Self-funding LTC allows you to get the care YOU want when you want/need it, whether it’s having money for Uber/taxi/Lyft or a companion to drive/cook/shop/housekeep, whatever. Lots of times, having these types of services available can keep the person happily AND safely in the home much longer than purely medical services, IMHO.
@doschicos, I haven’t heard about kids paying LTC insurance, but I do have a friend who is retiring, and she stopped paying for life insurance. She told her kids if they wanted to pay for life insurance on her, they were welcome to.
It makes sense to allow kids to pay a premium for life insurance if they want to receive the face value and the insured no longer wants or needs the policy. The insurance won’t benefit the insured but could be a nice tax-free inheritance for the kids or whomever pays the premiums.
We found the premiums of LTC too high for the benefits they offered when we investigated it back about 10 years ago when they were STRONGLY encouraging federal employees to consider it. The coverage has been reduced and premiums increased since then, so I don’t see it as something that is reasonably affordable to a young person starting out to pay for his/her folks, no matter how dutiful. It seems more important for said young person to get into financially sound position instead of paying premiums for others.
@notrichenough, the founders shares will go into the dynasty trust so if I needed money, it would be there. But, I’m hoping that I have enough money on my own without the trust and that the trust can go to the next generation (or in a low probability case, the next generations). The trust has a little piece of his first company, which is operating at basically break-even after three years and seems one big customer away from profitability (but has been so for a while). ShawSon is just on the board at this point. He of course has a bigger piece. It’s not clear that this firm will have a big exit value if any, but lots of learning there and, per @HImom’s post, it helped him get to where he is now, probably more quickly.
I couldn’t get my head around LTC – self-insuring seemed much better. Two people showed me a hybrid LTC that seemed reasonable and not that fee-laden. But, I haven’t acted on it.
Wow @1214mom - maybe friend’s policy wasn’t a great policy, but if she is owner of the policy…maybe it had cash value. If the kids are adults and able to afford the life insurance premiums, that is for them to decide. Insurance isn’t an investment, but you do weigh out the situation.
We actually set up term policies for DDs so they don’t have to be bothered for a while. Premiums are low.
Two sizable premiums for DH term insurance (sizable based on our income), and two LTC insurance policies, 2% of gross wages for LTC insurance premiums are now 4% gross wages, but that is all the increases for a while and they are unlimited benefits policies no longer available today - gold standard. That and Medicare insurance are the ‘safety’ on keeping out of pocket costs low.
@IxnayBob I would definitely get your ‘free spirit’ nailed down some with Dave Ramsey information. You obviously need to protect him from himself too when it comes to your estate sharing. Maybe he will have a practical mate who does not fall for scams, or you can structure for another to make decisions for him.
Darling 96 YO aunt passed away last week - still has MIL and three other surviving siblings (ages 85 - 92). 92 YO has severe Alzheimer’s (doesn’t recognize her own sister anymore) and is in care of children and paid help - they all work as a team. Some families can do this - some cannot. These four siblings (H’s cousins) all live pretty close, and two are single - all have $$ (3 are computer geeks). Mom deserves the best loving care and she is getting it. The dad was a mean alcoholic (mean when drunk which was every night); mom kept the family together, supportive for all four to have college educations, worked her way up to being a very good paralegal. Many years later the dad did become sober and apologized.
If you take your kids off your cellphone, be prepared for what they pick on their own budget. Our frugal DD amd er fiance have a budget plan that is mostly VOIP (voice over IP / wifi). She had been paying us $50 for her Verizon phone, but when Verison did not have the phone she wanted she opted to cut the cord. We mostly text or email, but I’m still sorry we didn’t just keep her on our plan and pay for it. DS has better salary, but he has realized the economy of staying with us.
We are gifting our kids every year and we plan to fund our grandchildren’s 529s, so in a sense our kids will never be off our payroll even though they are doing very well financially. Both kids are married and we still have them on our phone plan which we have been paying since high school and their spouses are on their own plans. My D recently had twins and she is lucky to be able to be a SAHM for now.
@cbreeze, we are indirectly funding a trust instead of gifting but do plan to separately fund grandchildren’s 529s when they are apparent. I’d like to do it now as it seems a great estate tax vehicle, but that may be premature since neither kid is yet married. We should consider hybrid LTCs again in the interim.
Interestingly, with cell phone plans, I think we discovered that there was no great benefit to aggregating in a family plan but in ATT or Verizon there is. Because of all of my international traveling (and especially Canada/Mexico), I find T-Mobile to be the most economical.
TMobile had 4 lines for $100 + taxes for us, including 2.5 gb data per line. It’s about 1/2 what we were paying with Sprint and much less than we paid Verizon with NO data! TMobile does have some free international data and text, which is nice.
@Himom , that is the plan we have also with T-mobile: 4 lines for $100. Me + wife + 2 adult sons = 4 lines. It would be silly to make either boy get their own plan because he would pay more and I don’t think I would pay any less. I don’t bother to bill them for $25/month. Huge benefit at our home is the android phones use the wireless network. Cell phone reception is really bad in our house, whether it is ATT or Tmobile.
Yes, nice having wifi for the TMobile phones. For awhile, our kids were renting apartments that had poor TMobile reception, which is why we switched to Verizon. Got tired of their high rates after 2 years and migrated to Sprint with free iPhones and unlimited data. Have migrated back to TMobile with their low monthly rates.
S pays the phone bills with his WFargo CC, so if anything happens to the phones, his CC has insurance. Will see if it pays for his cracked iPhone 6s screen. He already got Discover to pay for one cracked screen, since the phone was charged on Discover.
Due to our US travel and the spotty LD we had with other plans, we have been on Verizon quite a long time and fairly pleased. One DD is on her own (we paid her $30/mo before her college graduation for getting her own plan). One DD pays us $30 a month for data charges, and we pay for the main cell phone service. H and I don’t need data plan. If we drive somewhere we use GPS. I did buy a Surface so I can use Wi Fi at train stations and be able to look at schedules - will also load other aps like free texting. If I had a data plan I could buy international time during my trip, but instead I will load a burner phone DD had used overseas. I do understand the usefulness of the data android.
I was the middle of 5 children - dad died in 1995 and mom died in 2010. Parents left enough of an estate to be of help to 4 of the 5 of us - one sibling had a very successful business and the inheritance was about a year of his salary.
Wonderful to help with generation skipping (like for college funding). I am still working on setting up our estate details, but I believe both DDs will inherit at least as much as I did and most likely much more.
How much do I need to retire? About $3000/month (adjusted for inflation each year) With the 4% rule and $900,000, I could retire for an indefinite length of time without ever working (not that I have $900,000 in the bank…).
@dadof1, I don’t like to be the bearer of bad news, but I think a safe withdrawal rate nowadays is probably 2.5 - 3%. Ymmv.
So…you’re saying my plan of raiding 50% each year is bad?
I’m hoping you have much more than two years to live, TempeMom! Otherwise, your plan would be good.
Technically, if you raid 50% every year it lasts forever, just smaller amount every year.
@TempeMom , the joke used to be, “I’m financially all set, just as long as I die before next Thursday at noon.” Obviously a joke, but planning financially for an unknown duration of life is tough. Asymmetrical risk if you miscalculate.
“Technically, if you raid 50% every year it lasts forever, just smaller amount every year.”
Good point. And if you do that, in a couple of years (unless you had a whole lot to start with), you won’t want to be sticking around much longer!
If you are 2 ft from a wall and you continuously walk 50 percent of the distance
Between you and the wall, how far do you walk?