Those of you planning for retirement..what is your LTC plan?

[GlamMistress]

I work in the senior living industry and I know how much care at a five star facility costs per month. We're talking $16k a month for skilled nursing. Starting at $9k for assisted living. My husband and I will be purchasing LTC when we hit 50. We are childfree and wouldn't want the other to be left poor or have to penny pinch on care.

Most are better off going into a CCRC when still "young" and healthy so you move through the continuum as your needs change and you are always taken care of, even as one spouse remains healthy.

Think twice about preservation of assets just to avoid going to pay for care or to "the state." You want to avoid a completely Medicaid facility at all costs. Just trust me on this.

 

[AmyAnne]

I work in the senior living industry and I know how much care at a five star facility costs per month. We're talking $16k a month for skilled nursing. Starting at $9k for assisted living. My husband and I will be purchasing LTC when we hit 50. We are childfree and wouldn't want the other to be left poor or have to penny pinch on care.

Most are better off going into a CCRC when still "young" and healthy so you move through the continuum as your needs change and you are always taken care of, even as one spouse remains healthy.

Think twice about preservation of assets just to avoid going to pay for care or to "the state." You want to avoid a completely Medicaid facility at all costs. Just trust me on this.

@GlamMistress thanks for your thoughts on this. Do you have any suggestions about how to go about finding a good LTC policy? DH and I are early 50s and this is on our radar now. We will have a decent retirement fund but the costs of good LTC are only going to go up over the next 20+ years and even though we are both in good health, I feel like insurance on this issue (like most) is a good idea. We have four kids and I do not want them to have to worry about paying for us in our old age. (OTOH, I'm not especially worried about leaving them a huge inheritance--we paid for their college educations and are helping two with grad school now, and the other two will probably get similar help soon. If they have kids or buy a house or have other expenses while we are alive and can help, then we will. I'd rather do that then leave them a bunch of money later.)

 

[snappy]

I agree about going into a CCRC if you go in when you are still independent when you still qualify and when you can enjoy all the activities and facilities. My mom has been in one since 2015. The sale proceeds of her house we’re more than enough to cover the cost of the non refundable option buy in, and her monthly pension and social security payments more than cover her costs after she transferred to assisted living. The good thing about a CCRC is that the cost doesn’t go up astronomically if assisted living or memory care is needed. So far only had to add the cost of 2 additional meals per day and payment for medicine nurses to administer meds. We are able to eat with mom in the dining room often as well at a very reasonable cost.

 

[georgina]

I've had my mother and in-laws in assisted living so I am well aware of what they cost here in SW PA. I still don't think LTC insurance is right for us.

 

[tink1970]

I was a single mother for years so when I had the opportunity to buy LTC insurance in my late 30s I did and I've kept it. Will I regret it in the future? No idea but I did not want my child to have to bear the burden of any potential costs (or worries about costs) because I failed to plan. My now DH and I have solid assets but for me a higher degree of peace of mind (not saying it takes away all concerns because of course it does not) is worth their premiums...I'm also the person who had short term and long term disability insurance when I was a single working parent too. I like to know things are kind of covered.

 

[DisMommyTX]

I just want to chime in that it is worth researching now to get real costs in your community. Four years ago we had 5 family members over 80, and they have been through the spectrum of care facilities. I was surprised to learn that in our community assisted living starts at 4k, nursing 6k for a semi-private and 8k for a private room. Memory care is over 11K/month. (Yes, we have researched and have first-hand experience with most facilities we would even remotely consider acceptable in our surrounding community of 700,000 people). In San Antonio (about 2 hours away) we were able to find equivalent nursing facilities for half that cost. So far, four parents/grandparents have each spent at least 3 to 8+ years in a LTC facility with out of pocket costs ranging from 60k-120k/year. I can only imagine what those costs will look like in 20 years. Also, Medicaid eligibility is particularly cruel if you have one spouse in a facility and one still living independently.

This is definitely an individual decision you need to research and plan for carefully.

 

[snappy]

Yes, I figured out how much LTC to buy after calling around and getting quotes. I decided to get the most I could afford.

 

[disfanforlife]

It’s a good question. My DH and I hope to retire in the next 5 years. We haven’t looked into it LTC insurance. My parents had it for awhile and then decided it was too expensive and canceled it. That was about 15-20 years ago.

 

[kymom99]

I work in the senior living industry and I know how much care at a five star facility costs per month. We're talking $16k a month for skilled nursing. Starting at $9k for assisted living. My husband and I will be purchasing LTC when we hit 50. We are childfree and wouldn't want the other to be left poor or have to penny pinch on care.

Most are better off going into a CCRC when still "young" and healthy so you move through the continuum as your needs change and you are always taken care of, even as one spouse remains healthy.

Think twice about preservation of assets just to avoid going to pay for care or to "the state." You want to avoid a completely Medicaid facility at all costs. Just trust me on this.

What do you mean by a completely Medicaid facility? There is no such thing in my area

 

[MrsPete]

I have three thoughts to add to this topic:

1. The Baby Boomers are hitting retirement now, and they -- through their sheer numbers -- are likely to change the face of this question. Exactly how it'll change, I can't say.

2. We are building a house for our retirement, and we are planning things that'll allow us to stay in our house: Small, easy-to-maintain, one-story, covered entrance, laundry next to the master closet, easy-access master bath ... and a bedroom and that'd work for a live-in caretaker (not a child's bedroom with a small closet and bath down the hall), if necessary.

3. Staying in your own home is getting easier in some ways: If you can't drive, Uber and Lyft exist. It's easy to have groceries delivered, or to hire yard work or heavy cleaning done.

 

[GlamMistress]

What do you mean by a completely Medicaid facility? There is no such thing in my area

All facilities have a payer mix, that is true but many are much heavier on Medcaid beds versus private pay. Facilities that have a disproportionate amount of Medicaid beds often face financial challenges because they lack diverse income streams. This shows up first and most importantly in staffing ratio. Hiring for STNAs is especially hard because they can leave one facility in the morning and get hired at another in the afternoon for, say, $1 more an hour. So you want to be in a place that can staff well and pay above average wages. Happy staff typically equals higher continuity of care.

You can check out staffing and star ratings and more via the CMS website. (Centers for Medicaid and Medicare Services).

 

[GlamMistress]

@GlamMistress thanks for your thoughts on this. Do you have any suggestions about how to go about finding a good LTC policy? DH and I are early 50s and this is on our radar now. We will have a decent retirement fund but the costs of good LTC are only going to go up over the next 20+ years and even though we are both in good health, I feel like insurance on this issue (like most) is a good idea. We have four kids and I do not want them to have to worry about paying for us in our old age. (OTOH, I'm not especially worried about leaving them a huge inheritance--we paid for their college educations and are helping two with grad school now, and the other two will probably get similar help soon. If they have kids or buy a house or have other expenses while we are alive and can help, then we will. I'd rather do that then leave them a bunch of money later.)

You really have to just pound the pavement and get quotes from different providers. You need to worry about the waiting period. I would discuss with your financial planner first and go from there.

You can't use a LTC policy as a buy in to an endowment (schedule C) CCRC. I think that confuses folks. There is no care involved on the independent living side of a CCRC, so no triggering event for the LTC policy to kick in.

 

[runwad]

I was able to get a LTC policy on my DH through work 10 years ago through John Hancock. And I opted to prepay his policy in 10 years. I'll be done paying in July, whoop, whoop!! And now my work doesn't offer it as a benefit anymore.

His policy will pay for 3 years in a nursing home more for in home care. It also has an inflation rider and if I would've cancelled the policy all the $ I paid in premiums would've been there for him to use. If he dies before age 70 I will get all my premiums back.

When I got this in 2010 I paid $400/mo. I'm in Ohio and every 5 years they (who is they??) go to the State Insurance board and ask to raise premiums and then they are raised. I researched this and that was why I chose to prepay his policy in 10 years. I've had 2 premium increases and am now paying 510.79/mo till July. All in all I will have probably paid around 60k in premiums.

And the sad thing this policy won't cover 100% of his care, I couldn't afford the premiums of the policy that would've paid 100% of his care. I will still probably have to chip in a little but he has a pension and so some of that will be able to go towards his care.

Alzheimer's runs in my DH's family so his chances of getting it are extremely high. I wanted to plan for the eventuality of us dealing with this and this policy was the best I could do. I thought when we were done paying for his policy, I'd get one on me. But I don't really think we could afford one at this time. Our kids will have to use our savings for my care if it comes to that. I got a term life insurance policy on me so they could inherit something if it comes to that. I realize I might outlive the term and they'd get nothing, but that's a gamble I'm willing to take. My parents both died of cancer at 67 and 78 so I don't really feel I will live all that long anyway.

edit I should say DH was 46 when I took this policy out on him. He's now 56 and I'm 53.

I pray that I just threw away 60k and never have to use this policy!

 

[tvguy]

You really have to just pound the pavement and get quotes from different providers. You need to worry about the waiting period. I would discuss with your financial planner first and go from there.

You can't use a LTC policy as a buy in to an endowment (schedule C) CCRC. I think that confuses folks. There is no care involved on the independent living side of a CCRC, so no triggering event for the LTC policy to kick in.

Exactly. You need to match a policy with what you want, need and can afford. I opted for a policy with annual premiums that pays a fixed amount each month with an inflation factor, and will pay for 3 years. That's about double what the average person in LTC uses.
My mom opted for a plan that had a 1 time premium, with a life insurance component equal to the 1 time premium less anything paid out for LTC. It had a cap of $300,000.

 

[barkley]

1. The Baby Boomers are hitting retirement now, and they -- through their sheer numbers -- are likely to change the face of this question. Exactly how it'll change, I can't say.

i'm noticing changes. one is that in some areas both suburban and rural properties that have/still are strictly zoned for 1 single occupancy home can get a special waiver building permit for an additional limited size/design stand alone house for an 'elderly' or 'disabled' family member (has to be a minimum age or meet a specific definition of disabled AND be either the property owner or within a certain degree of relatedness to the property owner-so no building one to set up a pay for care set up in your back yard). it offers an option akin to assisted living, actually almost identical to the assisted living set up db's mil was in at one point-small cottages on a property with people checking in regularly, helping with the stuff that was needed but independence and privacy so long as it was safe.

i know some folks who don't need assisting per say but aren't comfortable living alone so they are doing the tiny house thing in their adult kid's backyard but as more cities ban them (one near us recently did) other options will have to evolve.

 

[jenmsmith]

For those who are planning to self-fund care, what does that look like if one spouse is in need of expensive, full-time care and the other is not? I can see the thought process of selling the house and spending down retirement and other savings, but what if one partner needs several years of care and the other needs the funds to continue the life led to that point?

 

[QueenIsabella]

For those who are planning to self-fund care, what does that look like if one spouse is in need of expensive, full-time care and the other is not? I can see the thought process of selling the house and spending down retirement and other savings, but what if one partner needs several years of care and the other needs the funds to continue the life led to that point?

Obviously, this is going to be different for each person or couple. As of right now, we figure pension and SS will give us ~$60k a year. Next, we already have RMDs from inherited IRAs--right now, those are giving us in the range of ~$30k/yr. That number will go up, as the investments grow and Dh ages--the RMD is based on his life expectancy. So, that's a pretty good chunk of change--more than I think we'll need annually, once the kids are grown and gone. In addition, we have $1M earmarked for long-term care. We actually have more than that set aside, but we're big on experiences with our children, versus leaving them a pot of money. As they say, you can give with a warm hand, or give with a cold one. We'd prefer to give with a warm one. But hey--if we don't need the extra money for long-term care, they're welcome to it.

 

[Frwinkley]

My thought is this: Use retirement savings, other savings, investments, sale of house for the more expensive care for one of us. Upon the death of either myself or my spouse, life insurance will be used to recoup some of that savings, etc.

Upon retiring from teaching (in 4 years), I will collect a pension. I will take less in a monthly amount so that my spouse will have a survivor benefit. We will both delay the collection of social security for as long as possible in order to maximize that benefit.

 

[MillauFr]

We will both delay the collection of social security for as long as possible in order to maximize that benefit.

Delaying Social Security is a gamble. I would rather play it safe and start taking it ASAP.

 

[Frwinkley]

Every bit of it is a gamble...we’ll wait until full retirement age (67) rather than taking it earlier (unless something changes with our health.)