We are blessed
After reading sad stories, we feel blessed that we did a few things right and in a timely fashion.
I am 73 and my wife is 72. Both are of the very sound mind and highly educated - no signs of dementia at all. But she has several metastatic colon cancer surgeries since 2014 and has been beating the odds and we keep traveling - one of the few things she likes to do - she does not care for jewelry etc. I have BP, Sleep Apnea, and early stage of Diabetes - all under control with sound health.
1) Though we had high professional income, we always were frugal. We sent kids to Brown, Harvard, MIT, and UCLA to get their education and they are well settled with far more savings than we had at their age! They have frugality in the blood too. We were the role model. And both read financial literature and do their max Roth IRA, 403(b) and invest mainly in Index funds (they are 36 & 37)
2) We consolidated all accounts under just one - Fidelity and gave them to manage the investment so we have time to learn new things and travel.
We converted one IRA to Roth and intend to leave Roth to kids. Second IRA we use for retirement income. We converted Pension to IRA (good timing since the market has been good for the last 5 years)! Roth is Aggressive (for the legacy to kids) 85% stocks, 10% bonds, and rest is cash. And IRA is 70% stock.
3) Every year we did Monte Carlo simulations on our assets to assess how much we can afford to spend on travel, charity and to give to kids without running out of money. We give $20K to kids for their IRA, 403 etc, so they can use their money for their nice living. They chose not to go to high paying wall street job and enjoy positively contributing to society by being high school teachers.
4) We sat down with kids and shared our Will, Financial POA, Living Will, and Advanced Health proxy. As well as an excel of all the info about bills, CC,
where the water and gas valves are in the home, had them as beneficiaries on all financial accounts and banks including access to the safe deposit vault, etc.
We shared our Last wishes info - what to do on the 1st day of death, in a week, in a month, in six months and a year after our death, major contacts like Dr., Accountant, Lawyer, Plumber, Handyman, relatives, friends (to notify of our death) including our own obit and so on.
5) we showed all finances and shared what we may give to charity and what we may give to them. They said that they do not want anything, and we should use it ourselves (insisted that we fly business class, at least, if not the first class in all our travel, and do charity.).
Of course, we will leave some to them! But will leave it as tax-free Roth and stretch IRA. We are NOT doing trust - they are good kids with heads screwed on right and do not fear them to be spendthrift and do not worry about them under a creditor situation where the inherited IRA can be pried open. For others, that may not be a good option and they should do a trust to protect from a creditor (or divorce) and control the use of the funds.
6) We knew that 70% will need some kind of Long Term Care - be it home aid, Assisted Living, Nursing home, (God have mercy on us) Dementia/Parkinson - any neurological chronic disease - that can keep us for far longer than 3 years in a nursing home.
Most importantly we knew that LTC insurance was not possible for us and even if we can get it it would be limited to $5K month which is hardly 50% of the today's cost and will run out in 3 years anyway. If we wanted $5K for a month for the lifetime then it would cost us close to $30K/year and will be a hassle to choose at the last minute and could be a burden on the caretaker Spouse. My MIL was in a nursing home for ~3 years and it took a real toll on us since she had language and food barrier so my wife would be at the nursing home EVERY day from 9-10 AM to 7-8 PM.
7) So we talked to the kids about us going to a LifeCare (CCRC) facility and they loved the idea provided that they will share their thoughts on the facilities. We read five books on CCRC (Continuing Care Retirement Community), searched the net, and visited several in few states including in good weather and near my daughter also.
8) We finally settled for a Non-Profit - Willow Valley Communities [mod edit] in Lancaster, PA. It has been around 30+ years with 2,500 residents with hundreds of activities right on the 210-acre campus including two big clubs with modern 500 seat auditorium where they bring shows at a nominal price, Swimming, Bowling alley, Gym, Golf, Wood Club, Tennis, Pickleball, model railroad club - two of them etc.
Our building, with 400 residents, has 500 seats auditorium, an Art studio, two dining halls (one requires a reservation!), a bank with safe deposit vault, pharmacy, ~3,000 Sq ft. Library, Hair Saloon, Swimming pool, Gym, Wood club, Cafe, 24 hr. resident registered nurse etc.! I don't have to go out of the building if I don't want to! If I get sick, then the food is delivered to my apartment.
The larger unit will have a larger cost. We downsized 11 years ago from 4,000 to 1,800 sq ft so further downsizing is not an issue with so many activities going on, we will be coming home basically to sleep - like an inside cabin on a cruise ship. This is a land cruise ship in the cornfield or as one resident put it - it is God's waiting room with luxury!
Our Monthly cost is $4,000 but we will cook our own and so our monthly cost will be $3,500. (We would have paid ~$2,500 for LTC anyway!). We will get ~1,200 Sq ft condo as independent living with 2 bedrooms, 2 baths, large balcony overlooking a large courtyard with Koi Pond, shuffleboard, BBQ etc.!
We will not have any mortgage, property tax, or HOA fees! Our condo is updated with new carpet, wood floor, new appliance, new bathroom etc now and will be redone every 10 years along with the renovation of the building also every 10 years at no or nominal cost for the upgrade.
For normal maintenance, we call the staff for free. Maid cost is $25/hour, Internet $25 and 200 Channel TV is $35/month. Free shuttle to take us around the campus as well as nearby shopping, hospital and doctor's office! On the campus, there is U Penn's Medical Arts building with doctors of various discipline and modern lab, so we can be taken care of on the campus, and the lab comes to the home to take a blood sample if need be!
Most IMPORTANT, if one us need Assisted Living/Nursing Home/ Memory ward/Hospice etc. then there four major facilities (one connected to our building - just walk over and no driving for the other spouse). Two new are being built. All of these is included in the monthly fees.
And when one of us passes away the other will be remaining active mentally and physically with so many activities and so many folks to interact with. People gain years by avoiding the deadly disease of loneliness (the equivalent of 8 years of life - about 15 cigarettes per day according to the surgeon general).
They have CMS 5-star medical facilities. Yes, monthly fees do increase 3-3.5% /year to keep up with inflation and with increases in the medical cost.
You also pay a one-time entrance fee. It can be partially refundable for 4 years (none after), or 33% refundable or 90% refundable but the cost goes up for the refundable option. We took a nonrefundable option. We will manage our own - either spend on travel, give to charity, invest etc. vs. give to Willow Valley - kids have their own and will leave them some anyway. No need to tie up 80% more for a 90% refund!
Our kids THANKED us profusely for this decision and said that this is the BEST GIFT (second to the education) that we are giving them!
We move in January 2019!
Morale: Plan ahead, get rid of junk, don't be a burden on kids. They have their own life to live!
If your parents need such help, then get them in good CCRC to protect and take care of them - mentally and physically.
If you need more info, you can PM me. [mod edit]
Best of luck for your own journey and help with your parents and the loved ones. May God bless all of us.
BTW: Most CCRC require that medical exam and will NOT take you if you have any neurological disease - so you must plan ahead!
Typically, they look for your net assets as double your entrance fee and your income as double your monthly fees - they want you to have a life outside of the CCRC!
