Long-Term Care Decision

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pintail07
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Re: Long-Term Care Decision

Post by pintail07 » Tue Aug 13, 2019 3:50 pm

As a broker for almost 40 years WOW's information is almost always spot on, he is one of the most knowledgeable brokers in the country. One might not like how he delivers his information. My experience is that folks that haven't personally experienced the struggle of long term care, very difficult for them to see the advantages of insuring. The real cost to shift this burden to an insurance company has much less an impact on the very wealthy. Regardless if someone sells LTCi, , they should be judged by the accuracy of their comments.

ChrisC
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Re: Long-Term Care Decision

Post by ChrisC » Tue Aug 13, 2019 3:52 pm

cognovimus wrote:
Tue Aug 13, 2019 2:29 pm
WoW2012 wrote:
Tue Aug 13, 2019 2:11 pm
bearwithbear wrote:
Tue Aug 13, 2019 1:50 pm
Cognovimus,

Stop it.
Stop worrying that every bad possibility will happen (did I miss World War Z)
4 million and social security more than makes this work.
Self fund long term care.
Done.

Bear

ps. I have this conversation with my self on a too regular basis. Not that the numbers change, just a little hard wired to worry.
Getting better about it. Keep being reminded on this site that you only live once. So live.

Or, he could sacrifice 15 basis points from his portfolio each year to buy $1.5M of long-term care insurance benefits.
Ok, I'm new here. Bear's advice I is crystal clear. But WOW, are you being facetious? Because none of the options I'm considering would give me that coverage amount. Anyway, I'm going to rerun my numbers with NO LTC expense. Maybe that will help.
You don't "need" LTCi if you and your family won't be financially wrecked by LTC; on the other hand, it could be financially and emotionally prudent for you to have LTCi if you are risk adverse to LTC, want to provide more funds for your heirs (if LTC for you or your spouse occurs) or, if you believe, like me that LTCi provides a better financial, emotional and logistical transition if LTC occurs.

No one here can really answer the question of whether it's a sound decision for you to procure LTCi. You get one camp, championed by people who generally have family members that have gone through LTC, that believe it makes sense for them to have this insurance. Then you get the other camp who believe for a number of reasons that you're flushing money down the drain when you purchase LTCi if you can "self-insure" and won't imporverish you or your spouse if LTC occurs.

I don't think WOW is being facetious here with his "pitch" that for a few dollars out of your portfolio you are potentially protecting/insuring against $1.5 million of bad luck that could occur from LTC. I actually calculated that the cost of my LTCi is a few basis points of my new worth and shields $1.1 million of combined coverage of LTC for both my wife and me. My policy was purchased a number of years ago so YMMV.

TN_Boy
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Re: Long-Term Care Decision

Post by TN_Boy » Tue Aug 13, 2019 4:10 pm

pintail07 wrote:
Tue Aug 13, 2019 3:50 pm
As a broker for almost 40 years WOW's information is almost always spot on, he is one of the most knowledgeable brokers in the country. One might not like how he delivers his information. My experience is that folks that haven't personally experienced the struggle of long term care, very difficult for them to see the advantages of insuring. The real cost to shift this burden to an insurance company has much less an impact on the very wealthy. Regardless if someone sells LTCi, , they should be judged by the accuracy of their comments.
As someone who has/had parents in LTC and has dealt with LTC insurance, I feel comfortable discussing the topic.

I believe that financial advisors are generally less enthusiastic about LTC insurance than people who sell LTC insurance.

TN_Boy
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Re: Long-Term Care Decision

Post by TN_Boy » Tue Aug 13, 2019 4:23 pm

cognovimus wrote:
Tue Aug 13, 2019 1:33 pm
willthrill81 wrote:
Tue Aug 13, 2019 10:16 am
TN_Boy wrote:
Tue Aug 13, 2019 8:36 am
cognovimus wrote:
Tue Aug 13, 2019 8:15 am
willthrill81 wrote:
Sun Aug 11, 2019 4:04 pm


You didn't mention this, but I really think that the two big questions revolving around LTC insurance are (1) how much do you have in terms of assets that you wish to protect and (2) are facilities that will accept Medicaid and/or those that will start as private pay but transition to Medicaid in your area acceptable and reasonably available.

The CCRC model discussed above intrigues me.
Thank you for the response re self pay. NW = about $4 million (not counting house), primarily for funding retirement needs. If there is some left over for heirs, great. That will depend on the market and our personal health situation.

I'm looking at the other options, including traditional and a 10-20 pay hybrid. None of them are that great and don't cover even current costs, but would help.

I haven't considered facilities that accept Medicaid. I will look into that, but I've known of people who tried to "protect" assets from Medicaid and ended up financially strapped. Had to break out of the trusts to fund living expenses.

I'm familiar with CCRCs. It's a good idea, but they all have different models. The one I know best is pay as you go (no deposit/buy-in), you pay more as you need more care, and I'm sure they would kick you out if your needs exceeded your financial resources. The person I know of who lived there died in independent living after an acute illness. There is a lot of death and sickness in these places, even the IP section. And a lot of cliques, like a high school or college. Because it is fairly dense housing, novovirus is not unknown. I wouldn't go there unless I really needed to because I live in a HCOL area and even IP is very expensive. But my children and grandchildren are here, so I wouldn't go elsewhere unless they moved.
4M + house? How about SS or pensions? How much do you plan to pull from that 4m yearly?

Assuming your expenses are reasonable for a 4m portfolio (pulling less than maybe 160k a year from it), I believe most would say you have no need to buy LTC insurance. I would reiterate something I said before, I cannot imagine why you would want to set aside part of that money and reduce spending. With 4m, unless you are a pretty big spender, that is just not needed.

How much do you think you would need to "reserve" for LTC (and what is that number based on) and why do you think those funds need to be segregated?

As you live in a HCOL and have a pretty big nest egg, I'm guessing your house is worth a lot as well (paid off?). The equity in a house is another way to pay for some LTC expenses.

At your asset level, I don't believe thinking about medicaid issues is very useful. You will not be needing medicaid.
$4 million, plus SS benefits, maybe other income, and a paid for home means that he has no need at all for LTC insurance. Assuming 4% withdrawals, his portfolio alone should easily provide $160k of annual income, more than enough to cover LTC. Everything else is added safety.
Hmm, that's somewhat reassuring, but we will be early retirees (63/61). As such we may need to make our nest egg last a little longer than most. We have no pensions and won't be able to live on interest and dividends; we'll be drawing down assets. We have a modest paid-off home, but I haven't relied upon that in terms of expenses because we need somewhere to live and prefer to be near family. Total after tax expenses are about $168,000 (today's dollars) but that's padded with estimated LTC expenses and out of pocket medical premiums for the years between COBRA & Medicare, includes increased travel post-retirement, and a new car here and there. When we run the FIdelity and PC retirement planners, we get results that indicate we're "on track" but not batting it out of the park. Also availed ourselves of a "fee only" planner whose MC analysis rendered 90% of the trials successful. So we're moving ahead with our plan, but understand we may need to revisit expenses on the fun stuff.
cognovimus,

You are doing a couple of things that make it hard to assess your total financial picture.

1) Okay, no corporate pension, will you have any SS income?
2) 168k is a moderately high spend rate. Could you stop lumping in "padded with estimated LTC expenses?"
3) Your retirement expenses are daily expenses (groceries, utilities, gasoline, etc etc) medical insurance costs, plus a new car every X years, house repair every Y years, vacation, and taxes on the portfolio withdrawal to fund those expenses. (Taxes in retirement usually lower than than before retirement).
4) Your house is useful for LTC in some situations. For example, you die and a couple of years later your spouse needs LTC care. Well, if the family sells the house you probably have several years of care paid for, depending on house value and LTC costs in your area. How much is your house worth.

I'll ask again, how much are you "setting aside" for LTC? The median stay in assisted living in something like 18 months. How much would that cost in your area? I think if you would elaborate on how much LTC you are trying to plan for you might get useful comments on LTC costs and the likelihood of such costs. And you can get some data on LTC insurance costs. Although some people do wind up with long expensive stays in LTC, believe it or not, most people do not, and quite a number of people wind up needling little or no LTC.

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Tue Aug 13, 2019 4:25 pm

cognovimus wrote:
Tue Aug 13, 2019 1:33 pm
willthrill81 wrote:
Tue Aug 13, 2019 10:16 am
TN_Boy wrote:
Tue Aug 13, 2019 8:36 am
cognovimus wrote:
Tue Aug 13, 2019 8:15 am
willthrill81 wrote:
Sun Aug 11, 2019 4:04 pm


You didn't mention this, but I really think that the two big questions revolving around LTC insurance are (1) how much do you have in terms of assets that you wish to protect and (2) are facilities that will accept Medicaid and/or those that will start as private pay but transition to Medicaid in your area acceptable and reasonably available.

The CCRC model discussed above intrigues me.
Thank you for the response re self pay. NW = about $4 million (not counting house), primarily for funding retirement needs. If there is some left over for heirs, great. That will depend on the market and our personal health situation.

I'm looking at the other options, including traditional and a 10-20 pay hybrid. None of them are that great and don't cover even current costs, but would help.

I haven't considered facilities that accept Medicaid. I will look into that, but I've known of people who tried to "protect" assets from Medicaid and ended up financially strapped. Had to break out of the trusts to fund living expenses.

I'm familiar with CCRCs. It's a good idea, but they all have different models. The one I know best is pay as you go (no deposit/buy-in), you pay more as you need more care, and I'm sure they would kick you out if your needs exceeded your financial resources. The person I know of who lived there died in independent living after an acute illness. There is a lot of death and sickness in these places, even the IP section. And a lot of cliques, like a high school or college. Because it is fairly dense housing, novovirus is not unknown. I wouldn't go there unless I really needed to because I live in a HCOL area and even IP is very expensive. But my children and grandchildren are here, so I wouldn't go elsewhere unless they moved.
4M + house? How about SS or pensions? How much do you plan to pull from that 4m yearly?

Assuming your expenses are reasonable for a 4m portfolio (pulling less than maybe 160k a year from it), I believe most would say you have no need to buy LTC insurance. I would reiterate something I said before, I cannot imagine why you would want to set aside part of that money and reduce spending. With 4m, unless you are a pretty big spender, that is just not needed.

How much do you think you would need to "reserve" for LTC (and what is that number based on) and why do you think those funds need to be segregated?

As you live in a HCOL and have a pretty big nest egg, I'm guessing your house is worth a lot as well (paid off?). The equity in a house is another way to pay for some LTC expenses.

At your asset level, I don't believe thinking about medicaid issues is very useful. You will not be needing medicaid.
$4 million, plus SS benefits, maybe other income, and a paid for home means that he has no need at all for LTC insurance. Assuming 4% withdrawals, his portfolio alone should easily provide $160k of annual income, more than enough to cover LTC. Everything else is added safety.
Hmm, that's somewhat reassuring, but we will be early retirees (63/61). As such we may need to make our nest egg last a little longer than most. We have no pensions and won't be able to live on interest and dividends; we'll be drawing down assets. We have a modest paid-off home, but I haven't relied upon that in terms of expenses because we need somewhere to live and prefer to be near family. Total after tax expenses are about $168,000 (today's dollars) but that's padded with estimated LTC expenses and out of pocket medical premiums for the years between COBRA & Medicare, includes increased travel post-retirement, and a new car here and there. When we run the FIdelity and PC retirement planners, we get results that indicate we're "on track" but not batting it out of the park. Also availed ourselves of a "fee only" planner whose MC analysis rendered 90% of the trials successful. So we're moving ahead with our plan, but understand we may need to revisit expenses on the fun stuff.
63/61 is not very early to retire, but a 3.5% withdrawal rate would still leave you with $140k of spending from your portfolio, and that's been about the perpetual withdrawal rate (i.e. over 20 year or longer periods, you would always have had at least your inflation-adjusted starting balance still intact) for most balanced portfolios since 1970. So after 30 years of spending, if you don't experience worse returns and sequence of returns than the worst we've had since 1970 (and 1972-1973 were pretty bad), you would have even more than $4 million after adjusting for inflation. In reality, you're historically likely to be able to significant ramp up your withdrawals as your portfolio grows over time. In all likelihood, you could be withdrawing $160-$200k a decade from now just because your portfolio is doing that well. And that is in addition to SS benefits, which I would guess will probably be at least $50k for you and your spouse combined, and any other income you might have.

So you're potentially looking at a ballpark minimum of around $200k of annual retirement spending available to you without a real concern for ever drawing down your portfolio. Viewed through that lens, why would spending even $150k annually on LTC for even 5-10 years be a problem? Yes, in the very unlikely that that happens, you might not even draw down on your assets at all, depending on how much spending your spouse did during that time. And once you're deceased, all of the remaining portfolio plus SS survivor's benefit, if applicable, will be available to your spouse.

You're pretty close to a textbook case of a person who has what I would call 'reasonably achievable wealth' and has no financial need for LTC insurance whatsoever.

Relax. Based on the information you've provided, you're in rock solid shape for virtually anything. Just keep good liability coverage in place.
“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

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Tue Aug 13, 2019 4:28 pm

WoW2012 wrote:
Tue Aug 13, 2019 2:11 pm
bearwithbear wrote:
Tue Aug 13, 2019 1:50 pm
Cognovimus,

Stop it.
Stop worrying that every bad possibility will happen (did I miss World War Z)
4 million and social security more than makes this work.
Self fund long term care.
Done.

Bear

ps. I have this conversation with my self on a too regular basis. Not that the numbers change, just a little hard wired to worry.
Getting better about it. Keep being reminded on this site that you only live once. So live.

Or, he could sacrifice 15 basis points from his portfolio each year to buy $1.5M of long-term care insurance benefits.
That is something they teach in 'sales tactics 101'. I'm dead serious.

"You could lease this Mercedes for only 64 cents an hour!"
“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

pintail07
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Re: Long-Term Care Decision

Post by pintail07 » Tue Aug 13, 2019 4:35 pm

The question is not if it is taught in "sales tactics 101', but was the statement true or false. Totally true IMO.

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Tue Aug 13, 2019 4:45 pm

pintail07 wrote:
Tue Aug 13, 2019 3:50 pm
As a broker for almost 40 years WOW's information is almost always spot on, he is one of the most knowledgeable brokers in the country. One might not like how he delivers his information. My experience is that folks that haven't personally experienced the struggle of long term care, very difficult for them to see the advantages of insuring. The real cost to shift this burden to an insurance company has much less an impact on the very wealthy. Regardless if someone sells LTCi, , they should be judged by the accuracy of their comments.
Contrary to what you, WoW2012, and others might think, I actually believe that on occasion, he has made some good contributions to our discussions of LTC insurance. For instance, he has readily admitted that most retirees don't have enough assets/income to justify LTCi and must rely on Medicaid. He corrected me on a point regarding the use of Medicaid-compliant annuities. There is value in that.

But one problem is that he apparently believes that LTCi of one form or another is essentially the one-size-fits-all solution for everyone with significant assets. That is bona fide false. The literally textbook financial purpose of insurance is to protect against financial catastrophe. So if the worst case scenario with regard to a specific risk is not even close to a financial catastrophe, there is no financial need for the insurance. It's difficult to get just about anyone who works in insurance sales to admit this, partially because they've been trained to believe otherwise.

"It's difficult to get a man to understand something when his salary depends upon him not understanding it."
- Upton Sinclair

Several people have asked WoW2012 at what level of portfolio/net worth someone no longer needs LTCi. I do not believe that he has ever answered that question. When I responded to him regarding an issue he brought up with Medicaid-compliant annuities, I demonstrated that the issue wasn't a real problem for those who would be interested in this tactic. He didn't respond to it. I've asked him several questions regarding various aspects of LTC insurance that he has never responded to, possibly because it would be very difficult to do so without admitting that LTCi is not a one-size-fits-all solution.

Another problem is the 'salesy-ness' of some of WoW2012's comments, like the above "it's only 15 basis points," or "what will your spouse do with only $50k of SS benefits and a million dollars."

I sincerely hope that the moderators will not delete my comment for whatever reason because (1) I'm not attacking WoW2012 and (2) everything I've said can be easily verified by an examination of WoW2012's posts. Again, he occasionally provides valuable contributions to the discussion, but people should be aware, at a minimum, that he has a potential conflict of interest.
“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

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Tue Aug 13, 2019 4:47 pm

pintail07 wrote:
Tue Aug 13, 2019 4:35 pm
The question is not if it is taught in "sales tactics 101', but was the statement true or false. Totally true IMO.
The statement might be true, but it's changing the mode of comparison to one that is not familiar to most people and in such a way as to potentially minimize the perceived cost of LTCi. We don't buy auto insurance or medical insurance for 'basis points of our portfolio'; we pay X dollars for them, which is also true of LTCi, unless there is some policy out there actually priced in that manner that I've never heard of before.
“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

TN_Boy
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Re: Long-Term Care Decision

Post by TN_Boy » Tue Aug 13, 2019 4:51 pm

pintail07 wrote:
Tue Aug 13, 2019 4:35 pm
The question is not if it is taught in "sales tactics 101', but was the statement true or false. Totally true IMO.
Walk me through the dollar amount. 15 basis points on 4m .... that's $6,000? So for $6,000 a year you can get 1.5 million in LTC insurance? Is that for a couple or an individual?

So twenty years of LTC insurance is $120,000, not counting the opportunity cost of that money being spent, not invested.

15 basis points sounds trivial. $120,000 sounds less trivial.

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Tue Aug 13, 2019 5:00 pm

TN_Boy wrote:
Tue Aug 13, 2019 4:51 pm
pintail07 wrote:
Tue Aug 13, 2019 4:35 pm
The question is not if it is taught in "sales tactics 101', but was the statement true or false. Totally true IMO.
Walk me through the dollar amount. 15 basis points on 4m .... that's $6,000? So for $6,000 a year you can get 1.5 million in LTC insurance? Is that for a couple or an individual?

So twenty years of LTC insurance is $120,000, not counting the opportunity cost of that money being spent, not invested.

15 basis points sounds trivial. $120,000 sounds less trivial.
Precisely. I'll bet that premiums is for a couple aged 55. They would be buying it at that age knowing that there is only a tiny chance that they'll make a claim for the first decade of paying for it, but if they wait until age 65 or later, the premiums will be much more expensive, and WoW2012 has said that they could easily be uninsurable anyway.
“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

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Tue Aug 13, 2019 5:03 pm

WoW2012 wrote:
Tue Aug 13, 2019 2:08 pm
It seems pretty objective to me that it makes sense for a quadra-millionaire to have collision insurance on his $100,000 Mercedes that he paid cash for.
No, it doesn't. $100k would represent only 2.5% of such a person's net worth. Losing 2.5% of one's net worth at these dollar amounts is nowhere near catastrophic. And many quadra-millionairs own vehicles only valued at half that amount or less anyway (e.g. Millionaire Next Door types).
“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

TN_Boy
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Re: Long-Term Care Decision

Post by TN_Boy » Tue Aug 13, 2019 5:20 pm

willthrill81 wrote:
Tue Aug 13, 2019 5:00 pm
TN_Boy wrote:
Tue Aug 13, 2019 4:51 pm
pintail07 wrote:
Tue Aug 13, 2019 4:35 pm
The question is not if it is taught in "sales tactics 101', but was the statement true or false. Totally true IMO.
Walk me through the dollar amount. 15 basis points on 4m .... that's $6,000? So for $6,000 a year you can get 1.5 million in LTC insurance? Is that for a couple or an individual?

So twenty years of LTC insurance is $120,000, not counting the opportunity cost of that money being spent, not invested.

15 basis points sounds trivial. $120,000 sounds less trivial.
Precisely. I'll bet that premiums is for a couple aged 55. They would be buying it at that age knowing that there is only a tiny chance that they'll make a claim for the first decade of paying for it, but if they wait until age 65 or later, the premiums will be much more expensive, and WoW2012 has said that they could easily be uninsurable anyway.
Right and what I'm trying to get to .... for both the OP, though they seem to have lost interest, and cognovimus .... is something like:

1) Here is what LTC insurance will cost for a given amount of coverage. (I forgot to note above that rates are almost certain to rise, though how much we don't know)
2) With a kinda sorta handle on what LTC insurance will cost, look at different LTC scenarios (including the substantial possibility that no long lasting LTC will be needed) and then make a rational decision on self-insure versus insurance.

[Edited to add] And if one person is thinking dollars and the other is spouting basis points it is really hard to compare options. And, you have to remember probabilities .... it is unlikely you will spend a long time in expensive LTC care.

If you knew that was going to happen, sure, buy the insurance. But you don't. LTC sales people don't mention that 30% of people ... will need zero LTC care (at home or in a facility): https://longtermcare.acl.gov/the-basics ... -need.html

Silk McCue
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Re: Long-Term Care Decision

Post by Silk McCue » Tue Aug 13, 2019 5:40 pm

TomatoTomahto wrote:
Tue Aug 13, 2019 3:30 pm
cognovimus wrote:
Tue Aug 13, 2019 2:29 pm
Ok, I'm new here. Bear's advice I is crystal clear. But WOW, are you being facetious? Because none of the options I'm considering would give me that coverage amount. Anyway, I'm going to rerun my numbers with NO LTC expense. Maybe that will help.
Cognovimus, you are new here. Wow is not. He posts, extensively and chronically, on one topic only: LTCi. After much discussion, he finally acknowledged that it's his profession. Many of us know better than to encourage him, but it's sometimes tempting.

Good luck.
If it weren’t for WOW we wouldn’t have any knowledgeable voice to provide informed perspective or reply to those that are adamantly opposed to this product because they are living in the past or living in denial. He is treated poorly by too many folks here.

It certainly is his profession but don’t see how that does him any good given we have no clue who he is.

Cheers

adamthesmythe
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Re: Long-Term Care Decision

Post by adamthesmythe » Tue Aug 13, 2019 6:05 pm

TN_Boy wrote:
Tue Aug 13, 2019 5:20 pm
willthrill81 wrote:
Tue Aug 13, 2019 5:00 pm
TN_Boy wrote:
Tue Aug 13, 2019 4:51 pm
pintail07 wrote:
Tue Aug 13, 2019 4:35 pm
The question is not if it is taught in "sales tactics 101', but was the statement true or false. Totally true IMO.
Walk me through the dollar amount. 15 basis points on 4m .... that's $6,000? So for $6,000 a year you can get 1.5 million in LTC insurance? Is that for a couple or an individual?

So twenty years of LTC insurance is $120,000, not counting the opportunity cost of that money being spent, not invested.

15 basis points sounds trivial. $120,000 sounds less trivial.
Precisely. I'll bet that premiums is for a couple aged 55. They would be buying it at that age knowing that there is only a tiny chance that they'll make a claim for the first decade of paying for it, but if they wait until age 65 or later, the premiums will be much more expensive, and WoW2012 has said that they could easily be uninsurable anyway.
Right and what I'm trying to get to .... for both the OP, though they seem to have lost interest, and cognovimus .... is something like:

1) Here is what LTC insurance will cost for a given amount of coverage. (I forgot to note above that rates are almost certain to rise, though how much we don't know)
2) With a kinda sorta handle on what LTC insurance will cost, look at different LTC scenarios (including the substantial possibility that no long lasting LTC will be needed) and then make a rational decision on self-insure versus insurance.

[Edited to add] And if one person is thinking dollars and the other is spouting basis points it is really hard to compare options. And, you have to remember probabilities .... it is unlikely you will spend a long time in expensive LTC care.

If you knew that was going to happen, sure, buy the insurance. But you don't. LTC sales people don't mention that 30% of people ... will need zero LTC care (at home or in a facility): https://longtermcare.acl.gov/the-basics ... -need.html
Many of us have wished for real examples of policies with enough details. Sorry, basis points don't cut it.

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Tue Aug 13, 2019 6:36 pm

Silk McCue wrote:
Tue Aug 13, 2019 5:40 pm
If it weren’t for WOW we wouldn’t have any knowledgeable voice to provide informed perspective or reply to those that are adamantly opposed to this product because they are living in the past or living in denial.
Contrary to what you might think, I am not "adamantly opposed" to LTCi. But I think that we should all readily admit that there are no 'really good' (i.e. cheap) solutions to the LTC issue. I entirely agree with WoW2012 that most retirees don't need LTCi because they can't afford it or don't have enough assets to protect. I strongly believe that it's possible to self-insure LTCi, but he doesn't seem willing to admit this or at least suggest a potential level where self-insurance is possible, which erodes his credibility somewhat in my view.

However, I do believe that in terms of net worth/portfolio size, there is a fairly narrow window where LTCi may be the best option. Those with $300k of net worth will have to rely on family, friends, and Medicaid and probably couldn't afford it anyway, and those with $2 million or more can easily pay for virtually any LTC event. Those in the middle might be well served with LTCi, but even then, that's not their only plausible option, nor is the decision mutually exclusive. For instance, LTCi with a limited daily maximum but long coverage period might augment one's portfolio quite well. And SS benefits relative to the expenses incurred by a widowed spouse impact all of this as well; someone who needs $50k annually and is getting $40k of that from SS probably doesn't need much protection at all, and as WoW2012 has pointed out, policies are available that would protect a given amount of assets, up to a point.

And yet again, I would be very interested in a LTC policy with a long elimination period, at least three years, or a very large deductible (e.g. at least several hundred thousand dollars), which is what financial planners like Michael Kitces have been asking for for years.

To sum up, LTCi is not needed for either ends of the net worth/portfolio size spectrum, while the middle might be well served with a LTC policy that is part of a larger LTC strategy.

At the same time, the LTCi industry has not earned a reputation as being very consumer friendly. WoW2012 has pointed out that policies before federal reforms in the 90s were basically junk. Then the states had to get involved because premiums were spiraling out of control.
Silk McCue wrote:
Tue Aug 13, 2019 5:40 pm
It certainly is his profession but don’t see how that does him any good given we have no clue who he is.
Whether it does him any good personally may be irrelevant. The fact that his profession requires him to do for a living what he's doing here at least opens the strong possibility for a conflict of interest. As TN_Boy noted, most financial professionals who don't have a vested interested in LTCi are not strong proponents of it.
Last edited by willthrill81 on Wed Aug 14, 2019 4:06 pm, edited 1 time in total.
“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

TN_Boy
Posts: 1122
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long-Term Care Decision

Post by TN_Boy » Tue Aug 13, 2019 6:46 pm

adamthesmythe wrote:
Tue Aug 13, 2019 6:05 pm
TN_Boy wrote:
Tue Aug 13, 2019 5:20 pm
willthrill81 wrote:
Tue Aug 13, 2019 5:00 pm
TN_Boy wrote:
Tue Aug 13, 2019 4:51 pm
pintail07 wrote:
Tue Aug 13, 2019 4:35 pm
The question is not if it is taught in "sales tactics 101', but was the statement true or false. Totally true IMO.
Walk me through the dollar amount. 15 basis points on 4m .... that's $6,000? So for $6,000 a year you can get 1.5 million in LTC insurance? Is that for a couple or an individual?

So twenty years of LTC insurance is $120,000, not counting the opportunity cost of that money being spent, not invested.

15 basis points sounds trivial. $120,000 sounds less trivial.
Precisely. I'll bet that premiums is for a couple aged 55. They would be buying it at that age knowing that there is only a tiny chance that they'll make a claim for the first decade of paying for it, but if they wait until age 65 or later, the premiums will be much more expensive, and WoW2012 has said that they could easily be uninsurable anyway.
Right and what I'm trying to get to .... for both the OP, though they seem to have lost interest, and cognovimus .... is something like:

1) Here is what LTC insurance will cost for a given amount of coverage. (I forgot to note above that rates are almost certain to rise, though how much we don't know)
2) With a kinda sorta handle on what LTC insurance will cost, look at different LTC scenarios (including the substantial possibility that no long lasting LTC will be needed) and then make a rational decision on self-insure versus insurance.

[Edited to add] And if one person is thinking dollars and the other is spouting basis points it is really hard to compare options. And, you have to remember probabilities .... it is unlikely you will spend a long time in expensive LTC care.

If you knew that was going to happen, sure, buy the insurance. But you don't. LTC sales people don't mention that 30% of people ... will need zero LTC care (at home or in a facility): https://longtermcare.acl.gov/the-basics ... -need.html
Many of us have wished for real examples of policies with enough details. Sorry, basis points don't cut it.
I think wow probably would be happy to give us example of real policies and pricing. (Though yeah, I had the same reaction as willthrill did to the 15 basis point thing ...)

What we have to do is decide what the risks are and their magnitude.

It's a hard decision. Scare tactics do not enlighten.

Silk McCue
Posts: 3094
Joined: Thu Feb 25, 2016 7:11 pm

Re: Long-Term Care Decision

Post by Silk McCue » Tue Aug 13, 2019 6:56 pm

TN_Boy wrote:
Tue Aug 13, 2019 6:46 pm

I think wow probably would be happy to give us example of real policies and pricing. (Though yeah, I had the same reaction as willthrill did to the 15 basis point thing ...)

What we have to do is decide what the risks are and their magnitude.

It's a hard decision. Scare tactics do not enlighten.
Using basis points against holdings is a way to put the cost in perspective. Does anyone think he didn’t expect us to do the math on $4M and 15bp to get $6000. Some people here are looking to nitpick every word, or lack thereof, from WoW. I am not making that poInt at you. Just noting that some folks here just want to be unhappy with anything WoW shares and everything he doesn't share. No way for him to win.

Cheers
Last edited by Silk McCue on Fri Aug 16, 2019 8:50 am, edited 1 time in total.

TN_Boy
Posts: 1122
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long-Term Care Decision

Post by TN_Boy » Tue Aug 13, 2019 7:15 pm

Silk McCue wrote:
Tue Aug 13, 2019 6:56 pm
TN_Boy wrote:
Tue Aug 13, 2019 6:46 pm

I think wow probably would be happy to give us example of real policies and pricing. (Though yeah, I had the same reaction as willthrill did to the 15 basis point thing ...)

What we have to do is decide what the risks are and their magnitude.

It's a hard decision. Scare tactics do not enlighten.
Using basis points against holdings is a way to put the cost in perspective. Does anyone think he didn’t expect us to do the math on $4M and 15bp to get $6000. Some people here are looking to nitpick every word, or lack thereof, from WoW. I am not making that poInt at you. Just noting that some folks here just want to be unhappy with anything WoW shares and everything he does share. No way for him to win.

Cheers
Well, I believe you are wrong and I think using basis points obscures the (yearly) cost quite nicely. [Edited to add -- and makes the discussion much harder to follow ... if you say LTC insurance costs 15 basis points for poster X, someone reading that post has to go back and find out how big poster X's portfolio, and then do the math to see how that would apply to THEIR portfolio].

If the cost is $6k a year, say that. For example, I don't recall anyone saying "for poster ImConfusedAboutLTC with a portfolio of Y dollars, a year of assisted living, minus the person's SS income, is 45 basis points" because that would be absurd.

If you want to argue that $6k per year for someone with a $4m portfolio is a reasonable expense, say that. Remind them that is per year. Remind them the cost is likely to go up. Give the stats on how likely a stay is, etc.
Last edited by TN_Boy on Tue Aug 13, 2019 7:24 pm, edited 1 time in total.

Silk McCue
Posts: 3094
Joined: Thu Feb 25, 2016 7:11 pm

Re: Long-Term Care Decision

Post by Silk McCue » Tue Aug 13, 2019 7:22 pm

TN_Boy wrote:
Tue Aug 13, 2019 7:15 pm
Silk McCue wrote:
Tue Aug 13, 2019 6:56 pm
TN_Boy wrote:
Tue Aug 13, 2019 6:46 pm

I think wow probably would be happy to give us example of real policies and pricing. (Though yeah, I had the same reaction as willthrill did to the 15 basis point thing ...)

What we have to do is decide what the risks are and their magnitude.

It's a hard decision. Scare tactics do not enlighten.
Using basis points against holdings is a way to put the cost in perspective. Does anyone think he didn’t expect us to do the math on $4M and 15bp to get $6000. Some people here are looking to nitpick every word, or lack thereof, from WoW. I am not making that poInt at you. Just noting that some folks here just want to be unhappy with anything WoW shares and everything he does share. No way for him to win.

Cheers
Well, I believe you are wrong and I think using basis points obscures the (yearly) cost quite nicely.

If the cost is $6k a year, say that. For example, I don't recall anyone saying "for poster ImConfusedAboutLTC with a portfolio of Y dollars, a year of assisted living, minus the person's SS income, is 45 basis points" because that would be absurd.

If you want to argue that $6k per year for someone with a $4m portfolio is a reasonable expense, say that. Remind them that is per year. Remind them the cost is likely to go up. Give the stats on how likely a stay is, etc.
You don’t get to control the the manner in which someone paints a word picture or tries to get a point across. That type of nitpicking against WoW is exactly what I am talking about. Too many people here just want to be unhappy with either what he says, doesn’t say to their satisfaction, or what he doesn’t say at all because they think he should. All because he sells the product.

Cheers

TN_Boy
Posts: 1122
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long-Term Care Decision

Post by TN_Boy » Tue Aug 13, 2019 7:28 pm

Silk McCue wrote:
Tue Aug 13, 2019 7:22 pm
TN_Boy wrote:
Tue Aug 13, 2019 7:15 pm
Silk McCue wrote:
Tue Aug 13, 2019 6:56 pm
TN_Boy wrote:
Tue Aug 13, 2019 6:46 pm

I think wow probably would be happy to give us example of real policies and pricing. (Though yeah, I had the same reaction as willthrill did to the 15 basis point thing ...)

What we have to do is decide what the risks are and their magnitude.

It's a hard decision. Scare tactics do not enlighten.
Using basis points against holdings is a way to put the cost in perspective. Does anyone think he didn’t expect us to do the math on $4M and 15bp to get $6000. Some people here are looking to nitpick every word, or lack thereof, from WoW. I am not making that poInt at you. Just noting that some folks here just want to be unhappy with anything WoW shares and everything he does share. No way for him to win.

Cheers
Well, I believe you are wrong and I think using basis points obscures the (yearly) cost quite nicely.

If the cost is $6k a year, say that. For example, I don't recall anyone saying "for poster ImConfusedAboutLTC with a portfolio of Y dollars, a year of assisted living, minus the person's SS income, is 45 basis points" because that would be absurd.

If you want to argue that $6k per year for someone with a $4m portfolio is a reasonable expense, say that. Remind them that is per year. Remind them the cost is likely to go up. Give the stats on how likely a stay is, etc.
You don’t get to control the the manner in which someone paints a word picture or tries to get a point across. That type of nitpicking against WoW is exactly what I am talking about. Too many people here just want to be unhappy with either what he says, doesn’t say to their satisfaction, or what he doesn’t say at all because they think he should. All because he sells the product.

Cheers
No I don't get to control how posters present their point. People will have different opinions on whether a given "style" is meant to elucidate or obscure the big picture. Based partly I suspect on how much exposure or training they have had to marketing and sales techniques.

adamthesmythe
Posts: 2979
Joined: Mon Sep 22, 2014 4:47 pm

Re: Long-Term Care Decision

Post by adamthesmythe » Tue Aug 13, 2019 9:39 pm

TN_Boy wrote:
Tue Aug 13, 2019 6:46 pm
adamthesmythe wrote:
Tue Aug 13, 2019 6:05 pm
TN_Boy wrote:
Tue Aug 13, 2019 5:20 pm
willthrill81 wrote:
Tue Aug 13, 2019 5:00 pm
TN_Boy wrote:
Tue Aug 13, 2019 4:51 pm


Walk me through the dollar amount. 15 basis points on 4m .... that's $6,000? So for $6,000 a year you can get 1.5 million in LTC insurance? Is that for a couple or an individual?

So twenty years of LTC insurance is $120,000, not counting the opportunity cost of that money being spent, not invested.

15 basis points sounds trivial. $120,000 sounds less trivial.
Precisely. I'll bet that premiums is for a couple aged 55. They would be buying it at that age knowing that there is only a tiny chance that they'll make a claim for the first decade of paying for it, but if they wait until age 65 or later, the premiums will be much more expensive, and WoW2012 has said that they could easily be uninsurable anyway.
Right and what I'm trying to get to .... for both the OP, though they seem to have lost interest, and cognovimus .... is something like:

1) Here is what LTC insurance will cost for a given amount of coverage. (I forgot to note above that rates are almost certain to rise, though how much we don't know)
2) With a kinda sorta handle on what LTC insurance will cost, look at different LTC scenarios (including the substantial possibility that no long lasting LTC will be needed) and then make a rational decision on self-insure versus insurance.

[Edited to add] And if one person is thinking dollars and the other is spouting basis points it is really hard to compare options. And, you have to remember probabilities .... it is unlikely you will spend a long time in expensive LTC care.

If you knew that was going to happen, sure, buy the insurance. But you don't. LTC sales people don't mention that 30% of people ... will need zero LTC care (at home or in a facility): https://longtermcare.acl.gov/the-basics ... -need.html
Many of us have wished for real examples of policies with enough details. Sorry, basis points don't cut it.
I think wow probably would be happy to give us example of real policies and pricing. (Though yeah, I had the same reaction as willthrill did to the 15 basis point thing ...)

What we have to do is decide what the risks are and their magnitude.

It's a hard decision. Scare tactics do not enlighten.
That was me, not willthrill.

But anyway- there WERE a couple of people who posted examples of recently purchased policies, with some details. I can't find them anymore. and a couple of times I have asked for recent examples in a new thread, which disappeared. Apparently the Powers didn't like it.

But I would like to follow up a bit on the comment that desirability of a policy depends on circumstances, in addition to assets. WoW's comments often focus on "preservation of assets" as a justification. This is sometimes not appropriate or necessary.

Take a single person with no essential requirement (like a disabled dependent) to leave a legacy. Why NOT use your assets for your care? You can't take them with you.

Even if you have a DESIRE for a bequest (say, to a charity or a relative) statistically the recipient will be better off if you don't buy insurance. Not always, of course, some will use up all their assets and the recipient will get less, or nothing.

Now take a couple, again without a bequest need. Now the issue is limiting the amount used for care so that the other partner has some left. There are ways to do that (medicaid annuity, maybe others). Statistically the partner in care is very unlikely to run out, even if assets are divided. Statistically the other partner is cared for adequately, or is better off if not much ends up being used for care.

Now add to this the fact that it is very difficult (impossible?) to buy a policy that will cover the worst-case, tail risk.

I submit that sometimes no policy can be the best choice. I am, of course, willing to be persuaded by examples of policies that are attractive to me in my circumstances.

cognovimus
Posts: 71
Joined: Sat Aug 10, 2019 1:07 pm

Re: Long-Term Care Decision

Post by cognovimus » Wed Aug 14, 2019 6:06 am

TN_Boy wrote:
Tue Aug 13, 2019 4:23 pm
cognovimus wrote:
Tue Aug 13, 2019 1:33 pm
willthrill81 wrote:
Tue Aug 13, 2019 10:16 am
TN_Boy wrote:
Tue Aug 13, 2019 8:36 am
cognovimus wrote:
Tue Aug 13, 2019 8:15 am


Thank you for the response re self pay. NW = about $4 million (not counting house), primarily for funding retirement needs. If there is some left over for heirs, great. That will depend on the market and our personal health situation.

I'm looking at the other options, including traditional and a 10-20 pay hybrid. None of them are that great and don't cover even current costs, but would help.

I haven't considered facilities that accept Medicaid. I will look into that, but I've known of people who tried to "protect" assets from Medicaid and ended up financially strapped. Had to break out of the trusts to fund living expenses.

I'm familiar with CCRCs. It's a good idea, but they all have different models. The one I know best is pay as you go (no deposit/buy-in), you pay more as you need more care, and I'm sure they would kick you out if your needs exceeded your financial resources. The person I know of who lived there died in independent living after an acute illness. There is a lot of death and sickness in these places, even the IP section. And a lot of cliques, like a high school or college. Because it is fairly dense housing, novovirus is not unknown. I wouldn't go there unless I really needed to because I live in a HCOL area and even IP is very expensive. But my children and grandchildren are here, so I wouldn't go elsewhere unless they moved.
4M + house? How about SS or pensions? How much do you plan to pull from that 4m yearly?

Assuming your expenses are reasonable for a 4m portfolio (pulling less than maybe 160k a year from it), I believe most would say you have no need to buy LTC insurance. I would reiterate something I said before, I cannot imagine why you would want to set aside part of that money and reduce spending. With 4m, unless you are a pretty big spender, that is just not needed.

How much do you think you would need to "reserve" for LTC (and what is that number based on) and why do you think those funds need to be segregated?

As you live in a HCOL and have a pretty big nest egg, I'm guessing your house is worth a lot as well (paid off?). The equity in a house is another way to pay for some LTC expenses.

At your asset level, I don't believe thinking about medicaid issues is very useful. You will not be needing medicaid.
$4 million, plus SS benefits, maybe other income, and a paid for home means that he has no need at all for LTC insurance. Assuming 4% withdrawals, his portfolio alone should easily provide $160k of annual income, more than enough to cover LTC. Everything else is added safety.
Hmm, that's somewhat reassuring, but we will be early retirees (63/61). As such we may need to make our nest egg last a little longer than most. We have no pensions and won't be able to live on interest and dividends; we'll be drawing down assets. We have a modest paid-off home, but I haven't relied upon that in terms of expenses because we need somewhere to live and prefer to be near family. Total after tax expenses are about $168,000 (today's dollars) but that's padded with estimated LTC expenses and out of pocket medical premiums for the years between COBRA & Medicare, includes increased travel post-retirement, and a new car here and there. When we run the FIdelity and PC retirement planners, we get results that indicate we're "on track" but not batting it out of the park. Also availed ourselves of a "fee only" planner whose MC analysis rendered 90% of the trials successful. So we're moving ahead with our plan, but understand we may need to revisit expenses on the fun stuff.
cognovimus,

You are doing a couple of things that make it hard to assess your total financial picture.

1) Okay, no corporate pension, will you have any SS income?
2) 168k is a moderately high spend rate. Could you stop lumping in "padded with estimated LTC expenses?"
3) Your retirement expenses are daily expenses (groceries, utilities, gasoline, etc etc) medical insurance costs, plus a new car every X years, house repair every Y years, vacation, and taxes on the portfolio withdrawal to fund those expenses. (Taxes in retirement usually lower than than before retirement).
4) Your house is useful for LTC in some situations. For example, you die and a couple of years later your spouse needs LTC care. Well, if the family sells the house you probably have several years of care paid for, depending on house value and LTC costs in your area. How much is your house worth.

I'll ask again, how much are you "setting aside" for LTC? The median stay in assisted living in something like 18 months. How much would that cost in your area? I think if you would elaborate on how much LTC you are trying to plan for you might get useful comments on LTC costs and the likelihood of such costs. And you can get some data on LTC insurance costs. Although some people do wind up with long expensive stays in LTC, believe it or not, most people do not, and quite a number of people wind up needling little or no LTC.
Not trying to be coy. I thought I had responded yesterday but it never made it "live." I didn't mean to hijack the OP's post or stir up sentiment against a certain poster. All comments have been valuable to me. I hope OP is following along and maybe benefiting as well.

The bps "calc" for coverage does make the cost sound trivial, but I never got quoted $1.2 million in coverage either because the agent probably knew we would bawk at the cost.

Anyway,
1. Yes, about $50K per year from SS at 67.
2. If I take out the "placeholder" for LTC, expenses would be $161K annually, but this does reflect the years when we're paying out of pocket for ACA care. (If we use our cash reserves only for those years, we can probably get this down to $131K by qualifying for subsidies.) Per the exchange for my area, non-subsidized medical care for 2 currently ranges $30000-45000/year and each time I look the options are fewer and costs higher.
3. I've used the guidance of a couple of different financial planners to project living expenses and lower federal and state tax rates in retirement, so I think we're okay there. None of them seems to think we are bullet proof. Naturally, the one who gets commissions thinks we should keep working and saving a couple of more years. I should also mention that the fee only financial planner did not advise us to forego LTCi, but referred us to a LTCi specialist (agent). This, and the fact that they will "manage" your assets for a fee makes me wonder how pure their motives are. I'm also stuck with a static "plan" that I need to find another tool to update (topic for another thread).
4. Our home is modest but because HCOL is high, it's assessed at about $740K. No mortgage but taxes are high. We plan to live it in as long as possible as it is very close (10 min) from children/grandchildren.

I have no idea what an appropriate amount would be to set aside in lieu of buying coverage. I've heard about QLACs, so maybe the maximum allowed there, since it could be used for other expenses as well?

Thanks again to all.

TN_Boy
Posts: 1122
Joined: Sat Jan 17, 2009 12:51 pm

Re: Long-Term Care Decision

Post by TN_Boy » Wed Aug 14, 2019 7:39 am

cognovimus wrote:
Wed Aug 14, 2019 6:06 am
TN_Boy wrote:
Tue Aug 13, 2019 4:23 pm
cognovimus wrote:
Tue Aug 13, 2019 1:33 pm
willthrill81 wrote:
Tue Aug 13, 2019 10:16 am
TN_Boy wrote:
Tue Aug 13, 2019 8:36 am


4M + house? How about SS or pensions? How much do you plan to pull from that 4m yearly?

Assuming your expenses are reasonable for a 4m portfolio (pulling less than maybe 160k a year from it), I believe most would say you have no need to buy LTC insurance. I would reiterate something I said before, I cannot imagine why you would want to set aside part of that money and reduce spending. With 4m, unless you are a pretty big spender, that is just not needed.

How much do you think you would need to "reserve" for LTC (and what is that number based on) and why do you think those funds need to be segregated?

As you live in a HCOL and have a pretty big nest egg, I'm guessing your house is worth a lot as well (paid off?). The equity in a house is another way to pay for some LTC expenses.

At your asset level, I don't believe thinking about medicaid issues is very useful. You will not be needing medicaid.
$4 million, plus SS benefits, maybe other income, and a paid for home means that he has no need at all for LTC insurance. Assuming 4% withdrawals, his portfolio alone should easily provide $160k of annual income, more than enough to cover LTC. Everything else is added safety.
Hmm, that's somewhat reassuring, but we will be early retirees (63/61). As such we may need to make our nest egg last a little longer than most. We have no pensions and won't be able to live on interest and dividends; we'll be drawing down assets. We have a modest paid-off home, but I haven't relied upon that in terms of expenses because we need somewhere to live and prefer to be near family. Total after tax expenses are about $168,000 (today's dollars) but that's padded with estimated LTC expenses and out of pocket medical premiums for the years between COBRA & Medicare, includes increased travel post-retirement, and a new car here and there. When we run the FIdelity and PC retirement planners, we get results that indicate we're "on track" but not batting it out of the park. Also availed ourselves of a "fee only" planner whose MC analysis rendered 90% of the trials successful. So we're moving ahead with our plan, but understand we may need to revisit expenses on the fun stuff.
cognovimus,

You are doing a couple of things that make it hard to assess your total financial picture.

1) Okay, no corporate pension, will you have any SS income?
2) 168k is a moderately high spend rate. Could you stop lumping in "padded with estimated LTC expenses?"
3) Your retirement expenses are daily expenses (groceries, utilities, gasoline, etc etc) medical insurance costs, plus a new car every X years, house repair every Y years, vacation, and taxes on the portfolio withdrawal to fund those expenses. (Taxes in retirement usually lower than than before retirement).
4) Your house is useful for LTC in some situations. For example, you die and a couple of years later your spouse needs LTC care. Well, if the family sells the house you probably have several years of care paid for, depending on house value and LTC costs in your area. How much is your house worth.

I'll ask again, how much are you "setting aside" for LTC? The median stay in assisted living in something like 18 months. How much would that cost in your area? I think if you would elaborate on how much LTC you are trying to plan for you might get useful comments on LTC costs and the likelihood of such costs. And you can get some data on LTC insurance costs. Although some people do wind up with long expensive stays in LTC, believe it or not, most people do not, and quite a number of people wind up needling little or no LTC.
Not trying to be coy. I thought I had responded yesterday but it never made it "live." I didn't mean to hijack the OP's post or stir up sentiment against a certain poster. All comments have been valuable to me. I hope OP is following along and maybe benefiting as well.

The bps "calc" for coverage does make the cost sound trivial, but I never got quoted $1.2 million in coverage either because the agent probably knew we would bawk at the cost.

Anyway,
1. Yes, about $50K per year from SS at 67.
2. If I take out the "placeholder" for LTC, expenses would be $161K annually, but this does reflect the years when we're paying out of pocket for ACA care. (If we use our cash reserves only for those years, we can probably get this down to $131K by qualifying for subsidies.) Per the exchange for my area, non-subsidized medical care for 2 currently ranges $30000-45000/year and each time I look the options are fewer and costs higher.
3. I've used the guidance of a couple of different financial planners to project living expenses and lower federal and state tax rates in retirement, so I think we're okay there. None of them seems to think we are bullet proof. Naturally, the one who gets commissions thinks we should keep working and saving a couple of more years. I should also mention that the fee only financial planner did not advise us to forego LTCi, but referred us to a LTCi specialist (agent). This, and the fact that they will "manage" your assets for a fee makes me wonder how pure their motives are. I'm also stuck with a static "plan" that I need to find another tool to update (topic for another thread).
4. Our home is modest but because HCOL is high, it's assessed at about $740K. No mortgage but taxes are high. We plan to live it in as long as possible as it is very close (10 min) from children/grandchildren.

I have no idea what an appropriate amount would be to set aside in lieu of buying coverage. I've heard about QLACs, so maybe the maximum allowed there, since it could be used for other expenses as well?

Thanks again to all.
Great, thanks for the update.

You could start a separate "can I retire now" thread -- we have lots of those -- but with a 4M portfolio, 50k in SS income starting at 67 and a paid off 740k house, I don't know why a planner would counsel you to keep working if you wanted to retire. I will say your spending looks moderately high to me; it's a quite a bit more than my spouse and I spend, and we take nice vacations, etc. I mention this only because I assume you could cut that back a good bit without excessive pain if you really had to.

Your medical insurance costs will be high until medicare, but medicare at 65, then SS at 67, which point the draw from the portfolio goes way down.

How much to set aside for LTC? Well, in your financial situation I wouldn't personally "set aside" a dime. Pulling (after SS) 110k from a portfolio your size should leave a LOT of money available for LTC if needed.

Have you looked into costs of LTC? In my medium cost of living area, assisted living is maybe 60k to 70k a year. Skilled nursing getting close to 100k. Your area would be more expensive. So, how many years of LTC do you want to worry about? Don't forget its not just the portfolio ... you have a big chunk of change in home equity. And SS income would cover some expenses.

You should absolutely do your own research into the likelihood of LTC stays (how likely you and/or spouse would need care and for how long). It will become obvious if you look at the numbers that you can easily "self-insure" against typical LTC stays. If you want to guard against some disaster, like 10 years in skilled nursing (which by the way you could still handle) I would get LTC insurance quotes for that kind of stay. If you don't go with insurance, I wouldn't segregate the money into "I can spend this" and "this is for LTC."

And again, the thing about LTC insurance is the large yearly fixed cost. And the rates are likely to go up.

I'm sure others will have opinions on LTC care versus not, tailored to your specific situation.

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willthrill81
Posts: 13210
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Re: Long-Term Care Decision

Post by willthrill81 » Wed Aug 14, 2019 11:14 am

TN_Boy wrote:
Wed Aug 14, 2019 7:39 am
cognovimus wrote:
Wed Aug 14, 2019 6:06 am
TN_Boy wrote:
Tue Aug 13, 2019 4:23 pm
cognovimus wrote:
Tue Aug 13, 2019 1:33 pm
willthrill81 wrote:
Tue Aug 13, 2019 10:16 am


$4 million, plus SS benefits, maybe other income, and a paid for home means that he has no need at all for LTC insurance. Assuming 4% withdrawals, his portfolio alone should easily provide $160k of annual income, more than enough to cover LTC. Everything else is added safety.
Hmm, that's somewhat reassuring, but we will be early retirees (63/61). As such we may need to make our nest egg last a little longer than most. We have no pensions and won't be able to live on interest and dividends; we'll be drawing down assets. We have a modest paid-off home, but I haven't relied upon that in terms of expenses because we need somewhere to live and prefer to be near family. Total after tax expenses are about $168,000 (today's dollars) but that's padded with estimated LTC expenses and out of pocket medical premiums for the years between COBRA & Medicare, includes increased travel post-retirement, and a new car here and there. When we run the FIdelity and PC retirement planners, we get results that indicate we're "on track" but not batting it out of the park. Also availed ourselves of a "fee only" planner whose MC analysis rendered 90% of the trials successful. So we're moving ahead with our plan, but understand we may need to revisit expenses on the fun stuff.
cognovimus,

You are doing a couple of things that make it hard to assess your total financial picture.

1) Okay, no corporate pension, will you have any SS income?
2) 168k is a moderately high spend rate. Could you stop lumping in "padded with estimated LTC expenses?"
3) Your retirement expenses are daily expenses (groceries, utilities, gasoline, etc etc) medical insurance costs, plus a new car every X years, house repair every Y years, vacation, and taxes on the portfolio withdrawal to fund those expenses. (Taxes in retirement usually lower than than before retirement).
4) Your house is useful for LTC in some situations. For example, you die and a couple of years later your spouse needs LTC care. Well, if the family sells the house you probably have several years of care paid for, depending on house value and LTC costs in your area. How much is your house worth.

I'll ask again, how much are you "setting aside" for LTC? The median stay in assisted living in something like 18 months. How much would that cost in your area? I think if you would elaborate on how much LTC you are trying to plan for you might get useful comments on LTC costs and the likelihood of such costs. And you can get some data on LTC insurance costs. Although some people do wind up with long expensive stays in LTC, believe it or not, most people do not, and quite a number of people wind up needling little or no LTC.
Not trying to be coy. I thought I had responded yesterday but it never made it "live." I didn't mean to hijack the OP's post or stir up sentiment against a certain poster. All comments have been valuable to me. I hope OP is following along and maybe benefiting as well.

The bps "calc" for coverage does make the cost sound trivial, but I never got quoted $1.2 million in coverage either because the agent probably knew we would bawk at the cost.

Anyway,
1. Yes, about $50K per year from SS at 67.
2. If I take out the "placeholder" for LTC, expenses would be $161K annually, but this does reflect the years when we're paying out of pocket for ACA care. (If we use our cash reserves only for those years, we can probably get this down to $131K by qualifying for subsidies.) Per the exchange for my area, non-subsidized medical care for 2 currently ranges $30000-45000/year and each time I look the options are fewer and costs higher.
3. I've used the guidance of a couple of different financial planners to project living expenses and lower federal and state tax rates in retirement, so I think we're okay there. None of them seems to think we are bullet proof. Naturally, the one who gets commissions thinks we should keep working and saving a couple of more years. I should also mention that the fee only financial planner did not advise us to forego LTCi, but referred us to a LTCi specialist (agent). This, and the fact that they will "manage" your assets for a fee makes me wonder how pure their motives are. I'm also stuck with a static "plan" that I need to find another tool to update (topic for another thread).
4. Our home is modest but because HCOL is high, it's assessed at about $740K. No mortgage but taxes are high. We plan to live it in as long as possible as it is very close (10 min) from children/grandchildren.

I have no idea what an appropriate amount would be to set aside in lieu of buying coverage. I've heard about QLACs, so maybe the maximum allowed there, since it could be used for other expenses as well?

Thanks again to all.
Great, thanks for the update.

You could start a separate "can I retire now" thread -- we have lots of those -- but with a 4M portfolio, 50k in SS income starting at 67 and a paid off 740k house, I don't know why a planner would counsel you to keep working if you wanted to retire. I will say your spending looks moderately high to me; it's a quite a bit more than my spouse and I spend, and we take nice vacations, etc. I mention this only because I assume you could cut that back a good bit without excessive pain if you really had to.

Your medical insurance costs will be high until medicare, but medicare at 65, then SS at 67, which point the draw from the portfolio goes way down.

How much to set aside for LTC? Well, in your financial situation I wouldn't personally "set aside" a dime. Pulling (after SS) 110k from a portfolio your size should leave a LOT of money available for LTC if needed.

Have you looked into costs of LTC? In my medium cost of living area, assisted living is maybe 60k to 70k a year. Skilled nursing getting close to 100k. Your area would be more expensive. So, how many years of LTC do you want to worry about? Don't forget its not just the portfolio ... you have a big chunk of change in home equity. And SS income would cover some expenses.

You should absolutely do your own research into the likelihood of LTC stays (how likely you and/or spouse would need care and for how long). It will become obvious if you look at the numbers that you can easily "self-insure" against typical LTC stays. If you want to guard against some disaster, like 10 years in skilled nursing (which by the way you could still handle) I would get LTC insurance quotes for that kind of stay. If you don't go with insurance, I wouldn't segregate the money into "I can spend this" and "this is for LTC."

And again, the thing about LTC insurance is the large yearly fixed cost. And the rates are likely to go up.

I'm sure others will have opinions on LTC care versus not, tailored to your specific situation.
I entirely agree. They clearly have no need for LTCi, even in a HCOL area, but it may be that a LTC policy with a limited daily maximum benefit but with no maximum benefit period might be worth the peace of mind they seem to currently lack. Otherwise, they might feel the need to be more conservative than needed in order to hang on to enough funds to pay for an extended LTC event.

Also, I think that they should consider what would happen to the 'well' spouse's spending if the other were receiving LTC, whether at home or in a facility. I suspect that their budget includes a lot of discretionary spending. Would this continue if one of them is receiving LTC? If it would be significantly reduced, their total spending including LTC might not increase substantially (e.g. replacing luxury cars and extensive travel with paying for LTC out of mere practicality).
“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

Dottie57
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Re: Long-Term Care Decision

Post by Dottie57 » Wed Aug 14, 2019 11:31 am

RetiredAL wrote:
Sun Jul 28, 2019 10:54 pm
JPM wrote:
Sun Jul 28, 2019 1:50 pm
As the Kansas doctor wrote, getting the insurer to pay legitimate claims can be challenging and it helps to have an attorney or to be able and willing to play hardball with the insurer. In health lines, insurers put a lot of effort into dodging payment of claims and will use creative dodges to get the insured to pay charges that the insurer has agreed to pay. Dodging payment in these lines is a game played for money by insurers.



My experience with my Dad this year with his LTC Insurance. To date, I've had no problems with Genworth. First with in-home care, including equipment purchases and repairs. Now that he is in assisted living, they contacted me this last Thurs saying that everything had been approved, but I have not yet seen the statement.

So far, I've found Genworth easy to work with. Much better than what I had expected before I started the process.
Thanks for the information on Genworth. I have long term insurance with GW. My policy has a maximum total payout and maximum daily. It helps me to keep paying when I hear someone who is able to collect.

TN_Boy
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Re: Long-Term Care Decision

Post by TN_Boy » Wed Aug 14, 2019 12:15 pm

cognovimus wrote:
Wed Aug 14, 2019 6:06 am
TN_Boy wrote:
Tue Aug 13, 2019 4:23 pm
cognovimus wrote:
Tue Aug 13, 2019 1:33 pm
willthrill81 wrote:
Tue Aug 13, 2019 10:16 am
TN_Boy wrote:
Tue Aug 13, 2019 8:36 am

Bunch of stuff deleted ...

Anyway,
1. Yes, about $50K per year from SS at 67.
2. If I take out the "placeholder" for LTC, expenses would be $161K annually, but this does reflect the years when we're paying out of pocket for ACA care. (If we use our cash reserves only for those years, we can probably get this down to $131K by qualifying for subsidies.) Per the exchange for my area, non-subsidized medical care for 2 currently ranges $30000-45000/year and each time I look the options are fewer and costs higher.
3. I've used the guidance of a couple of different financial planners to project living expenses and lower federal and state tax rates in retirement, so I think we're okay there. None of them seems to think we are bullet proof. Naturally, the one who gets commissions thinks we should keep working and saving a couple of more years. I should also mention that the fee only financial planner did not advise us to forego LTCi, but referred us to a LTCi specialist (agent). This, and the fact that they will "manage" your assets for a fee makes me wonder how pure their motives are. I'm also stuck with a static "plan" that I need to find another tool to update (topic for another thread).
4. Our home is modest but because HCOL is high, it's assessed at about $740K. No mortgage but taxes are high. We plan to live it in as long as possible as it is very close (10 min) from children/grandchildren.

I have no idea what an appropriate amount would be to set aside in lieu of buying coverage. I've heard about QLACs, so maybe the maximum allowed there, since it could be used for other expenses as well?

Thanks again to all.
I wanted to circle back to a detail here. When you say "If I take out the "placeholder" for LTC, expenses would be $161K annually" (versus your planned 168k draw) what do you mean?

Exactly would you be doing with the 7k?

Are you withdrawing it and putting it .... in some safe investment? Would you use it for LTC insurance premiums? Something else? The point that willthrill81 and I are making is that you should be fine to "self-insure" LTC care by doing absolutely nothing. If the time comes for such care, pay it out of your portfolio at that time. [Edited for clarity]. What I mean is, IF you decide to self-insure, no need to do anything complicated with a separate fund, or setting aside money, etc. Just use what is in the portfolio if and when the need arises. That is separate from whether or not you should buy LTC insurance.

An aside, I'm assuming that you have a "reasonable" asset allocation for your investments. For example, of that 4m, 60% is in stocks, 40% high-quality bonds. Or 50-50, whatever. And hopefully, those investments are in low cost, tax-efficient index mutual funds or ETFs.

If that is not the case, then I would suggest you start a new thread, "help me with my asset allocation before retirement" or somesuch.
Last edited by TN_Boy on Wed Aug 14, 2019 1:04 pm, edited 1 time in total.

TN_Boy
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Re: Long-Term Care Decision

Post by TN_Boy » Wed Aug 14, 2019 12:30 pm

Dottie57 wrote:
Wed Aug 14, 2019 11:31 am
RetiredAL wrote:
Sun Jul 28, 2019 10:54 pm
JPM wrote:
Sun Jul 28, 2019 1:50 pm
As the Kansas doctor wrote, getting the insurer to pay legitimate claims can be challenging and it helps to have an attorney or to be able and willing to play hardball with the insurer. In health lines, insurers put a lot of effort into dodging payment of claims and will use creative dodges to get the insured to pay charges that the insurer has agreed to pay. Dodging payment in these lines is a game played for money by insurers.



My experience with my Dad this year with his LTC Insurance. To date, I've had no problems with Genworth. First with in-home care, including equipment purchases and repairs. Now that he is in assisted living, they contacted me this last Thurs saying that everything had been approved, but I have not yet seen the statement.

So far, I've found Genworth easy to work with. Much better than what I had expected before I started the process.
Thanks for the information on Genworth. I have long term insurance with GW. My policy has a maximum total payout and maximum daily. It helps me to keep paying when I hear someone who is able to collect.
I had a family member with a Metlife LTC policy and we had no issues getting that going. Family member had clear-cut diagnosis and was staying in a facility. This from about 10 years ago.

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Re: Long-Term Care Decision

Post by LadyGeek » Wed Aug 14, 2019 1:02 pm

I removed a post regarding an observation of moderator activity. Please don't publicly post opinions.

Instead, PM a moderator with your concerns. Alternatively, report the post using the "!" button in the top-right corner of the post and explain what's wrong.


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cognovimus
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Re: Long-Term Care Decision

Post by cognovimus » Wed Aug 14, 2019 3:57 pm

TN_Boy wrote:
Wed Aug 14, 2019 12:15 pm
cognovimus wrote:
Wed Aug 14, 2019 6:06 am
TN_Boy wrote:
Tue Aug 13, 2019 4:23 pm
cognovimus wrote:
Tue Aug 13, 2019 1:33 pm
willthrill81 wrote:
Tue Aug 13, 2019 10:16 am
I wanted to circle back to a detail here. When you say "If I take out the "placeholder" for LTC, expenses would be $161K annually" (versus your planned 168k draw) what do you mean?

Exactly would you be doing with the 7k?

Are you withdrawing it and putting it .... in some safe investment? Would you use it for LTC insurance premiums? Something else? The point that willthrill81 and I are making is that you should be fine to "self-insure" LTC care by doing absolutely nothing. If the time comes for such care, pay it out of your portfolio at that time. [Edited for clarity]. What I mean is, IF you decide to self-insure, no need to do anything complicated with a separate fund, or setting aside money, etc. Just use what is in the portfolio if and when the need arises. That is separate from whether or not you should buy LTC insurance.

An aside, I'm assuming that you have a "reasonable" asset allocation for your investments. For example, of that 4m, 60% is in stocks, 40% high-quality bonds. Or 50-50, whatever. And hopefully, those investments are in low cost, tax-efficient index mutual funds or ETFs.

If that is not the case, then I would suggest you start a new thread, "help me with my asset allocation before retirement" or somesuch.
Exactly would you be doing with the 7k?
The $7K/year is just the part of the original expense estimate that was related to LTC premium (based on an online quote). Since then, I've looked at all sorts of options, many of them more expensive (shared care, inflation protection riders). If we ditch the LTC option, we have $7K less in expenses.

Asset allocation
It's too messy to put out there for a consult at the moment, but it's about 55% (stocks)/45% (bonds + cash). Whether the funds are optimally tax-efficient, low expense, is doubtful. There are way too many of them.
I'm exploring tools for helping with planning/monitoring expenses and assets. I have a static "plan" from a financial planner from a short term engagement, but I need to be able to update it, and they don't give access to that under you have them manage your assets for a %. Right now, I use Fidelity for expense what-ifs, and PC to see what's up with my AA. I'd like something that I can update and have spit out different scenarios, provide guidance on sources of withdrawals, etc.

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Wed Aug 14, 2019 3:59 pm

cognovimus wrote:
Wed Aug 14, 2019 3:57 pm
TN_Boy wrote:
Wed Aug 14, 2019 12:15 pm
cognovimus wrote:
Wed Aug 14, 2019 6:06 am
TN_Boy wrote:
Tue Aug 13, 2019 4:23 pm
cognovimus wrote:
Tue Aug 13, 2019 1:33 pm
I wanted to circle back to a detail here. When you say "If I take out the "placeholder" for LTC, expenses would be $161K annually" (versus your planned 168k draw) what do you mean?

Exactly would you be doing with the 7k?

Are you withdrawing it and putting it .... in some safe investment? Would you use it for LTC insurance premiums? Something else? The point that willthrill81 and I are making is that you should be fine to "self-insure" LTC care by doing absolutely nothing. If the time comes for such care, pay it out of your portfolio at that time. [Edited for clarity]. What I mean is, IF you decide to self-insure, no need to do anything complicated with a separate fund, or setting aside money, etc. Just use what is in the portfolio if and when the need arises. That is separate from whether or not you should buy LTC insurance.

An aside, I'm assuming that you have a "reasonable" asset allocation for your investments. For example, of that 4m, 60% is in stocks, 40% high-quality bonds. Or 50-50, whatever. And hopefully, those investments are in low cost, tax-efficient index mutual funds or ETFs.

If that is not the case, then I would suggest you start a new thread, "help me with my asset allocation before retirement" or somesuch.
Exactly would you be doing with the 7k?
The $7K/year is just the part of the original expense estimate that was related to LTC premium (based on an online quote). Since then, I've looked at all sorts of options, many of them more expensive (shared care, inflation protection riders). If we ditch the LTC option, we have $7K less in expenses.

Asset allocation
It's too messy to put out there for a consult at the moment, but it's about 55% (stocks)/45% (bonds + cash). Whether the funds are optimally tax-efficient, low expense, is doubtful. There are way too many of them.
I'm exploring tools for helping with planning/monitoring expenses and assets. I have a static "plan" from a financial planner from a short term engagement, but I need to be able to update it, and they don't give access to that under you have them manage your assets for a %. Right now, I use Fidelity for expense what-ifs, and PC to see what's up with my AA. I'd like something that I can update and have spit out different scenarios, provide guidance on sources of withdrawals, etc.
It sounds like investing in an in-depth consultation with a fee-only (i.e. flat fee or hourly basis) financial planner acting at all times as a legal fiduciary that is highly recommended by others would be very wise in your situation, regardless of the LTC issue.
“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

cognovimus
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Re: Long-Term Care Decision

Post by cognovimus » Wed Aug 14, 2019 4:18 pm

willthrill81 wrote:
Wed Aug 14, 2019 3:59 pm
cognovimus wrote:
Wed Aug 14, 2019 3:57 pm
TN_Boy wrote:
Wed Aug 14, 2019 12:15 pm
cognovimus wrote:
Wed Aug 14, 2019 6:06 am
TN_Boy wrote:
Tue Aug 13, 2019 4:23 pm
I wanted to circle back to a detail here. When you say "If I take out the "placeholder" for LTC, expenses would be $161K annually" (versus your planned 168k draw) what do you mean?

Exactly would you be doing with the 7k?

Are you withdrawing it and putting it .... in some safe investment? Would you use it for LTC insurance premiums? Something else? The point that willthrill81 and I are making is that you should be fine to "self-insure" LTC care by doing absolutely nothing. If the time comes for such care, pay it out of your portfolio at that time. [Edited for clarity]. What I mean is, IF you decide to self-insure, no need to do anything complicated with a separate fund, or setting aside money, etc. Just use what is in the portfolio if and when the need arises. That is separate from whether or not you should buy LTC insurance.

An aside, I'm assuming that you have a "reasonable" asset allocation for your investments. For example, of that 4m, 60% is in stocks, 40% high-quality bonds. Or 50-50, whatever. And hopefully, those investments are in low cost, tax-efficient index mutual funds or ETFs.

If that is not the case, then I would suggest you start a new thread, "help me with my asset allocation before retirement" or somesuch.
Exactly would you be doing with the 7k?
The $7K/year is just the part of the original expense estimate that was related to LTC premium (based on an online quote). Since then, I've looked at all sorts of options, many of them more expensive (shared care, inflation protection riders). If we ditch the LTC option, we have $7K less in expenses.

Asset allocation
It's too messy to put out there for a consult at the moment, but it's about 55% (stocks)/45% (bonds + cash). Whether the funds are optimally tax-efficient, low expense, is doubtful. There are way too many of them.
I'm exploring tools for helping with planning/monitoring expenses and assets. I have a static "plan" from a financial planner from a short term engagement, but I need to be able to update it, and they don't give access to that under you have them manage your assets for a %. Right now, I use Fidelity for expense what-ifs, and PC to see what's up with my AA. I'd like something that I can update and have spit out different scenarios, provide guidance on sources of withdrawals, etc.
It sounds like investing in an in-depth consultation with a fee-only (i.e. flat fee or hourly basis) financial planner acting at all times as a legal fiduciary that is highly recommended by others would be very wise in your situation, regardless of the LTC issue.
Yes, I might not have been clear, but I did that earlier this year. It was expensive, and they made some mistakes that that to be corrected. I think it's all good now, but as I mentioned "static." so it became out of date as soon as it was produced. It was more of a "can we retire this year" exercise. There was no detailed guidance on shaping up our portfolio, only that most of their clients found 60/40 the best AA but that we'd need to consider strategies for managing Sequence of Returns risk. On the LTC issue, they gave us a referral to a agent who specializes in it.

pintail07
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Re: Long-Term Care Decision

Post by pintail07 » Wed Aug 14, 2019 4:20 pm

Most financial advisers farm out their long term care and disability insurance issues.

TN_Boy
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Re: Long-Term Care Decision

Post by TN_Boy » Wed Aug 14, 2019 4:23 pm

cognovimus wrote:
Wed Aug 14, 2019 3:57 pm
TN_Boy wrote:
Wed Aug 14, 2019 12:15 pm
cognovimus wrote:
Wed Aug 14, 2019 6:06 am
TN_Boy wrote:
Tue Aug 13, 2019 4:23 pm
cognovimus wrote:
Tue Aug 13, 2019 1:33 pm
I wanted to circle back to a detail here. When you say "If I take out the "placeholder" for LTC, expenses would be $161K annually" (versus your planned 168k draw) what do you mean?

Exactly would you be doing with the 7k?

Are you withdrawing it and putting it .... in some safe investment? Would you use it for LTC insurance premiums? Something else? The point that willthrill81 and I are making is that you should be fine to "self-insure" LTC care by doing absolutely nothing. If the time comes for such care, pay it out of your portfolio at that time. [Edited for clarity]. What I mean is, IF you decide to self-insure, no need to do anything complicated with a separate fund, or setting aside money, etc. Just use what is in the portfolio if and when the need arises. That is separate from whether or not you should buy LTC insurance.

An aside, I'm assuming that you have a "reasonable" asset allocation for your investments. For example, of that 4m, 60% is in stocks, 40% high-quality bonds. Or 50-50, whatever. And hopefully, those investments are in low cost, tax-efficient index mutual funds or ETFs.

If that is not the case, then I would suggest you start a new thread, "help me with my asset allocation before retirement" or somesuch.
Exactly would you be doing with the 7k?
The $7K/year is just the part of the original expense estimate that was related to LTC premium (based on an online quote). Since then, I've looked at all sorts of options, many of them more expensive (shared care, inflation protection riders). If we ditch the LTC option, we have $7K less in expenses.

Asset allocation
It's too messy to put out there for a consult at the moment, but it's about 55% (stocks)/45% (bonds + cash). Whether the funds are optimally tax-efficient, low expense, is doubtful. There are way too many of them.
I'm exploring tools for helping with planning/monitoring expenses and assets. I have a static "plan" from a financial planner from a short term engagement, but I need to be able to update it, and they don't give access to that under you have them manage your assets for a %. Right now, I use Fidelity for expense what-ifs, and PC to see what's up with my AA. I'd like something that I can update and have spit out different scenarios, provide guidance on sources of withdrawals, etc.
Okay, thanks for the explanation. The 7k was for LTC insurance premiums. I think that one poster here could provide more examples of LTC insurance pricing, if you weren't sure that you had good information on premium costs. But you still want to do your own research on care costs and so forth.

For your asset allocation, the overall mix sounds reasonable, you should perhaps put together a medium term plan for how to simplify things and evaluate tax efficiency. Think of it as a hobby that makes you money.

I think Fidelity's retirement planner is pretty good, if you give it all the details (which takes a bit of time).

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Re: Long-Term Care Decision

Post by willthrill81 » Wed Aug 14, 2019 4:26 pm

cognovimus wrote:
Wed Aug 14, 2019 4:18 pm
willthrill81 wrote:
Wed Aug 14, 2019 3:59 pm
cognovimus wrote:
Wed Aug 14, 2019 3:57 pm
TN_Boy wrote:
Wed Aug 14, 2019 12:15 pm
cognovimus wrote:
Wed Aug 14, 2019 6:06 am
I wanted to circle back to a detail here. When you say "If I take out the "placeholder" for LTC, expenses would be $161K annually" (versus your planned 168k draw) what do you mean?

Exactly would you be doing with the 7k?

Are you withdrawing it and putting it .... in some safe investment? Would you use it for LTC insurance premiums? Something else? The point that willthrill81 and I are making is that you should be fine to "self-insure" LTC care by doing absolutely nothing. If the time comes for such care, pay it out of your portfolio at that time. [Edited for clarity]. What I mean is, IF you decide to self-insure, no need to do anything complicated with a separate fund, or setting aside money, etc. Just use what is in the portfolio if and when the need arises. That is separate from whether or not you should buy LTC insurance.

An aside, I'm assuming that you have a "reasonable" asset allocation for your investments. For example, of that 4m, 60% is in stocks, 40% high-quality bonds. Or 50-50, whatever. And hopefully, those investments are in low cost, tax-efficient index mutual funds or ETFs.

If that is not the case, then I would suggest you start a new thread, "help me with my asset allocation before retirement" or somesuch.
Exactly would you be doing with the 7k?
The $7K/year is just the part of the original expense estimate that was related to LTC premium (based on an online quote). Since then, I've looked at all sorts of options, many of them more expensive (shared care, inflation protection riders). If we ditch the LTC option, we have $7K less in expenses.

Asset allocation
It's too messy to put out there for a consult at the moment, but it's about 55% (stocks)/45% (bonds + cash). Whether the funds are optimally tax-efficient, low expense, is doubtful. There are way too many of them.
I'm exploring tools for helping with planning/monitoring expenses and assets. I have a static "plan" from a financial planner from a short term engagement, but I need to be able to update it, and they don't give access to that under you have them manage your assets for a %. Right now, I use Fidelity for expense what-ifs, and PC to see what's up with my AA. I'd like something that I can update and have spit out different scenarios, provide guidance on sources of withdrawals, etc.
It sounds like investing in an in-depth consultation with a fee-only (i.e. flat fee or hourly basis) financial planner acting at all times as a legal fiduciary that is highly recommended by others would be very wise in your situation, regardless of the LTC issue.
Yes, I might not have been clear, but I did that earlier this year. It was expensive, and they made some mistakes that that to be corrected. I think it's all good now, but as I mentioned "static." so it became out of date as soon as it was produced. It was more of a "can we retire this year" exercise. There was no detailed guidance on shaping up our portfolio, only that most of their clients found 60/40 the best AA but that we'd need to consider strategies for managing Sequence of Returns risk. On the LTC issue, they gave us a referral to a agent who specializes in it.
You might have said that already, and if so, I apologize for missing it.

It sounds like you got a less than great advisor. Anyone who gives you a blanket 'most of our clients like 60/40 the best' is a pretty poor answer, and the advice should have been far more specific. If you have a CPA, I'd ask him/her for a recommendation for a better one.
“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

cognovimus
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Re: Long-Term Care Decision

Post by cognovimus » Wed Aug 14, 2019 4:31 pm

pintail07 wrote:
Wed Aug 14, 2019 4:20 pm
Most financial advisers farm out their long term care and disability insurance issues.
I understand that makes sense if they think you need it. If they didn't think we needed it, shouldn't they have said so, being in a fiduciary capacity and all? (In fairness, they were looking at a slightly smaller portfolio at the time, but still.) I've spent hours and hours studying the options and discussing with a rep (sales person). Not sure now if I was wasting both our time.

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Wed Aug 14, 2019 4:42 pm

cognovimus wrote:
Wed Aug 14, 2019 4:31 pm
pintail07 wrote:
Wed Aug 14, 2019 4:20 pm
Most financial advisers farm out their long term care and disability insurance issues.
I understand that makes sense if they think you need it. If they didn't think we needed it, shouldn't they have said so, being in a fiduciary capacity and all? (In fairness, they were looking at a slightly smaller portfolio at the time, but still.) I've spent hours and hours studying the options and discussing with a rep (sales person). Not sure now if I was wasting both our time.
Michael Kitces, one of the best minds in the financial planning space, has no problems telling his clients whether he believes that they would be well served with LTCi and, if so, getting into the weeds.
“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

cognovimus
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Re: Long-Term Care Decision

Post by cognovimus » Wed Aug 14, 2019 4:47 pm

willthrill81 wrote:
Wed Aug 14, 2019 4:26 pm
cognovimus wrote:
Wed Aug 14, 2019 4:18 pm
willthrill81 wrote:
Wed Aug 14, 2019 3:59 pm
cognovimus wrote:
Wed Aug 14, 2019 3:57 pm
TN_Boy wrote:
Wed Aug 14, 2019 12:15 pm


I wanted to circle back to a detail here. When you say "If I take out the "placeholder" for LTC, expenses would be $161K annually" (versus your planned 168k draw) what do you mean?

Exactly would you be doing with the 7k?

Are you withdrawing it and putting it .... in some safe investment? Would you use it for LTC insurance premiums? Something else? The point that willthrill81 and I are making is that you should be fine to "self-insure" LTC care by doing absolutely nothing. If the time comes for such care, pay it out of your portfolio at that time. [Edited for clarity]. What I mean is, IF you decide to self-insure, no need to do anything complicated with a separate fund, or setting aside money, etc. Just use what is in the portfolio if and when the need arises. That is separate from whether or not you should buy LTC insurance.

An aside, I'm assuming that you have a "reasonable" asset allocation for your investments. For example, of that 4m, 60% is in stocks, 40% high-quality bonds. Or 50-50, whatever. And hopefully, those investments are in low cost, tax-efficient index mutual funds or ETFs.

If that is not the case, then I would suggest you start a new thread, "help me with my asset allocation before retirement" or somesuch.
Exactly would you be doing with the 7k?
The $7K/year is just the part of the original expense estimate that was related to LTC premium (based on an online quote). Since then, I've looked at all sorts of options, many of them more expensive (shared care, inflation protection riders). If we ditch the LTC option, we have $7K less in expenses.

Asset allocation
It's too messy to put out there for a consult at the moment, but it's about 55% (stocks)/45% (bonds + cash). Whether the funds are optimally tax-efficient, low expense, is doubtful. There are way too many of them.
I'm exploring tools for helping with planning/monitoring expenses and assets. I have a static "plan" from a financial planner from a short term engagement, but I need to be able to update it, and they don't give access to that under you have them manage your assets for a %. Right now, I use Fidelity for expense what-ifs, and PC to see what's up with my AA. I'd like something that I can update and have spit out different scenarios, provide guidance on sources of withdrawals, etc.
It sounds like investing in an in-depth consultation with a fee-only (i.e. flat fee or hourly basis) financial planner acting at all times as a legal fiduciary that is highly recommended by others would be very wise in your situation, regardless of the LTC issue.
Yes, I might not have been clear, but I did that earlier this year. It was expensive, and they made some mistakes that that to be corrected. I think it's all good now, but as I mentioned "static." so it became out of date as soon as it was produced. It was more of a "can we retire this year" exercise. There was no detailed guidance on shaping up our portfolio, only that most of their clients found 60/40 the best AA but that we'd need to consider strategies for managing Sequence of Returns risk. On the LTC issue, they gave us a referral to a agent who specializes in it.
You might have said that already, and if so, I apologize for missing it.

It sounds like you got a less than great advisor. Anyone who gives you a blanket 'most of our clients like 60/40 the best' is a pretty poor answer, and the advice should have been far more specific. If you have a CPA, I'd ask him/her for a recommendation for a better one.
It was more like most clients find 60/40 optimal --kind of like what you suggested except they had all our assets laid out before them.

Alas, my CPA is Turbo Tax, and I don't think we're up for spending another $3000+. I will keep looking for an appropriate tool, even if I have to pay something for it. Just need something that isn't only based on a static snapshot. The recent PC vs MaxiFi discussion devolved into more of ann online security issue.

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willthrill81
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Re: Long-Term Care Decision

Post by willthrill81 » Wed Aug 14, 2019 4:50 pm

cognovimus wrote:
Wed Aug 14, 2019 4:47 pm
willthrill81 wrote:
Wed Aug 14, 2019 4:26 pm
cognovimus wrote:
Wed Aug 14, 2019 4:18 pm
willthrill81 wrote:
Wed Aug 14, 2019 3:59 pm
cognovimus wrote:
Wed Aug 14, 2019 3:57 pm


Exactly would you be doing with the 7k?
The $7K/year is just the part of the original expense estimate that was related to LTC premium (based on an online quote). Since then, I've looked at all sorts of options, many of them more expensive (shared care, inflation protection riders). If we ditch the LTC option, we have $7K less in expenses.

Asset allocation
It's too messy to put out there for a consult at the moment, but it's about 55% (stocks)/45% (bonds + cash). Whether the funds are optimally tax-efficient, low expense, is doubtful. There are way too many of them.
I'm exploring tools for helping with planning/monitoring expenses and assets. I have a static "plan" from a financial planner from a short term engagement, but I need to be able to update it, and they don't give access to that under you have them manage your assets for a %. Right now, I use Fidelity for expense what-ifs, and PC to see what's up with my AA. I'd like something that I can update and have spit out different scenarios, provide guidance on sources of withdrawals, etc.
It sounds like investing in an in-depth consultation with a fee-only (i.e. flat fee or hourly basis) financial planner acting at all times as a legal fiduciary that is highly recommended by others would be very wise in your situation, regardless of the LTC issue.
Yes, I might not have been clear, but I did that earlier this year. It was expensive, and they made some mistakes that that to be corrected. I think it's all good now, but as I mentioned "static." so it became out of date as soon as it was produced. It was more of a "can we retire this year" exercise. There was no detailed guidance on shaping up our portfolio, only that most of their clients found 60/40 the best AA but that we'd need to consider strategies for managing Sequence of Returns risk. On the LTC issue, they gave us a referral to a agent who specializes in it.
You might have said that already, and if so, I apologize for missing it.

It sounds like you got a less than great advisor. Anyone who gives you a blanket 'most of our clients like 60/40 the best' is a pretty poor answer, and the advice should have been far more specific. If you have a CPA, I'd ask him/her for a recommendation for a better one.
It was more like most clients find 60/40 optimal --kind of like what you suggested except they had all our assets laid out before them.

Alas, my CPA is Turbo Tax, and I don't think we're up for spending another $3000+. I will keep looking for an appropriate tool, even if I have to pay something for it. Just need something that isn't only based on a static snapshot. The recent PC vs MaxiFi discussion devolved into more of ann online security issue.
If/when your situation changes in such a way that you believe that you can ask the forum for specific portfolio advice, you'll probably be very well served. When you do so, you can also ask the forum for thoughts about funding LTC. I strongly suspect that in your instance, most will tell you to just pay for it out of pocket if/when it happens.
“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

pintail07
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Re: Long-Term Care Decision

Post by pintail07 » Wed Aug 14, 2019 4:55 pm

cognovimus wrote:
Wed Aug 14, 2019 4:31 pm
pintail07 wrote:
Wed Aug 14, 2019 4:20 pm
Most financial advisers farm out their long term care and disability insurance issues.
I understand that makes sense if they think you need it. If they didn't think we needed it, shouldn't they have said so, being in a fiduciary capacity and all? (In fairness, they were looking at a slightly smaller portfolio at the time, but still.) I've spent hours and hours studying the options and discussing with a rep (sales person). Not sure now if I was wasting both our time.
Find a broker that will show all options along with what they consider are the advantages and disadvantages and will put that all in writing. I was recently with a client with a multi million dollar portfolio that wanted to look at all options. He decided insuring the risk was his best option and decided to buy insurance on his two children and their spouses. High net worth folks often see the advantages of using a small portion of their earnings to leverage potential large claims.

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Re: Long-Term Care Decision

Post by WoW2012 » Wed Aug 14, 2019 11:22 pm

TomatoTomahto wrote:
Tue Aug 13, 2019 2:20 pm
Maybe someone should create a poll on this thread to see how many quadra-millionaires are on this forum and see how many of them have collision insurance on their cars.
One here. A difference between having collision insurance on the car is that I’d have to make a choice not to have it on a vehicle that I’m obliged to insure by state law. I could go out of my way to decline collision, but that doesn’t save very much, so I just have a high deductible and worry about other things.

OTOH, to get LTCi, I’d have to deal with an insurance salesman, and that’s a bridge too far. I’ve had an insurance guy for years who provides homeowners, auto, and umbrella. He knows me well enough to not discuss LTCi, which I don’t think he sells.
Do you know what collision insurance is?
It's not something that needs to be "declined".
It is something that needs to be added onto the policy.
There is no law requiring anyone to own collision insurance on a vehicle that is free of liens.

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Re: Long-Term Care Decision

Post by WoW2012 » Wed Aug 14, 2019 11:27 pm

cognovimus wrote:
Tue Aug 13, 2019 2:29 pm
WoW2012 wrote:
Tue Aug 13, 2019 2:11 pm
bearwithbear wrote:
Tue Aug 13, 2019 1:50 pm
Cognovimus,

Stop it.
Stop worrying that every bad possibility will happen (did I miss World War Z)
4 million and social security more than makes this work.
Self fund long term care.
Done.

Bear

ps. I have this conversation with my self on a too regular basis. Not that the numbers change, just a little hard wired to worry.
Getting better about it. Keep being reminded on this site that you only live once. So live.

Or, he could sacrifice 15 basis points from his portfolio each year to buy $1.5M of long-term care insurance benefits.
Ok, I'm new here. Bear's advice I is crystal clear. But WOW, are you being facetious? Because none of the options I'm considering would give me that coverage amount. Anyway, I'm going to rerun my numbers with NO LTC expense. Maybe that will help.

I was not being facetious.
A healthy couple in their early 60's can buy $1.5M of LTCi benefits for about $6K/yr in premium.
It would pay $100K per year per spouse.
One spouse could use up to $1.0 million in benefits, reserving the other .5M for the other spouse.
It's available in 47 states (NOT NY, CA, or MT).
Comparable policies are available in NY, CA, and MT.

WoW2012
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Re: Long-Term Care Decision

Post by WoW2012 » Wed Aug 14, 2019 11:28 pm

TomatoTomahto wrote:
Tue Aug 13, 2019 3:30 pm
cognovimus wrote:
Tue Aug 13, 2019 2:29 pm
Ok, I'm new here. Bear's advice I is crystal clear. But WOW, are you being facetious? Because none of the options I'm considering would give me that coverage amount. Anyway, I'm going to rerun my numbers with NO LTC expense. Maybe that will help.
Cognovimus, you are new here. Wow is not. He posts, extensively and chronically, on one topic only: LTCi. After much discussion, he finally acknowledged that it's his profession. Many of us know better than to encourage him, but it's sometimes tempting.

Good luck.

Would you prefer I post on matters in which I am not an expert?

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Re: Long-Term Care Decision

Post by WoW2012 » Wed Aug 14, 2019 11:29 pm

pintail07 wrote:
Tue Aug 13, 2019 3:50 pm
As a broker for almost 40 years WOW's information is almost always spot on, he is one of the most knowledgeable brokers in the country. One might not like how he delivers his information. My experience is that folks that haven't personally experienced the struggle of long term care, very difficult for them to see the advantages of insuring. The real cost to shift this burden to an insurance company has much less an impact on the very wealthy. Regardless if someone sells LTCi, , they should be judged by the accuracy of their comments.
Thank you.

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Re: Long-Term Care Decision

Post by WoW2012 » Wed Aug 14, 2019 11:31 pm

ChrisC wrote:
Tue Aug 13, 2019 3:52 pm
cognovimus wrote:
Tue Aug 13, 2019 2:29 pm
WoW2012 wrote:
Tue Aug 13, 2019 2:11 pm
bearwithbear wrote:
Tue Aug 13, 2019 1:50 pm
Cognovimus,

Stop it.
Stop worrying that every bad possibility will happen (did I miss World War Z)
4 million and social security more than makes this work.
Self fund long term care.
Done.

Bear

ps. I have this conversation with my self on a too regular basis. Not that the numbers change, just a little hard wired to worry.
Getting better about it. Keep being reminded on this site that you only live once. So live.

Or, he could sacrifice 15 basis points from his portfolio each year to buy $1.5M of long-term care insurance benefits.
Ok, I'm new here. Bear's advice I is crystal clear. But WOW, are you being facetious? Because none of the options I'm considering would give me that coverage amount. Anyway, I'm going to rerun my numbers with NO LTC expense. Maybe that will help.
You don't "need" LTCi if you and your family won't be financially wrecked by LTC; on the other hand, it could be financially and emotionally prudent for you to have LTCi if you are risk adverse to LTC, want to provide more funds for your heirs (if LTC for you or your spouse occurs) or, if you believe, like me that LTCi provides a better financial, emotional and logistical transition if LTC occurs.

No one here can really answer the question of whether it's a sound decision for you to procure LTCi. You get one camp, championed by people who generally have family members that have gone through LTC, that believe it makes sense for them to have this insurance. Then you get the other camp who believe for a number of reasons that you're flushing money down the drain when you purchase LTCi if you can "self-insure" and won't imporverish you or your spouse if LTC occurs.

I don't think WOW is being facetious here with his "pitch" that for a few dollars out of your portfolio you are potentially protecting/insuring against $1.5 million of bad luck that could occur from LTC. I actually calculated that the cost of my LTCi is a few basis points of my new worth and shields $1.1 million of combined coverage of LTC for both my wife and me. My policy was purchased a number of years ago so YMMV.

Great points, Chris.

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Re: Long-Term Care Decision

Post by WoW2012 » Wed Aug 14, 2019 11:31 pm

TN_Boy wrote:
Tue Aug 13, 2019 4:10 pm
pintail07 wrote:
Tue Aug 13, 2019 3:50 pm
As a broker for almost 40 years WOW's information is almost always spot on, he is one of the most knowledgeable brokers in the country. One might not like how he delivers his information. My experience is that folks that haven't personally experienced the struggle of long term care, very difficult for them to see the advantages of insuring. The real cost to shift this burden to an insurance company has much less an impact on the very wealthy. Regardless if someone sells LTCi, , they should be judged by the accuracy of their comments.
As someone who has/had parents in LTC and has dealt with LTC insurance, I feel comfortable discussing the topic.

I believe that financial advisors are generally less enthusiastic about LTC insurance than people who sell LTC insurance.
That's because most financial advisors sell hybrids, NOT long-term care insurance.

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Re: Long-Term Care Decision

Post by WoW2012 » Wed Aug 14, 2019 11:40 pm

TN_Boy wrote:
Tue Aug 13, 2019 4:51 pm
pintail07 wrote:
Tue Aug 13, 2019 4:35 pm
The question is not if it is taught in "sales tactics 101', but was the statement true or false. Totally true IMO.
Walk me through the dollar amount. 15 basis points on 4m .... that's $6,000? So for $6,000 a year you can get 1.5 million in LTC insurance? Is that for a couple or an individual?

So twenty years of LTC insurance is $120,000, not counting the opportunity cost of that money being spent, not invested.

15 basis points sounds trivial. $120,000 sounds less trivial.
That $6,000 a year premium covers both spouses.

If $120,000 sounds like a lot of money to someone, do they think the actual long-term care expenses they and their spouse incur will be less than that?

If writing a check for $6,000 per year is hard, how hard would it be to write a check for $72,000 per year?

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Re: Long-Term Care Decision

Post by WoW2012 » Wed Aug 14, 2019 11:44 pm

willthrill81 wrote:
Tue Aug 13, 2019 5:00 pm

Precisely. I'll bet that premiums is for a couple aged 55. They would be buying it at that age knowing that there is only a tiny chance that they'll make a claim for the first decade of paying for it, but if they wait until age 65 or later, the premiums will be much more expensive, and WoW2012 has said that they could easily be uninsurable anyway.

I was replying to cognovimus.
He's 63.
His wife is 61.
$1.5M in shared LTCi benefits.
$6,000/yr combined premium.
It's available in every state except CA, NY, and MT.
(Those states have similar policies, but not exactly the same.)

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Re: Long-Term Care Decision

Post by WoW2012 » Wed Aug 14, 2019 11:46 pm

willthrill81 wrote:
Tue Aug 13, 2019 4:47 pm
pintail07 wrote:
Tue Aug 13, 2019 4:35 pm
The question is not if it is taught in "sales tactics 101', but was the statement true or false. Totally true IMO.
The statement might be true, but it's changing the mode of comparison to one that is not familiar to most people and in such a way as to potentially minimize the perceived cost of LTCi. We don't buy auto insurance or medical insurance for 'basis points of our portfolio'; we pay X dollars for them, which is also true of LTCi, unless there is some policy out there actually priced in that manner that I've never heard of before.
We do look at the risk/reward of our investment portfolio in terms of basis points.
That's why the comparison is valid.
A slightly reduced return (15 basis points in this case) to reduce the risk of loss of principal.

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Re: Long-Term Care Decision

Post by WoW2012 » Wed Aug 14, 2019 11:47 pm

willthrill81 wrote:
Tue Aug 13, 2019 4:45 pm
pintail07 wrote:
Tue Aug 13, 2019 3:50 pm
As a broker for almost 40 years WOW's information is almost always spot on, he is one of the most knowledgeable brokers in the country. One might not like how he delivers his information. My experience is that folks that haven't personally experienced the struggle of long term care, very difficult for them to see the advantages of insuring. The real cost to shift this burden to an insurance company has much less an impact on the very wealthy. Regardless if someone sells LTCi, , they should be judged by the accuracy of their comments.
Contrary to what you, WoW2012, and others might think, I actually believe that on occasion, he has made some good contributions to our discussions of LTC insurance. For instance, he has readily admitted that most retirees don't have enough assets/income to justify LTCi and must rely on Medicaid. He corrected me on a point regarding the use of Medicaid-compliant annuities. There is value in that.

But one problem is that he apparently believes that LTCi of one form or another is essentially the one-size-fits-all solution for everyone with significant assets. That is bona fide false. The literally textbook financial purpose of insurance is to protect against financial catastrophe. So if the worst case scenario with regard to a specific risk is not even close to a financial catastrophe, there is no financial need for the insurance. It's difficult to get just about anyone who works in insurance sales to admit this, partially because they've been trained to believe otherwise.

"It's difficult to get a man to understand something when his salary depends upon him not understanding it."
- Upton Sinclair

Several people have asked WoW2012 at what level of portfolio/net worth someone no longer needs LTCi. I do not believe that he has ever answered that question. When I responded to him regarding an issue he brought up with Medicaid-compliant annuities, I demonstrated that the issue wasn't a real problem for those who would be interested in this tactic. He didn't respond to it. I've asked him several questions regarding various aspects of LTC insurance that he has never responded to, possibly because it would be very difficult to do so without admitting that LTCi is not a one-size-fits-all solution.

Another problem is the 'salesy-ness' of some of WoW2012's comments, like the above "it's only 15 basis points," or "what will your spouse do with only $50k of SS benefits and a million dollars."

I sincerely hope that the moderators will not delete my comment for whatever reason because (1) I'm not attacking WoW2012 and (2) everything I've said can be easily verified by an examination of WoW2012's posts. Again, he occasionally provides valuable contributions to the discussion, but people should be aware, at a minimum, that he has a potential conflict of interest.

Please provide me a list of all the questions you've asked which I've failed to answer.
I'll reply as soon as I can.

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