Assisted Living Expenses

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yousha
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Assisted Living Expenses

Post by yousha »

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.
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Re: Assisted Living Expenses

Post by Gill »

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ResearchMed
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Re: Assisted Living Expenses

Post by ResearchMed »

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.

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adamthesmythe
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Re: Assisted Living Expenses

Post by adamthesmythe »

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 »

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 »

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 »

"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.
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22twain
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Re: Assisted Living Expenses

Post by 22twain »

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 »

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.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
marielake
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Re: Assisted Living Expenses

Post by marielake »

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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Re: Assisted Living Expenses

Post by marielake »

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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Re: Assisted Living Expenses

Post by William4u »

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.
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Re: Assisted Living Expenses

Post by desafinado »

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..
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yousha
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Re: Assisted Living Expenses

Post by yousha »

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.
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Re: Assisted Living Expenses

Post by Jack FFR1846 »

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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Re: Assisted Living Expenses

Post by SQRT »

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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Re: Assisted Living Expenses

Post by willthrill81 »

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.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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Re: Assisted Living Expenses

Post by CULater »

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
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yousha
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Re: Assisted Living Expenses

Post by yousha »

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.
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Re: Assisted Living Expenses

Post by andypanda »

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. ;)
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yousha
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Re: Assisted Living Expenses

Post by yousha »

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 »

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.
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Re: Assisted Living Expenses

Post by DC3509 »

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.
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Re: Assisted Living Expenses

Post by coincollector »

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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Re: Assisted Living Expenses

Post by TomatoTomahto »

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.
I get the FI part but not the RE part of FIRE.
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Re: Assisted Living Expenses

Post by TomatoTomahto »

Gill wrote: Sat Jul 28, 2018 5:35 pm Saving and investing all one’s life.
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More emphasis on the FI rather than the RE in FIRE.
I get the FI part but not the RE part of FIRE.
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RickBoglehead
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Re: Assisted Living Expenses

Post by RickBoglehead »

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.
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Re: Assisted Living Expenses

Post by Gnirk »

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.
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Re: Assisted Living Expenses

Post by FBN2014 »

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
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Re: Assisted Living Expenses

Post by willthrill81 »

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.
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Re: Assisted Living Expenses

Post by Northern Flicker »

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.
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Re: Assisted Living Expenses

Post by Lon »

My Assisted Living & Care Fees for February 2021 is $ 7,117.00 with more than half of that paid for with Long Term Care Insurance that I purchased the same time I retired at age 60. I am now 86, single and living in a First Class Assisted Living facility in Fresno, Ca. The LTC insurance has enabled me to retain ALL of my investments. I would encourage all middle age investors to purchase LTC insurance. :happy
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Re: Assisted Living Expenses

Post by MikeG62 »

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.
As has been pointed out by others, the living expenses that one would incur prior to becoming disabled would shrink to or near zero. In addition, the LTC expenses should qualify as deductible medical expenses (subject to clearing the floor - which won’t be hard) eliminating most if not all Federal income tax on RMD’s and other sources of income. Lastly, if the person needing assisted living is a widower, there are lots of other expenses that can be zeroed out and repurposed for LTC.

For many people, it should not be as impossible to finance as you are thinking.
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celia
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Re: Assisted Living Expenses

Post by celia »

We recently put a married couple in assisted living in Calif for $8K a month. The services they need at this time are minimal but may increase over time.
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Re: Assisted Living Expenses

Post by Lon »

celia wrote: Mon Feb 15, 2021 8:58 pm We recently put a married couple in assisted living in Calif for $8K a month. The services they need at this time are minimal but may increase over time.
We have here where I live in Fresno, Ca. several married couples.
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Re: Assisted Living Expenses

Post by IMO »

MikeG62 wrote: Mon Feb 15, 2021 8:12 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.
As has been pointed out by others, the living expenses that one would incur prior to becoming disabled would shrink to or near zero. In addition, the LTC expenses should qualify as deductible medical expenses (subject to clearing the floor - which won’t be hard) eliminating most if not all Federal income tax on RMD’s and other sources of income. Lastly, if the person needing assisted living is a widower, there are lots of other expenses that can be zeroed out and repurposed for LTC.

For many people, it should not be as impossible to finance as you are thinking.
I really think it's a daunting issue. One one hand, if you have a spouse that goes into a facility (lets say at $7,000/month or $84,000 year (after taxes), sure you'll have less expenses such as food, travel, maybe a car, and some others, but you still have the other expenses that probably don't really drop down that much. For example, you still have to pay for your housing, still have to pay for the utilities, pay for a car, etc even though your significant other just went into a facility. So now your at your normal annual expenses,lets say that's $65,000 yr (minus the relatively minimal saved for the spouse lets say $20,000) + $84,000 year for the long term care expense annual. So you just went from 2 people at home at $65,000 year to 1 person at home/other at a facility and your annual expense is now at $129,000 ($65,000 - $20,000 + $84,000), or just about DOUBLE what your annual expenses were prior to the change. It's in situations like these where I can see some deciding that maybe they should take out a reverse mortgage to help the situation or if lucky sell one's home and downsize or move into an less expensive apartment (but that might not even be cheaper than it was to own/maintain your home).

Now if the 2nd person has to go into a nursing home, it just seems like the logical choice is to spend down the assets and go onto Medicaid which is really the last hope for most people (except the very wealthy on this site).

Problem with LTC insurances, it seems they all have limited payouts, for example a $400,000 maximum policy. That can help but it's certainly not inexpensive from what I've read on this site.
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Re: Assisted Living Expenses

Post by MikeG62 »

IMO wrote: Tue Feb 16, 2021 3:07 am
MikeG62 wrote: Mon Feb 15, 2021 8:12 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.
As has been pointed out by others, the living expenses that one would incur prior to becoming disabled would shrink to or near zero. In addition, the LTC expenses should qualify as deductible medical expenses (subject to clearing the floor - which won’t be hard) eliminating most if not all Federal income tax on RMD’s and other sources of income. Lastly, if the person needing assisted living is a widower, there are lots of other expenses that can be zeroed out and repurposed for LTC.

For many people, it should not be as impossible to finance as you are thinking.
I really think it's a daunting issue. One one hand, if you have a spouse that goes into a facility (lets say at $7,000/month or $84,000 year (after taxes), sure you'll have less expenses such as food, travel, maybe a car, and some others, but you still have the other expenses that probably don't really drop down that much. For example, you still have to pay for your housing, still have to pay for the utilities, pay for a car, etc even though your significant other just went into a facility. So now your at your normal annual expenses,lets say that's $65,000 yr (minus the relatively minimal saved for the spouse lets say $20,000) + $84,000 year for the long term care expense annual. So you just went from 2 people at home at $65,000 year to 1 person at home/other at a facility and your annual expense is now at $129,000 ($65,000 - $20,000 + $84,000), or just about DOUBLE what your annual expenses were prior to the change. It's in situations like these where I can see some deciding that maybe they should take out a reverse mortgage to help the situation or if lucky sell one's home and downsize or move into an less expensive apartment (but that might not even be cheaper than it was to own/maintain your home).

Now if the 2nd person has to go into a nursing home, it just seems like the logical choice is to spend down the assets and go onto Medicaid which is really the last hope for most people (except the very wealthy on this site).

Problem with LTC insurances, it seems they all have limited payouts, for example a $400,000 maximum policy. That can help but it's certainly not inexpensive from what I've read on this site.
You aren't wrong. There is clearly a cohort where purchasing LTC insurance makes sense. The example you set out could be one of those. Also, if this couple truly does not have the wherewithal to pay the incremental $64,000 per year for very long, then maybe they are a candidate where medicaid will step in?

I think it's important when retiring to either have a sizable portion of discretionary dollars in ones budget or plan for a very low withdrawal rate. In the case of the former, these dollars can be eliminated and repurposed for LTC costs. In the case of the latter, there should be considerable dry powder available. Add in the tax benefit. Also, the spouse who is able to stay at home may well be able to relocate to lower cost accommodations. If all that does not free up more than $20,000 annually, then as I said this couple could be a candidate for LTC insurance. This analysis needs to be done when people are in their 50's (or early 60's) and not ignored until there is a problem,
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Re: Assisted Living Expenses

Post by bluegill »

You prepare by having Long Term Care insurance.

"Problem with LTC insurances, it seems they all have limited payouts, for example a $400,000 maximum policy." <--- WRONG
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Re: Assisted Living Expenses

Post by chw »

willthrill81 wrote: 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.
What 22twain is factually accurate in his description of AL communities- they are quite common in areas with high levels of senior populations- like FL. My own parents currently reside in such an Assisted Living community in FL, and actually are paying about 9K a month. They get 3 meals a day, full housekeeping, a full range of activities provided daily, and “level” care provided by nursing staff based on need. The “level” care is not what would be provided in a Nursing Home, but is meant to assist the resident as needed so they can keep a daily routine in the community. I shopped for AL facilities in the area last year, and would rank this community in the top tier of those available (there were more moderate priced communities in the $7500 mo range). My parents are able to pay for this with a combo of pension, SS, savings, and a LTC policy which is currently paying a claim that covers most of the cost.

As a side note, we found that all of the “nice” facilities we were looking at, did not accept Medicaid when the resident’s money ran out. The ones that did accept Medicaid seemed to have a poor reputation, and were poorly managed.
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Re: Assisted Living Expenses

Post by DarthSage »

When my MIL entered an assisted living facility, it cost ~$4500/mo. This is for the basic level of care--no nursing required. Some points to keep in mind:

--in my MIL's case, she opted for the most expensive accommodations they offered, a 2BR apartment
--the cost included her apartment, all utilities, all meals, weekly laundry, etc.
--we were less concerned with preserving her wealth versus having her live in comfort
--she had incontinence issues, so we paid for extra laundry service for her. She didn't like paying it, but we didn't like the idea of her sleeping in soiled sheets, so there you have it.
--her only complaint, aside from cost (she was cheap!), was that the food was so good, she gained weight. We didn't consider this a negative--when she lived on her own, she was subsisting on Lean Cuisines for the last couple years.

As it happened, my MIL had a nasty fall (6 fractures) which required us to hire nursing support for her. The understanding was that this would be temporary--when she healed, she would no longer need so much assistance. But, she died, 24 hours after she got home from the hospital and started with the nursing care.
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Re: Assisted Living Expenses

Post by GmanJeff »

Costs can be quite variable, depending not only on local market conditions but on the nature of the specific accommodations desired and level of service needed. In a well-regarded suburban CCRC near me, Assisted Living starts at $6381/month for a studio and can go as high as $9802/month for a 2-bedroom apartment. In addition, there are separate service packages, tailored to the particular needs of the residents, providing varying levels of hours of assistance with the activities of daily living - personal hygiene, dressing, etc., should that be needed. Those supplemental fees range from $914/month to $3195/month, and are independent of the type of apartment a resident occupies. These fees do not include telephone service, cable TV upgrades, newspaper subscriptions, incontinence products, salon services for haircuts and the like, or for medical specialists like dentists who provide on-site services.

Independent Living, which includes one meal daily and other amenities but provides for no aide support, is separate and distinct from Assisted Living and is priced much lower. Assisted Living provides all meals, medication management, and assistance from aides to varying degrees, depending on the service package selected. Memory Care has a different fee schedule, as does Skilled Nursing.

It's not difficult for someone in Assisted Living in a 1 bedroom apartment ($7566/month) to incur base annual fees of nearly $130K/yr. if the highest level of personal assistance is needed due to cognitive and/or physical decline. This is in a pleasant, modern, appropriately staffed environment where vacancies are quickly filled - demand is strong for the services on offer.

Prudent financial planning and modeling takes these kinds of potential later-life costs into account.
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Re: Assisted Living Expenses

Post by djmbob »

My 93-yo Mom is in Assisted Living in MD - an Erickson Retirement Community - a really nice facility.

She moved in last July and is at "level D" of "G levels," G being memory care, previously she has lived in their independent living residences for about 20 years. If she runs out of money, they will take Medicaid and cover all the remainder of her costs. She has CHF.

Her monthly rate for a single room with bath is $8,580. 3 meals, housekeeping, meds, nursing care, etc.

She didn't have an LTC policy, so is using her retirement savings and SS. Should last for a while, so not concerned about running out for some time yet. She is happy and that's all that counts.

OTOH, I applied last July for SS Rep Payee and that has been a nightmare = nothing at all done after mailing the paperwork (and doctor's letter) once, then calling and they said to fax it in Nov -- it would be faster. Just absolutely no contact from SS at all, even after calling the office and national 800 number several times. So frustrating!! Emailed Congressman at the end of Jan and nothing from his office either. :x

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Re: Assisted Living Expenses

Post by Lon »

bluegill wrote: Tue Feb 16, 2021 9:30 am You prepare by having Long Term Care insurance.

"Problem with LTC insurances, it seems they all have limited payouts, for example a $400,000 maximum policy." <--- WRONG
My LTC policy has no limited dollar amount or time period. The daily benefit is $ 130.00. Premiums have been $ 90.00 month since 1995
I have a one bedroom,onebath,livingroom,kitchenette apartment, three gourmet meals, etc,etc.
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Re: Assisted Living Expenses

Post by willthrill81 »

Lon wrote: Tue Feb 16, 2021 2:19 pm
bluegill wrote: Tue Feb 16, 2021 9:30 am You prepare by having Long Term Care insurance.

"Problem with LTC insurances, it seems they all have limited payouts, for example a $400,000 maximum policy." <--- WRONG
My LTC policy has no limited dollar amount or time period. The daily benefit is $ 130.00. Premiums have been $ 90.00 month since 1995
I have a one bedroom,onebath,livingroom,kitchenette apartment, three gourmet meals, etc,etc.
Traditional LTC policies with no limit on benefits are no longer available, though there may be hybrid policies that may effectively result in an unlimited benefit.

Also, your policy has an annual maximum benefit of $47,450. Many levels of LTC can cost much more than that.
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Re: Assisted Living Expenses

Post by 557880yvi »

The costs are very different depending on geographic location. We have relatives from FL to MA in ALF's. In MA - and not even near Boston where it is much higher, a decent ALF with limited nursing care (very limited, pretty much just giving meds) costs over$10k/mo for a 400sq ft apt . Does include 3 meals but everything else is a la carte.
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Re: Assisted Living Expenses

Post by TN_Boy »

GmanJeff wrote: Tue Feb 16, 2021 12:12 pm Costs can be quite variable, depending not only on local market conditions but on the nature of the specific accommodations desired and level of service needed. In a well-regarded suburban CCRC near me, Assisted Living starts at $6381/month for a studio and can go as high as $9802/month for a 2-bedroom apartment. In addition, there are separate service packages, tailored to the particular needs of the residents, providing varying levels of hours of assistance with the activities of daily living - personal hygiene, dressing, etc., should that be needed. Those supplemental fees range from $914/month to $3195/month, and are independent of the type of apartment a resident occupies. These fees do not include telephone service, cable TV upgrades, newspaper subscriptions, incontinence products, salon services for haircuts and the like, or for medical specialists like dentists who provide on-site services.

Independent Living, which includes one meal daily and other amenities but provides for no aide support, is separate and distinct from Assisted Living and is priced much lower. Assisted Living provides all meals, medication management, and assistance from aides to varying degrees, depending on the service package selected. Memory Care has a different fee schedule, as does Skilled Nursing.

It's not difficult for someone in Assisted Living in a 1 bedroom apartment ($7566/month) to incur base annual fees of nearly $130K/yr. if the highest level of personal assistance is needed due to cognitive and/or physical decline. This is in a pleasant, modern, appropriately staffed environment where vacancies are quickly filled - demand is strong for the services on offer.

Prudent financial planning and modeling takes these kinds of potential later-life costs into account.
As others have noted, this is VERY location dependent. In the medium cost area I live (parts of it inching towards the lower end of HCOL..), a top-notch memory care or group home is more like $8,500 a month. Assisted living definitely less.
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