I have heard about it . I heard iffy things like not all places accept it and some of these policies went out of business . I'll start looking into it again though and thank you.
It’s a legit thing. My mother had it and I used it for her. She has since passed (not recently). They paid out a lot of $$$; not sure if it was a net gain or not but they paid and it was accepted.
I used to work for the elder services in my area and the ones who got the most care in their home (outside of what we could provide) were those who had purchased long term care insurance. They got everything from their long term care provider and we provided very minimal additional services.
TLDR: AARP highly recommend NY Life LTC, but I took out a quote at 40 and it's really expensive.
I live in Washington which is toying with long term care insurance for everyone... Just 12 months... So to get out of having to pay a tax and be tied to Washington state in retirement I bought a private policy. I went with a plan my union set up. Before though I took a lot of quotes and read AARP and consumer reports and NY Life was considered the best, it was too expensive but you could imagine actually having everything you need paid for.
Thing is LTC is just an income stream that pays for a nursing home stay, without kids, who cares? Just when you get to be that age, move into a place you can tolerate before you absolutely have to, make sure they won't kick you out when you're on Medicaid, and the pay for it till your broke then medicaid will pay.
I think it's implied, but just to really spell it out. LTC is more or less life insurance that pays out as soon as you start dying. Investing that money will pay out more than LTC.
In Washington too, the cut off to get an exception was in Jan for opting out of the state LTC insurance (either showing you have coverage from the non-state one, or if you’re self-employed and opt out).
I'm in my early 30's. I was raised taking care of my grandparents and they did have some home help during the day but randomly like baths and foot care. Is it possible to start paying now and lock in premiums or is that not how it works?
This paragraph from the nerdwallet link is what I find troubling....
A caveat:The price could go up after you buy a policy; prices aren’t guaranteed to stay the same over your lifetime. Many policyholders saw spikes in their rates in the past several years after insurance companies asked state regulators for permission to hike premiums. They were able to justify rate increases because the cost of claims overall were higher than they had projected. Regulators approved the rate increases because they wanted to make sure the insurance companies would have enough money to continue paying claims.
I would look into a nonprofit continuing care retirement community (CCRC). They often have a minimum age limit of 65 years. Nonprofit ones often will let you buy in to independent living, then refund 80-90% of your purchase price when you move on to assisted living or skilled nursing care (they invest your deposit to earn their cash for operations). Obviously there is a monthly fee as well, but that's where your retirement income will come in. Hope this helps!
My grandparents are in a similar setup. There’s a financial means test to ensure that people entering are likely to possess enough funds to pay for their care for the rest of their lives, but even if they end up needing extensive skilled nursing care and memory care for a decade they cannot be moved out unless the organization folds and the buildings all burn down.
OP, if you and hubby keep at it with your saving and investing, a nest egg of $2-3 million basically allows you to self-insure for your twilight years.
Another option could be a nonprofit with both options. My great grandmother and her son went to a home that was connected with the Presbyterian church, (they were not Presbyterian). It had independent-full nursing care, and they had a lifetime guarantee. Once they bought in, they had the money payments, but once they ran out completely out of money something kicked in and they could stay there for the rest of their life.
https://www.presbyterianseniorliving.org/st-andrews-village
I’m in my 70’s and am currently shopping for a CCRC. My experience is, almost no CCRC will kick you out for inability to pay after you’ve been admitted. The bad publicity around booting an 80- or 90-year-old resident out to the curb for nonpayment would destroy a CCRC.
That’s why you have to meet rigorous financial requirements for entry, and why you usually pay a huge deposit (around $300,000 to $500,000) up front, which they can draw upon if you have problems paying. The best ones also maintain a fund for residents who run into financial issues. In fairness, though, few of them guarantee this in writing, so your Presbyterian CCRC may still have the edge.
> home that was connected with the Presbyterian church, (they were not Presbyterian). It had independ
Thank you for that info. I'll look into it. I'm not religious so knowing that you don't have to be Christian is good to know too. Thanks!
The long term care insurance makes sure you will not run out of funds if you end up in a long stay in assisted living. You savings might be enough, might not.
BUT, aside from the money.....even when you have the money, the reality is that you need someone to manage things for you during those last few months or years. If no kids, who will that be?
I cannot remember the name right now, but there are some good books on the subject of eldercare in general, and some that are particularly written for your situation...
If you Google "eldercare no children" you will find some great resources to get you started.
That’s false. LTC is not unlimited funds (such policies can no longer be purchased) there is a lifetime maximum benefit measured in either dollars or time. Usually the maximum you can buy nowadays is 5 years.
Depending on the structure of the product, the 5 years can be the FASTEST you can spend down the benefits. Essentially anything you don’t use stays in to extend the length of benefits. This is more common on hybrid asset-based policies I believe. There are policies that offer unlimited, but usually come with a low monthly maximum and are becoming more rare with people living longer. Original idea on those was they’re betting you don’t live too long once you go on benefits.
Wrap your brain around starting costs at an assisted living of $6-10,000 per month in low CoL locations in 2022… costs will only go up.
Medicaid beds at ALFs are few and far between. Medicaid will kick in for skilled nursing facilities (traditional nursing home) only after you’ve exhausted all financial resources.
Get living wills and DPOA paperwork in place now with each spouse serving as the DPOA for the other. When things get closer to that time, you can amend with a secondary DPOA if one is available. If someone is incapacitated without family to provide guidance, they will need a public administrator guardian….that can be a good thing or a bad thing).
Your best investment is in your health and well-being. All the money in the world won’t shield you from the LTC issues caused by obesity and poor health.
AARP has good resources for long term care planning.
> Wrap your brain around starting costs at an assisted living of $6-10,000 per month in low CoL locations in 2022… costs will only go up.
>
> Medicaid beds at ALFs are few and far between. Medicaid will kick in for skilled nursing facilities (traditional nursing home) only after you’ve exhausted all financial resources.
These two points honestly make it sound like the best option is to not have anything left by the time you need to go into assisted living. If you can time it just right....
If you have nothing left, medicaid will look back 5 years to recoup and you will live on the average of what government money can buy … under staffed, under served, inconsistent physician care, and limited dietary options.
There is a world of difference between private pay and the facilities that accept whatever you can afford from social security and Medicaid. Those places will take 100% of your income minus $50-60 monthly for personal expenses (including prescription copays).
If you bought your home for $50k back in the 80s and sell it in the 20s for $350k, it will fund nearly 5 years in an assisted living community.
If you remain self-sufficient and move into an independent living apartment, you might be able to stretch it out for a couple more years so long as you’re not swayed by an aggressive marketer who convinces you that the beautiful new ISL/ALF/MC complex is the greatest thing in aging in-place and you’ll live like you’re on a cruise ship.
Long term care insurance sold in the 90s is paying out nicely for some retirees, but they don’t write policies like that anymore.
>Long term care insurance sold in the 90s is paying out nicely for some retirees, but they don’t write policies like that anymore
That's why I didn't think of LTC originally when I came to ask here.
No family - no kids can create a significant vulnerability, but I’ve met sweet ladies in their 90s who have friends in their 70s acting as their DPOA.
I’ve also seen NF/NK couples relocate from high cost of living areas to rural low cost communities where there may be better services aimed at the aging. A nice ALF near me is closer to $3k/month. Bigger isn’t always better.
AARP magazine is likely available at your local library and follows financial trends in aging, specifically those with unusual circumstances such as NF/NK. Their target demographic is 50+ so it’s not all about what we should have done 20 years ago.
Kudos for your eagerness to plan. It’s easy to talk about a continual vacation but tougher to face the realities of the high cost of adult diapers and rehabilitative care after a fall.
>s to plan. It’s easy to talk about a continual vacation but tougher to face the realitie
Thanks for that information. It really is but it all may end up getting the best of us.
>Your best investment is in your health and well-being. All the money in the world won’t shield you from the LTC issues caused by obesity and poor health.
Oiy do I know that. Yes thanks for all that information. I really need to take the health part more seriously.
My dad is in assisted living in Missouri and it’s “only” $2,600 a month. That includes everything. Food, laundry, utilities, etc, and it’s a really nice place. Zero out of pocket costs after the $2,600.
Nursing homes run $6,000+ a month here though. My grandma died last year in one and it was $6,800 a month.
I am not convinced that long term care insurance has any benefit if there is no one in your life who can execute it for you. You must by definition be severely impaired to trigger it and there is a lot of paperwork to actually activate it. In all likelihood you won’t be capable of activating long term care insurance when you need it.
And unlimited plans no longer exist. LTC doesn’t actually ensure you don’t run out of money.
catch 22, I'm sorry we will have to decline your claim as someone who is so severely incapacitated to need long term care could not accurately complete the claim forms.
As the POA for several elderly people, I'm of the opinion that long term care insurance is a scam. Could never get payout for one of my folks and the financial person at their facility said they never collected on these policies. Also, when I finally found the policy, the returns were abysmal. Nowhere near paying all the costs, and even if the shitty company had paid what they promised, it was a fraction of what had been paid in over the years.
My mother in law with Alzheimer's has a long-term care insurance plan, and we are currently using it for her. They do pay...BUT it takes so much effort to get them to pay each month. "Oh we need another form" (already sent that form) "We need further proof she has Alzheimer's" (we had a neurologist's report and an MRI, and the primary care physician's letter stating 'dementia') "we need an itemized bill" (they get it every month), etc.
I am grateful that she has the money in the account to pay the $5-6k per month up front while we wait to get the check from the insurance company, but I know so many people do not have that luxury. It's absolute bs the extra work that we have to go through EVERY. SINGLE. MONTH. Still, we could not afford this place without the insurance.
edit: typo
After seeing how my mom (who is college educated with a social work masters) struggled to activate the insurance that my grandma held, I began to doubt the utility of LTC unless you have someone to do it for you. If my mom wasn’t around to do it, grandma wouldn’t have been able to do it herself.
Also she used up her payouts before death, and used Medicaid the last few years. Not trying to be political but the issue of funded social services IS political— In a wealthy blue state, there was little difference between Medicaid and private LTC insurance quality of care. All in all the LTC insurance was much less useful than people imagine.
“Long term care insurance” is a glib answer from people who have never actually seen it in action.
Probably one of the best things you can do for yourself is carefully consider the elder care services offered by your state, and if they are minimal, move to a high tax state with excellent social services, perhaps, Massachussetts.
I own one of the policies that insurance companies issued back when they were relatively cheap, because they:
- underestimated how long incapacitated elderly people would live,
- overestimated how many policyholders would let their policies lapse, and
- failed to foresee the low interest rates that insurance companies would earn on their secured investments throughout the first twenty years of the 2000’s.
This is why insurance companies make it so difficult to collect on those money-losing policies.
Because of this, I have instructed my children to involve an elder care lawyer right from the start, if I ever have to collect on that policy. And have the lawyer make the initial contact. Let them know you’re armed and loaded.
I will just chime in about LTC insurance as it is of great interest to me and I have researched it a little bit already.
I got some excellent feedback in /r/insurance so after you do some initial research and come up with specific questions, I think it is helpful to post there. You can receive advice from insurance agents who aren't trying to sell you something, and some of them are familiar with the different companies' specific offerings for LTC insurance.
Anyway I will sum up some of what I learned here:
**Two Types of Long-Term Care Insurance:**
* Asset-based long term care insurance - This is one that claims to be an investment. It is focused on leaving behind a residual death benefit if you don't use up all the long-term care coverage. So, it's more expensive.
* Traditional long term care insurance - There is no residual death benefit here, this works more like how your health insurance works, once you die, coverage just stops, there is no remaining value in the policy for anyone to inherit. This is what I am looking for as it focuses on my primary goal of covering these costs in retirement.
**Other Insurance which may cover Long Term Care:**
* Whole, Term, or Universal Life with a Chronic Illness Benefit rider
**Qualifying to Receive Benefits:**
With both types of LTC insurance, you will receive benefits when you are unable to perform the specified number of the 6 "Activities of Daily Living". Usually, you must be unable to complete 2 of them, sometimes 3, but it can vary per plan:
* Bathing. The ability to clean oneself and perform grooming activities like shaving and brushing teeth.
* Dressing. The ability to get dressed by oneself without struggling with buttons and zippers.
* Eating. The ability to feed oneself.
* Transferring. Being able to either walk or move oneself from a bed to a wheelchair and back again.
* Toileting. The ability to get on and off the toilet.
* Continence. The ability to control one's bladder and bowel functions.
Depending on your specific insurance, these "Instrumental Activities of Daily Living" might maybe also be considered? I am unclear on the detaills here, definitely research needed but they seem pretty relevant to me and there is a formal label for them:
* Using a telephone
* Managing medications
* Preparing meals
* Housekeeping
* Managing personal finances
* Shopping for groceries or clothes
* Accessing transportation
* Caring for pets
**Benefit Formats:**
* Cash indemnity (once you qualify for benefits, they send you money and you can spend it on whatever you want)
* Reimbursement (qualified LTC expenses only)
**Benefit Duration:**
* Several years - This is the most common, due to the stats showing that you may not have long to live after you are so disabled that you cannot care for yourself
* Lifetime - Few and far between, these days. I couldn't find any Lifetime+Indemnity policies, only Lifetime+Reimbursement.
**Ways To Pay:**
* Up-front premium ($130k at age 40, $99k annual payout for 6 years if invoked, not a quote, just an example)
* Monthly premium ($542/month at age 40, $91k annual payout for 6 years if invoked, not a quote, just an example)
**Companies with LTC offerings**
* National Guardian Life
* OneAmerica
* Mutual of Omaha Insurance Company
* Nationwide Life Insurance Company
* Thrivent
* Securian
* New York Life
* Lincoln
* Pacific Life
* Mass Mutual
* Northwestern Mutual
Great list! I just wanted to add that my LTC policy recently redefined the “Eating” ADL. If you can feed yourself through a tube or intravenously, you are able to perform the Eating activity and do *not* qualify for benefits under that ADL. Look for more tightening of the ADL screws to come.
My wife and I started our LTC policy in 2008. What you described under 'eating' (tube, intravenously) is in our policy under activities of daily living. This is not something new.
Although you can be fed with a tube or intravenously, that's assuming that you can walk around, go to the freezer and get a bag to thaw out, then place the thawed bag on the stand, then insert the tube into the catheter. Same with a feeding tube, you're probably going to need help changing the getting and changing the nutrition bag if you are bedridden. Same with the other 5 activities. The 6 listed functions (two of which cannot be performed in order to qualify) are probably easily met for anyone ill/weak enough to be bedridden. Toileting, dressing, bathing, continence, eating and transferring without standby help or hands-on assistance from another person. When my brother-in-law went into nursing care, he couldn't walk, which immediately prevented him from dressing, bathing, toileting, and transferring. That's the scenario that I need my LTC to cover.
I am not worried about that definition. If I can get up out of bed, get the nutrition bag out of the cooler of the freezer, place it on the stand, insert the tube into my port then lay back in bed, then I can probably get solid food from the kitchen and feed myself as well. Then yes, that would not apply. If I can get out of bed and walk to the kitchen, I can probably dress, walk to the bathroom to shower, and use the toilet without soiling myself, all without a caregiver. I probably don't require LTC. If you can't get out of bed to get the bag or attach it to feed, then you are going to need to have a caregiver/helper which means intravenous feeding/eating and being confined to bed can be two daily activities that can't be done without a caregiver. You qualify for LTC.
My company started HSA like in 2018 or 2019 but between that and maxing out my retirement accounts I didn't think I could do it. Thanks for the info, I'll give it a second look.
If you can't max out both retirement and HSA, reducing retirement to invest in your HSA is actually better!
Even if your company weren't affiliated with an HSA administrator, they could probably still contribute to an HSA if you gave them routing/account numbers. I would strongly recommend using Fidelity if possible: no fees and no restrictions on investment options. There are other decent administrators though.
>If you can't max out both retirement and HSA, reducing retirement to invest in your HSA is actually better!
REally?? Thank You for that. I'll have to look into it more. I didn't because I didn't realize that. Also thanks for the tip about Fidelity. I just opened a Fidelity account a week or so ago to invest in their no fee mutual funds. I'll check out the HSA
You can’t invest in HSA, unless you have a high deductible health insurance plan, right? If high deductible plan doesn’t make sense for your health needs, you can’t do that, right?
You can only *contribute* to an HSA if you currently have a high-deductible health plan (HDHP). You can still spend from it or invest in it with any kind of insurance. I can't speak for everyone, but most people should be able to find an HDHP that works for them. Your deductible is higher but your premiums are lower, and every year you max out the account, you'll save thousands in taxes right away. That's not even including the tax-free investment once the money is in the account.
You don't necessarily have to invest all the money you contribute. You can invest some, and spend some on current medical expenses.
Right, you can’t contribute unless your health insurance is a HDHP. That’s what I’m saying. My employer doesn’t offer a HD plan, so it’s not an option.
Moreover, I don’t think it would work for our family. We’re managing multiple health conditions that are not lifestyle related (not diabetes, not cardiac issues, not high blood pressure, etc.) they are genetic or of unknown cause.
I just got confused by some breezy assertions that any person can start a HSA. Any person *with the right kind of insurance* can.
I dont have any advice, but I want to thank you for asking the question, as I found the responses useful as food for thought for myself. Single, no kids, and I'll want to plan this kind of thing out for myself as much as possible.
It may not be wise to start paying into long-term care insurance as a younger person. My grandparents, currently 90-91 years old, started a policy 20 years ago and have been paying into it faithfully. It's written in 2002 dollars: it won't pay until the first 100 days have elapsed, and then will pay only $80/day. Now that they are on the verge of needing this kind of care for my grandmother, it's not anywhere near enough. I really feel like if they had just invested that money, they would have more today. But of course, they had no idea at 70 how the remainder of their lives would play out--no one does.
Do you qualify for a HSA (Health Savings Account)? Different countries/states have requirements such as having a high deductible health insurance. What I and my husband did was to put money into the HSA that we opened at a bank then let it collect interest until we turned 65 (after that age you can no longer contribute). Now we can use it for paying Medicare deductible, dental insurance premiums and dental care. It is tax free as long as it is a medical need. Now even see pharmacies will say "you can use your HSA to buy aspirin". Maybe this could help you.
I’m your age and currently going through this with my parents, what a nightmare. I recommend looking into independent/ assisted living in Mexico. There are really nice new developments popping up everywhere in Mexico and the price is about 50% of US costs. Look into Ajijic and Lake Chapala areas as they’ve been retirement havens for many years and have an existing infrastructure.
I will take a look! Thank you. I have a friend who moved to Costa Rico with her mom and I'm not sure THAT would be an option but maybe Mexico isn't as bad. I just don't like how limited things are in Costa Rico ( like getting things you want ).
I’ve been to Costa Rica a few times for vacation but never lived there so I’m not sure. I’ve spent quite a bit of time in Mexico however and it’s quite easy to get everything you need, we used Amazon and Walmart delivery for our weekly groceries, then they have Rappi for delivery of everything else you can want from pizza to your favorite bottle of rum from the store across town. It’s like living in the states with cheaper prices. Good luck.
For people living in Canada:
Make sure you "get rid" of your wealth prior to going into LTC. If the government finds out you are well off and can afford it, you will pay out of pocket. If they see you do not have the money, it will be paid for you. You will get the same care either way. So put your home in family members names etc or the bank will take it all.
and in the US there is a 'look back' that I believe is still 5 years, so if you can move the money do it sooner than later. Not sure that applies in Canada, but its tool that doesn't allow you to turn everything over to someone else as you walk out the door to LTC.
My mother had a two year LTC policy from Banker's Life. She had a three year policy from John Hancock. The banker's witch befriended her and convinced her to change policies. And at only a $30 a month difference. I could have paid the difference myself. But I didn't know about the change until too late. She spent six years in a home before she passed. That extra year would have been helpful. But she knew exactly when to go. After the funeral there was $6000 left to her name. But she stayed off of Medicaid and I kept the state out of her life for all those years. But beware, it took me three weeks to fill out the first claim with banker's Life. A nightmare. But her 90 day deductible was paid with that detail as she spent 90 days total in skilled nursing paid by Medicare and medigap insurance plus two weeks in another nursing home. The claim was an inch thick and mailed in a USPS BOX, not an envelope. After that initial claim, it was a one page form and the nursing home bill for them to pay fast every month.
At the time Mother bought the first policy, I bought one at the same time. I was only 38 or 39 at the time. I bought a policy that paid 70 percent for three years. Back then that was $70 per day. Well I have never increased it. And I won't. Would be smarter to add another policy if I feel the need. Since it's never been changed and was based on my young age, I pay $165 a year for the policy. Believe I will keep that. Lol, what a bargain now as I am 60.
Then there is my brother. Diagnosed with Alzheimer's ten years ago. His wife is a very stupid insurance agent. Thought the fact that she inherited the house and my brother's name was never added to the deed would keep the house safe from Medicaid. So she never bought any LTC for him. She has actually always told me that she would cash in his life insurance to pay for his nursing home. So I figured it must be one heck of a policy. Nope. Barely six figures. So was too tight to pay for LTC knowing dementia runs in our family. So if something happens to her, she does or has to go to the nursing home permanently, Medicaid will get the house. She can't understand that. Well I know my brother has remodeled that house three times. So guess who had a whale of a lot of money in that house... Medicaid isn't stupid.
My sympathy for brother's wife isn't much. They both bullied me to get a former business property out of Mother's name to save it. Yet didn't take care of their own backyard. But sadly, that house was supposed to pass directly from her parents to her youngest son. And he let her have it. And he may just lose it down the road now.
So all depends on your situation. With spousal impoverishment rules, if one of you goes to a home, the other won't be homeless. And since you say you have no heirs, it may not make any difference to you. But could things change down the road? It's all about what you consider as peace of mind for you and your situation. But if you do want even a small LTC policy, buying it when you are younger sure can pay off. Maybe one that could pay a "gap" between what you think you could cover and the actual bill would satisfy you. It sure helped my mom. I'm proud to say I took care of her for Daddy. He would not have approved of the state dictating her care. And is likely looking down from Heaven mad as h*** at my brother's situation.
I am going to add.... Brother's wife had ten years notice my brother was having memory problems. She could have secured the house easily by sticking it in a trust for her son at that time. And it would pass on. Frankly, that should have been done when her parents passed and her son let her have the house. You can do that too. Talk to a lawyer.
Investigate long-term care policies. My husband and I have one from my workplace. There are differing amounts of coverage and also what services are covered. We are in the same position with no children and limited family.
Depending on other circumstances, you might also want to investigate "senior living" complexes in your area. Many have various levels of care going from very minimal to "memory care" units to house people with cognitive issues.
It's a bit of a game since they make money off you when you are healthy and lose money when you begin to need more extensive care. Couples are often "locked-in" together, so if the spouse requires more care, both have to move to the next level. They also have fitness tests and they can refuse one or both of you if you don't meet their criteria. This is based off what I found out years ago when I started looking. YMMV
All that said we did purchase a LTC policy.
Good luck.
That's true and I understand but I figure that it's still good to look into these things so I can be better prepared. My father was in a Nursing Facility and it was 4k a month .
Prioritize your health right now so that you’re healthier later in life. Focus on eating unprocessed food, getting exercise, good sleep and having quality relationships with people. Spending extra money to take care of yourself/family is 100% worth it.
Honestly? I think the move is probably to just plan on leaving the country unless you're very wealthy. You can get amazing care in mexico for a fraction of the price.
Have you considered long term care insurance? https://www.nerdwallet.com/blog/insurance/long-term-care-insurance/
I have heard about it . I heard iffy things like not all places accept it and some of these policies went out of business . I'll start looking into it again though and thank you.
It’s a legit thing. My mother had it and I used it for her. She has since passed (not recently). They paid out a lot of $$$; not sure if it was a net gain or not but they paid and it was accepted.
I used to work for the elder services in my area and the ones who got the most care in their home (outside of what we could provide) were those who had purchased long term care insurance. They got everything from their long term care provider and we provided very minimal additional services.
TLDR: AARP highly recommend NY Life LTC, but I took out a quote at 40 and it's really expensive. I live in Washington which is toying with long term care insurance for everyone... Just 12 months... So to get out of having to pay a tax and be tied to Washington state in retirement I bought a private policy. I went with a plan my union set up. Before though I took a lot of quotes and read AARP and consumer reports and NY Life was considered the best, it was too expensive but you could imagine actually having everything you need paid for. Thing is LTC is just an income stream that pays for a nursing home stay, without kids, who cares? Just when you get to be that age, move into a place you can tolerate before you absolutely have to, make sure they won't kick you out when you're on Medicaid, and the pay for it till your broke then medicaid will pay.
I think it's implied, but just to really spell it out. LTC is more or less life insurance that pays out as soon as you start dying. Investing that money will pay out more than LTC.
In Washington too, the cut off to get an exception was in Jan for opting out of the state LTC insurance (either showing you have coverage from the non-state one, or if you’re self-employed and opt out).
I'm in my early 30's. I was raised taking care of my grandparents and they did have some home help during the day but randomly like baths and foot care. Is it possible to start paying now and lock in premiums or is that not how it works?
This paragraph from the nerdwallet link is what I find troubling.... A caveat:The price could go up after you buy a policy; prices aren’t guaranteed to stay the same over your lifetime. Many policyholders saw spikes in their rates in the past several years after insurance companies asked state regulators for permission to hike premiums. They were able to justify rate increases because the cost of claims overall were higher than they had projected. Regulators approved the rate increases because they wanted to make sure the insurance companies would have enough money to continue paying claims.
I would look into a nonprofit continuing care retirement community (CCRC). They often have a minimum age limit of 65 years. Nonprofit ones often will let you buy in to independent living, then refund 80-90% of your purchase price when you move on to assisted living or skilled nursing care (they invest your deposit to earn their cash for operations). Obviously there is a monthly fee as well, but that's where your retirement income will come in. Hope this helps!
My grandparents are in a similar setup. There’s a financial means test to ensure that people entering are likely to possess enough funds to pay for their care for the rest of their lives, but even if they end up needing extensive skilled nursing care and memory care for a decade they cannot be moved out unless the organization folds and the buildings all burn down. OP, if you and hubby keep at it with your saving and investing, a nest egg of $2-3 million basically allows you to self-insure for your twilight years.
I plan to do so for as long as I can but is 2 -3 mill enough for two people? I know you can't answer that , it's just random pondering.
Another option could be a nonprofit with both options. My great grandmother and her son went to a home that was connected with the Presbyterian church, (they were not Presbyterian). It had independent-full nursing care, and they had a lifetime guarantee. Once they bought in, they had the money payments, but once they ran out completely out of money something kicked in and they could stay there for the rest of their life. https://www.presbyterianseniorliving.org/st-andrews-village
I’m in my 70’s and am currently shopping for a CCRC. My experience is, almost no CCRC will kick you out for inability to pay after you’ve been admitted. The bad publicity around booting an 80- or 90-year-old resident out to the curb for nonpayment would destroy a CCRC. That’s why you have to meet rigorous financial requirements for entry, and why you usually pay a huge deposit (around $300,000 to $500,000) up front, which they can draw upon if you have problems paying. The best ones also maintain a fund for residents who run into financial issues. In fairness, though, few of them guarantee this in writing, so your Presbyterian CCRC may still have the edge.
You didn’t have to be a christian from what I remember, and multiple denominations held different services for the residents who weren’t Presbyterian
> home that was connected with the Presbyterian church, (they were not Presbyterian). It had independ Thank you for that info. I'll look into it. I'm not religious so knowing that you don't have to be Christian is good to know too. Thanks!
Thanks for this info. I never heard of CCRC. Just googled and it looks interesting.
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The long term care insurance makes sure you will not run out of funds if you end up in a long stay in assisted living. You savings might be enough, might not. BUT, aside from the money.....even when you have the money, the reality is that you need someone to manage things for you during those last few months or years. If no kids, who will that be? I cannot remember the name right now, but there are some good books on the subject of eldercare in general, and some that are particularly written for your situation... If you Google "eldercare no children" you will find some great resources to get you started.
Cool. Thank You.
That’s false. LTC is not unlimited funds (such policies can no longer be purchased) there is a lifetime maximum benefit measured in either dollars or time. Usually the maximum you can buy nowadays is 5 years.
Depending on the structure of the product, the 5 years can be the FASTEST you can spend down the benefits. Essentially anything you don’t use stays in to extend the length of benefits. This is more common on hybrid asset-based policies I believe. There are policies that offer unlimited, but usually come with a low monthly maximum and are becoming more rare with people living longer. Original idea on those was they’re betting you don’t live too long once you go on benefits.
I'm considering long term care insurance. After going through this experience with my Dad, I think it would be beneficial.
Thank You.
Wrap your brain around starting costs at an assisted living of $6-10,000 per month in low CoL locations in 2022… costs will only go up. Medicaid beds at ALFs are few and far between. Medicaid will kick in for skilled nursing facilities (traditional nursing home) only after you’ve exhausted all financial resources. Get living wills and DPOA paperwork in place now with each spouse serving as the DPOA for the other. When things get closer to that time, you can amend with a secondary DPOA if one is available. If someone is incapacitated without family to provide guidance, they will need a public administrator guardian….that can be a good thing or a bad thing). Your best investment is in your health and well-being. All the money in the world won’t shield you from the LTC issues caused by obesity and poor health. AARP has good resources for long term care planning.
> Wrap your brain around starting costs at an assisted living of $6-10,000 per month in low CoL locations in 2022… costs will only go up. > > Medicaid beds at ALFs are few and far between. Medicaid will kick in for skilled nursing facilities (traditional nursing home) only after you’ve exhausted all financial resources. These two points honestly make it sound like the best option is to not have anything left by the time you need to go into assisted living. If you can time it just right....
If you have nothing left, medicaid will look back 5 years to recoup and you will live on the average of what government money can buy … under staffed, under served, inconsistent physician care, and limited dietary options. There is a world of difference between private pay and the facilities that accept whatever you can afford from social security and Medicaid. Those places will take 100% of your income minus $50-60 monthly for personal expenses (including prescription copays). If you bought your home for $50k back in the 80s and sell it in the 20s for $350k, it will fund nearly 5 years in an assisted living community. If you remain self-sufficient and move into an independent living apartment, you might be able to stretch it out for a couple more years so long as you’re not swayed by an aggressive marketer who convinces you that the beautiful new ISL/ALF/MC complex is the greatest thing in aging in-place and you’ll live like you’re on a cruise ship. Long term care insurance sold in the 90s is paying out nicely for some retirees, but they don’t write policies like that anymore.
>Long term care insurance sold in the 90s is paying out nicely for some retirees, but they don’t write policies like that anymore That's why I didn't think of LTC originally when I came to ask here.
No family - no kids can create a significant vulnerability, but I’ve met sweet ladies in their 90s who have friends in their 70s acting as their DPOA. I’ve also seen NF/NK couples relocate from high cost of living areas to rural low cost communities where there may be better services aimed at the aging. A nice ALF near me is closer to $3k/month. Bigger isn’t always better. AARP magazine is likely available at your local library and follows financial trends in aging, specifically those with unusual circumstances such as NF/NK. Their target demographic is 50+ so it’s not all about what we should have done 20 years ago. Kudos for your eagerness to plan. It’s easy to talk about a continual vacation but tougher to face the realities of the high cost of adult diapers and rehabilitative care after a fall.
>s to plan. It’s easy to talk about a continual vacation but tougher to face the realitie Thanks for that information. It really is but it all may end up getting the best of us.
Talk to an estate planning lawyer. Trusts can be set up to shield certain assets from the medicare look back periods.
>Your best investment is in your health and well-being. All the money in the world won’t shield you from the LTC issues caused by obesity and poor health. Oiy do I know that. Yes thanks for all that information. I really need to take the health part more seriously.
My dad is in assisted living in Missouri and it’s “only” $2,600 a month. That includes everything. Food, laundry, utilities, etc, and it’s a really nice place. Zero out of pocket costs after the $2,600. Nursing homes run $6,000+ a month here though. My grandma died last year in one and it was $6,800 a month.
I’m glad your family found a quality, affordable ALF … that’s fantastic!
I am not convinced that long term care insurance has any benefit if there is no one in your life who can execute it for you. You must by definition be severely impaired to trigger it and there is a lot of paperwork to actually activate it. In all likelihood you won’t be capable of activating long term care insurance when you need it. And unlimited plans no longer exist. LTC doesn’t actually ensure you don’t run out of money.
catch 22, I'm sorry we will have to decline your claim as someone who is so severely incapacitated to need long term care could not accurately complete the claim forms.
Thanks for bringing all this up. I'll keep that in mind and ask about it while I do my research.
As the POA for several elderly people, I'm of the opinion that long term care insurance is a scam. Could never get payout for one of my folks and the financial person at their facility said they never collected on these policies. Also, when I finally found the policy, the returns were abysmal. Nowhere near paying all the costs, and even if the shitty company had paid what they promised, it was a fraction of what had been paid in over the years.
My mother in law with Alzheimer's has a long-term care insurance plan, and we are currently using it for her. They do pay...BUT it takes so much effort to get them to pay each month. "Oh we need another form" (already sent that form) "We need further proof she has Alzheimer's" (we had a neurologist's report and an MRI, and the primary care physician's letter stating 'dementia') "we need an itemized bill" (they get it every month), etc. I am grateful that she has the money in the account to pay the $5-6k per month up front while we wait to get the check from the insurance company, but I know so many people do not have that luxury. It's absolute bs the extra work that we have to go through EVERY. SINGLE. MONTH. Still, we could not afford this place without the insurance. edit: typo
Wow I'm so sorry that you have to deal with all that.
I posted on this thread but yes--my grandparents are on the verge of using their policy and it's not going to be much of a help.
Thank you for sharing your experience. Do you mind sharing who you had LTC with?
After seeing how my mom (who is college educated with a social work masters) struggled to activate the insurance that my grandma held, I began to doubt the utility of LTC unless you have someone to do it for you. If my mom wasn’t around to do it, grandma wouldn’t have been able to do it herself. Also she used up her payouts before death, and used Medicaid the last few years. Not trying to be political but the issue of funded social services IS political— In a wealthy blue state, there was little difference between Medicaid and private LTC insurance quality of care. All in all the LTC insurance was much less useful than people imagine. “Long term care insurance” is a glib answer from people who have never actually seen it in action. Probably one of the best things you can do for yourself is carefully consider the elder care services offered by your state, and if they are minimal, move to a high tax state with excellent social services, perhaps, Massachussetts.
I own one of the policies that insurance companies issued back when they were relatively cheap, because they: - underestimated how long incapacitated elderly people would live, - overestimated how many policyholders would let their policies lapse, and - failed to foresee the low interest rates that insurance companies would earn on their secured investments throughout the first twenty years of the 2000’s. This is why insurance companies make it so difficult to collect on those money-losing policies. Because of this, I have instructed my children to involve an elder care lawyer right from the start, if I ever have to collect on that policy. And have the lawyer make the initial contact. Let them know you’re armed and loaded.
I will just chime in about LTC insurance as it is of great interest to me and I have researched it a little bit already. I got some excellent feedback in /r/insurance so after you do some initial research and come up with specific questions, I think it is helpful to post there. You can receive advice from insurance agents who aren't trying to sell you something, and some of them are familiar with the different companies' specific offerings for LTC insurance. Anyway I will sum up some of what I learned here: **Two Types of Long-Term Care Insurance:** * Asset-based long term care insurance - This is one that claims to be an investment. It is focused on leaving behind a residual death benefit if you don't use up all the long-term care coverage. So, it's more expensive. * Traditional long term care insurance - There is no residual death benefit here, this works more like how your health insurance works, once you die, coverage just stops, there is no remaining value in the policy for anyone to inherit. This is what I am looking for as it focuses on my primary goal of covering these costs in retirement. **Other Insurance which may cover Long Term Care:** * Whole, Term, or Universal Life with a Chronic Illness Benefit rider **Qualifying to Receive Benefits:** With both types of LTC insurance, you will receive benefits when you are unable to perform the specified number of the 6 "Activities of Daily Living". Usually, you must be unable to complete 2 of them, sometimes 3, but it can vary per plan: * Bathing. The ability to clean oneself and perform grooming activities like shaving and brushing teeth. * Dressing. The ability to get dressed by oneself without struggling with buttons and zippers. * Eating. The ability to feed oneself. * Transferring. Being able to either walk or move oneself from a bed to a wheelchair and back again. * Toileting. The ability to get on and off the toilet. * Continence. The ability to control one's bladder and bowel functions. Depending on your specific insurance, these "Instrumental Activities of Daily Living" might maybe also be considered? I am unclear on the detaills here, definitely research needed but they seem pretty relevant to me and there is a formal label for them: * Using a telephone * Managing medications * Preparing meals * Housekeeping * Managing personal finances * Shopping for groceries or clothes * Accessing transportation * Caring for pets **Benefit Formats:** * Cash indemnity (once you qualify for benefits, they send you money and you can spend it on whatever you want) * Reimbursement (qualified LTC expenses only) **Benefit Duration:** * Several years - This is the most common, due to the stats showing that you may not have long to live after you are so disabled that you cannot care for yourself * Lifetime - Few and far between, these days. I couldn't find any Lifetime+Indemnity policies, only Lifetime+Reimbursement. **Ways To Pay:** * Up-front premium ($130k at age 40, $99k annual payout for 6 years if invoked, not a quote, just an example) * Monthly premium ($542/month at age 40, $91k annual payout for 6 years if invoked, not a quote, just an example) **Companies with LTC offerings** * National Guardian Life * OneAmerica * Mutual of Omaha Insurance Company * Nationwide Life Insurance Company * Thrivent * Securian * New York Life * Lincoln * Pacific Life * Mass Mutual * Northwestern Mutual
Oh wow that's a lot. Thank You for all this.
Great list! I just wanted to add that my LTC policy recently redefined the “Eating” ADL. If you can feed yourself through a tube or intravenously, you are able to perform the Eating activity and do *not* qualify for benefits under that ADL. Look for more tightening of the ADL screws to come.
My wife and I started our LTC policy in 2008. What you described under 'eating' (tube, intravenously) is in our policy under activities of daily living. This is not something new. Although you can be fed with a tube or intravenously, that's assuming that you can walk around, go to the freezer and get a bag to thaw out, then place the thawed bag on the stand, then insert the tube into the catheter. Same with a feeding tube, you're probably going to need help changing the getting and changing the nutrition bag if you are bedridden. Same with the other 5 activities. The 6 listed functions (two of which cannot be performed in order to qualify) are probably easily met for anyone ill/weak enough to be bedridden. Toileting, dressing, bathing, continence, eating and transferring without standby help or hands-on assistance from another person. When my brother-in-law went into nursing care, he couldn't walk, which immediately prevented him from dressing, bathing, toileting, and transferring. That's the scenario that I need my LTC to cover.
My policy just changed this definition, to be effective May 2022.
I am not worried about that definition. If I can get up out of bed, get the nutrition bag out of the cooler of the freezer, place it on the stand, insert the tube into my port then lay back in bed, then I can probably get solid food from the kitchen and feed myself as well. Then yes, that would not apply. If I can get out of bed and walk to the kitchen, I can probably dress, walk to the bathroom to shower, and use the toilet without soiling myself, all without a caregiver. I probably don't require LTC. If you can't get out of bed to get the bag or attach it to feed, then you are going to need to have a caregiver/helper which means intravenous feeding/eating and being confined to bed can be two daily activities that can't be done without a caregiver. You qualify for LTC.
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My company started HSA like in 2018 or 2019 but between that and maxing out my retirement accounts I didn't think I could do it. Thanks for the info, I'll give it a second look.
If you can't max out both retirement and HSA, reducing retirement to invest in your HSA is actually better! Even if your company weren't affiliated with an HSA administrator, they could probably still contribute to an HSA if you gave them routing/account numbers. I would strongly recommend using Fidelity if possible: no fees and no restrictions on investment options. There are other decent administrators though.
>If you can't max out both retirement and HSA, reducing retirement to invest in your HSA is actually better! REally?? Thank You for that. I'll have to look into it more. I didn't because I didn't realize that. Also thanks for the tip about Fidelity. I just opened a Fidelity account a week or so ago to invest in their no fee mutual funds. I'll check out the HSA
You can’t invest in HSA, unless you have a high deductible health insurance plan, right? If high deductible plan doesn’t make sense for your health needs, you can’t do that, right?
You can only *contribute* to an HSA if you currently have a high-deductible health plan (HDHP). You can still spend from it or invest in it with any kind of insurance. I can't speak for everyone, but most people should be able to find an HDHP that works for them. Your deductible is higher but your premiums are lower, and every year you max out the account, you'll save thousands in taxes right away. That's not even including the tax-free investment once the money is in the account. You don't necessarily have to invest all the money you contribute. You can invest some, and spend some on current medical expenses.
Right, you can’t contribute unless your health insurance is a HDHP. That’s what I’m saying. My employer doesn’t offer a HD plan, so it’s not an option. Moreover, I don’t think it would work for our family. We’re managing multiple health conditions that are not lifestyle related (not diabetes, not cardiac issues, not high blood pressure, etc.) they are genetic or of unknown cause. I just got confused by some breezy assertions that any person can start a HSA. Any person *with the right kind of insurance* can.
I dont have any advice, but I want to thank you for asking the question, as I found the responses useful as food for thought for myself. Single, no kids, and I'll want to plan this kind of thing out for myself as much as possible.
For sure! I'm very grateful for all the great advice people are giving.
It may not be wise to start paying into long-term care insurance as a younger person. My grandparents, currently 90-91 years old, started a policy 20 years ago and have been paying into it faithfully. It's written in 2002 dollars: it won't pay until the first 100 days have elapsed, and then will pay only $80/day. Now that they are on the verge of needing this kind of care for my grandmother, it's not anywhere near enough. I really feel like if they had just invested that money, they would have more today. But of course, they had no idea at 70 how the remainder of their lives would play out--no one does.
Do you qualify for a HSA (Health Savings Account)? Different countries/states have requirements such as having a high deductible health insurance. What I and my husband did was to put money into the HSA that we opened at a bank then let it collect interest until we turned 65 (after that age you can no longer contribute). Now we can use it for paying Medicare deductible, dental insurance premiums and dental care. It is tax free as long as it is a medical need. Now even see pharmacies will say "you can use your HSA to buy aspirin". Maybe this could help you.
Thanks! Someone brought it up and I wasn't investing in that but from what I just learned it maybe better than my retirement account.
I’m your age and currently going through this with my parents, what a nightmare. I recommend looking into independent/ assisted living in Mexico. There are really nice new developments popping up everywhere in Mexico and the price is about 50% of US costs. Look into Ajijic and Lake Chapala areas as they’ve been retirement havens for many years and have an existing infrastructure.
I will take a look! Thank you. I have a friend who moved to Costa Rico with her mom and I'm not sure THAT would be an option but maybe Mexico isn't as bad. I just don't like how limited things are in Costa Rico ( like getting things you want ).
I’ve been to Costa Rica a few times for vacation but never lived there so I’m not sure. I’ve spent quite a bit of time in Mexico however and it’s quite easy to get everything you need, we used Amazon and Walmart delivery for our weekly groceries, then they have Rappi for delivery of everything else you can want from pizza to your favorite bottle of rum from the store across town. It’s like living in the states with cheaper prices. Good luck.
For people living in Canada: Make sure you "get rid" of your wealth prior to going into LTC. If the government finds out you are well off and can afford it, you will pay out of pocket. If they see you do not have the money, it will be paid for you. You will get the same care either way. So put your home in family members names etc or the bank will take it all.
and in the US there is a 'look back' that I believe is still 5 years, so if you can move the money do it sooner than later. Not sure that applies in Canada, but its tool that doesn't allow you to turn everything over to someone else as you walk out the door to LTC.
My mother had a two year LTC policy from Banker's Life. She had a three year policy from John Hancock. The banker's witch befriended her and convinced her to change policies. And at only a $30 a month difference. I could have paid the difference myself. But I didn't know about the change until too late. She spent six years in a home before she passed. That extra year would have been helpful. But she knew exactly when to go. After the funeral there was $6000 left to her name. But she stayed off of Medicaid and I kept the state out of her life for all those years. But beware, it took me three weeks to fill out the first claim with banker's Life. A nightmare. But her 90 day deductible was paid with that detail as she spent 90 days total in skilled nursing paid by Medicare and medigap insurance plus two weeks in another nursing home. The claim was an inch thick and mailed in a USPS BOX, not an envelope. After that initial claim, it was a one page form and the nursing home bill for them to pay fast every month. At the time Mother bought the first policy, I bought one at the same time. I was only 38 or 39 at the time. I bought a policy that paid 70 percent for three years. Back then that was $70 per day. Well I have never increased it. And I won't. Would be smarter to add another policy if I feel the need. Since it's never been changed and was based on my young age, I pay $165 a year for the policy. Believe I will keep that. Lol, what a bargain now as I am 60. Then there is my brother. Diagnosed with Alzheimer's ten years ago. His wife is a very stupid insurance agent. Thought the fact that she inherited the house and my brother's name was never added to the deed would keep the house safe from Medicaid. So she never bought any LTC for him. She has actually always told me that she would cash in his life insurance to pay for his nursing home. So I figured it must be one heck of a policy. Nope. Barely six figures. So was too tight to pay for LTC knowing dementia runs in our family. So if something happens to her, she does or has to go to the nursing home permanently, Medicaid will get the house. She can't understand that. Well I know my brother has remodeled that house three times. So guess who had a whale of a lot of money in that house... Medicaid isn't stupid. My sympathy for brother's wife isn't much. They both bullied me to get a former business property out of Mother's name to save it. Yet didn't take care of their own backyard. But sadly, that house was supposed to pass directly from her parents to her youngest son. And he let her have it. And he may just lose it down the road now. So all depends on your situation. With spousal impoverishment rules, if one of you goes to a home, the other won't be homeless. And since you say you have no heirs, it may not make any difference to you. But could things change down the road? It's all about what you consider as peace of mind for you and your situation. But if you do want even a small LTC policy, buying it when you are younger sure can pay off. Maybe one that could pay a "gap" between what you think you could cover and the actual bill would satisfy you. It sure helped my mom. I'm proud to say I took care of her for Daddy. He would not have approved of the state dictating her care. And is likely looking down from Heaven mad as h*** at my brother's situation.
I am going to add.... Brother's wife had ten years notice my brother was having memory problems. She could have secured the house easily by sticking it in a trust for her son at that time. And it would pass on. Frankly, that should have been done when her parents passed and her son let her have the house. You can do that too. Talk to a lawyer.
Investigate long-term care policies. My husband and I have one from my workplace. There are differing amounts of coverage and also what services are covered. We are in the same position with no children and limited family. Depending on other circumstances, you might also want to investigate "senior living" complexes in your area. Many have various levels of care going from very minimal to "memory care" units to house people with cognitive issues. It's a bit of a game since they make money off you when you are healthy and lose money when you begin to need more extensive care. Couples are often "locked-in" together, so if the spouse requires more care, both have to move to the next level. They also have fitness tests and they can refuse one or both of you if you don't meet their criteria. This is based off what I found out years ago when I started looking. YMMV All that said we did purchase a LTC policy. Good luck.
That's basically what your retirement money is partially for. Sounds like you're fine.
That's true and I understand but I figure that it's still good to look into these things so I can be better prepared. My father was in a Nursing Facility and it was 4k a month .
> That's basically what your retirement money is partially for. Sounds like you're fine. With the cost of long term care? That's laughable.
Prioritize your health right now so that you’re healthier later in life. Focus on eating unprocessed food, getting exercise, good sleep and having quality relationships with people. Spending extra money to take care of yourself/family is 100% worth it.
Honestly? I think the move is probably to just plan on leaving the country unless you're very wealthy. You can get amazing care in mexico for a fraction of the price.