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<p>Actually, in some families leaving an inheritance is a deliberate strategy, not just a side effect. Particularly for families that have historically had to get family members out of countries that have become dangerous.</p>
<p>momsquad–we are still in our 40’s–we have not had our policies for very long. Yes, John Hancock has had a horrible history with rate increases, we are not with them. We have Northwestern Mutual and their LTC reserve is backed up with their substantial life insurance business as well. I’m not worried at all that they won’t be around to pay. </p>
<p>Yes, qualifying is not being able to do 2 ADL’s, feeding, clothing, bathing, etc. It’s not about being in a nursing home and people need to understand that. It’s about being able to take care of yourself in your OWN home for as long as possible. The 100 day elimination period dovetails with Medicare and their 100 days of coverage following a qualifying hospital stay. Even if you need help for one hour/week, that starts your elimination period on our our policy–be very careful that you get a policy that goes by days, not hours for the elimination period. Yes, there are some crap policies out there but the good ones are worth having. Any financial planner worth their fee will tell you that from the outset if you are 50 or older. Look up the Medicaid requirements in your state and if that doesn’t change your mind…besides, I do NOT want to put my kids through what we had to do with my mom. There is NO WAY I would expect my kids to take care of me like that.</p>
<p>Our retirement is taken care of, part of that is leaving money to our children, money they won’t see until they are older however via terms set up in our trust.</p>
<p>I can see why you would want ltc insurance stevema, but statements like this…</p>
<p>“Any financial planner worth their fee will tell you that from the outset if you are 50 or older” </p>
<p>Are bs.</p>
<p>Most people who buy ltc insurance are going to be losers…</p>
<p>There is no reason to make statements like the above…</p>
<p>Each person should look at his or hers own situation and economic and psychological needs.</p>
<p>I had looked at LTC and at my age and with health issues, it was prohibitively expensive. I decided to go the savings route. Neither of my parents needed long term health care but 3 of my uncles on my mother’s side had Parkinson’s and ended up in nursing homes. One was in a nursing home for many years but he had some kind of VA benefits that made it very affordable - not that he needed it - he was very well off.</p>
<p>“Consumer and financial experts generally agree that LTC insurance is a bad investment unless the monthly premium is 5% or less of your monthly income. When calculating this 5% figure for future years, bear in mind that your premiums are likely to rise, while your income will probably drop.”</p>
<p>wondering if the 5% or less of your monthly income refers to net income? My LTC costs $229 w Genworth, through my employer. Would never have qualified on the open market. It is a very individual decision, based not only on economics, but one’s own health issues and risks. Not a fun thing to think about, but important.</p>
<p>I bought my husband LTC through my teacher’s union because it is cheap (about $50 a month), and I have cancer so I don’t think I will be around to take care of him (I can’t get it myself). How much do you guys have saved up, if you don’t mind my asking? We have around $800,000 (cash, stocks, 401Ks and 403Bs not including home equity)- I am hoping we can get to a million before I retire (in about 5 years, God willing). There is no way we can get to two million unless I win the lottery. I know we should have more, but I have a good teacher’s pension, so that offsets the need for more savings. I keep reading that the average couple only have around $25,000 in retirement savings. So I am just wondering where we stand.</p>
<p>Tptshorty, you are in great financial shape. Don’t worry about money.</p>
<p>“I bought my husband LTC through my teacher’s union because it is cheap (about $50 a month)”</p>
<p>Wow!! I’m going to have to ask my wife about that and see what her school system offers.</p>
<p>Tpts, From what I have read you seem to be in very good shape for retirement. And hopefully the worst is over for awhile with the stock market. </p>
<p>SteveMA, sorry- I didn’t know you were still youngsters!</p>
<p>Our financial planner didn’t tell us outright not to purchase a LTC policy, but she sat for at least 15 minutes (I know because we paid by the hour) running Monte Carlo predictions trying to “blow up” our retirement assets by inflicting various hypothetical catastrophic events on us. She had both me and my husband requiring 6 years of nursing home care with inflation adjusted average rates, and we still had money left to leave to our daughter at death. Our salvation is our pension, social security and compulsive saving in 403B’s for the past 20 years. They will provide a guaranteed revenue stream that should cover LTC.</p>
<p>Assuming the US continues to have a large population interested in service work, we should be able to hire someone to come in a few hours per day to boil us an egg and check our diaper supply. And if either of us starts putting our shoes in the refrigerator or forgetting how to read the clock, we will sign on to a continuing care community while we can still convince them we are able to live independently. This may involve selling the house and using the proceeds as the buy-in payment, but it will be worth it knowing our daughter won’t be burdened with late night calls to retrieve us from our nightly
wanderings.</p>
<p>About the teacher’s union insurance benefits, I bought mine through the NEA. Their policies are much cheaper than anyone else’s, like AARP. If any of you have children becoming teachers, they should get the extra life insurance when they are hired. It’s very cheap then. Check out the AFT, NEA, and whatever state union they belong to ( I am in CTA in California).</p>
<p>I own shares in Manulife Financial which owns John Hancock and I just own the shares for the dividends. I guess their LTC business helps out there.</p>
<p>Rough numbers but $1,000,000 will get you an income of about $50,000/year for about 20 years. Obviously there are a lot of variables here–tax rates being the biggest cash suck of the plan but that is a good estimate. If all of your funds are in 401K’s and other taxed accounts upon retirement, plan on that number being closer to $35,000-40,000/year. If you have a good balance of pre and post tax accounts, $50,000 is about right. Now you need to figure out if that is enough or not. How much do you need/want on a monthly basis in retirement—including things like property taxes, medical insurance premiums, medical costs not covered by premiums, etc. Will you want to travel a lot, how about lawn work, association fees, spoiling the grand kids funds, etc. It’s commonly assumed that you will spend less in retirement but studies show that your first 10 years of retirement are as expensive as your last 10 working years.</p>
<p>One thing about group LTC plans is that the coverage isn’t typically as good as what you can get privately. Just read the policies and study the exclusion clauses as well as various elimination periods, etc.</p>
<p>The other thing about group LTC plans is that you often can’t continue it once you do retire.</p>
<p>Individual LTC insurance might also be expensive due to adverse selection, since people in worse health or worse family histories of health problems requiring assisted living or nursing care may be more prone to buying them (individual disability insurance also seems to be subject to the same problem; it is expensive to buy a policy individually, but employers can often buy policies for all employees relatively cheaply due to including the low risk as well as the high risk).</p>
<p>ucbalumnus-there is a medical qualifying process for LTC so they handle risk that way. Premiums for LTC and disability for private plans are more expensive because the coverage is better. A typical group disability policy only covers 60% of your salary and typically is an “any occupation” policy meaning you can’t work at all in order to receive benefits. In a private plan they are typically “your occupation” policies meaning if you can’t do YOUR job you can collect benefits. A good example is a surgeon–say that surgeon develops a twitch or tremor in her hand, can’t do surgery any longer but could teach at a medical school for a fraction of the pay. In a group plan she would need to teach, in an individual plan she could file for disability and not work. You can also buy closer to 100% of your salary, depending on your occupation. That is not an option with a group plan, best group plans get to is about 80%. Also, if your employer pays your premium on your disability plan, your benefits are taxed so you are getting 60% of your take home pay. Individual plans, since you pay the premium, are not taxed so you are getting whatever percentage of your actual salary.</p>
<p>I paid $99 to 23andme.com for genetic testing. I’m now reassured that my genetic risk of Alzheimer’s is significantly below average. I feel no need for LTC insurance. OTOH, I’m working hard to reduce my controllable risks of Type 2 diabetes ;-0!</p>
<p>The OP’s list of things to do financially is the same list we were given fifteen or more years ago. As for mutual funds, I use ETFs; my favorite is IWM.</p>
<p>Kind browsed through this, but has anyone done Roth IRA conversions? Our financial planner ran various economic scenarios for the next 30 years, and at the end of the day the Roth conversion won in every case. This was a few years back and it does seem to be the right decision now, but <em>OUCH</em> on the taxes these last two years! They also recommended adding an umbrella policy along with earthquake insurance (we’re in Southern California). They did not recommend LTC insurance.</p>
<p>We converted everything to Roths more than a decade ago.</p>
<p>MacMom, I recall that in 2010 or 2011 our tax preparer was stressed out over all the Roth conversions she was dealing with. At that time you could spread out the taxes due over 2 years, but I’m not sure if that’s still true. In her opinion the ability to roll over an unlimited amount from a regular IRA to a Roth was too good to be true. The Roth has an advantage for estate planning, as unlike the regular IRA there are no mandatory withdrawals and heirs will owe no taxes on an inherited Roth. That’s assuming anything is left over after LTC expenses.</p>