What are you budgeting for LTC?

[livingalmostlarge]

People talk about LTC and how expensive it is. What numbers are people realistically using? And for how long? Are you projecting care for 10-20-30 years?

Length of stay in a nursing home which is usually the most expensive is 2-5 years. That's where I think right now it can run in HCOLA $20k/month. 5 years is $1.2m per person and in theory you could double it for a couple. But that $20k/month is not only from a portfolio but if there is SS, annuity, and or pension that covers a portion of it.

And right now my mom's friends who spouses and partners have done it most have paid $8-10k so about half and some have LTC insurance. Most have some sort of fixed income SS is a big one that can contribute a couple thousand to it. Then RMD. Then LTC insurance. So assuming $10k/month and $2k ss it's $8k right now per month so about $100k/year. What do people assume really?

 

[Fermion]

About $0.50. Wait, Seattle has a special tax on my LTC plan. $0.55

 

[YellowSubmarine]

Plan to use our HSAs on demand. TV 350k today.
I assume in home care initially for half the cost of residential care.
Also, we have enough medical receipts/invoices to cover much of our withdraws.

 

[RetiredHappy]

I have LTCI, which pays about $10K a month for 5 years, with a 3% inflation rider. My husband's is about 72K a year, also with a 3% inflation rider for 6 years. Anything extra will come out from our portfolio. Not going to budget for it as we should be able to supplement without issue.

 

[Midpack]

Zero. I wasn’t really even on the fence about it, but seeing how John Hancock handled the claims on behalf of my now deceased sister I’d never give them a dime. My sister paid LTC premiums for about 3 decades, she believed in them. She was diagnosed with a terminal cancer in May, started in home hospice in June, and moved to assisted living in Nov and passed away 30 days later. We applied and submitted her first claim on 11/21. They finally paid me on 5/16, roughly 1/3rd what she was entitled to IMO. I initiated all the communication, they attempted to close the case several times, and never told me until I called to follow up. They asked for information and documentation one piece at a time (where all at once would have been much quicker and more efficient), and told me I’d have to wait 10-15 business days after each. Sometimes they let me upload online, but sometimes they only accepted via email, and twice they insisted on snail mail! The only people I was allowed to talk to were script reading robots, most offshore with language issues, with no authority. There is no doubt in my mind stalling is part of their standard operating procedure, they’re banking on customers just giving up without collecting the $ benefits they’re entitled to. I doubt many customers are as tenacious as I was…

 

[YellowSubmarine]

Zero. I wasn’t really even on the fence about it, but seeing how John Hancock handled the claims on behalf of my now deceased sister I’d never give them a dime. My sister paid LTC premiums for about 3 decades, she believed in them. She was diagnosed with a terminal cancer in May, started in home hospice in June, and moved to assisted living in Nov and passed away 30 days later. We applied and submitted her first claim on 11/21. They finally paid me on 5/16, roughly 1/3rd what she was entitled to IMO. I initiated all the communication, they attempted to close the case several times, and never told me until I called to follow up. They asked for information and documentation one piece at a time (where all at once would have been much quicker and more efficient), and told me I’d have to wait 10-15 business days after each. Sometimes they let me upload online, but sometimes they only accepted via email, and twice they insisted on snail mail! The only people I was allowed to talk to were script reading robots, most offshore with language issues, with no authority. There is no doubt in my mind stalling is part of their standard operating procedure, they’re banking on customers just giving up without collecting the $ benefits they’re entitled to. I doubt many customers are as tenacious as I was…

Sad, sorry to hear that; but it's not uncommon.

 

[COcheesehead]

No LTC policy. Will self insure. I assume $120,000/year and we can carry that for a long, long time with lots of buffer on top.

 

[Lewis Clark]

Keep in mind that LTC costs may not be fully in addition to your current expenses. Once a single person is in LTC, or one of a married partnership is in LTC, other expenses will decrease.

Examples may include travel, vehicle expenses, food, and entertainment.

 

[RetiredHappy]

Zero. I wasn’t really even on the fence about it, but seeing how John Hancock handled the claims on behalf of my now deceased sister I’d never give them a dime. My sister paid LTC premiums for about 3 decades, she believed in them. She was diagnosed with a terminal cancer in May, started in home hospice in June, and moved to assisted living in Nov and passed away 30 days later. We applied and submitted her first claim on 11/21. They finally paid me on 5/16, roughly 1/3rd what she was entitled to IMO. I initiated all the communication, they attempted to close the case several times, and never told me until I called to follow up. They asked for information and documentation one piece at a time (where all at once would have been much quicker and more efficient), and told me I’d have to wait 10-15 business days after each. Sometimes they let me upload online, but sometimes they only accepted via email, and twice they insisted on snail mail! The only people I was allowed to talk to were script reading robots, most offshore with language issues, with no authority. There is no doubt in my mind stalling is part of their standard operating procedure, they’re banking on customers just giving up without collecting the $ benefits they’re entitled to. I doubt many customers are as tenacious as I was…

There are some LTCI companies that are worse than others for sure. But we ran our home care business for 8 years and we collected direct payments from LTCI companies in the tune of more than $2M per year in our last few years, without issue. We helped clients get approved and then once approved, we got assignment of benefits from the clients so that we did all direct billing and payment. We are not concerned about the claims process.

 

[NW-Bound]

A local nice senior living facility charges close to $100K/year for the highest care level that they provide (bed-ridden and in diaper ).

While I do not wish to live in that condition for long, I can afford that indefinitely for both of us (unless the market crashes really hard).

 

[Aerides]

If firecalc is right, we'll have plenty of money left over by that time in our lives. That's when our healthy portfolio gets to do the heavy lifting.

No LTC insurance for me, I've read enough stories to know it's unreliable.

 

[WhenIsItTime]

Don't you just need enough to get into a forever care facility, let them run your accounts dry and they can get the rest from medicare/medicaid?

 

[Dtail]

Don't you just need enough to get into a forever care facility, let them run your accounts dry and they can get the rest from medicare/medicaid?

Definitely not from Medicare.

 

[FREE866]

Zero. I wasn’t really even on the fence about it, but seeing how John Hancock handled the claims on behalf of my now deceased sister I’d never give them a dime. My sister paid LTC premiums for about 3 decades, she believed in them. She was diagnosed with a terminal cancer in May, started in home hospice in June, and moved to assisted living in Nov and passed away 30 days later. We applied and submitted her first claim on 11/21. They finally paid me on 5/16, roughly 1/3rd what she was entitled to IMO. I initiated all the communication, they attempted to close the case several times, and never told me until I called to follow up. They asked for information and documentation one piece at a time (where all at once would have been much quicker and more efficient), and told me I’d have to wait 10-15 business days after each. Sometimes they let me upload online, but sometimes they only accepted via email, and twice they insisted on snail mail! The only people I was allowed to talk to were script reading robots, most offshore with language issues, with no authority. There is no doubt in my mind stalling is part of their standard operating procedure, they’re banking on customers just giving up without collecting the $ benefits they’re entitled to. I doubt many customers are as tenacious as I was…

That sounds absolutely maddening. So sorry you had to go through that. Everyone I know in real life has talked negatively about LTCI----premiums constantly going up, etc

 

[COcheesehead]

Don't you just need enough to get into a forever care facility, let them run your accounts dry and they can get the rest from medicare/medicaid?

I have a friend who does elder law. He told me a center will determine a patient is beyond the care of the facility when funds dry up. The patient is then transferred to a hospital and cannot be readmitted.

 

[NW-Bound]

I have a friend who does elder law. He told me a center will determine a patient is beyond the care of the facility when funds dry up. The patient is then transferred to a hospital and cannot be readmitted.

Sounds about right. When the hospital discharges the patient, the state will find a low-cost nursing home to transfer the patient. He will not be thrown out on the street. Of course, the facility and level of care will not be as nice as the ones that charge beaucoup money.

 

[COcheesehead]

Sounds about right. When the hospital discharges the patient, the state will find a low-cost nursing home to transfer the patient. He will not be thrown out on the street. Of course, the facility and level of care will not be as nice as the ones that charge beaucoup money.

No, but no longer under the guidance of the patient. My lawyer buddy was seeking legislation to stop the “beyond our care” discharges.

 

[Koolau]

Keep in mind that LTC costs may not be fully in addition to your current expenses. Once a single person is in LTC, or one of a married partnership is in LTC, other expenses will decrease.

Examples may include travel, vehicle expenses, food, and entertainment.

While that may be true, most expenses stay virtually the same. Anything to do with the housing situation will be virtually the same for one as for two.

I think that's a big issue that people forget. While one person of a couple is suddenly paying $12K/month for LTC, the other is still in the house or Condo that the couple used to occupy together. Food costs go down, but not things like utilities (maybe 10% lower)??

 

[aaronc879]

Not budgeting anything for LTC. I'll stay in my home by myself, hiring help as needed, until my money is gone then take care of the problem myself.

 

[COcheesehead]

That is long term care

 

[equakesfan]

We budgeted $300k in 2024. we assumed LTC would cost $10k/mo. in 2024. We assumed SSI would go towards LTC if either or both of us in in LTC. We also assumed that income from our real estate investment would be used if both are in LTC or if only 1 is alive and in LTC. We did not include rental income from our house if we are no longer in need the house (although if our kids are not living in the house, we will instruct our kids to rent the house out for additional income*). This will cover about 3 years for either of us if both of us are still living, 2 years for both of us in LTC and about 9 years if only one of us is still alive and in LTC.

We adjust all the figures for inflation for near term. Since we are probably about 30 years from needing LTC, we will reassess when we get closer (~20 years).

*Our neighbor's house was vacant for about 3 years while she was in LTC before she passed. She didn't prepare for the possibility of needing LTC. Therefore her family couldn't deal with the property until she passed. They could of had ~$3k/month in income from the house but instead the house sat vacant in a hot rental market.

 

[NW-Bound]

No, but no longer under the guidance of the patient. My lawyer buddy was seeking legislation to stop the “beyond our care” discharges.

Well, to guide a caregiver you need to pay him. Money talks.

Also, many elderly patients in poor physical conditions are also too muddle-headed to ask or demand much.

 

[Telly]

In more recent years, I was figuring $500k for each of us to self-insure. With the loss of my wonderful DW, that leaves just me now. By myself, I don't plan on needing any long term care, unless something happens that I have no knowledge/control.

 

[audreyh1]

Our plan is to have plenty left over for LTC.

 

[bada bing]

One potential plan is to enter a CCRC while still able to pass the entrance requirements for independent living. I don't have an exact prospect now because hopefully it's 10-15 years off for me. And there's no guarantee of timing the entrance correctly. Too early and you burn through excess rental and too late and you can't be admitted under contract. Best guess today is $500K-$650K entrance bond, 75% refundable, and $6K-$7K/month rent. I've seen Type A contract facilities around that cost or lower. Not cheap, but it's not all attributable to LTC. Housing expenses are part of the total. Except for the entrance bond, ongoing costs aren't out of line with my current budget running a household and some BTD. Just downsizing to an apartment verses a couple houses snow birding lifestyle now.

DGF and I are part of a permanent household. Likely one of us will care for the other first to go, which is sort of traditional. There's reasons to expect I'm the one that needs to plan for a solo survivor plan, but the future isn't set.

I've seen planning articles saying that $1M net worth is the market group for LTCI. Much less than that and you're headed for Medicaid. Much more than that and you can reasonably self insure. Seems like the membership here skews mostly to the self insurance capability.