Moms retirement

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Svtwhitel24
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Moms retirement

Post by Svtwhitel24 »

Backstory: Mom is 61yo with chronic disability both physical (active spinal osteomyelitis on antibiotics but has developed spinal deformity due to delayed treatment from checking out AMA on multiple occasions, this has caused nerve impingements causing current inability to walk) and mental (bipolar and possible early dementia) currently receiving social security. Has been deemed to not have capacity to make medical decisions, and I'm currently functioning as her POA for healthcare, but she is functioning high enough to maintain competency and thus I have little/no control of her finances at the moment, however, she is currently agreeing to add me to her accounts to help manage finances. Changes by the day. :/

Financial situation:
Social security = 1100/mo.
Stock = 300k (Publix) which currently has dividends of ~8k year.

Plan: Move her from FL to TN where I live. She is currently heading to skilled nursing facility here in TN, then likely to assisted living facility. She cannot live at an assisted living facility (ALF) with income of ~19-20k/yr. Likely will need to give her 4k+ per month until death. I'm estimating her monthly costs to be 6k per month.

Her income will then be:
Social Security = 1100/mo
Dividends = 8k per year
Monthly income from me 4000/mo

Questions:
1. How do I make that 300k inaccessible to her so she doesn't have a manic episode and really put her and I in more of a financial predicament? Ideally, I would like the sale of stock to need joint approval, where I can't access it without her and she can't access it without me. Is this possible?
2. Am I able to fund entire cost of ALF from my account (5-6k per month), then write it off as medical expense deduction (everything > 7.5% of AGI; my AGI is ~550k/yr). Try to Maximize tax benefit. Then just keep her SS and Dividends in a shared account which would come to me upon death.
3. Any other tax benefits or things to think about? Smart way to handle this scenario?

I'm 37 yo so the benefit of not touching the 300k is that she gets to keep the dividends that hopefully increase with time, but also I'll be able to recoup some of the money I spend when she expires. Hopefully will be a wash with time.

Tried to organize this as best I could, though situation to navigate, and I appreciate any and all feedback. Thank you.
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Wiggums
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Re: Moms retirement

Post by Wiggums »

You can ask for Guardianship over property If Mom is not capable of making financial decisions on her own. My Grandfather always follow the advice of his attorney. He was a competent man. When the doctor told him that he was dying, Grandpa starting writing out checks without think out the implications for his wife with dementia or the medical bills for himself.

There must be other ways to accomplish what you’re trying to do.

I’m not sure why you wouldn’t pay moms bills out of her $300,000
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02nz
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Re: Moms retirement

Post by 02nz »

Did I read that correctly that essentially her entire net worth is in one company's stock? That's incredibly risky - orders of magnitude riskier than a total stock market fund (and no one here would recommend that a 61-year-old be 100% invested in the stock market). That needs to be fixed right away. Something like a 50/50 (stock/bond) allocation would be reasonable, with the stock portion invested in a total stock market fund.
BarbBrooklyn
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Re: Moms retirement

Post by BarbBrooklyn »

Have you applied for SSDI on her behalf?

Have you consulted your or her Area Agency on Aging for advice about her needs (you can ask for a "needs assessment", for case management and for advice regarding resources (besides her money) to pay for care.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
trueblueky
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Re: Moms retirement

Post by trueblueky »

For responders' info:
Publix stock can only be sold to the company. It is not publicly traded. If the stock is in their retirement plan, there are restrictions on selling it. The company sets its value quarterly.
HomeStretch
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Re: Moms retirement

Post by HomeStretch »

Have you looked into whether TN has a Medicaid program for long term care that might cover a portion of your mom’s Assisted Living expenses (such as the medical/care portion)?

Medicaid eligibility is generally income and means tested. If assistance is available, it would be better to first spend down your mom’s portfolio for her care in order to qualify for Medicaid assistance.
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JoeRetire
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Re: Moms retirement

Post by JoeRetire »

Svtwhitel24 wrote: Wed Nov 24, 2021 5:42 pmcurrently receiving social security.
I assume this is SSDI?
Has been deemed to not have capacity to make medical decisions, and I'm currently functioning as her POA for healthcare, but she is functioning high enough to maintain competency and thus I have little/no control of her finances
Really? I didn't know the two could be separated that way. Seems odd.
Plan: Move her from FL to TN where I live. She is currently heading to skilled nursing facility here in TN, then likely to assisted living facility. She cannot live at an assisted living facility (ALF) with income of ~19-20k/yr. Likely will need to give her 4k+ per month until death. I'm estimating her monthly costs to be 6k per month.
She will start in a skilled nursing facility? Under what conditions would she be ready to move to an assisted living facility? If her conditions are chronic and progressive, it would seem that she would need skilled nursing indefinitely, no?

Have you already costed out the particular assisted living facility and discussed your mom's situation with them?
Do they have a memory care wing, where she could go once things progress?
1. How do I make that 300k inaccessible to her so she doesn't have a manic episode and really put her and I in more of a financial predicament? Ideally, I would like the sale of stock to need joint approval, where I can't access it without her and she can't access it without me. Is this possible?
You really need legal advice for that. I'm not sure how it could be inaccessible, yet accessible with your consent.
2. Am I able to fund entire cost of ALF from my account (5-6k per month), then write it off as medical expense deduction (everything > 7.5% of AGI; my AGI is ~550k/yr). Try to Maximize tax benefit. Then just keep her SS and Dividends in a shared account which would come to me upon death.
You may be able to write some of it off as a medical expense deduction. Consult with your tax expert.
See: https://turbotax.intuit.com/tax-tips/fa ... /L34jePeT9
3. Any other tax benefits or things to think about? Smart way to handle this scenario?

I'm 37 yo so the benefit of not touching the 300k is that she gets to keep the dividends that hopefully increase with time, but also I'll be able to recoup some of the money I spend when she expires. Hopefully will be a wash with time.
So the basic point of this funding plan (where the funding will "be a wash") is just to give you some tax benefits, rather than using mom's assets? Maybe. At 61, your mom is rather young and could be around for a long time.

I would run the whole plan by a good estate attorney and perhaps your accountant. I'm not sure this makes more sense than spending down her assets and getting her on Medicaid. But a good estate attorney might know.
I love a good nap. Sometimes it’s the only thing getting me out of bed in the morning.
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BL
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Re: Moms retirement

Post by BL »

I don't see any magic in looking for dividends only from this fund. You could just as well take dividends + $X (instead of $8k dividends + your $4,000 contribution). This sounds like a single company, so she may be at significant risk of something going wrong here. Actually, if it were cashed in, she might have 25 years worth of 12,000 income with no risk except inflation. So, mostly fixed income, with possibly up to 30% in a total stock market or possibly S&P 500, could be a good solution. (I guess we don't know if it could even be cashed in wholly or partially. That would definitely be worth checking.)

Have you considered the likelihood of greatly increased costs of nursing homes and/ or memory care in the future or perhaps the possibility of Medicaid should she need long-term nursing home care? It sounds like you may be able to select a nursing home that will accept Medicaid for the patient if X years have been paid by patient.

It is good to arrange things including financial. You may have to do the paperwork with the brokerage instead of relying on POA giving you authority.
dandinsac
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Re: Moms retirement

Post by dandinsac »

You could considerusing the $300,000 to buy an SPIA that should pay quite a bit more than $8,000 per year. That way it’s privided a little bit over time, making it harder to spend or give away.
Topic Author
Svtwhitel24
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Re: Moms retirement

Post by Svtwhitel24 »

More history:
Mom has had long-term history of bipolar and has made some poor financial/personal decision, but prior to spinal infection that started ~3 months ago, she was fully functional and independent. Its hard to say if the spinal deformity caused by infection has caused permanent inability to walk, she is still obtaining IV antibiotics for osteomyelitis until 2nd week of December, and the current hospital is doing a poor job with consistent Physical therapy. So the plan is to get to skilled nursing facility in hope that consistent PT will get her walking again. Currently we don't know where she will plateau with functionality. The early dementia is hard to determine if its truly present vs present w/ hospital exacerbation vs pharmaceutically induced. Walking potential and dementia is a bit gray at the moment.

Coarse of action is the following:
1. Short-term rehab (skilled nurse facility) --> if no improvement --> long-term care - Will spend down her assets to obtain Medicaid. This is the clear option.
2. Short-term rehab (skilled nurse facility) --> improves physically and/or mentally --> assisted living facility or memory care - This is where I'm trying to build a plan. Plan is to get her here Friday, then assess if we can work together to get finances in order. If not, I'll have to work on Guardianship.
Wiggums wrote: Wed Nov 24, 2021 6:03 pm You can ask for Guardianship over property If Mom is not capable of making financial decisions on her own. My Grandfather always follow the advice of his attorney. He was a competent man. When the doctor told him that he was dying, Grandpa starting writing out checks without think out the implications for his wife with dementia or the medical bills for himself.

There must be other ways to accomplish what you’re trying to do.

I’m not sure why you wouldn’t pay moms bills out of her $300,000
Please see above coarse of action for clarification.
02nz wrote: Wed Nov 24, 2021 6:07 pm Did I read that correctly that essentially her entire net worth is in one company's stock? That's incredibly risky - orders of magnitude riskier than a total stock market fund (and no one here would recommend that a 61-year-old be 100% invested in the stock market). That needs to be fixed right away. Something like a 50/50 (stock/bond) allocation would be reasonable, with the stock portion invested in a total stock market fund.
I agree with that plan at her age, however, if plan #2 above takes place I would theoretically work her 300k stock into my asset allocation and balance from there. Essentially I would be paying 4k+ per month until death, which could be a long time, with the tradeoff of 300k in PUBLIX stock, that has historically done very well.
BarbBrooklyn wrote: Wed Nov 24, 2021 6:49 pm Have you applied for SSDI on her behalf?

Have you consulted your or her Area Agency on Aging for advice about her needs (you can ask for a "needs assessment", for case management and for advice regarding resources (besides her money) to pay for care.
I believe she is on SSDI but have to look into that. I will look into that agency for advice. I guess what I need to compare is:
#1. spending down her 300k (about 5-6 years) then rolling into medicaid which is unlikely to pay all her expenses, then I pay everything at a loss from there out VERSUS
#2. Hold her 300k in stock with hope of increased value and dividends with time. I would spend 480K (4k/mo x 10 years) over the next 10 years, if her stock doubles in 10 years, which is reasonable, it would be worth 600k. If she lives 20 years, I would spend 960k over 20 years, if stock doubles again it would be at 1.2 mil. My thought is even if it doesn't track that progress, I have time to ride it out being 37 yo. I'm unsure if this Stock works like a taxable account with a step up in basis upon death which would make it worth more than if I invested this gradually over the same period of time. I guess I'm trying to evaluate if it's worth trying to make this model work rather than relying on government.
3. Any other tax benefits or things to think about? Smart way to handle this scenario?

I'm 37 yo so the benefit of not touching the 300k is that she gets to keep the dividends that hopefully increase with time, but also I'll be able to recoup some of the money I spend when she expires. Hopefully will be a wash with time.
So the basic point of this funding plan (where the funding will "be a wash") is just to give you some tax benefits, rather than using mom's assets? Maybe. At 61, your mom is rather young and could be around for a long time.

The wash would be that the 300k would be passed to me upon death, which would likely appreciate with time, plus the tax advantages, ultimately leading to a wash as stated above. Maybe I'm missing something.
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Watty
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Re: Moms retirement

Post by Watty »

trueblueky wrote: Wed Nov 24, 2021 6:59 pm For responders' info:
Publix stock can only be sold to the company. It is not publicly traded. If the stock is in their retirement plan, there are restrictions on selling it. The company sets its value quarterly.
I am not familiar with it but I would be amazed if she could not easily sell it once she if 59.5 since it is in a retirement plan and she is no longer working for the company.

You should really look into that ASAP since it might make sense to sell some of it before the end of the year to get it on her 2021 taxes.
iamblessed
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Re: Moms retirement

Post by iamblessed »

I would spend all her money first. Then she might get aid and you can help her to.
Topic Author
Svtwhitel24
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Re: Moms retirement

Post by Svtwhitel24 »

I just found out there are no medicaid approved assisted living facilities in my area. So spending down her 300k invesment, then rolling into medicaid approved facility does not seem to be an option.

My estimates: Her 300k will only last 5-6 years, we will also loose her dividend income in the process, then will only have 1100/mo in SS to help toward total costs.

Doesn't anyone see the benefit of leaving the 300k alone, letting it grow, and capturing it when she passes (Ideally it would double every 10 years) as reimbursement for me giving 4k monthly stipend to help maintain quality of life? Am I crazy or missing something?
fourniks
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Re: Moms retirement

Post by fourniks »

Svtwhitel24 wrote: Fri Nov 26, 2021 7:32 am I just found out there are no medicaid approved assisted living facilities in my area. So spending down her 300k invesment, then rolling into medicaid approved facility does not seem to be an option.

My estimates: Her 300k will only last 5-6 years, we will also loose her dividend income in the process, then will only have 1100/mo in SS to help toward total costs.

Doesn't anyone see the benefit of leaving the 300k alone, letting it grow, and capturing it when she passes (Ideally it would double every 10 years) as reimbursement for me giving 4k monthly stipend to help maintain quality of life? Am I crazy or missing something?
That's unfortunate that there are no Medicaid facilities near you. You may want to expand your geographic search area, if possible. I'm guessing you are in a more rural area? Large town in the midwest here, and my mom's assets were just south of $300k. They lasted less than 4 years, but the skilled nursing facility transitioned her to a Medicaid bed after she ran out of money. Before that, we had her assets in a trust, and we claimed her as a dependent and were able to deduct her medical expenses (and get the tax benefits).

As far as investments were concerned, I took the low-risk route and converted everything to a money market.
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JoeRetire
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Re: Moms retirement

Post by JoeRetire »

Svtwhitel24 wrote: Fri Nov 26, 2021 7:32 amI just found out there are no medicaid approved assisted living facilities in my area. So spending down her 300k invesment, then rolling into medicaid approved facility does not seem to be an option.
That's unfortunate. In your situation, I'd be looking to see if I could do something about "in my area" to have more options for assisted living facilities. Perhaps move. Perhaps widen the search area. Perhaps something else.

And if not TennCare, perhaps your area provides other services for low-income seniors? I'd look into that as well.
Doesn't anyone see the benefit of leaving the 300k alone, letting it grow, and capturing it when she passes (Ideally it would double every 10 years) as reimbursement for me giving 4k monthly stipend to help maintain quality of life? Am I crazy or missing something?
This $4k/month you are chipping in - if you weren't using it for her expenses, wouldn't it grow? Wouldn't it likewise ideally "double every 10 years"?

Other than the tax gambit you are shooting for, how much does it matter if the $4k came from her assets or your assets? I assume you are an only child, so no siblings to worry about when it comes to funding mom's needs and collecting an inheritance?

Consult with a knowledgeable tax and estate expert.
I love a good nap. Sometimes it’s the only thing getting me out of bed in the morning.
Topic Author
Svtwhitel24
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Re: Moms retirement

Post by Svtwhitel24 »

That's unfortunate. In your situation, I'd be looking to see if I could do something about "in my area" to have more options for assisted living facilities. Perhaps move. Perhaps widen the search area. Perhaps something else.

And if not TennCare, perhaps your area provides other services for low-income seniors? I'd look into that as well..
I make too much in my current location to consider moving.
This $4k/month you are chipping in - if you weren't using it for her expenses, wouldn't it grow? Wouldn't it likewise ideally "double every 10 years"?

Other than the tax gambit you are shooting for, how much does it matter if the $4k came from her assets or your assets?

Consult with a knowledgeable tax and estate expert.
Ill use 10 year returns as example for this comment:

1. Yes but 300k w/ 8% annual return would be 583,835 after 10 years, plus would likely have step-up in basis upon death. So, stipend to mom of 4k/mo x 10 years would be 480k. 583835 - 48000 = +103,835
2. Putting 4k month in taxable account x first 5 years (while were spending down her 300k in investment), would be taxable because I'm currently maxed on 401k/PF/backdoor Roth/CBP, would equate to about $357,865 with no step-up from there, not as tax efficient.
Everything after 5 years would be on me, I would also have to makeup her dividend income, so my contribution after 5 years would likely be 5k month, which would be 300k over the latter 5 years. Remember, my mom is 61 yo, she will likely have residual mental issues and difficulty walking/wheel chair bound but other than that she's fine. So, I'm planning a likely 10- 20 years of expenses. So, 357,865 - 300,000 = +57,865

The problem is after 10 years, option 2 decreases in value no matter what. Whereas option 1 has higher potential to increase or stay the same.
trueblueky
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Re: Moms retirement

Post by trueblueky »

Svtwhitel24 wrote: Fri Nov 26, 2021 8:37 am
That's unfortunate. In your situation, I'd be looking to see if I could do something about "in my area" to have more options for assisted living facilities. Perhaps move. Perhaps widen the search area. Perhaps something else.

And if not TennCare, perhaps your area provides other services for low-income seniors? I'd look into that as well..
I make too much in my current location to consider moving.
This $4k/month you are chipping in - if you weren't using it for her expenses, wouldn't it grow? Wouldn't it likewise ideally "double every 10 years"?

Other than the tax gambit you are shooting for, how much does it matter if the $4k came from her assets or your assets?

Consult with a knowledgeable tax and estate expert.
Ill use 10 year returns as example for this comment:

1. Yes but 300k w/ 8% annual return would be 583,835 after 10 years, plus would likely have step-up in basis upon death. So, stipend to mom of 4k/mo x 10 years would be 480k. 583835 - 48000 = +103,835
2. Putting 4k month in taxable account x first 5 years (while were spending down her 300k in investment), would be taxable because I'm currently maxed on 401k/PF/backdoor Roth/CBP, would equate to about $357,865 with no step-up from there, not as tax efficient.
Everything after 5 years would be on me, I would also have to makeup her dividend income, so my contribution after 5 years would likely be 5k month, which would be 300k over the latter 5 years. Remember, my mom is 61 yo, she will likely have residual mental issues and difficulty walking/wheel chair bound but other than that she's fine. So, I'm planning a likely 10- 20 years of expenses. So, 357,865 - 300,000 = +57,865

The problem is after 10 years, option 2 decreases in value no matter what. Whereas option 1 has higher potential to increase or stay the same.
Check with Publix on whether the stock is in a taxable account or a retirement account. If in a retirement account, it might not get step up.
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bampf
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Re: Moms retirement

Post by bampf »

Svtwhitel24 wrote: Fri Nov 26, 2021 7:32 am I just found out there are no medicaid approved assisted living facilities in my area. So spending down her 300k invesment, then rolling into medicaid approved facility does not seem to be an option.

My estimates: Her 300k will only last 5-6 years, we will also loose her dividend income in the process, then will only have 1100/mo in SS to help toward total costs.

Doesn't anyone see the benefit of leaving the 300k alone, letting it grow, and capturing it when she passes (Ideally it would double every 10 years) as reimbursement for me giving 4k monthly stipend to help maintain quality of life? Am I crazy or missing something?
You are trading $4k a month or $48K a year of real/certain money for maybe $30K a year of possible money (10% a year return). You are trading a certainty for a possible. You are also trading a certainty of your money for a possible of her money. Take the $48K a year of your money and invest it yourself. Use her money to sustain her, that is what it is there for. In 6 years that $48K you invested will definitely be $288K of your contributed money (setting aside any gains or losses in the market). It is yours regardless of her situation. Odds are reasonable that the 300K will last longer than 6 years and yet if it doesn't you are no worse off. In general I wouldn't spend my money to preserve someone elses money with the expectation that their money would become mine.
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HomeStretch
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Re: Moms retirement

Post by HomeStretch »

With your mom being age 61, in poor physical/cognitive health (which may be temporary) and $300k in assets, the probability is that her assets/income aren’t going to be enough to support her/her care for the rest of her life. She will likely need future financial and other support from family and public assistance programs such as Medicaid or SS disability. As someone going through this with parents/in laws, there are no circumstances in my state where it would make sense financially to spend my assets for their care before spending down their assets. Means-tested assistance (Medicaid and other public programs) is not available until their assets are spent down.

If I were in your position, I would:
1. focus on getting your mom’s immediate health/cognitive conditions resolved as best as possible before making any permanent decisions.
2. immediately de-risk her portfolio by selling the single stock and reinvesting the proceeds with no more than 20% equity as she may need to spend the proceeds within 5-6 years.
3. If moving her in with you is not an option, look into an Assisted Living (AL) facility where you can move her temporarily so she is supported while you make more permanent decisions regarding her longer term living facility and care.

In my area, there are no AL/Memory Care facilities that accept Medicaid when/if private pay means are exhausted. However, in my state there are Medicaid programs for in-home or in-facility care under certain circumstances that will cover the medical (not the room & board) portion of care for residents with low income/low assets. So for an AL facility that charges $7k/mo ($5k for room & board and $2k for care), the $2k would be eligible for Medicaid reimbursement if the resident qualifies financially.

There are better Skilled Nursing Facilities (SNF) that will agree to period of private pay then will accept Medicaid. To be accepted into a SNF a patient needs to qualify for entry via dementia, needing assistance with daily living activities, having a medical condition that requires nursing level care, etc.

Best of luck with a difficult situation.
Last edited by HomeStretch on Fri Nov 26, 2021 10:41 am, edited 1 time in total.
exodusNH
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Re: Moms retirement

Post by exodusNH »

Svtwhitel24 wrote: Fri Nov 26, 2021 7:32 am Doesn't anyone see the benefit of leaving the 300k alone, letting it grow, and capturing it when she passes (Ideally it would double every 10 years) as reimbursement for me giving 4k monthly stipend to help maintain quality of life? Am I crazy or missing something?
No. Anything you invest in your own taxable account will have roughly the same returns.

Her $300k is in a single company's non-public stock, that can only be sold to that company under terms it dictates. That is extremely risky -- more so than holding a single public stock -- even if it has "historically done well." General Electric, General Motors, Chrysler, Yahoo! all did well historically, until they didn't.

As someone else pointed out, if you were to put $50k/yr even into a savings account, over 6 years, you'd have $300k, guaranteed.

At the very least, if this is in some sort of IRS-recognized, tax-deferred retirement account, you should see if she's able to cash it all in at once and then roll it into an IRA, where she can invest it in a diversified portfolio with an appropriate asset allocation. That will make it easier to pull money out as she needs it as well as greatly de-risk her life savings
ncbill
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Re: Moms retirement

Post by ncbill »

trueblueky wrote: Wed Nov 24, 2021 6:59 pm For responders' info:
Publix stock can only be sold to the company. It is not publicly traded. If the stock is in their retirement plan, there are restrictions on selling it. The company sets its value quarterly.
OP's mom should call and ask if those restrictions are waived for the disabled...didn't the OP say she was receiving SSDI?

As other posters note, it makes the most sense to spend down mom's assets before the OP starts subsidizing her.
Agent 99
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Re: Moms retirement

Post by Agent 99 »

You really need to get on board with a good eldercare attorney not an estate or other type. Don’t do anything until you do. From a medicaid and therefore financial perspective she may be better off in FL but it is quite understandable that you want her near you. Get thee to an eldercare attorney yesterday!
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JoeRetire
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Re: Moms retirement

Post by JoeRetire »

Svtwhitel24 wrote: Fri Nov 26, 2021 8:37 amThe problem is after 10 years, option 2 decreases in value no matter what. Whereas option 1 has higher potential to increase or stay the same.
You seem to place a lot of value and trust in the $300k your mom has (all in a single stock) - seemingly more than your diversified portfolio. Not something I would do. It's clear you need to be prepared to spend some money on your mom's care one way or the other. I prefer spending mom's money now and seeing what happens when it runs out.

I still suggest spending a few hours with tax/estate/eldercare professionals. But you seem confident that you have it figured out, so maybe you don't need additional help.

Good luck.
I love a good nap. Sometimes it’s the only thing getting me out of bed in the morning.
twh
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Re: Moms retirement

Post by twh »

Svtwhitel24 wrote: Fri Nov 26, 2021 8:37 am
That's unfortunate. In your situation, I'd be looking to see if I could do something about "in my area" to have more options for assisted living facilities. Perhaps move. Perhaps widen the search area. Perhaps something else.

And if not TennCare, perhaps your area provides other services for low-income seniors? I'd look into that as well..
I make too much in my current location to consider moving.
This $4k/month you are chipping in - if you weren't using it for her expenses, wouldn't it grow? Wouldn't it likewise ideally "double every 10 years"?

Other than the tax gambit you are shooting for, how much does it matter if the $4k came from her assets or your assets?

Consult with a knowledgeable tax and estate expert.
Ill use 10 year returns as example for this comment:

1. Yes but 300k w/ 8% annual return would be 583,835 after 10 years, plus would likely have step-up in basis upon death. So, stipend to mom of 4k/mo x 10 years would be 480k. 583835 - 48000 = +103,835
2. Putting 4k month in taxable account x first 5 years (while were spending down her 300k in investment), would be taxable because I'm currently maxed on 401k/PF/backdoor Roth/CBP, would equate to about $357,865 with no step-up from there, not as tax efficient.
Everything after 5 years would be on me, I would also have to makeup her dividend income, so my contribution after 5 years would likely be 5k month, which would be 300k over the latter 5 years. Remember, my mom is 61 yo, she will likely have residual mental issues and difficulty walking/wheel chair bound but other than that she's fine. So, I'm planning a likely 10- 20 years of expenses. So, 357,865 - 300,000 = +57,865

The problem is after 10 years, option 2 decreases in value no matter what. Whereas option 1 has higher potential to increase or stay the same.
I am really sorry for your situation. You mother has a host of issues and is going to live for decades. It seems clear she will end up in assisted living or needing 24x7 care. More than likely, she will need assisted living memory care. The costs are staggering. Depending on the location and facility type, this may easily be over $10,000/month. You need to look into the future and see where she would start assisted living and where she would go if and when she needs memory care and then where she will go when she runs out of money. Many of the Medicaid funded places have very long waiting lists, so take this into account.
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Re: Moms retirement

Post by BarbBrooklyn »

Svtwhitel24 wrote: Fri Nov 26, 2021 7:32 am I just found out there are no medicaid approved assisted living facilities in my area. So spending down her 300k invesment, then rolling into medicaid approved facility does not seem to be an option.

My estimates: Her 300k will only last 5-6 years, we will also loose her dividend income in the process, then will only have 1100/mo in SS to help toward total costs.

Doesn't anyone see the benefit of leaving the 300k alone, letting it grow, and capturing it when she passes (Ideally it would double every 10 years) as reimbursement for me giving 4k monthly stipend to help maintain quality of life? Am I crazy or missing something?
Some state Medicaid programs pay for Assisted Living through waivers.

Some state Medicaid programs will not pay for AL no matter what.

It is worthwhile to consult with a certified eldercare attorney who knows the ropes in a specific state before making an ill-advised plan.

Also, www.agingcare.com is a good site for discussing these issues.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
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Svtwhitel24
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Re: Moms retirement

Post by Svtwhitel24 »

JoeRetire wrote: Fri Nov 26, 2021 12:53 pm
Svtwhitel24 wrote: Fri Nov 26, 2021 8:37 amThe problem is after 10 years, option 2 decreases in value no matter what. Whereas option 1 has higher potential to increase or stay the same.
You seem to place a lot of value and trust in the $300k your mom has (all in a single stock) - seemingly more than your diversified portfolio. Not something I would do. It's clear you need to be prepared to spend some money on your mom's care one way or the other. I prefer spending mom's money now and seeing what happens when it runs out.

I still suggest spending a few hours with tax/estate/eldercare professionals. But you seem confident that you have it figured out, so maybe you don't need additional help.

Good luck.
I think you missed the part where I would work this single stock into my diversified portfolio, and balance accordingly. I don't have it all figured out, I'm just trying to make sure my idea is correctly conveyed and if understood, telling me exactly why its a bad idea, which I have received that feedback and is helping form my decision making. Currently this stock would make up 30% of my portfolio which is not ideal, would prefer it to be 10%, but at the rate I'm contributing to accounts (100K+ per year), it will dilute with time. Also, as you probably noticed, I am a bit biased with Publix stock due to my entire family having worked for them and believing in the companies values and future (Publix has zero debt and growing). It would be an emotional asset in my portfolio, no doubt.

I just put a call out to elder law attorney to help navigate.

If we decide to spend it down, I will de-risk it by putting it in IRA with AA of 20% stock 80% bond.

Being in the medical field I can't morally put her in a crappy medicaid-approved assisted living facility after her funds run out, which is my experience with medicaid in general.

I completely get everyones push to de-risk her portfolio, spend her funds down, then get assistance and bootstrap from there. Though its probably the right thing to do its very hard for me to run that route knowing its not sustainable, my internal scale is for some reason leaning toward what I'm arguing and am trying to renew my mind to everyones wise advise.

I realize as stated above, that costs for her care could significantly go up, if that happens I could always start pulling from her investments.

I recognize 2 things on why I'm pushing back against the advise: 1. Don't want mom in Medicaid facilities, I'm in the medical field and it feels wrong (maybe there is alternative or subsidized option as stated above, for the facility I want her to be in) and 2. I believe in Publix stock (which goes against my personal investment strategy, 3-fund portfolio)

Good thing is I don't have to make immediate decisions and will have many nights to sleep on it and learn about all routes. I really appreciate all of your time and feedback, really helps me see different perspectives. Thank you all :)
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Re: Moms retirement

Post by make_a_better_world »

Svtwhitel24 wrote: Wed Nov 24, 2021 5:42 pm Questions:
1. How do I make that 300k inaccessible to her so she doesn't have a manic episode and really put her and I in more of a financial predicament? Ideally, I would like the sale of stock to need joint approval, where I can't access it without her and she can't access it without me. Is this possible?
After you talk to the elder attorney, I'm really interested if you find a solution to this. For every joint account I am aware of, both parties have full access independently.

I can think of ways one party can restrict the other if she is aware of her manic episodes and consents to setting things up this way in advance as a safeguard when she is of sound mind. For example, you could obtain legal POA and/or be added as an authorized agent to her account and then put a 2FA step for sales/purchases/transfers that goes to your cell phone or authenticator app. Or a trust could be set up that you manage for her benefit. But I cannot think of a practical way both parties would need to simultaneously consent for an online transaction. Even from an IT standpoint this would be a technical nightmare for the custodian.

My friend's very elderly mom sent $10,000 to one of those email scams to another country. He moved her in with him and took over her finances. That may be the wisest/simplest way if her cognition is significantly bad/unstable as long as she is in agreement when she's at her best.
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Re: Moms retirement

Post by BarbBrooklyn »

OP, in my experiece, there are facilities that accept a variety of forms of payment.

The nice NH that my mom was in for 4 1/2 years accepted private pay, LTC insurance and Medicaid after 2 years of private pay or LTCi. We sought out a facility of that flavor because mom had a limited pile of assets and we had no idea how long she'd live.

Unless you live in a state where there is only a binary choice between Only Medicaid and Only Private Pay, I think you are missing some of the nuances of the decision making process.
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bampf
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Re: Moms retirement

Post by bampf »

Svtwhitel24 wrote: Fri Nov 26, 2021 2:23 pm
I recognize 2 things on why I'm pushing back against the advise: 1. Don't want mom in Medicaid facilities, I'm in the medical field and it feels wrong (maybe there is alternative or subsidized option as stated above, for the facility I want her to be in) and 2. I believe in Publix stock (which goes against my personal investment strategy, 3-fund portfolio)
It always baffles me when someone comes on asking for advice and then flat out rejects it for reasons they admit are in conflict with not only the opinion of literally everyone that has commented but also in conflict with what this board is about.

OP, JoeRetire called it right. You have your mind made up. No one has said your plan is a good one. Not even you, really.

Best of luck. I think you may need it.
Nescio
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Svtwhitel24
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Re: Moms retirement

Post by Svtwhitel24 »


It always baffles me when someone comes on asking for advice and then flat out rejects it for reasons they admit are in conflict with not only the opinion of literally everyone that has commented but also in conflict with what this board is about.

OP, JoeRetire called it right. You have your mind made up. No one has said your plan is a good one. Not even you, really.

Best of luck. I think you may need it.
Being honest with my struggle in this situation is being humanistic and vulnerable. You come on here making unjustified comments about my final decision, it’s just incorrect, and unnecessary to say.

Please don’t leave comments if it’s not productive. I hope you don’t have kids that come to you for wisdom/advice, then they explain why they are having struggles in unknown territory, then you just crap on them.
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Svtwhitel24
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Re: Moms retirement

Post by Svtwhitel24 »

BarbBrooklyn wrote: Fri Nov 26, 2021 7:31 pm OP, in my experiece, there are facilities that accept a variety of forms of payment.

The nice NH that my mom was in for 4 1/2 years accepted private pay, LTC insurance and Medicaid after 2 years of private pay or LTCi. We sought out a facility of that flavor because mom had a limited pile of assets and we had no idea how long she'd live.

Unless you live in a state where there is only a binary choice between Only Medicaid and Only Private Pay, I think you are missing some of the nuances of the decision making process.
I think that is where my head has been, only Medicaid vs only private pay. My hope is that Medicaid provides some assistance for the facilities in my area, either way assistance is going to be necessary on my part, just may be delayed. My hope is with advise of elder law attorney and area agency for aging and disability office, it’s a clear answer. Thanks for feedback.
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bampf
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Re: Moms retirement

Post by bampf »

Svtwhitel24 wrote: Sat Nov 27, 2021 12:44 am

It always baffles me when someone comes on asking for advice and then flat out rejects it for reasons they admit are in conflict with not only the opinion of literally everyone that has commented but also in conflict with what this board is about.

OP, JoeRetire called it right. You have your mind made up. No one has said your plan is a good one. Not even you, really.

Best of luck. I think you may need it.
Being honest with my struggle in this situation is being humanistic and vulnerable. You come on here making unjustified comments about my final decision, it’s just incorrect, and unnecessary to say.

Please don’t leave comments if it’s not productive. I hope you don’t have kids that come to you for wisdom/advice, then they explain why they are having struggles in unknown territory, then you just crap on them.
It is possible that my comments are being misconstrued. You asked for advice. Advice was freely given. You state you are struggling with that advice for reasons that are the antithesis of what this community recommends. You yourself have said it is contrary to your investment plan. When you make an emotional decision about your financial future (emotional feelings towards publix) and reject or deflect or justify your decisions with a "yes but" there isn't much this community can do.

Your investment question is predicated on feelings around one company for stock you don't even own. I think that is a mistake, but, frankly I am some random internet stranger. However, many smart people have said:

1. The money in your mothers account is not yours.
2. Don't use your money with the expectation that you will inherit a better tax situation. Personally, I would never do that. Certainly not with someone that is 61.
3. Don't invest a lot of your portfolio in one stock. Publix may be great. It may be Enron. You just don't know.

This is a hard time for you. I think you are trying to walk yourself into a complex plan that really doesn't buy you that much. More importantly, apparently you make $400K or so a year and as such, this is a negligible part of your real or potential net worth.

I do think my comments are necessary. This community is widely read and I have learned a ton from people way smarter than I am commenting on things that I haven't posted. We all benefit. I do think it is productive to realize when you are making choices that are the opposite of what the best advice is. I am sorry you think I crapped on you. That wasn't my intent and if you read my words, that isn't even what I said. I said I think you have made up your mind. I wish you the best of luck. I think that if you go the way you intend to go (or at least I believe you are intending to go) you are going to need luck as you can't know if having 30% of your portfolio tied up in one stock is wise.

I truly wish you the best in a rough and tough time.
Nescio
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Re: Moms retirement

Post by BarbBrooklyn »

OP, I just PM'ed you a link to a site which explains some of the ins and outs of Tennessee Medicaid--TennCare.

If mom is going into a NH in Tenn (for rehab? paid for by Medicare?) you should, in addition to talking an eldercare attorney, take advantage of the Social work resources at the NH (they vary widely in helpfulness and competence) in determining what level of care mom needs next.

If mom continues to need skilled nursing care, the financial picture will look very different, as you've noted.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
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JoeRetire
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Re: Moms retirement

Post by JoeRetire »

bampf wrote: Fri Nov 26, 2021 8:20 pm It always baffles me when someone comes on asking for advice and then flat out rejects it for reasons they admit are in conflict with not only the opinion of literally everyone that has commented but also in conflict with what this board is about.

OP, JoeRetire called it right. You have your mind made up. No one has said your plan is a good one. Not even you, really.
To be fair, it's hard to solicit truly relevant advice in an internet forum.

The OPs can't possibly express all the nuances of the decision they are trying to make from their point of view. Almost without exception, they write the factors they think are important and leave out the factors that they don't think are important. Then, when an answer is provided, they realize that they haven't provided an important piece of data.

And of course many folks aren't really looking for answer, but rather are looking for support/approval for the path they already want to take. (Note: I'm NOT saying that is necessarily the case here.)

It really doesn't matter what everyone's opinion here is, nor even if it is unanimous. There's only one person's opinion that truly matters - that of the OP. Only the OP of a question bears the responsibility and must make the ultimate decision. Others are just trying to be helpful.
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Eagle33
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Re: Moms retirement

Post by Eagle33 »

+1 with what JoeRetire said above. Personal finance is personal.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.
twh
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Re: Moms retirement

Post by twh »

In defense of the OP...it is not an easy thing to do what he's trying to do. And, just because some random people on the Internet say something doesn't make those comments true. He has to digest the information and do some more thinking and surfing and professional advice taking. And, to make matters a lot worse, his mother's situation does not allow a lot of flexibility. In addition, there is trust in a long time good for the family company and its stock. All the advice and path forward takes time to come to terms with and decide what to do. Sometimes, in hindsight, hanging on to "we just should be able to make this work" takes longer than it should. Now, I'm not saying he's received bad advice in this thread, I'm just saying he's in the middle of a learning/coming-to-terms process.
Lalamimi
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Re: Moms retirement

Post by Lalamimi »

a few more questions for you. Is she a widow? If so, was her husband a veteran? If so, she might be able to get Aid and Attendance through the VA. Also, have you looked at SS to see just what she is eligible for. If married 10 yrs, possibly spousal benefits, or widow. We were told recently assets can be put in an Irrevocable Trust to be eligible for Medicaid, but there is a 3-5 yr "look back" rule. Yes, Assisted living facilities do not take Medicaid.
Good luck to both, its hard. went through this 5 yrs ago but my mom was almost 90.
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Re: Moms retirement

Post by HomeStretch »

Consider obtaining now a 20 or 30-year level-premium term life insurance policy with your mother as beneficiary if you believe you are/will financially support your mom.

If you’re not yet financially independent, consider also whether disability insurance for you is prudent to cover both yourself and your mom (if you are supporting her).

If she has not already done so, it would be prudent for your mom to name a Successor Healthcare Representative as a back-up for you. When/if your mom executes a power-of-attorney for financial matters, she should name both a Primary and Successor attorney-in-fact.
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