Alt-Retirement and the Long-Term Care Dilemma

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Last week in It’s High Time to Roll Out the Alt-Retirement Movement the comment thread took us in an unexpected direction. It often does. It brought us right to a very difficult retirement related topic: the long-term care dilemma.

We can make all the plans we want as to how we’d like to retire or semi-retire. We can plan to continue working, to save money, and to lower expenses. But if you have a major health event, or you simply live long enough, you’ll come to a time when you can’t live on your own. That’s when circumstances go from complicated to really complicated.

Alt-Retirement and the Long-Term Care Dilemma
Alt-Retirement and the Long-Term Care Dilemma

I’d like to say that there’s an easy workaround, but there isn’t. There are alternatives, but none of them are as good as being able to move into a high quality senior living center. But develop workarounds, we must. As lifespans increase, and as retirement resources become increasingly strained, many of us will face the long-term care dilemma at some point in the future.

Why Long-term Care Becomes Necessary

It may be possible to live independently throughout your 70s and 80s. But many people are now living into their 90s. There are two problems with living an extremely long life:

  1. The likelihood of losing your spouse is very high, and
  2. You’re very likely to develop chronic health conditions.

With regard to the death of a spouse, it can be tough enough for two elderly people living together. But it will be infinitely more difficult to live alone in extremely advanced age.

The second problem is no less threatening. The National Council on Aging (NCOA) reports that 80% of people over 65 have at least one chronic illness, and 68% have two or more. Chronic illnesses can include conditions such as heart disease, diabetes, COPD and Alzheimer’s disease. Now the number may be somewhat inflated, because it also includes more common and highly survivable conditions, such as arthritis, hypertension, and high cholesterol – conditions that are not exclusive to seniors.

When you combine the death of a spouse with one or more chronic illnesses, it creates the necessity for some type of senior living arrangement. This doesn’t necessarily mean a nursing home. It could also mean assisted-living, or simply a residence at a complex that’s specifically tailored to the needs of seniors.

As the senior population the US continues to grow much faster than the general population over the next three decades, the demand for senior living arrangements will only grow.

The Long-term Care Dilemma for the Masses: Cost

It’s easy enough to see how the demand for senior living facilities will increase. But perhaps the bigger problem is the cost. The two are related. As the demand for senior living facilities grows, the price increases. It’s cost prohibitive now, but it will only be more so in the future.

It’s hard to get a precise cost on senior living facilities. Part of that is due to the fact that there are different kinds of facilities. There’s also a wide variation in costs from one region or city to another.

But here are some numbers I was able to cobble together from the website Senior Homes.com. Keep in mind that the statistics are from 2015, so they’re likely higher now. But these will serve as a ballpark to emphasize the prohibitive cost factor.

The costs look like this:

Now here’s the really bad news: Back in 1950, it cost just $700 per year for a person to stay in a nursing home. By 1969, the cost had risen to $5,300. Today, it can cost more than $60,000 in the least expensive state, and more than a quarter-million dollars in the most expensive.

It seems destined only get more expensive going forward.

Dealing With the Cost of Long-term Care

When we’re talking about long-term care costs, we’re talking about hundreds of thousands of dollars. If you’re in an assisted living facility at $5,000 per month – $60,000 per year – the total cost will be $600,000 over 10 years. Very few people will be able to pay that kind of money out of current income, especially retirement income.

If you’re concerned about long-term care, there are two basic ways to prepare for the cost. The first is long-term care insurance, and the second is building up a very large savings cushion.

Long-term Care Insurance

AARP’s Understanding Long-Term Care Insurance provides an excellent discussion of the nuances of long-term care insurance. It’s worth a read if you’re considering getting the coverage.

Here’s a summary of the highlights of the article points:

  • Waiting periods. Up to 100 days in care before benefits begin. If the cost of care is $200 per day with a 100 day waiting period, you’ll pay $20,000 out-of-pocket.
  • Pre-existing conditions. Coverage may not begin on a pre-existing condition until after an extended waiting period.
  • Different types of coverage. A policy may only be good for nursing home coverage. If you only need assisted-living or home care, it may not be covered.
  • Policy limits. An LTC policy isn’t open-ended. Limits will include a per day reimbursement, a time limit (commonly three years), or a maximum lifetime benefit.
  • Coverage exclusions. These can include Alzheimer’s, heart disease, and certain types of cancer.
  • Premium increases. Insurers can’t raise premiums on your policy due to age or health condition. But they do increase premiums across the board.
  • Inflation protection. A common option on LTC policies. Will cost extra, but well worth the price.
  • Premium cost. The average annual premium is about $1,500 for a single 55-year-old, and $3,000 for a 60-year-old couple. It rises with age of application.

There’s one BIG disadvantage with LTC policies. Due to spiraling costs and the difficulty in making accurate estimates of future benefit payments, many insurance companies are withdrawing from the market or failing. Should that happen with the issuer of your policy, you’ll end up with no coverage.

Also, if you take a policy at 60, stop making payments at 75, and need care at 80, the coverage won’t apply.

In either case, many thousands in premium payments will be lost.

Saving up to Pay for Long-term Care

Saving money for long-term care is self-insuring. That’s to say that you’ll have all the concerns and limitations that insurance companies have. There’s no way to know what level of care you’ll need – at-home, assisted living, or a nursing home. There’s also no way to adequately estimate what the cost of the services will be in the future. As it is for insurance companies, preparing for long-term care is an actuarial nightmare!

If you’re saving up a large amount of money for retirement anyway, this could also address long-term care. But there are some complications.

  • If interest rates remain low well into the future, you may draw down your retirement savings principal early. When the time comes that you need long-term care, funds may be very limited.
  • If you have a spouse or other dependent(s), who are also relying on your retirement savings, you might drain it for long-term care costs. The spouse or dependent(s) could be left broke.
  • Even a very large retirement portfolio can be drained completely with a long-term stay.
  • While you might have enough to cover the cost of long-term care, you’ll still have other expenses. These will include medical insurance, healthcare costs, and other living expenses.
  • The need to get higher returns on your savings could cause you to take on high risk. But a stock market crash can drain a retirement plan a lot faster than long-term care costs.

If you have several hundred thousand dollars saved for retirement, you’ll be covered if you’re only in a facility for two or three years. The problems will develop if you need care for several years.

Then there’s also the potential that both spouses will need long-term care. That’s a nightmare scenario, so we won’t even go there.

Lining Up Long-term Care Alternatives – A Necessary Alt-Retirement Strategy

Okay, now we come to the main purpose of this article. If you’re in the top 10% of households by income or wealth or both, none of this applies to you. It’s likely that you’ll be able to afford both long-term care insurance and a very large retirement portfolio. This section is dedicated to the 90% of Americans who probably won’t be able to afford either.

As I said at the outset, there are no easy solutions when it comes to long-term care. It’s likely that the vast majority will never need it. But the percentage who will is high enough that we all need to be concerned.

There’s one more variable… With the rapid rise in the elderly population, as well as the relentless escalation of healthcare costs, the cost of long-term care may eventually overwhelm the ability of both insurance companies and individuals to pay. It’s entirely possible that only the very wealthy will be able to afford it a decade from now.

With that in mind, let’s take a stab at alternatives to address the long-term care dilemma.

Take Increasingly Good Care of Your Mind and Body from Now On

This one may be so self-evident that it isn’t worth mentioning. But while not all of the diseases and conditions associated with old age can be prevented, some can be. It’s vitally important that this be approached holistically.

Even if you’ve never done so up to this point, have a complete physical exam, and find out what’s going on inside. Some health conditions can be headed off, and others can be minimized. Proactively participate in any treatment regimen recommended. And even if all is good, start exercising regularly, and adopting a healthy diet.

Also take good care of your mind. Part of the reason why I often recommend planning some sort of post-retirement career is so that we stay active and engaged in life. This is more important than most people generally assume. Our work is part of who we are, and certainly what we do. There are consequences to stopping.

Apart from work, do your best to stay engaged with the world around you. Maintain active personal relationships and social contacts. Continue to educate yourself throughout life. Pick subjects, skills and hobbies, and focus on learning them at different times after you retire. An active mind is a healthy mind.

Expand your spiritual horizons as well. It’s easy to deny faith when we’re young, healthy and self-sufficient. But as we age, all those qualities erode. In my own life, I find that I have a healthier attitude and a better outlook – particularly in the midst of crisis – when I realize that God is always with me. Call it a fantasy, but we all need to know that we’re not alone, no matter what. And we aren’t, but we have to seize that baton.

In its own way, each will contribute to better overall health.

Investigate Local Options

Many communities offer senior housing. It’s usually available to local residents only, but it’s offered at a reduced rate. It’s common for rent to be based on a percentage of retirement income. For example, if you have Social Security income of $2,000 per month, and senior housing requires 25% of income, your rent will be $500 per month.

This isn’t the same as assisted-living, and certainly not nursing home care. But many of these facilities do offer limited senior services. That can include access to meal preparation, housecleaning, transportation and connections with senior-related organizations.

I’ve known a number of people who have moved into senior housing, including extended family members. In general, they seem to be content with the arrangement. It’s never luxury housing, but it keeps you in your home community, and is frequently located close to public services, like shopping, transportation, municipal offices, and houses of worship.

I suspect this will be a growing trend in the future, as more of the elderly are shut out of formal long-term care facilities. But that also means there are often waiting lists to get in. If you even think you might go this route, get on a waiting list now. I’ve heard of waiting lists as long as 10 years, so it’s never too early to start.

Consider Communal Living Arrangements

We see ourselves as rugged individualists, who deserve to have our own space. But the reality is that once you reach a point where you can no longer live independently, you won’t be able to have your own space at all. This is the way it needs to be.

If it’s not likely that you’ll be able to afford formal long-term care, you’ll have no choice but to seek alternatives. This is mostly about lining up communal living arrangements. A lot of people are already familiar with this from earlier in life. There’s a good chance that when you were in your late teens or 20s you had one or more roommates. That’s the basic idea.

There are different ways you could replicate this in old age. It mostly applies to singles, but it could be necessary for couples as well. Many people are forced into assisted living situations simply because they can no longer perform the tasks of independent living, and not because of specific health conditions.

Here are some thoughts in that direction:

  • Bring in a boarder who will provide services like housecleaning, shopping and cooking, in lieu of rent.
  • Move in with family. This can mean moving into their home, or having them move into yours. It usually involves living with your children, but it can also include siblings or close friends. This is similar to what many people did before World War II. More than anything, it’s about shared household responsibilities, as well as having others around in an emergency. It can also lower the cost of housing.
  • Get a roommate. This is similar to what you might have done earlier in life. But it will also offer shared household responsibilities and expenses, as well as having another person around in an emergency.

Stay on Top of Future Developments

Life in the 21st century seems to be on an accelerated course. There are three things that we know for sure:

  1. The elderly population is rising
  2. The cost of long-term care is rising
  3. The economy is far less predictable than it used to be

For those reasons, we need to be attuned to new developments. This is only a prediction, but one that I think is coming by necessity. I expect we’ll see the development of small-scale communal housing for seniors.

Groups of seniors may band together and move into a large house that’s owned by one of them. They may also purchase a house as a group or even move into a rental. The basic idea will be shared expenses and responsibilities. They will also be able to look after each other, creating a kind of geriatric synergy.

That’s just one example of what I think could be coming in just a few years. Actively investigate trends on this front. The solution to your long-term care problem could be out there waiting to be discovered. The Internet makes it so much easier.

Look for local solutions that may already be happening. But also investigate bigger picture trends. You may be the person who brings an innovative concept to your community. In a world where people no longer talk with their neighbors, I’ve learned that the Internet is the place to make things happen. Get into forums and chat rooms on the subject and see what comes up. There may be nothing right now, but as the saying goes, necessity is the mother of invention.

Given the right combination of circumstances – and a sufficient amount of discomfort – people will usually find solutions to their biggest problems.

Final Thoughts on the Long-term Care Dilemma

All right, I confess that I’ve thrown a few darts in this article. But this is a huge problem that defies easy solutions.

What are your thoughts on the long-term care dilemma? Do you have any loose strategies that you can share with others?

( Photo by Pictures by Ann )

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30 Responses to Alt-Retirement and the Long-Term Care Dilemma

  1. My wife and I bought a long term care policy even though we are easily self insured. Got it for the same reason she has a ton of term life on me even though I am retired. It makes her feel better and it is not that expensive in either case. That puts us in the belt plus suspenders crowd. It is good to do what you can to stay healthy mentally and physically but the fact is many diseases are totally unpreventable. My dad exercised, was slim and stayed mentally sharp but he still got Parkinson’s which is a terminal and horrible disease. One of my best older friends, worth tens of millions, was brilliant and ran over 100 marathons yet he has Alzheimer’s and no longer knows my name only three years later. It is smart to plan but remember the Yiddish proverb, man plans, God laughs.

  2. I’ve heard that proverb many times Steve, and it’s sobering. Also, John Lennon was credited with saying “Life is what happens while we make other plans.” You’re absolutely correct, there’s so much we can’t anticipate or plan for. That’s why the best plans are loose, flexible and layered. But I do feel strongly that, given the uncertainties of the future, we need to make alternative plans. For example, if for any reason you’re unable to continue making premium payments on an LTC policy, it will lapse as soon as you stop. Even if you’ve paid into it for 20 years, you’ll get nothing out of it. And of course, the majority of people don’t have a policy at all. This article is dedicated to them.

  3. My parents stopped paying into their long-term care insurance after it got too expensive. They are now 80 and 78 so getting them back in would be even worse now. They said that they would get about 1 year out of what they paid in, but with your article, I realize that the company could go out of business and they get nothing and us children will be stuck with that bill. At least they live on a single story house, but their property is ginormous. I could see my sister in law taking care of them but that’s a lot to ask. All my grandparents pretty much just dropped dead, but my parents look like they could be lingerers. These next few years are going to have some interesting decisions.

  4. Hi Kevin – Yeah, that’s that gray area that you hit if you live long enough. My mom is in independent senior housing, and it’s well over $40,000 a year. But she’s at that point (91) where she’s on the edge of needing to go to assisted living. That’s even more expensive. I have no idea how it’ll turn out, but my sisters and I agreed that we’re not going to push for it, and she doens’t want to go anyway. But the point is, if you live long enough, you’ll most likely face these choices. What’s interesting is that none of my grandparents were ever in a facility, and one did live to 91. But I don’t think it was on their radar screen either. I think my grandparent’s generation were the last of the truly self-reliant class. They’d rather have taken a poison pill than have someone take care of them. We’re a lot softer today.

  5. We got very lucky with my mother. Her original place started at 1900 per month. She is in assisted living. It was 3000 just two years later. We found another place that was 1800 per month and they guarantee the price never to rise. As long as we moved her there before the first of this year. We have it in writing when we signed her in. So we moved her there. She now has a roommate which she didn’t have before but they seem to get along so it’s been good so far.

    She gets 1000 per month from social security and 1000 per month from the veterans association. We sold her house for 80000 and we put that away for anything that crops up.

    There is a benefit that you can get from the veterans association. If you or your spouse served in the military. My father was in WW2 and Korea.

    We realize we got very lucky. It is not usually like this. If it got too pricey then one of us would take her in.

    I realize the longer I live I’ll probably die broke. I just leave it in God’s hands honestly. I save and spend wisely but I kow it will never be enough.

  6. I completely agree with that last paragraph Tim, we can only do what we can, and trust God for the outcome. And believe me, I’m perfectly OK with that! Until 50 years or so ago, no one went into facilities. They lived life on its own terms and accepted what happened (again, my grandparents generation). Somehow it all worked out – not perfectly, but just because things weren’t perfect doesn’t mean they were bad. We can adapt to more than we realize, but we don’t want to go there.

    You’re doing well with your mom, but you’ve had to accept a compromise to get it (the roommate). That’s exactly the point I’m trying to make with this article. Things can work out, but we need to accept compromises, and think in different ways. Most of us won’t have VA benefits, and who knows if they won’t cut them down going forward.

  7. That’s the approach I decided to take Kevin. I can’t worry about everything. I do what I can but it’s in God’s hands.

    We did have to compromise, it was really a no-brainer for us. My sister couldn’t make a decision. She felt guilty moving her. Once you take out the emotion and look at it from a realistic standpoint it was no decision.

    The veteran benefits, I realize not everybody can get that. I just thought I would throw that out there for anybody who could get it. We didn’t know about it. It isn’t publicised. We had to dig a bit. They might cut them but we will deal with it if it happens.

    I’ve made peace with it if I leave this earth with nothing left. It’s ok. I brought nothing in. If I can give the kids anything then, cool but If I can’t they will survive.

  8. You have a healthy attitude Tim. And I love what you said here: “Once you take out the emotion and look at it from a realistic standpoint it was no decision.” That says it all. If my mom had to take a roommate it would be NO DEAL. She goes on and on about surviving the Depression (which really her parents did, since she was just a kid), but she doesn’t get that a lot of years have passed since then, and she’s gotten used to a very different lifestyle.

    If I need to be in a facility, I hope (and believe) that I’ll be more flexible. As long as I have a warm bed to sleep in, a relatively clean environment, and food in my stomach, everything else is pure luxury. Years ago I had a good elderly friend who was separated from his wife. She lived in a nice apartment in a well-to-do community, he lived in a 3rd floor rented room. But he was happier than she was. In fact, she was kind of miserable. Like you said Tim, “Once you take the emotion of it…” Yep, that says it all.

    I love this verse from the Apostle Paul (Philippians 4:11-13):

    “I am not saying this because I am in need, for I have learned to be content whatever the circumstances. I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want. I can do all this through him who gives me strength.”

    We’d all do well to adopt that attitude.

  9. Long-term care is a very emotional issue for most people. Either we feel guilty as kids who have to basically commit your parents into an institution. Or as the parent we let pride get in the way and make bad decisions.
    Either way, emotions cloud our judgments. I see so many people who make terrible decisions because of emotion.
    I was always taught as a kid that when I’m emotional about something to never make a decision that can alter your life. How many times do we see people start dating a week after they separate from their spouse? Move or change cities or jobs after some event that happens in there life before they have dealt with their emotion.
    It almost never works out.

    I love that scripture, Kevin. That should be in a life statement for all of us. One of them, anyway.

    We I look back at all the bad decisions I made in life, yes we all make them. At least 90 percent were based on emotion.

    So I think dealing with our emotions is just as important as the numbers. If we can train ourselves to take emotion out of this then we can look at the numbers logically and make a much better decision. I think if most were honest they got into debt the same way. We see something we love or think we need and we jump in without looking at our situation or whether we can afford it. The choice we make is always better without an emotional element to it.
    It is all part of thinking differently. Which we have talked about several times on here.

  10. I’m in agreement, but as human beings emotions are hard-wired into us. It’s fairly easy for me to put emotion aside when an issue concerns me. But with my kids, for instance, it isn’t so easy. My kids are in their 20s now, but I’ve learned that you never stop being a parent. I constantly push them to do more on their own, and let them suffer the consequences of their own choices. But it’s tough to watch them take a hit, even knowing that’s the only way to mature.

    But back to long-term care, there’s no question emotions get in the way. Too often preferences are given a higher priority than actual needs. You’re mom’s situation of accepting a roommate arrangement is a prime example. Some would insist on a private room, when they could do just as well, or even better in a shared situation. It’s more emotion than anything else. I personally believe shared rooms, even with more than two people, will become the norm in care facilities. It’s the best way to deal with the rising cost issue. But people will resist the change as it takes place.

  11. Hi Kevin. Just now getting around to comment. You post is well done. But, sadly, the whole subject is distressing. But I like that you write the truth and not paint a rosy picture of something that isn’t so rosy. I really like your conversation with Tim and his comment about doing what you can, trying your best to remove emotions from the problem, and leaving the rest in God’s hands. Because this is something we have no control over, i.e., aging or cost of LTC facilities. The best we can do is plan and hope life stays somewhat on track. As I’ve mentioned before, I’ve had experience with this, and it was a very difficult time in my life as well as my sister’s. We wrestled with emotions, guilt, worry, etc. But looking back now after more than ten years, I know we made the right decision to place our uncle (father) in an Alzheimer’s facility, as it was impossible to care for him at home. We were fortunate he had the funds to pay for it, but it used up almost everything he had. It was his money, and we used it for his care. Sadly, I think too many people are trying to beat the system and salvage their parent’s money while having the gov’t pay for everything, which is another subject altogether and one I think would need to be approached with caution.

  12. Unfortunately Bev, when the subject is long-term care, we’re in a classic no-win situation. Heads you lose, tails you lose. Even if you make a bad decision or two during the process, you have to forgive yourself. There just are no easy answers. If there’s money there you do have more options. But even a large nest egg could be drained if nursing home care is required and/or care is needed for several years. Realistically there’s no way to save up for it. And LTC insurance policies have benefit caps, like three years.

    Long-term care makes sense in only three situations:

    1. When the money is there to pay for it on an ongoing basis (subject to the limits above)
    2. When a person is broke and can have it paid by Medicaid
    3. In a true end-of-life situation, to the degree that can ever be known

    I agree that some game the system to preserve assets to pass to their kids. But part of me gets that too. If you consider how much the cost of LTC has increased since 1970, it’s like a system wide conspiracy. So people are using the system to offset the excesses of the system.

    Bizarre, but that’s what the world has come to.

    In another example of system malfunction, Me, my wife and my 21 year old daughter went to the optometrist this week and all three of us got eye exams and new glasses. We paid nearly $1,000 out of pocket, and we have vision insurance coverage! For what it’s worth, we intentionally chose the lowest cost frames.

    I used it as a lesson to explain to my daughter how the world works. Naturally she doesn’t like it, but there’s no alternative. The cost of necessities is rising in a relentless price spiral.

  13. LTC costs is merely another way to milk us out of our money (even with Medicaid paying, that comes out of the funds of Medicare). The top 1% income will have have the necessary funds available and won’t question the costs. What we need to do is question the high cost, like stated we can’t even predict the costs. In those facilities, how is the money spent? I know that there’s a limitation on how many skilled qualified staff is on board per shift ( nurses and doctors) so much of the staff is minimum wage employees who do the cleaning maintenance (like bathing, diaper changes, changing the bedding, serving the food, etc). So the labor cost is minimum to cost but the billing to puts a premium on cost and services. Just like we need to question every line on our bills, we need to fine-tooth detail these costs to facility versus the profit. I was just watching an episode of a new show called The Resident where someone hired by the corporation that runs the hospital held a conference with all staff on the importance of up billing services to get more money. For those of you who never worked retail, this upselling tactic is a way to make customer get more than just a simple purchase because of the higher profit occurs from a higher cost to person. Think of the process to buy a new phone with accessories and a special plan which includes insurance all suggested by your salesperson.
    I am not suggesting that we deny medical services needed but we need to question costs. My father had to spend 30 days in a patient facility because he cracked a bone on his hip, but he was up and moving within days and could have easily gone home with home visitation services but they kept him there to ensure they would get all money paid. WhenI visited him and questioned his care, he told me they served him three meals a day, his room was a shared room but his roommate had been moved out to another facility. I saw only one nurse center with three nurses who had a certain number of patients they see on a eight-hour shift. The other staff wore scrubs but they had no medical certifications ( they were labeled nursing care workers. I watched these individuals the most as they are the ones who don’t always follow the best sanitary procedures. (Think of that person you see wearing scrubs on the street). In this era of mindless sheep thinking, pandemics occur with carelessness, like our current FLU situation.
    I have seen at close view the difference in the senior living facilities in my local area and only those with money get the best, anyone else gets barely served. My son ( as a joke) trys to tell me, that he will put me in one of these facilities and my answer to him was that I would shoot him before I commit suicide. Not that I would need to, but these “senior” centers are death traps, worse than homeless shelters. Perhaps it is my reaction to the ultra-liberal thinking of my state, where the rich only care that the poor don’t get their money. A person who is poor working middle-class income pays for everything full price or goes without. The poor get free healthcare and housing but not top service either. All part of the problem with no transparency in cost.
    You made key points in this area but we need to change how seniors are viewed and cared for especially with our longer lifespans. We have to be the group that causes the change or our lifespans will be shorted by lack of availability of affordable services.

  14. Hi Maria Rose – You’ve hit on something huge with the salary situation. The vast majority of workers at these facilities are very low wage. They’re also worked to death. They form the front line that most deals with the residents, and they’re not qualified to do so. The high paid professional staff is usually minimal, and way over-worked because management doesn’t want to pay to have proper professional staff levels. It makes no sense given the cost of the facilities. That’s why I suggested taking in a boarder who will perform services in lieu of rent. I really think that’s going to become a common arrangement. I watched a show on NPR that was focused on life in 1900. They said the top occupation at that time was domestic worker. Even middle class families typically had a domestic to take care of the home, watch the kids or care for the elderly. We’ll likely cycle back to that. And maybe it’s better to have a dedicated domestic, rather than a staff of low-paid workers who are mostly looking to get off their shift. It’ll certainly be less expensive.

    But as you say, there’s a wide difference in the quality of facilities. The well-off can afford the “TV facilities” with first class care and facilities. Those of the lower economic rungs get put in what are one step higher than detention centers. My wife’s uncle was moved to one after he had a heart attack and needed a place to go to die (literally). They put him in an over-crowded, under-staffed and smelly county facility that looked like a prison without bars.

    I don’t know how much good it will do to scrutinize bills. The healthcare industry has gotten very adept at burying costs. As I’ve found in the past, it can be a part-time job trying to figure all this stuff out. I think the only strategy is to work to be as healthy as possible, and reserve care facilities for the very last moment. This is a bad situation that will only get worse as the number of people needing care rises. As I wrote to Bev, there’s no easy way to deal with this.

  15. I have recently been exploring long term care options, of which there are few at this point, and learned that John Hancock has just pulled out of the long term care marketplace. Here is one of the links: https://www.forbes.com/sites/jamiehopkins/2016/11/10/john-hancock-withdrawing-from-long-term-care-market/#67c997a6426d. USAA offered this through John Hancock, and at this point, they have even stopped offering long term care insurance. It doesn’t look to me like the federal or state governments are trying to even address this problem. I feel like, along with the pensions, the older baby boomer generation will be the last to truly benefit from this on a larger scale. As I was reading, I started coming across articles that some states are now taking family members to court in an effort to force them to pay for their parents, also that if one sibling took care of a parent in the home, that they can now sue the other siblings to force them to pay for some of the care that the one sibling provided. What a world! Senior co-housing communities are now increasing in number across the U.S. Last night my friends were telling me that some annuities and life insurance plans can be turned into ltc policies; however, I’m not familiar with how this works. I’m so glad to see you addressing this, as I don’t see that many articles or blogs written on this important issue!

  16. I want to zero in on this comment you made in particular, “I feel like, along with the pensions, the older baby boomer generation will be the last to truly benefit from this on a larger scale.” I’ve been aware of this trend for some time, and it’s what motivates a lot of my thoughts and writings. I’m afraid that we’re caught in a trap of thinking that what’s common right now will be waiting for us when our time comes, but that’s not what’s likely to happen. I’m aware of John Hancock pulling out. It’s not unusual. Providing LTC is an actuarial nightmare, and insurance companies are now becoming aware they can’t cover it. It’s a big market, sure, but the cost is overwhelming.

    The problem is that society is getting used to the higher levels of care, both healthcare and LTC. It’s become a citizens right, but everyone expects someone else to pay. It’s hardly surprising that we’d get vindictive/punitive outcomes like lawsuits or mandates. But the silver lining that may come about is that as institutional funding dries up, the cost of LTC may come down to reasonable levels. As Maria Rose wrote, the employee cost of LTC is ridiculously low, so where’s all the money going? After all, it’s the hands-on care that makes LTC what it is, not the facilities or the over all system.

    Glad to hear senior co-housing is coming up, and that it even has a name! Can you send me some links on it? It could be the solution to this increasingly unmanageable mess, even if it isn’t perfect.

  17. Co-housing is an interesting and very realistic option. So I do remember several times that I have seen on TV shows where the grandparents live with the families of there children. I personally know a guy last year who build a 600 square foot addition to his home for his wife’s parents. It had a separate entrance. They had there own kitchen and living area along with a bedroom.
    The parents sold there home and paid for the addition at a fraction of the cost of moving to some senior facility.

    I know that where my mother is there are many people who can’t live on there own but are somewhat physically healthy. They need some general care but overall they could still live on there own with some help. There are in-home nursing programs. If they can’t cook there are meals on wheels which we used for a time. They were excellent.

    My point is that there are options. With a little planning and cooperation from both sides, it can work out. I know of a married couple who convinced both sets of parents to pool their money together and they bought a 2-acre estate where they all live. It’s a great set-up. They all maintain their independence but they are together.

    I also have done this. I bought a 3 unit building. Converted the entire 2nd floor to my home. The first floor is where my mother in law lives and it also houses my business. She’s 76. She still loves to cook which is what she does at least 4 nights a week. We all eat together.

    I tried to do this with my mother but my family was resistant to this. I don’t know why but to keep the family peace I gave into my sister on that one.

    My point is again, it can work out but planning a realistic communication is key to this. We are so quick as a society know to just these people into some kind of facility so we don’t have to bother or it’s easier.

    I’m not saying this is for everybody. I realize there are people who need full-time nursing. I get that. There are still alot of cases though where alternatives could have been worked out.

  18. Hi Tim – I’m thinking co-housing is a topic I need to cover. This is another example of how I learn from readers. I never knew this was even a thing, and I’m encouraged to see that it’s already in motion. It’s a return to an old, well-established practice, which is multi-generational housing. The biggest obstacle I see is people learning to think outside the box, which is the usual dilemma. Most long-term solutions are organic, coming from the bottom-up. But we’ve become conditioned as a society to always seek institutional/system solutions. Conversely, I’ve learned that the real answers are almost outside the system and the institutions. I agree, some people do need to be in facilities, certainly those who need round-the-clock care. But that’s not the majority of the elderly. And if you can’t afford an institution, the debate is really academic anyway.

  19. My city being one of the older cities in the country is loaded with multi unit homes.
    This was the desired lifestyle back in the early 1900’s right up to the 40’s. It was done mostly as a cost relief. Families lived on different floors. Had there own space but pooled there resources. The real answers are always outside the system.

    Yes, it is totally happening now Kevin. Not as much as I think it is going to in the future. There really is no reason we need all these senior homes or LTC policies or whatever are the system’s answers are. There always wrong.

  20. I think you’re right Tim. There’s a bit of a self-fulfilling prophecy. Big business sees profit in LTC, institutionalize the concept, and create a perceived need. Years ago, people worked this out without LTC. The extreme cases went to assylums, but from I’ve seen, some of the lower end LTCs are barely one step above – maybe. Multi-generational housing worked for centuries, and I think we will be going back to it. Maybe not by choice, but much more in human history has been motivated by necessity than choice.

  21. Most nursing homes spend down all assets to qualify the resident for Medicaid which is the only total pay insurance. It can take up to 9 months to get someone qualified. Until you qualify you are self pay and they will run you a “credit”. Things like burial plots, life insurances, annuities, homes, bank accounts, etc., are assets that are “attached” for payment of services. Nursing homes look back 5 years. The paperwork states you will give them full disclosure of assets, and the legal right to collect by legal course. They can not touch a home that has a survivorship deed. They can not touch a family trust. But again things must be set up 5 years before needing full time care.
    Senior hi rises, or rent by income, follow the same course of determining your assets, basic to one car, withdrawals from accounts, credit or debit card use, sale of property… Considered income to base rent amount.
    As for renting out a room in your home, there is the city laws to check out. Like having a license to rent, rental property insurance and passing inspection of the home. Considering all situations, it is best to get out of debt and downsize your lifestyle, keeping aware of your health needs. Early prevention can save you tons. I feel medical insurance companies are running this country with the rising costs of medical expenses. Also wanted to say there are plenty of home care providers who work on the side… And family members, friends are important to keep us involved in social ways or if we need a ride. It’s all about our own attitude towards aging. My grandmother was independent until she died.. To get help or need help would of made her feel old!

  22. You’ve covered the gamut Deb, good information to have, especially with Medicaid. I agree, there are non-institutional options, but we have to be open to them. My grandmother had a woman from Poland living with her toward the end of her life. My grandmother needed care, and the woman needed a place to live and some money. It worked out. A lot of people are hysterically opposed to immigration, but it may very well be that an immigrant stranger will be the one who will care for us in our old age. And that’s whether we engage at-home care, an informal live-in arrangement or an LTC facility. Americans don’t want to do that kind of work, even in caring for our own families. I think the closest we get to a solution here is to participate in the open exchange of ideas, and be willing to think outside the box. A big part of the reason why so many problems today seem so big is that we’re looking for grand solutions, that are either unaffordable, or impractical.

  23. Kevin, if you have Medicaid, you can get home healthcare, continually, free. Most health insurance policies will cover Home care for 4 weeks. Then it is $175 a day for skilled care. I found a church member to help with my mother for $20 a few hours a day since she lives with us. I have had family living with us for years, 4 generations, it’s all in how you organize your life. I think it would work with friends too. I at least want to try it. Hubby’s gr-grandmother rented out rooms for $50. a month and meals were $2. a day. So I don’t think it is far fetched to consider that option. History has a way of repeating itself.

  24. I apologize for taking this long to get back to you with the co-housing links! I love Tim and Deb’s comments and ideas, too! I was actually referring to private home communities, of which there are many kinds, but I ran across several that were more geared towards seniors, and thought this was a great idea. http://www.cohousing.org (Cohousing is an intentional community of private homes clustered around shared space; and Cohousing makes it easy to form clubs, organize child and elder care, and carpool). I just started googling senior co-housing in different states, and while I did not find a ton of info, there was some. I think this may be in the beginning stages as many communities are looking for new and innovative options for seniors. I personally liked the idea, as it allows you to keep your independent living, while having a community of people to interact with and assist each other.

  25. Wow, thanks! I’m going to dig into this and maybe do an article on the topic to go with this one. It may not work for every one, but I think we’re coming to a point where alternative arrangements need to be considered.

  26. Good info. I work in long-term-care. Our Skilled units cost $9k per month. One aspect of skilled that people don’t realize is the average age. Most of the residents in skilled are over 88 years old. There is pressure to move people out of skilled and into personal care. The problem with that is that the acuity levels in personal care are increasing. Long-term care insurance is a good option to consider between the ages of 55-65.

  27. Thanks so much for touching on a topic that’s (conveniently perhaps?) neglected in the FIRE community. When I read other blogs, mainly by clueless millennials who want to retire by 30, I always wonder how they will handle a serious illness themselves, or an ailing parent or spouse. I applaud your effort to bring some reality into the discussion. Well done, sir, please keep it up!

  28. Hi Amanda – Thanks, you’ve identified exactly what I’m going for. There are thousands of blogs offering advice to young people on how to retire early, but we’re going for the reality that most people face in life. Planning for early retirement is a good goal to have on a number of fronts. But as a lot of us know, life doesn’t always cooperate with our plans. That’s what really needs to be focused on, not the perfect world scenarios. I guess you can say this is the blog for everyone else.

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