Assisted Living Expenses

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yousha
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Assisted Living Expenses

Post by yousha » Sat Jul 28, 2018 5:31 pm

These days it costs about $9000 per month to live in a decent facility. How does one prepare to spend that kind of money. It is mind boggling. Comments.

Gill
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Re: Assisted Living Expenses

Post by Gill » Sat Jul 28, 2018 5:35 pm

Saving and investing all one’s life.
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ResearchMed
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Re: Assisted Living Expenses

Post by ResearchMed » Sat Jul 28, 2018 5:43 pm

yousha wrote:
Sat Jul 28, 2018 5:31 pm
These days it costs about $9000 per month to live in a decent facility. How does one prepare to spend that kind of money. It is mind boggling. Comments.
The amount varies from facility to facility, and it also varies much more than I would have expected among different regions in the USA (no idea about arrangements elsewhere).

Even in our HCOLA, $9k per month for an ALF (assisted living facility) is heading into the high end.

But yes, for most people who are generally "middle income" (not very poor, and not ultra wealthy), it can be very expensive, especially when there is a prospect of many months or several years.

Keep in mind that after one "spends down", one can often switch to Medicaid, at least when one reaches a need for more skilled care. Just make sure that the facility IS one that will transition existing residents that way.

RM
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adamthesmythe
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Re: Assisted Living Expenses

Post by adamthesmythe » Sat Jul 28, 2018 6:05 pm

Had a relative in a facility not so long ago. Cost was about half that for a fairly decent facility. Cost depends on where you are.

When in a facility many other living expenses go away. And (with some exceptions) often the stay is not very long. Probably many people on this board have enough to cover expenses for years.

The main problem is for a couple where only one is in a facility. Worst case almost all assets need to be consumed before Medicaid takes over, leading to one partner with few assets left. There are ways around this according to my understanding (google Medicaid annuity).

> Saving and investing all one’s life.

I didn't save to have money for assisted living. I saved to have a good life in retirement, with assets that could be used for assisted living in the worst case.

coincollector
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Re: Assisted Living Expenses

Post by coincollector » Sat Jul 28, 2018 6:24 pm

An HSA is a great insurance policy for all health care needs including long term care. Let's say at 30 you begin saving the current max of $3,450 each year until age 45 in an S&P 500 index. 10% is a reasonable rate of return for that type of investment. At 65 you'll have $834k, $1.3M at 70, $2.1m at 75 and $3.4m at 80. Hopefully that will be plenty of money for long term care and any other health needs that might crop up. Inflation is a tricky beast to predict but the above is decent chunk of change.

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fandango
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Re: Assisted Living Expenses

Post by fandango » Sat Jul 28, 2018 6:49 pm

My mother was in a facility ranked in the 75th percentile for 5 years. She required more than average care.
Cost was around $40,000 per year.

$100,000 per year is the rate for most "nursing home" facilities. So, I am thinking that you may have the two confused.

In either case, you will have to liquidate most of your assets to pay the fees and eventually receive some Medicaid benefits. Only good/bad news is that most people only live for 3 years after entering a nursing home. So the length of payment is usually three years.

I learned this lesson the hard way when my mother became disabled from a stroke, and we had to look for a place to provide care for her. We received absolutely no help from the hospital in finding care before she was released. One of the major shortcomings of this whole process is the lack of support provided to families by the hospital system. This was a Tier 1 trauma center in Ohio and highly rated (not by me).

We did purchase a long term care policy after my mother became disabled. We saw how the system worked - money talks.

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willthrill81
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Re: Assisted Living Expenses

Post by willthrill81 » Sat Jul 28, 2018 8:55 pm

"Assisted living" can mean lots of things, but generally it's nowhere near $9k a month. Generally, it refers to the kind of facilities that are like living in a hotel where they come clean your room periodically and provide a meal or two a day. What you're describing in terms of costs is far more indicative of a nursing home.

According to the Genworth Cost of Care survey, average costs for assisted living in 2017 were $3,750 per month, a very manageable number for the financially fit.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

22twain
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Re: Assisted Living Expenses

Post by 22twain » Sat Jul 28, 2018 9:13 pm

willthrill81 wrote:
Sat Jul 28, 2018 8:55 pm
"Assisted living" can mean lots of things, but generally it's nowhere near $9k a month. Generally, it refers to the kind of facilities that are like living in a hotel where they come clean your room periodically and provide a meal or two a day.
My understanding of "assisted living" is that you receive help with bathing, dressing, etc. but do not need nursing care.

My mother spent her last three years in a three-stage retirement community. Stage 1 was "independent living" in which she had a small apartment with a small kitchen. She could make her own meals or eat in the community dining room. Usually she fixed her own breakfast and lunch, and ate dinner in the dining room. Cleaning services were provided, as in a hotel. She was still able to walk without assistance from another person. Stage 2 was "assisted living" as I described it. Stage 3 was nursing care. My mother never went beyond stage 1, because she died suddenly before she reached the point where she would have needed higher level care.
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willthrill81
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Re: Assisted Living Expenses

Post by willthrill81 » Sat Jul 28, 2018 9:19 pm

22twain wrote:
Sat Jul 28, 2018 9:13 pm
willthrill81 wrote:
Sat Jul 28, 2018 8:55 pm
"Assisted living" can mean lots of things, but generally it's nowhere near $9k a month. Generally, it refers to the kind of facilities that are like living in a hotel where they come clean your room periodically and provide a meal or two a day.
My understanding of "assisted living" is that you receive help with bathing, dressing, etc. but do not need nursing care.

My mother spent her last three years in a three-stage retirement community. Stage 1 was "independent living" in which she had a small apartment with a small kitchen. She could make her own meals or eat in the community dining room. Usually she fixed her own breakfast and lunch, and ate dinner in the dining room. Cleaning services were provided, as in a hotel. Stage 2 was "assisted living" as I described it. Stage 3 was nursing care. My mother never went beyond stage 1, because she died suddenly before she reached the point where she would have needed higher level care.
What "assisted living" specifically mean varies from one facility to another, but "nursing home" pretty much is universally recognized as being 24/7 care. For the price the OP is talking about, that's almost certainly referring to a nursing home. Lesser levels of care can be had for a much lower cost.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

marielake
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Re: Assisted Living Expenses

Post by marielake » Sat Jul 28, 2018 10:01 pm

I live in NC. Recently met with a financial planner. I was told the average cost for a one bedroom ALF here in NC in 2017 was $54K with a 5-year annual growth rate of 7%.

marielake
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Re: Assisted Living Expenses

Post by marielake » Sat Jul 28, 2018 10:03 pm

I live in NC. Recently met with a financial planner. I was told the average cost for a one bedroom ALF here in NC in 2017 was $54K with a 5-year annual growth rate of 7%.

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William4u
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Re: Assisted Living Expenses

Post by William4u » Sat Jul 28, 2018 11:30 pm

An n of 2 family members: each were in assisted living for about 2 years and in nursing care for less than a year before passing. Assisted living was around $4000 and nursing care around $7000 a month. Lets round up a bit and say that it was about $200k for assisted living/nursing home care.

However, these facilities had a policy: you had to have about $200k in assets to join the facility, and if you ran out of money, they would care for you after you became indigent and on medicaid until you passed away. I recall that this is a common kind of policy: they take medicaid after you run out of money, which happens a lot I imagine.

desafinado
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Re: Assisted Living Expenses

Post by desafinado » Sat Jul 28, 2018 11:36 pm

coincollector wrote:
Sat Jul 28, 2018 6:24 pm
An HSA is a great insurance policy for all health care needs including long term care. Let's say at 30 you begin saving the current max of $3,450 each year until age 45 in an S&P 500 index. 10% is a reasonable rate of return for that type of investment. At 65 you'll have $834k, $1.3M at 70, $2.1m at 75 and $3.4m at 80. Hopefully that will be plenty of money for long term care and any other health needs that might crop up. Inflation is a tricky beast to predict but the above is decent chunk of change.
I would be very pleased to end up with 10% returns into the 2070s..

yousha
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Re: Assisted Living Expenses

Post by yousha » Sun Jul 29, 2018 7:34 am

After reading all of these posts in response to my query, it is a wonder to me about how many folks are dealing with this issue. From an investment perspective, how does one account for this issue in terms of portfolio construction. What a hassle.

Jack FFR1846
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Re: Assisted Living Expenses

Post by Jack FFR1846 » Sun Jul 29, 2018 7:45 am

We have a relative about to go into assisted living in Central Mass. The facility offers assisted living in separate apartments and is city subsidized, or not depending on income and assets. Each care expense is separately available and paid for. For most services our relative needs, monthly cost is about $4200. Non-subsidzed cost is only about $4500 a month.

This relative has been in a rest home at $6k a month about 10 years ago and a nursing home at 10k a month before that following a horrible accident. There's a pension and an annuity to provide income and she's right on the edge income wise. No real savings besides a paid for house worth a bit over $100k. She's been deemed to have too much for a number of other city facilities. So it's really a "threading the needle" exercise, it seems with assets. You can't have too much to get into some facilities but if you do get in, how are you going to pay for it.
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SQRT
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Re: Assisted Living Expenses

Post by SQRT » Sun Jul 29, 2018 8:22 am

yousha wrote:
Sun Jul 29, 2018 7:34 am
After reading all of these posts in response to my query, it is a wonder to me about how many folks are dealing with this issue. From an investment perspective, how does one account for this issue in terms of portfolio construction. What a hassle.
Don’t forget that by the time you are in an assisted living or long term care (nursing home) facility, you probably dont have many other expenses. Assuming you are single or last to go, your home will be sold, no car, no travel, etc. A little more complicated if one spouse needs to keep going while the first is in care.

Case study:
My father died of Alzheimer’s at 77, after about 2 years of assisted living ($6,000 per month). My mother has gone through 5 years of assisted living at about $8,000 per month and probably has about 4 years of money left. She is now 93. I estimate that they retired 25 years ago with about $1.5 million. This turned out to be enough for a fairly extended period of LTC. I would think that at today’s prices, for most cases, $2million would be enough.

I wouldn’t change portfolio construction at least until near the end. I sold the last of my mother’s equities a few months ago. She is all cash now.

Getting old is indeed a “hassle”.

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willthrill81
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Re: Assisted Living Expenses

Post by willthrill81 » Sun Jul 29, 2018 10:02 am

desafinado wrote:
Sat Jul 28, 2018 11:36 pm
coincollector wrote:
Sat Jul 28, 2018 6:24 pm
An HSA is a great insurance policy for all health care needs including long term care. Let's say at 30 you begin saving the current max of $3,450 each year until age 45 in an S&P 500 index. 10% is a reasonable rate of return for that type of investment. At 65 you'll have $834k, $1.3M at 70, $2.1m at 75 and $3.4m at 80. Hopefully that will be plenty of money for long term care and any other health needs that might crop up. Inflation is a tricky beast to predict but the above is decent chunk of change.
I would be very pleased to end up with 10% returns into the 2070s..
Getting 10% returns after inflation over the long-term would be quite a feat indeed. The U.S. stock market has historically returned about 7% after inflation, and I wouldn't even use that for planning purposes. Since 2000, stocks have only had a 3.5% real return.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

CULater
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Re: Assisted Living Expenses

Post by CULater » Sun Jul 29, 2018 10:30 am

Newsflash: "Assisted" living care is overwhelmingly provided by family members. Only minority of people have the financial resources to afford the outrageous and inadequate care provided by institutions. You and I won't be able to afford it, and we're less and less likely to have family members nearby to provide it. It's time to stop moaning about it and figuring out what to do about it.
For generations, the nation has relied on family members to keep aging loved ones in their homes. Today, many Americans are growing older without family nearby, offering a glimpse of what the future may hold for the cohort of Americans who are approaching retirement.

The caregiving crunch comes at a time when Americans reaching retirement age are in a squeeze unseen in generations. Their median incomes, including Social Security and retirement fund receipts, haven’t risen in years. They have high average debt, some incurred from taking care of their own aging parents. And if they’re counting on family to care for them, too, they may well find their families too small and far-flung to meet the task.

The private sector isn’t an option for many older adults. Demand for private home health aides is expected to exceed supply by more than 3 million in the next decade. Many can’t afford it even if it was available. A full- time home-health aide costs, on average, $49,000 a year, according to a 2017 Cost of Care Survey by Genworth, a long-term-care insurance company.

Public support hasn’t kept pace either. Medicare and other government programs provide a fraction of the long-term supportive services that people need to remain in their own homes. Medicare generally doesn’t pay for long-term care stays in nursing homes, which can cost close to $100,000 a year for a private room.
https://www.jaapgh.org/sites/default/fi ... 0%2018.pdf
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

yousha
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Re: Assisted Living Expenses

Post by yousha » Sun Jul 29, 2018 10:44 am

CULater wrote:
Sun Jul 29, 2018 10:30 am
Newsflash: "Assisted" living care is overwhelmingly provided by family members. Only minority of people have the financial resources to afford the outrageous and inadequate care provided by institutions. You and I won't be able to afford it, and we're less and less likely to have family members nearby to provide it. It's time to stop moaning about it and figuring out what to do about it.
For generations, the nation has relied on family members to keep aging loved ones in their homes. Today, many Americans are growing older without family nearby, offering a glimpse of what the future may hold for the cohort of Americans who are approaching retirement.

The caregiving crunch comes at a time when Americans reaching retirement age are in a squeeze unseen in generations. Their median incomes, including Social Security and retirement fund receipts, haven’t risen in years. They have high average debt, some incurred from taking care of their own aging parents. And if they’re counting on family to care for them, too, they may well find their families too small and far-flung to meet the task.

The private sector isn’t an option for many older adults. Demand for private home health aides is expected to exceed supply by more than 3 million in the next decade. Many can’t afford it even if it was available. A full- time home-health aide costs, on average, $49,000 a year, according to a 2017 Cost of Care Survey by Genworth, a long-term-care insurance company.

Public support hasn’t kept pace either. Medicare and other government programs provide a fraction of the long-term supportive services that people need to remain in their own homes. Medicare generally doesn’t pay for long-term care stays in nursing homes, which can cost close to $100,000 a year for a private room.
https://www.jaapgh.org/sites/default/fi ... 0%2018.pdf
Hopeless. I agree. The best we can hope for is to pass on with dignity.

andypanda
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Re: Assisted Living Expenses

Post by andypanda » Sun Jul 29, 2018 11:13 am

Medicaid rules vary from state to state. Not all states have Medicaid funding available for assisted living. And the rules can change from one year to the next.

www.payingforseniorcare.com/medicaid-wa ... iving.html

In addition to the problem of higher-end places not taking what Medicaid will pay, there's the problem of limited initial access.

For instance, my fiancee's 70-year-old brother just had a brain tumor removed and has maybe a year to live. He will need memory care soon if not right now. His final radiation treatment is Tuesday and he has a follow-up neuropsych test on Wednesday. He decided that he would like to move to Virginia Beach and live at Westminster Canterbury on the Bay, a very nice continuing care facility. Yes, it is very expensive with a huge down payment and high monthly fees. Okay fine.

My fiancee called them and explained his needs. She was told that the facility needs it's memory care and nursing home beds for their current independent living and assisted living residents. I suspected there would be a waiting list for a bed in the nursing home section, but there isn't a waiting list at all for walk-ins.

Now for Plan B. And C.

I sort of knew all of this about continuing care facilities after my father spent 4.5 years in assisted living with increasingly costly services due to impaired mobility (they even let us hire nurse's aides twice a day to keep him out of the nursing home wing - everyone there thought the world of him and bent over backwards) and my mother spent 9.5 years progressing from assisted living to memory care to full nursing. The final 7 years she could chew and swallow and they did everything else for her. She only said a few words a year, but smiled from time to time.

Oh well, growing old is what it is.
What's the old joke - Be good to your kids, they'll be picking your nursing home. ;)

yousha
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Re: Assisted Living Expenses

Post by yousha » Sun Jul 29, 2018 11:34 am

andypanda wrote:
Sun Jul 29, 2018 11:13 am
Medicaid rules vary from state to state. Not all states have Medicaid funding available for assisted living. And the rules can change from one year to the next.

www.payingforseniorcare.com/medicaid-wa ... iving.html

In addition to the problem of higher-end places not taking what Medicaid will pay, there's the problem of limited initial access.

For instance, my fiancee's 70-year-old brother just had a brain tumor removed and has maybe a year to live. He will need memory care soon if not right now. His final radiation treatment is Tuesday and he has a follow-up neuropsych test on Wednesday. He decided that he would like to move to Virginia Beach and live at Westminster Canterbury on the Bay, a very nice continuing care facility. Yes, it is very expensive with a huge down payment and high monthly fees. Okay fine.

My fiancee called them and explained his needs. She was told that the facility needs it's memory care and nursing home beds for their current independent living and assisted living residents. I suspected there would be a waiting list for a bed in the nursing home section, but there isn't a waiting list at all for walk-ins.

Now for Plan B. And C.

I sort of knew all of this about continuing care facilities after my father spent 4.5 years in assisted living with increasingly costly services due to impaired mobility (they even let us hire nurse's aides twice a day to keep him out of the nursing home wing - everyone there thought the world of him and bent over backwards) and my mother spent 9.5 years progressing from assisted living to memory care to full nursing. The final 7 years she could chew and swallow and they did everything else for her. She only said a few words a year, but smiled from time to time.

Oh well, growing old is what it is.
What's the old joke - Be good to your kids, they'll be picking your nursing home. ;)
Don't get old....but what is the other option!

InMyDreams
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Re: Assisted Living Expenses

Post by InMyDreams » Sun Jul 29, 2018 11:39 am

MCOL area, my father's independent living, 1 bedroom apartment (small) includes 3 meals, activities, once a week basic housekeeping, and a concierge minding the front desk -> low $3k/mon. He can bring in personal assistants at his cost - which adds up pretty fast.

In this area, assisted living would add in help with bathing and dressing, possibly assistance with eating, and medication administration. I think that would increase his monthly costs to upper $4k or low $5k, and could include "memory care".

But. If you are a nuisance, or worse, a hazard (being combative, for example), then you're talking a much higher level of memory care - and therefore, more expensive.

DC3509
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Re: Assisted Living Expenses

Post by DC3509 » Sun Jul 29, 2018 11:52 am

CULater wrote:
Sun Jul 29, 2018 10:30 am
Newsflash: "Assisted" living care is overwhelmingly provided by family members. Only minority of people have the financial resources to afford the outrageous and inadequate care provided by institutions. You and I won't be able to afford it, and we're less and less likely to have family members nearby to provide it. It's time to stop moaning about it and figuring out what to do about it.
For generations, the nation has relied on family members to keep aging loved ones in their homes. Today, many Americans are growing older without family nearby, offering a glimpse of what the future may hold for the cohort of Americans who are approaching retirement.

The caregiving crunch comes at a time when Americans reaching retirement age are in a squeeze unseen in generations. Their median incomes, including Social Security and retirement fund receipts, haven’t risen in years. They have high average debt, some incurred from taking care of their own aging parents. And if they’re counting on family to care for them, too, they may well find their families too small and far-flung to meet the task.

The private sector isn’t an option for many older adults. Demand for private home health aides is expected to exceed supply by more than 3 million in the next decade. Many can’t afford it even if it was available. A full- time home-health aide costs, on average, $49,000 a year, according to a 2017 Cost of Care Survey by Genworth, a long-term-care insurance company.

Public support hasn’t kept pace either. Medicare and other government programs provide a fraction of the long-term supportive services that people need to remain in their own homes. Medicare generally doesn’t pay for long-term care stays in nursing homes, which can cost close to $100,000 a year for a private room.
https://www.jaapgh.org/sites/default/fi ... 0%2018.pdf
I agree that most "normal" people and even a fair number of people on here can't afford these things. But Medicaid can be a very useful government program and does provide some in-home health care as well. With proper planning, people can qualify for Medicaid even with financial assets and use those assets around the edges to make life better.

coincollector
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Re: Assisted Living Expenses

Post by coincollector » Sun Jul 29, 2018 12:08 pm

willthrill81 wrote:
Sun Jul 29, 2018 10:02 am
desafinado wrote:
Sat Jul 28, 2018 11:36 pm
coincollector wrote:
Sat Jul 28, 2018 6:24 pm
An HSA is a great insurance policy for all health care needs including long term care. Let's say at 30 you begin saving the current max of $3,450 each year until age 45 in an S&P 500 index. 10% is a reasonable rate of return for that type of investment. At 65 you'll have $834k, $1.3M at 70, $2.1m at 75 and $3.4m at 80. Hopefully that will be plenty of money for long term care and any other health needs that might crop up. Inflation is a tricky beast to predict but the above is decent chunk of change.
I would be very pleased to end up with 10% returns into the 2070s..
Getting 10% returns after inflation over the long-term would be quite a feat indeed. The U.S. stock market has historically returned about 7% after inflation, and I wouldn't even use that for planning purposes. Since 2000, stocks have only had a 3.5% real return.
The 10% return that I used is before inflation. Inflation in the medical realm has been much higher than other categories through the past couple decades. Hopefully that calms down but who knows. I simply did the calculations without inflation based on historical returns.

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TomatoTomahto
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Re: Assisted Living Expenses

Post by TomatoTomahto » Sun Jul 29, 2018 1:42 pm

yousha wrote:
Sun Jul 29, 2018 7:34 am
After reading all of these posts in response to my query, it is a wonder to me about how many folks are dealing with this issue. From an investment perspective, how does one account for this issue in terms of portfolio construction. What a hassle.
In part, one can account for this not by special portfolio construction, but by not being in such a damned rush to retire early. There are a zillion posts on this forum that seem to use an overly sharp pencil to see if they can somehow scrape by and not continue to work. Unlucky for the rest of us.

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TomatoTomahto
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Re: Assisted Living Expenses

Post by TomatoTomahto » Sun Jul 29, 2018 1:45 pm

Gill wrote:
Sat Jul 28, 2018 5:35 pm
Saving and investing all one’s life.
Gill
Once again, Gill nails it in. . . 6 words.

More emphasis on the FI rather than the RE in FIRE.

RickBoglehead
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Re: Assisted Living Expenses

Post by RickBoglehead » Sun Jul 29, 2018 2:15 pm

yousha wrote:
Sat Jul 28, 2018 5:31 pm
These days it costs about $9000 per month to live in a decent facility. How does one prepare to spend that kind of money. It is mind boggling. Comments.
Your number is roughly twice the rate around here, which is $150 per day. That excludes meds, doctors, etc. We just finished having two in assisted living for 3 1/2 years.

My FIL worked in a plant, never earned more than an hourly wage, forced retirement at 59. He put everything into company stock, buying fractions of a share most weeks. Really, really dumb. Company was bought by large conglomerate at his forced retirement (they shut down and moved to Mexico). Parlayed his lump sum from the stock into enough to cover 3 1/2 years of assisted living for two with money left over. SS for two and his pension didn't even cover half of one person.

Gnirk
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Re: Assisted Living Expenses

Post by Gnirk » Sun Jul 29, 2018 2:27 pm

In Washington State, and other states, there are alternatives to the large assisted living facilities, which usually give more personalized care at, often, a lower cost than some of the larger facilities who tack on a fee for each level of assistance. Here they are called Adult Family Homes and are licensed by the state for care of 1 to 6 residents. Like all care facilities, there can be differences in quality of care. And many do not take Medicaid, while some will after a period of self-pay.

My mom had Alzheimer's, and when family assistance proved to be not enough, I research care facilities, and through the help of a case manager, was paired with several care homes. I visited all of them: I interviewed them, and they interviewed me about my mom. We chose a smaller home that was licensed for three residents. The owner-caregiver cooked all meals from scratch, very healthy and nourishing meals, and adapted them to each of her residents' needs. The home specialized in memory care. My mom lived there for 8 years, received nearly one-to-one care, and was allowed to continue living there through Hospice care. In my opinion, the care she received was much better than any offered by the large memory care facilities or nursing homes ( I visited all those, too).

The cost started out at $4,000 per month, and during her last year and a half was raised to $5,000 per month. We still bought depends and any medications for her. In her case, it was just tylenol. I bought cases of depends at Costco when they put them on sale.

We were very fortunate that Mom's LTC policy agreed to pay accordion to it's coverage terms, which was a flat $145 per day, paid directly to her. The payment was the same regardless of the actual costs. Her policy covered four years, with a 30 day waiting period. The total premiums paid over 20 years was right about $20,000. The remainder was paid out of her investments.If she had been self-pay for 8 years, it would have cost her a total of $415,000 including depends and supplemental Medicare insurance. My mom was frugal and saved and invested all of her life. Her annual costs of living while she was healthy was around $22,000 per year, plus income taxes. She had no debt, and owned a nice home, and often complained that most of her costs were due to taxes and insurance.

The only downside I can see for some would be that there are no social activities, but in our case that was not an issue because my mom was shy by nature.

FBN2014
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Joined: Sat Mar 08, 2014 3:07 pm

Re: Assisted Living Expenses

Post by FBN2014 » Sun Jul 29, 2018 2:47 pm

Here's what I was told by my attorney. Buy a hybrid LTC insurance policy that will pay benefits for up to 5 years which is the lookback period for Medicaid. If you die suddenly and never use the benefits then your heirs get a death benefit. If your are starting to decline and will probably need assisted living in the near future then a Medicaid trust for asset protection should be created that you fund with all your assets. You are allowed to receive income distributions from the trust but not principal. This starts the 5 year lookback period to qualify for Medicaid. If your still around in 5 years then you can use Medicaid. Some states, such as Massachusetts, do allow Medicaid to pay for assisted living under PACE (Program for All Inclusive Care for the Elderly). My 89 year old uncle lives in an assisted living facility in Boston and all his expenses and health care are paid for by PACE. He gets very good care. If the need arises the facility he is in also has a memory care. He will probably not need that since he is as sharp as a tack.
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willthrill81
Posts: 5386
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Location: USA

Re: Assisted Living Expenses

Post by willthrill81 » Sun Jul 29, 2018 3:33 pm

Gnirk wrote:
Sun Jul 29, 2018 2:27 pm
In Washington State, and other states, there are alternatives to the large assisted living facilities, which usually give more personalized care at, often, a lower cost than some of the larger facilities who tack on a fee for each level of assistance. Here they are called Adult Family Homes and are licensed by the state for care of 1 to 6 residents. Like all care facilities, there can be differences in quality of care. And many do not take Medicaid, while some will after a period of self-pay.

My mom had Alzheimer's, and when family assistance proved to be not enough, I research care facilities, and through the help of a case manager, was paired with several care homes. I visited all of them: I interviewed them, and they interviewed me about my mom. We chose a smaller home that was licensed for three residents. The owner-caregiver cooked all meals from scratch, very healthy and nourishing meals, and adapted them to each of her residents' needs. The home specialized in memory care. My mom lived there for 8 years, received nearly one-to-one care, and was allowed to continue living there through Hospice care. In my opinion, the care she received was much better than any offered by the large memory care facilities or nursing homes ( I visited all those, too).

The cost started out at $4,000 per month, and during her last year and a half was raised to $5,000 per month. We still bought depends and any medications for her. In her case, it was just tylenol. I bought cases of depends at Costco when they put them on sale.

We were very fortunate that Mom's LTC policy agreed to pay accordion to it's coverage terms, which was a flat $145 per day, paid directly to her. The payment was the same regardless of the actual costs. Her policy covered four years, with a 30 day waiting period. The total premiums paid over 20 years was right about $20,000. The remainder was paid out of her investments.If she had been self-pay for 8 years, it would have cost her a total of $415,000 including depends and supplemental Medicare insurance. My mom was frugal and saved and invested all of her life. Her annual costs of living while she was healthy was around $22,000 per year, plus income taxes. She had no debt, and owned a nice home, and often complained that most of her costs were due to taxes and insurance.

The only downside I can see for some would be that there are no social activities, but in our case that was not an issue because my mom was shy by nature.
Thanks for sharing your and your mother's experiences. It's good to hear that she received excellent care and had the means to pay for it.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

jalbert
Posts: 3585
Joined: Fri Apr 10, 2015 12:29 am

Re: Assisted Living Expenses

Post by jalbert » Sun Jul 29, 2018 4:22 pm

An HSA is a great insurance policy for all health care needs including long term care.
LTC expenses are also a deductible healthcare expense which can offset substantial income realized from trad IRA withdrawals. LTC insurance premiums are HSA-eligible also.
Index fund investor since 1987.

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