Everyone needs a plan for how they are going to handle long-term care (55, pension)
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For a 65-year-old healthy couple retiring this year, the average cost for health-care — including medical, dental and vision — is $394,954 (assuming they're covered by Medicare Parts B and D and a supplemental insurance policy). For a 55-year-old couple retiring in 10 years, the number jumps to $463,849.
The above quote from the article is staggering and goes to show that much of your retirement income is going to go into health care. That being said having to pay that much in retirement for health care can leave an unforeseen medical problem uncovered. It is important that we think seriously about the plan for LTC. It don't mean you have to have insurance to cover it, but if you do decide to pick up LTCi you need to stick to that plan. Whatever the cost LTC is going to be more expensive if you need it.
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Medicaid planning. Many people rely on Medicaid to cover their long-term care costs. The problem is that you can only qualify for Medicaid once all of your other assets have been depleted, which means having nothing left to supplement your care or to leave for your beneficiaries.
This is where many people fail in their planning. If you think Medicaid is going to be there to help, yes but only after you have used up all other assets.
Self insuring?
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Self-insurance, or paying your health expenses out of pocket, may be an option for some high-net-worth individuals, but it can be risky.
Brad Rosley, a CFP and founder of Fortune Financial Group, said for people who self-insure it "means not spending, and enjoying the money they saved when they were younger in the hope of enjoying during retirement."
We for one couple are going to pick up LTCi going into retirement. It makes sense to us to be able to take a portion of our income and use it to protect our savings and assets.
We have discussed this over and over so everyone knows my views at this point. I won't rehash them.
Usually self insuring is no plan . It is keeping your fingers crossed and hoping you don't need care and if you do it is after you are funded and when markets are not down 40% . Most folks who self insure do nothing special to protect that money.
They also count that money in the balance they use to determine their draw rate. They do not know that a safe withdrawal rate is based on spending down principal possibly to near zero.
If the money is insurance it should not be counted as part of the income stream money. It may not be there if you are another y2k or 1966 retiree
Last edited by mathjak107; 07-11-2016 at 03:19 PM..
United States is about to enter a period of history it has never witnessed before; large numbers of persons entering old age as singles (widowed, divorced, spinsters, bachelors), coupled with either being estranged from their children or not having any at all. A good portion of this demographic will be women and due to their generally longer lifespan (compared to men) will feel a bulk of this pain.
This matters because like it or not the unofficial policy of LTC is that such work was/is undertaken by family members (children, grandchildren, spouses, etc...), as unpaid caregivers. Am sure many of us have memories of being "sent" to our grandparents or other elderly relatives as kids/teens to provide what amounted to basically unpaid labor. *LOL*
Well if you have no children, spouse or family what then? Even having children today is no promise they will do the right thing.
Large numbers of early Baby Boom women either spent their entire working careers in low paying employment. Those that didn't marry and did so well are going to face SS payments that reflect their work record; in short unless they have saved, invested and planned many are looking at an old age of at or near penury.
Medicare is still geared towards providing care for the elderly if it is provided in a skilled nursing facility. Those poor enough to qualify for Medicaid in their states may see some assistance as that program IIRC actually covers more in home/LTC costs.
Experts are predicting in the coming decades the USA shall see more "Golden Girls" type households. That is several unrelated seniors living together and forming a "family" to handle the associated costs of living including LTC situations.
LTC insurance for those who have not yet taken out policies is largely off the table. Costs are increasing and coverage is being scaled back as insurers reel from poor planning regarding past policies sold.
Even gay marriage figures into this as now same sex spouses will be able to tap into pension and other benefits formerly only awarded to "wives" and "husbands".
All and all agree LTC is the elephant in the room no one from the government on down wants to talk about. Obama wanted to include some sort of LTC insurance as part of his healthcare plan but quickly backed off once projected costs started coming in. This was a shame because quite frankly only the federal government has deep enough pockets to make LTC insurance for all remotely affordable. All over Europe and elsewhere this is how it is done.
We are lucky here in ny . Our partnership plan is the only one i know of that offers all the perks ours does after the 3 years insurance runs out.
Other partnership plans seem to be only a dollar for a dollar meaning if you spend 200k in insurance payouts then 200k in assets are protected . Here in ny we have total asset protection , medicaid picks up the bills and almost no income restrictions on the stay at home spouse.
We wanted the partnership plan more for the perks after the 3 years insurance runs out
Article like these drive me nuts for one reason.....no mention of true prevention......diet, staying active, good frame of mind, keeping slim, etc. Yes, I know, people get sick/serious illnesses even though they ate broccoli sandwiches their whole life, are rail thin, exercise all the time, etc. but there's a bunch many people can do with their lifestyle throughout their lives(not starting at 55) to keep the pills/procedures away and save a pile of costs healthcare wise. True prevention should always be a first step and at least offered as a "top 5/10" ways to cut health care costs that many don't practice with a country that the vast majority of people are overweight which alone causes a bunch of health issues.
Again, free choice, everyone can eat/weigh/choose any activity level they want and rely on pills for things that often lifestyle can take care of but at least offer the option of lifestyle in one of these "top 5/10/20" articles on how to save money in health care costs.
Yes, we get it, we all die of course. But genes need to be expressed, don't have to define your health as the final conclusion.
Example....wife was on high level of statin drug for years, 300+ total without it, 200 with 40mg of statin. Still high. Her parents have 400+ total cholesterol without pills. Most would say it's all hereditary, genes, no other options like her Dr.'s told her. Wife ate a fairly healthy diet the Dr. recommended and still no change in her total. The fix? She had to give up any food with cholesterol, including the small amount of boneless chicken and fish she ate. She adopted a whole foods plant based diet. In a few months, her total was down to the 150's, no statins.
Yes, she has a genetic disposition to high cholesterol. No question. But lifestyle changes were able to overshoot the expression of that genetic disposition for high cholesterol she no doubt has. The few people we know who wanted to give up their statins, blood pressure meds, etc we know had similar results with the same diet change my wife made.
Again, a choice is available for many of these common "diseases" that many think is all hereditary like cholesterol. Though I know most people don't want to adopt a lifestyle/diet change as my wife did. I get it. But for my wife it was well worth the change and it saves us a pile of money on statins and she's much healthier for it and goes back to this thread......at least offer this lifestyle advice as an option instead of the pills/procedure game in these top 5/10/20 lists to save money on healthcare costs.
The term "everyone" is misleading when only 15% of people over 65 will wind up in a LTC facility. Over 90? 50% But realize that many who enter LTC are there for a few weeks or a month or two. I had a 92 year old client who went into LTC and died 11 days later.
Also in CA, you can keep your home, over 120K in nonexempt assets, most of your income if your spouse goes into LTC thanks to the Spousal Impoverishment program.
And where does this $400,000 healthcare cost figure come from? The insurance industry?
The term "everyone" is misleading when only 15% of people over 65 will wind up in a LTC facility. Over 90? 50% But realize that many who enter LTC are there for a few weeks or a month or two. I had a 92 year old client who went into LTC and died 11 days later.
And where does this $400,000 figure come from? The insurance industry?
(The link doesn't work)
The stats I see from insurers are that 50% of the people with immediate coverage (zero elimination period) use the policy, while only 35% of people with 90 day elimination make a claim. So having insurance and therefore (to some degree) a choice about whether or not LTC is warranted ups the % who use it substantially.
The stats like 15% of the elderly are in snf 's are old numbers based on a different generation that had different life expectancy . They expect the boomer numbers to double the old numbers easily .
Longer life , double the people and the fact medicaid cut their nursing home budget in half in 2000 and instead of nursing homes folks were farmed out to other types of facility's and not counted as snf.
It is estimated that as many as 77% of us will need some sort of long term care either in home , assisted living. Community care development or snf .
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their whole life, are rail thin, exercise all the time, etc. but there's a bunch many people can do with their lifestyle throughout their lives(not starting at 55
) to keep the pills/procedures away and save a pile of costs healthcare wise. True prevention should always be a first step and at least offered as a "top 5/10" ways to cut health care costs that many don't practice with a country that the vast majority of people are overweight which alone causes a bunch of health issues.
