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Old 08-05-2016, 06:53 AM
 
31,028 posts, read 37,116,591 times
Reputation: 13325

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Quote:
Originally Posted by honobob View Post
Sorry, I read it as the flaw was people letting their LTCi lapse.
The realilty flaw or not was not being able to project forward what the lapse rate would be. It is still a fairly new product when you consider the typical time line from buying to using. Also it can go from being a necessary expense during working years to a product that is difficult to afford during retirement years. If I remember right there are differences in lapse rates between purely individually sold policies to those sold within a group offering.

Reality is that it is a product not meant to be sold from a affordability perspective to everyone and really has a more targeted audience long term then previous marketing targeted.

This health care financing in retirement is so heavily subsidized that the real cost is not evident to many. Between Medicaid, Medicaid, affordable housing and many other metrics including food stamps the real cost of life in retirement is out of the reach for most to be able to survive without government involvement.
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Old 08-05-2016, 06:59 AM
 
31,028 posts, read 37,116,591 times
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Quote:
Originally Posted by honobob View Post
So let's problem solve this. Anyone seriously considering LTCi should have $100,000 at age 50. If you put that in the market and earmark it for LTCi then at a 4% withdrawal rate you should be able to pull $4,000 a year to pay the premiums at $4,000 per year for 30 years and still have your $100,000. Solves that problem of lapsing.
There are a number of aspects to your above. One of which is having the money in a after tax account which I suggested having a minimum of 100K in a previous thread and got run out of town. If using a work place plan at age 50 in addition to paying full taxes on the withdrawal you will probably be paying a early withdrawal penalty, Even if withdrawing after retirement age you will still need to withdraw more than 4k to have that much after taxes. Also you need it identified for that use and nothing else meaning you have a more substantial nest egg.

Serious question, how old are you?
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Old 08-05-2016, 08:59 AM
 
8,995 posts, read 13,017,381 times
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Quote:
Originally Posted by lottamoxie View Post
If you at any time lapse in payments for LTCi (like say you're in a job and you get laid off and it takes a year to find another job and you have to cut expenses going out...), you will lose everything you put into LTCi to that point and will not get any of it back. That would majorly suck. So once you start a LTCi policy you can never not pay, not ever.
That's simply not true.

Most LTC policies these days have an optional non-forfeiture provision that is specifically designed to ensure that if you lapse your policy after a specified number of years, you retain some benefits from the policy; usually either a reduced daily benefit, or a shortened benefit period.

Now if you choose not to purchase this option with your LTC policy, then you just have to live with that choice. But that would be a problem of your own making and not a fault with the program itself.

Moreover, even if you choose not to sign up and pay for this option, there is another provision which may be applicable to you. Many policies contain a contingent non-forfeiture benefit which provides protection if you are no longer able (or willing) to pay the premium following a rate hike. This provision usually kicks in if you've been covered and paid premiums for X number of years and the premium goes up Y amount. In such situations, you can cancel the coverage, but still receive LTC benefits commensurate with the amount of premiums you have paid over the years.
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Old 08-05-2016, 01:14 PM
 
Location: SF Bay & Diamond Head
1,776 posts, read 1,583,025 times
Reputation: 1973
Quote:
Originally Posted by TuborgP View Post
There are a number of aspects to your above. One of which is having the money in a after tax account which I suggested having a minimum of 100K in a previous thread and got run out of town. If using a work place plan at age 50 in addition to paying full taxes on the withdrawal you will probably be paying a early withdrawal penalty, Even if withdrawing after retirement age you will still need to withdraw more than 4k to have that much after taxes. Also you need it identified for that use and nothing else meaning you have a more substantial nest egg.

Serious question, how old are you?
Wait, wait, wait! The $100,000 plan was just for the nervous Nellys that are petrified that they can't keep up the payments. I seem to be the only one putting out real numbers here while others are just saying "too much".

I do have a Cadillac plan! It is costing me the price of a pack of smokes a day!! If your retirement plan can't absorb the price of a pack of smokes a day then you have bigger problems that dealing with LTC.
If people don't want LTCi then don't buy it. If you want it but keep making baseless excuses for putting your money into play then just wait until your health precludes you for getting it. I have shared my experience of having it for almost two decades and my experience with SNF and my Dad and have been mighty attacked for it. I have made a pretty good argument of how it is pretty impossible to save to have coverage. I am here to help you make your decision by sharing my experience. I do not understand all the people that are gambling on statistics and filling their head with what ifs that continue on this thread.

Bought in 40's, had for almost two decades puts me on the sunny side of 60!
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Old 08-05-2016, 01:55 PM
 
8,334 posts, read 8,732,854 times
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OMG we get it.
Some people have LTCI and are pro LTCI. And those very same people are also paying much less than others would pay for the same thing. Some people don't like the 'self insure' plan. (That's obviously not insurance, just the phrase that's used). But enough already with implying that's not the smart way to go or that's just an uninformed decision. No one has literally said that but that's clearly what is conveyed.

Frankly when someone is only paying $180 a month for something that would cost me 250.00 (just as an example), their argument about how reckless and risky it is to not have that coverage doesn't carry a while lot of weight.

Last edited by selhars; 08-05-2016 at 02:04 PM..
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Old 08-05-2016, 02:47 PM
 
Location: SF Bay & Diamond Head
1,776 posts, read 1,583,025 times
Reputation: 1973
Quote:
Originally Posted by selhars View Post
OMG we get it.
Some people have LTCI and are pro LTCI. And those very same people are also paying much less than others would pay for the same thing. Some people don't like the 'self insure' plan. (That's obviously not insurance, just the phrase that's used). But enough already with implying that's not the smart way to go or that's just an uninformed decision. No one has literally said that but that's clearly what is conveyed.

Frankly when someone is only paying $180 a month for something that would cost me 250.00 (just as an example), their argument about how reckless and risky it is to not have that coverage doesn't carry a while lot of weight.
OMG, I don't think you do get "it". Exactly WHAT do you think is being said that is smart that, in your opinion, is NOT. Your post just seems to be a rant of you can't get the same deal someone got 20 years ago! That doesn't seem to be working out well for you. So are you saying you DO want LTCi but can't afford the equivalent of a pack of smokes a day? Don't worry what others have. You have to work with the market you are in.
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Old 08-05-2016, 03:19 PM
 
31,028 posts, read 37,116,591 times
Reputation: 13325
Quote:
Originally Posted by honobob View Post
Wait, wait, wait! The $100,000 plan was just for the nervous Nellys that are petrified that they can't keep up the payments. I seem to be the only one putting out real numbers here while others are just saying "too much".

I do have a Cadillac plan! It is costing me the price of a pack of smokes a day!! If your retirement plan can't absorb the price of a pack of smokes a day then you have bigger problems that dealing with LTC.
If people don't want LTCi then don't buy it. If you want it but keep making baseless excuses for putting your money into play then just wait until your health precludes you for getting it. I have shared my experience of having it for almost two decades and my experience with SNF and my Dad and have been mighty attacked for it. I have made a pretty good argument of how it is pretty impossible to save to have coverage. I am here to help you make your decision by sharing my experience. I do not understand all the people that are gambling on statistics and filling their head with what ifs that continue on this thread.

Bought in 40's, had for almost two decades puts me on the sunny side of 60!
I was curious about your age as I am beginning to realize how much our age could quite possibly change our perspectives as we retire and get older. We are in our late 60's and have been retired for almost nine years. My perspective on the financial cost of retirement is changing and while I am optimistic for ourselves I beginning to have concerns about the big picture for many others. This stuff is expensive and the current financial market isn't rewarding for many.
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Old 08-05-2016, 05:02 PM
 
Location: SF Bay & Diamond Head
1,776 posts, read 1,583,025 times
Reputation: 1973
Quote:
Originally Posted by TuborgP View Post
I was curious about your age as I am beginning to realize how much our age could quite possibly change our perspectives as we retire and get older. We are in our late 60's and have been retired for almost nine years. My perspective on the financial cost of retirement is changing and while I am optimistic for ourselves I beginning to have concerns about the big picture for many others. This stuff is expensive and the current financial market isn't rewarding for many.
I was concerned about aging when I was 17. I moved out on my own when I was a senior in high school with my parents permission. I just always felt I should carry my own weight. My retirement plan has always involved real estate. My simple plan was if people pay one third of their income on housing then if I retire with three properties plus my own house then I'll be making the equivalent of a full time job with no housing expenses. It has worked out much better than that.

Now when I was doing so well in real estate I suggested to my friends to do the same. I even offered to manage for them free. But it was always well you got lucky buying in the 70's, then it was you got lucky buying in the 80's then the 90's. See the pattern there?

So are you worried for yourself or others? My friends had the same opportunities as I but chose not to avail themselves. I sacrificed at times when they didn't. I cannot worry about their choices. I have an acquaintance from the 70's that squandered his money and he lives in his car parked in Kapiolani Park. I pass by him when I walk into Waikiki. I usually give him a hello but he seems to prefer not to acknowledge me. He passes out flyers on Kalakaua and has bought a different vehicle in the 10 years I've know him to be living in his car. He's closer to your age than mine. It is only going to get worse for him but I don't feel obligated to fix his life. Nor do I think I could.

If you go on the real estate forums you'll see me advocating real estate because of my experience. I'm here advocating a plan for LTC also because of my experience. No one has to take it or get upset that I have a plan.

Last edited by honobob; 08-05-2016 at 05:55 PM..
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Old 08-05-2016, 07:52 PM
 
31,028 posts, read 37,116,591 times
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^^^^^^^ Your LTCi involves a shared process in several ways. It is dependent on others buying policies and providing the needed ongoing cash flow. Genworth has lost 2 billion on LTC insurance and is spinning that division off. Met Life is losing money and share value on variable annuities and is spinning that off along with I believe their LTCi operations. That is all new news this week and I have linked it elsewhere.

Long Term Care/Skilled Nursing facilities are dependent on a segment of the population being able to afford to off set the loss of revenues from taking Medicaid patients. Many are going to a model to avoid completely having Medicaid beds and having only folks with the resources to pay full boat for a period of time if not permanently.

All of this is dependent on others joining us and being able to keep the ship upright and that is becoming a challenge that is starting to emerge and be discussed.

In summary our LTCi is dependent on others being able to buy and continue to pay their premiums and quality nursing care is dependent on a robust and healthy senior population with sufficient resources to keep them open.

As I have aged and am now at the stage where I am becoming fully aware that I am entering the stage of aging/retirement that becomes more of a shared process that involves others having success. Every time we walk the boardwalk and shops at the beach I am now hoping they are full and sales are brisk. I am willing to pay more to buy some things there instead of shopping the best price as I fully realize my property values there are dependent on the success of others.

Having become associated with a CCRC for down the road use I realize it is a path I am sharing with about 200 others who are also on their future residents list. I realize that any facility I give a deposit or a holding fee to needs to make money on that deposit or buy in fee so they can provide the promised services to those currently there and those to come.
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Old 08-05-2016, 08:46 PM
 
Location: SF Bay & Diamond Head
1,776 posts, read 1,583,025 times
Reputation: 1973
I have not heard that there was a problem getting new buyers of LTCi. CalPers stopped enrollment for several years to adjust to the changing economy. They don't seem to have an enrollment problem. Although what strikes me as odd is that everyone claims very few people ever use their benefit or if they do that it is very limited AND the premiums are too high yet companies are going out of business! That doesn't add up. I do agree if everyone were required to buy this insurance at a minimum level at least then it should be less cost for all.
I think my pool of insured are probably a higher educated level of participants and realize the goal is to never make a claim and gladly hope their money goes to someone else's care. I'm baffled by the people that post about not coming out ahead like this was an investment.
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