My mantra is simple: don’t compare yourself to others. There will always be those who are worse off financially and others who are far better off. If you’re content with your life, embrace it.
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We got LTC coverage the first year H’s employer offered it. It was also eight months after I was diagnosed with leukemia, so we had no idea how treatment would go. I got the max policy I could get without underwriting. I was 41 at the time and it was REALLY cheap. H also got a policy but with lower benefits. Rates have gone up, and the insurer has suspended sales of the policies. I get three times to decline a COL increase in the policy. Have done so once, and have adjusted coverage a couple times to maintain the same premium level. Am now 64 and am paying $130/mo.
Expect that we will do both Medicare and H’s medical insurance after retirement, which will give us some protection, as I regularly hit the OOP maximum. It will also protect me if Medicare drops any of my four Class 5 (most expensive) drugs.
We haven’t worried so much about a specific “number” because H will get a nice pension and we’ll have good SS benefits as well. Both have COLAs. He has done well for not starting to save for retirement til he was 37. Those should cover our regular expenses once we aren’t paying SS, putting $ in the 401k, saving on top of that, and paying for life insurance.
H isn’t retiring before 67.5, and I would not be at all surprised if he works longer. It’s his life and identity, and only doing the 2.5 hour RT daily commute twice a week and WFH the other three days has been a game-changer.
We have diligently saved over the years and time is doing most of the work now on account balances. In 2019 H moved most of his 401k to target funds, and laddered them in five-year increments so that money we’ll need in our 80s (G-d willing) will still be actively invested for another 20 years. My own rollover IRA is 70/30 stocks. Don’t plan to touch it until RMDs.
I worry about my siblings – one of my sisters proudly told me last summer that she had $22k in her 401k. She turns 60 next month. No other savings. My brother is in a similar boat. My other sister retired from her teaching position last December at age 56. She maxed out her service years and wanted to take care of her four grandsons. She was in the school system long enough to also get retiree medical coverage and fortunately also paid into SS. Her H will get a pension, but has a modest income, so it won’t be huge. OTOH, they live in a LCOL area and they have a great quality of life.
S1 has not needed our financial help and wouldn’t take it if offered. S2 now has a job in Ukraine with a US contractor and is making US salary (which is big bucks in Ukraine, though not enough to get an apartment in the DC area!). We help on a low-key level – plane tickets when they come here, use of the car while visiting, buying and shipping items as needed. Happy to do that for them. If they needed to get out of Ukraine quickly, we’d get them here and help them get settled. Otherwise, they are insistent on making their own way as well.
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I’m not explaining it well but it’s not that I’m comparing myself to them - it’s that I worry that because there are so many people that have so much, prices will go up and my retirement savings won’t be enough.
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Those that have LTC coverage policies - it is worth keeping them as @CountingDown explained her policy stipulation. We have had some choices with our policies as well - I was quite knowledgeable about policies and companies with training and licensing. I found people were reluctant to buy policies and then companies left the market in part because of their payout risk - the company we had (which was sold in 23 states) went to malpractice insurance focus. DH and I purchased ‘top of the line’ policies (unlimited years, 5% increase on payments per day) I believe around 2004. We locked in on a premium amount some years later to avoid price escalation. We just received a ‘buy out’ offer of our policies, which we are not taking (essentially offering back current value based on premiums in and value of policy, $50K each). We pay $1K each/year premium.
One has to see where one is at current time and move forward. We were probably mid-30’s with making some traction on retirement savings, mostly with 401k, and did the maximum in as long as we were able. By then, Roth IRAs came in, and we also got more savvy on investment choices within 401k. Then managing our risk later with obtaining a financial advisor and our purchasing of various annuities over time.
Our ‘number’ is good for us - including our home we have just a hare under $3 million. This amount has not dropped in 3 years. Stock market has gone up and down.
We are optimistic on the future with our country and as long as our health holds out. There are cost shifts with COGS (cost of goods sold) and cost of labor.
As far as Medicare not approving certain things/drugs, IDK. We purchase the part D and pay for a very good Medicare B supplement. I cannot see cuts that affect broad numbers of seniors, but those Medicare Managed Care plans are very risky IMHO.
Everyone has their own spending choices before and after retirement.
Learning from what happened with parents/other elders as far as retirement years but also having to make the adjustments to life today. Medications and lifestyle along with better medical can have better life for us in our senior years as long as we are mindful of finances.
To me it is very stressful when there is not a nest egg, and one does have to overcome fears of ‘not enough’ if one has a reasonable nest egg.
Happy New Year everyone.
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Whoa! I’m paying $303/month for Long Term Care insurance through the Federal Employees program. We signed up 20+ years ago before DH left active duty. I don’t remember the actual terms although they were pretty generous. The premiums had a big jump last year. (I’m 64 now, DH died at 64).
It’s a small part of my income so it seems reasonable to keep it. Yes, I could self-insure but I’d rather leave a nest egg for the kids.
DH died in 2024 and we managed the decline without using the LTC benefit. I could write a whole page on the pros and cons, but basically we managed by spending about $1000/mo in cash for help. We loved our caregiver helper (who I found on Care.com — and I spent time with her yesterday). She would have lost her subsidized housing if we had paid her in a taxable situation. And, when we hired through an agency, the workers were minimally helpful, if they showed up.
DD2 is my trusted person with Fidelity, and she told my advisor to remember gifting when setting my budget! (Luckily for her, I found this funny).
On the subject of gifting, I now have a notebook where I track gifting throughout the year. (I also track wedding gifts and baby gifts so I can remember to be fair to those!)
Currently I am paying for DD2’s appliances for her kitchen gut-remodel. Caveat, she has to put those on my credit card so I get the points. I did not limit her selections; she is mostly choosing KitchenAid. I’ll enter this in my notebook so when DD1 is ready to covert her house to gas (from oil heat), the same amount will be available to her.
2024 was a challenging year as I also became fully immersed in the care for two 90 year olds. In the long run, it is interesting to see the whole trajectory of aging and funding retirement through the end of life.
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I have to tread lightly here, because I could get doinked for being political. The truth is that the vast majority of people do not have as much as it seems, and even if they did, that’s not what is causing prices to go up. That said, I agree that prices will go up and our retirement savings will have less purchasing power than we had hoped. The good news is that you’re better off having saved than not having saved.
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I know exactly what you mean. I don’t feel jealous of those who have more, but it does occur to me that if most everyone around you is wealthier, prices for certain things will go up, because of supply and demand and what people are willing to pay. Real estate, personal services, travel, remodeling, those prices will go up as people are willing and able to pay more money for them. There is not an unlimited supply. I’m not worried about just surviving in retirement, but to have enough to do the things that we want to.
Funny, I was just thinking about when I was a teenager (we lived as if we were poor, though my parents had solid middle class jobs), I would walk through Nordstroms and think, “One day I’m going to have a good job and be able to afford to shop here”. Well. After decades of good jobs and working hard to save and invest, I still feel like I can’t afford to shop there, because prices have gone up so much. But the stores are full of people who can, and many who are living in far more luxury than we do. I’m not complaining, but I am confused at how so many people are able to do this. I don’t think they are all in debt. I wonder if generational wealth being passed down is a significant part of the equation.
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You know, maybe a good % of the people who shop there because that is their splurge. Maybe they don’t travel. Maybe they drive their cars did they die. Maybe they only shop the clearance racks.
I sometimes wonder if people (here on CC and elsewhere) become concerned that in retirement they might not for decades be able to keep up the lifestyle they like. There is a middle between spending as you like and just surviving. And health care aside (though I realize it is a big concern) if you retire at 65 you probably are not going to be worried about traveling and big spending on “things” when you are 85.
Do the best you can with what you have and with the life you’d like to lead. Sometimes you have to (or are forced to) roll the dice a bit.
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That definitely is a good point. You’re not going to be spending on the same things at age 85 that you’ll want to at age 65. It certainly is a balance between getting and doing the things you want to do at the younger ages, but not blowing everything so you end up with zip. I think part of my problem is attitude towards money. My youngest son told me, “Why can’t you just spend money and enjoy it? Why does everything have to be an investment, a bargain, a deal?” And he’s right. I think even if I won the lottery I would use coupons, buy things on sale, look for travel deals, good investments and not pay extra.
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I grew up in a "government cheese, receiving household. Free linch at school. No vacations. Parents renting a cheap house.
Starting out I bought a small manufactured home in a park and then a fixer upper small rancher.
Over the years my modest/frugal lifestyle has allowed me to save, trade up in housing and live more comfortably.
In retirement, it wouldn’t be the end of the world if I had to go back to a much simpler lifestyle. Small home or rental. Less excess. The basic needs met with enough left over to enjoy some cheap travel and entertainment.
I guess I’m saying my retirement number could be enough to support my current lifestyle or it could be much less and support a more frugal existence.
Healthcare is certainly a factor but Medicare should make that doable.
Long term care? I guess when/if my funds run out I might end up at a state facility.
I’m doing my best to be well set up but if things fall apart I’ll get by. Maybe I’ll work a bit longer as some of my siblings have had to do.
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I can feel this in my bones. I rhink it was ingrained in me from a young age. I don’t see a reason to change, too much.
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Sometimes I think of the tough times we have been through, and know that I could go back to doing that if I had to again. It would be difficult and depressing to have to do this in retirement, but having lived through this in childhood and adulthood, I think I could snap back to it.
Due to my dad’s mantra of, “Life is about the struggle”, we lived like we were poor. No heat or air, no vacations or restaurants, constant construction, dust, outhouse in the back yard some years. Showers, what are those? Then as an adult, both me and my husband got laid off from what we thought were secure jobs at American Airlines. Little kids, little savings, my husband parking cars for an income, and we’re not spending any money, not using the dryer or heat, giving up on alcohol and coffee. Coffee. I can’t believe we gave up that. It was really hard, but I think we could do it if we had to. Except for the coffee. 
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Another poor growing up person here. Raised by single mom (waitress, who also helped her mom and 7 siblings). But my mom did the best she could, talked to me about money, and I had relatives who helped make sure I was OK. Being poor did make me major in something that would allow me to fairly easily get a job when I graduated, and I started saving for retirement right out of college.
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When I started working at my long term (30 years) job, a more experienced teacher who became a very good friend took me aside and gave me a TON of advice about retirement contributions etc. She was spot on.
My own family was of modest means…and retirement accounts really were not a thing in their circle of friends.
We have a financial advisor, and one of our kids has an ongoing relationship with one who specializes who folks in her profession. The other kid has seen a CFP a few times, but he is very good with saving, contributing the max to his Roth, and contributing as much as possible to his IRA.
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When I look back at my childhood, we were food-stamp eligible but my parents were far too proud. We lived in subsidized housing as Dad was in graduate school. I spent a lot of time walking down the street to the library as my mother ran a daycare in our home as well as did something with computer data cards. Everything my parents had they earned themselves. Our “new” house was Mom’s and we spent a substantial amount of her money to repair and update the house before we moved in. Mom was very careful with her money because she wanted to leave something for her heirs - it was very important to her, I think because she knew life hasn’t been easy. I’m honestly not worried about outliving my money; I’ve cut costs before and I can do it again.
I do wonder - many of you mention managing your own retirement accounts. I have an advisor - it would never occur to me to try and manage my own funds. Do some of you do this professionally?
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I’m a strong believer in seeking professional advice when things are out of my area of expertise. We have a financial planner. He is awesome…and sure, maybe I could have done some of this on my own, but he has done a terrific job. Plus, he is an excellent communicator, and answers my email questions VERY promptly.
Some people might think this is not money well spent…but my husband and I think it’s well worth it!
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I completely agree with seeking professional advice. There are easy decisions I could make but the overall strategy, choosing funds and the like - no thanks. I also really like my advisor and she helps me think ahead as to what my needs/wants are going to be.
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I manage my own 401k and IRA accounts. I also managed my kids 529 accounts.
I am not a professional but i feel like i have a good understanding of these particular areas and have, unbeknownst to me, kind of followed the boglehead, keep it simple style.
I like numbers and find it enjoyable to look at different options and plot outcomes, etc.
In the future i might get with a professional just to ensure I’m thinking about everything though.
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For most, they can get a basket of indexes and for the young an S&P index and they’ll beat the high majority of paid folks - without shelling out a ton of extra expense like most who use paid advisors are.
Or they can get a target date fund or even two to diversify their risk amongst differently similarly named target funds.
In my mind, people can easily, in most cases win and on their own, but people that pay fees (thousands a year in lost returns) are doing so for comfort. In most cases, it’s not for a superior return even though they don’t realize that or they realize it but are ok in letting it slide so they can have a human to talk to.
But that’s many times in life - you pay more for a home with a feature or desired neighborhood or more for a steak at a nicer place.
Comfort drives behavior and many are willing to pay for that comfort and as we are reading, are satisfied with that expense.
And that’s great for both them and their advisor.
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We have a FA. Neither my husband or I have much interest. My husband was a project manager, I think he likes hiring people to do the skilled work.
I think his dad is much more hands on but they still have someone managing things. Which is good because his dad is getting a bit forgetful these days.
My fil keeps asking my husband to meet with his financial advisor. But my husband doesn’t want to push it. We don’t live in the same town, we tell the in laws when we have appointments in their town but it seems like they are having trouble putting two and two together.
My mil called today, told her when we would be in their town next. I finally said, fil wants husband to meet with the FA. “Oh, maybe I should write that down” My husband doesn’t want to mention it because it might seem pushy or something. Probably means that he doesn’t want to deal with any mortality. My fil is 89 and keeps bringing it up!
We will see if this meeting actually happens. Neither my husband or I much care but it probably is something that should be taken care of.
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