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Old 10-13-2017, 02:23 AM
 
71,490 posts, read 71,674,131 times
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the difference is when you need the money to pay the snf . being down like that is not a problem if you don't need the dough .

getting caught in an extended down turn and having to shell out 120k ADDITIONAL a year in these parts on top of what the community spouse needs could be killer.

anytime you increase a draw like that , sequence risk sky rockets and even the best of times can't help later on when things recover .

Last edited by mathjak107; 10-13-2017 at 03:45 AM..
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Old 10-13-2017, 05:13 AM
 
Location: Central Massachusetts
4,800 posts, read 4,843,254 times
Reputation: 6377
Quote:
Originally Posted by mathjak107 View Post
the difference is when you need the money to pay the snf . being down like that is not a problem if you don't need the dough .

getting caught in an extended down turn and having to shell out 120k ADDITIONAL a year in these parts on top of what the community spouse needs could be killer.

anytime you increase a draw like that , sequence risk sky rockets and even the best of times can't help later on when things recover .
Which is exactly why a sure bet isn't always the one that brings the most money. Totally understood. So therefore LTCi is important. Setting aside a portion of one's portfolio in something other than volatile equities. Even being very selective on bond funds as they can have a significant drop. Real estate is also a risk especially in over priced markets but it carries less risk if the property has no mortgage. So as the saying goes "Everyone needs a plan on how to deal with long term care." Review it and know it. Just understand even in fast illnesses that progress faster than usual there is time before and time after to deal with the financial aspects. Facilities are like even the dentist office. If you don't have insurance there are payment methods and the ability to negotiate a reasonable price for everyone. Having insurance locks in your costs which for some can be the most useful. It has to do with how comfortable one is with their plan. If it has LTCi or just assets set aside or as some here have said a 9mm and a soft place to land. BTW that last is not in our plan.
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Old 10-13-2017, 06:06 AM
 
Location: Philadelphia/South Jersey area
2,870 posts, read 1,400,541 times
Reputation: 10071
Quote:
Originally Posted by Larry Siegel View Post
I'm pretty sure I already have. The market was down 57% from the top in 2007 to the bottom in 2009 and I survived.
not only did people survive, some of us who did not panic actually increase our exposure so when the market bounced back by over 20% in 2009 and 2010 ( a little lower). my portfolio increased very nicely. now I didn't have to draw from those portfolios because I always have enough liquid assets secured very conservatively that when crap hits the fan I don't have start selling stuff.

Now I don't have a spouse so I don't have to worry about leaving some one in a hard place and since I'm not going to remarry that's not an issue for me.
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Old 10-13-2017, 07:38 AM
 
216 posts, read 114,130 times
Reputation: 168
Quote:
Originally Posted by LTCShop View Post
I didn't know you were "prospecting".
I'm not but you certainly seem to be. Why keep bashing someone's plan, gives brokers a bad eye.
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Old 10-13-2017, 10:19 AM
 
Location: LTCShop.com
236 posts, read 113,100 times
Reputation: 151
Quote:
Originally Posted by Pintail07 View Post
I'm not but you certainly seem to be. Why keep bashing someone's plan, gives brokers a bad eye.
You called oldsoldier "a prospect."
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Old 10-13-2017, 10:24 AM
 
Location: LTCShop.com
236 posts, read 113,100 times
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Quote:
Originally Posted by Larry Siegel View Post
I'm pretty sure I already have. The market was down 57% from the top in 2007 to the bottom in 2009 and I survived.
I've got a friend who recently retired.
He is worth about 2.5 million.
He and his wife both have pensions and social security that cover all of their living expenses.
Most of their net worth is in retirement accounts.

He asked my advice about an investment.
He said it would require a one-time $500,000 deposit.
The investment would guarantee a $4,000 per year return.
The $4,000 per year return could increase in the future, but it might not.
The principal is not guaranteed.
It's not likely the principal could be lost, but it's possible.
Should he do it?
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Old 10-13-2017, 11:43 AM
 
216 posts, read 114,130 times
Reputation: 168
Nope, reread my friend/
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Old 10-13-2017, 01:02 PM
 
29,772 posts, read 34,856,103 times
Reputation: 11681
Quote:
Originally Posted by LTCShop View Post
I've got a friend who recently retired.
He is worth about 2.5 million.
He and his wife both have pensions and social security that cover all of their living expenses.
Most of their net worth is in retirement accounts.

He asked my advice about an investment.
He said it would require a one-time $500,000 deposit.
The investment would guarantee a $4,000 per year return.
The $4,000 per year return could increase in the future, but it might not.
The principal is not guaranteed.
It's not likely the principal could be lost, but it's possible.
Should he do it?
That's approx. a .80% return?
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Old 10-13-2017, 01:26 PM
 
3,079 posts, read 816,938 times
Reputation: 1709
I've really agonized over LTCi. Now taking a break but I'll consider a hybrid. My conclusions so far:

PRO-LTCi:
1. There is a certain psychological plus to paying for LTC out of an income stream. My pension would not cover a SNF today, and less so in the future even though it's has a COLA. Medical costs will outstrip that.

2. I'm healthy as a horse. THAT doesn't necessarily cut it for underwriting. Conditions that you have been told and experience as innocuous might appear differently to an underwriter depending on the clarity of the records. Plus, there CAN be all sorts of outright errors in the medical records. Updates are no longer possible if physicians have moved on; you as the patient instead can file an addendum. (If you can demonstrate an outright error (clerical, say), the Quality Control team at the practice will add their own addendum but cannot reconstruct, they say, without creating additional "red flags").

Companies that have the lowest premiums and the fewer rate increases do so by (at least in part) ferociously managing *their* risk. STRICT underwriting.

If at all interested in LTCi, do NOT wait. There are three tiers. The difference between the best rate and the mid-rate on one policy was 11%. Qualify only for the highest rate? Pay 39% percent more.

3. At some point, if an issue is of enough concern that you're devoting a lot of time to it, the most sensible decision is just to go ahead and do it. Let go of whether it's financially optimal.

ANTI-LTCi:

1. USE - I find most LTCi statistics murky at best with comparisons of premiums paid to current LTC costs not helpful. No doubt some purchasers benefit greatly; others who never use it are told to be thankful of their good health. For that outlay of money, I'd want more - an assessment of the actual risk for *me* compared to the financial outlay. Sure, some of that might be family health and so on ... personal care resources.

More, and I can't now take the time to see if I bookmarked it ... I came across one statistics (from one of the major LTCi associations) that about 30% with LTCi initiate a claim. That's really LOW (to me):

Forget that many who require some form of custodial care as they age don't meet the 2 ADLs etc. That's simple.

For those who do meet the ADL-cutoffs:
The statistic notes indicated that a portion who qualify for payments under a LTC policy never collect because they die during the first 90 day elimination period.

Of those who begin receiving payments, some number do not live long enough to exhaust their total pool.

Another set (probably small, perhaps from a fall requiring home care during rehab and recovery) recover to where they no longer qualify for LTC payments. (This is the distinction between LTC riders and Chronic Illness riders, where the disability need be permanent.)

Then there's tail-end risk, more an issue now due to the current practical unavailability of unlimited policies. And that current medical costs tend to be higher than policy maximums.

Medicaid (perhaps with some assets sheltered for a Partnership Policy) remains the final outcome for some number whether or not they began with LTCi. Could LTCi help pay for an initial private pay bed? Sure, but again state regulations for Medicaid keep changing on what they'll reimburse, impacting how nursing homes beds are managed. This will not get better with soaring Medicaid costs - and possible future program changes.

My point is that I don't know how to weigh these probabilities - and assess how much risk-mitigation the dollar outlay for LTCi is buying. Insurance actuaries must have some of these data. Why not publish it? Most LTCi articles are waaaaay too general.

2. COST - Some rate stabilization statutes are better than others. My state is at 15% a year. I downloaded a spread sheet but didn't pour through it clearly, having moved on from LTCi. But Maryland continues to grant rate hikes. I *think* Genworth went up the max - 15% - for the three years preceeding/including 2016? Hearings were held in 2016 by policy holders asking that Maryland set an overall cap saying their policies were becoming unaffordable. Don't believe they got anywhere.

That said, if I had access to a group policy - or to state benefits like NY (sheltering all assets) - were young and "healthy" enough to qualify for a best rate from a solid company, with minimal history of rate hikes - I'd probably go ahead and buy it. The costs would be low enough that I'd wouldn't try to assess ACTUAL dollar gain (not a theoretical pool figure) with unknown tail-end risk.

Don't meet those categories, it becomes a much harder decision. Increasingly, the hybrid policies offer options (granted at A cost) that are appealing. There I know more what I'm paying for. Reduced LTCi pool (of unknown practical value). But flexibility (premium return for future CCC entrance fee). Stable rates. As mentioned earlier, don't find the opportunity cost consideration relevant.
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Old 10-13-2017, 01:57 PM
 
3,079 posts, read 816,938 times
Reputation: 1709
Quote:
Originally Posted by eliza61nyc View Post
not only did people survive, some of us who did not panic actually increase our exposure so when the market bounced back by over 20% in 2009 and 2010 ( a little lower). my portfolio increased very nicely. now I didn't have to draw from those portfolios because I always have enough liquid assets secured very conservatively that when crap hits the fan I don't have start selling stuff.

Now I don't have a spouse so I don't have to worry about leaving some one in a hard place and since I'm not going to remarry that's not an issue for me.
Yes ... I retired into the 2008-2009 mess with finances pretty much unstructured. Previously, no time. Single mom. Demanding job.

Anticipating tough times, I threw myself into reading, listening, monitoring with the same excruciating detail that I'm doing now with LTCi. It really paid off - in large part by taking a contrarian position. If not, there's a certain calm that I would hope comes from having really tried to do the homework.
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