extent that it exceeds 10% of AGI.

 

[pb4uski]

... I don't know why anyone would be against Medicaid planning, any more than they would be against Tax planning. ....

There are some of us who object to millionaires and multi-millionaire couples structuring their finances to pass their millions onto their kids while sticking taxpayers with a $65k+ a year bill for their long-term care in a nursing home. We think that a couples resources should be used for their care rather than shouldering taxpayers with that burden to the benefit of their heirs. There is a difference from tax planning in that tax planning reduces tax that the taxpayer would otherswise owe whereas Medicaid planning robs money from other taxpayers. Finally, the magnitude of the amounts for Medicaid planning is much more egregious/objectionable that the amounts that tax planners benefit from.

 

[MichaelB]

It’s probably best to avoid the Medicaid discussion. It’s really off topic, the OP said it’s not an issue or objective, and it risks derailing the thread.

 

[pb4uski]

Agreed... I just wanted to provide the OP with a snippet of the other side since he wrote that he didn't know why anyone would be against Medicaid planning.

 

[Hermit]

I would suggest going through the Medicaid planning process so you understand how it works in your state. In my friend's case, his wife could no longer physically care for him and a facility became the only option. In Colorado a spouse can have about $126k in assets and the car and house are not included as long as the house value is under about $500k. If your wife is placed under Medicaid, you are provided a monthly income and the rest of the income is used to pay for her care with Medicaid paying the rest. Knowing these figures and how it works including Medicaid application forms and income trusts (sometimes referred to as Miller trust) for your state would, in my estimation, be good planning for an unlikely but possible eventuality.