How to prepare early for Nursing Home

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gary1826

New Member
I had long term care in my early career but the cost kept getting more expensive. How I wish I kept it, In the last three years I have been in hospital and nursing home because of breaking an ankle and losing part of the bone.
My neighbor put their assets into their kid's name. They told me this was to protect their assets from being taken from Nursing Homes.
 

People are living longer and as a result there are more elderly who need long-term care. Too many people think its the responsibility of the welfare state to care for these people. I disagree. I think we all need to accept that we may need care in our later years and make some preparation for it. Ideally, older folks should be cared for by their families, but this is not always possible or desirable.
 
i can tell you with my dad there was no way anyone of us could have taken care of him in our home .

usually by the time snf is needed it is well beyond family .

how it typically plays out is a family member gets hurt trying to move 200 lbs of limp flesh if they are moving someone paralyzed from a stroke and they are both in trouble or the person becomes violent with memory issues and someone gets hurt ...

the best way to bust up a family is have one sibling step up to the plate and take in a parent who needs care . odds are the other siblings step back and the battles begin .

usually the person providing the care takes a monetary hit , a career hit , a social hit and maybe even loses a job .

if you have a spouse odds are you can kiss that marriage good bye once the spouse starts on why do we have to do it and sacrifice so much and your brothers and sisters do nothing .


one of the worst things parents can do to their kids is drop their long term care burden on their children .

remember we are talking people who need a snf , not in home care or assisted living .
 

after much thought about self insuring we went with a ny state partnership plan .

we wanted it not so much for the 3 years insurance , even though a snf is 120k-140k a year in our area , we wanted it for the perks after the insurance ran out .

no shifting of assets , full asset protection , pretty much full income protection for the stay at home spouse , a special version of medicaid picks up the bills after the insurance runs out .

i mentioned in another thread , the fact that money magazine did a feature story on us years ago .

they wanted to put their team of pro's against me since i did all my own planning .

i wanted to self insure and they were against it for so many reasons . they were right .

those who say they are self insuring really have no plan . they hope they don't need care and they hope they have the funds .

but once the stay at home spouse goes in to survival mode those funds become a battle ground usually .

the issue with self insuring is that like any insurance :

you need the funds to cover you day 1 . you have to invest that insurance money in a safe and secure fashion . it can not just be thrown in the pool of money generating your income since that assumes it can always go to zero doing so .

to self insure properly means safe low returns on that money .

for just a small percentage of the gains from keeping our money invested normally we can pay for a full blown , inflation adjusted policy that covers 3 years in a snf or 6 years assisted living or in home care .

so we ended up going the policy route .

most of our attorney's work today is the self insurer's . they are scrambling at the last minute trying to preserve assets and to protect the income of their spouse .
 
I've chosen to self insure but I'm hoping that our elected officials will approve an assisted suicide bill in our state so those of us that don't wish to enter a SNF can opt-out of the lengthy and expensive end of life nightmare.

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We've been paying for a Long Term Care policy for the past couple of decades. I'm hoping we go quickly, and all that money is wasted. However, should we wind up needing care in our later years, hopefully this policy will allow for some decent care in a nice facility.
 
Wife and I explored the ltc policies a few months ago. Found out that I was disqualified due to my R/A and the meds I take for it. My wife qualified for the LTC policy which was $200 per month for $4000 per month coverage for 3 years ($144,000 total) with a 3% inflation rider. We also looked into critical care policies as well, for what you pay in premiums the payouts aren't that much. It was $158 per month for an individual policy with a one time payout of $60K should we be diagnosed with one of the illnesses the policy covers (there are about 8 major illnesses covered). We are still thinking of purchasing at least one of these policies, but they aren't cheap. The prices I've listed here are for our current age of 55, the premiums go up the longer one waits to purchase a policy. Having to spend this much money per month both leading up to and into retirement to insure you don't lose your house should make everyone think twice about the lousy healthcare system in the US.
 
we bought a partnership plan , not for the 3 years coverage we had to take but for all the asset and income protection after the insurance is up . otherwise we likely would not have done it just for conventional coverage .
 
mathjak107 said:
we bought a partnership plan , not for the 3 years coverage we had to take but for all the asset and income protection after the insurance is up . otherwise we likely would not have done it just for conventional coverage .
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The partnership plans are even more expensive than regular policies.

I've been thinking of just putting the money we would pay in premiums into a Roth IRA. That may or may not cover us come a long term illness depending on when the illness happens and how long it drags out, but the upside is that money is also available should some non-medical emergency arise and we need the money. We are planning on sitting down with an elder care attorney before the year is out to see what our best options are regarding asset protection, possibly an irrevocable trust.
 
see my post above about self insuring .... if you self insure you need to do it like an insurer would . not leaving the money in the asset generation pool . it has to be isolated , safe and ready for action and that means low returns as well as a hit to income ... that money can not be used to spin an an income off since even a safe withdrawal rate assumes there can be a dollar left
 
Yeah, I can't see concerning myself with how to prepare, financially, for going into some facility that smells like Death's waiting room, where I'll sleep away the rest of my life, drooling on myself in a wheelchair in front of a TV tuned to who knows what channel, not that it'll make a difference. I'll take the alternative, no second thoughts needed.
 
mathjak107 said:
see my post above about self insuring .... if you self insure you need to do it like an insurer would . not leaving the money in the asset generation pool . it has to be isolated , safe and ready for action and that means low returns as well as a hit to income ... that money can not be used to spin an an income off since even a safe withdrawal rate assumes there can be a dollar left
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Not sure I understand this. If I'm saving the money to be used for long term heath expenses, wouldn't that money be gone by the time assetts start being taken? Why should it be isolated? Wouldn't putting that money in an irrevocable trust isolate it?
 
what most people who self insure do IS NOTHING . they basically have a pile of money in a portfolio that generates their income in retirement .

it may be in a 40/60 50/50 or 60/40 portfolio ....

drawing even 4% of it inflation adjusted to live assumes under worst case outcomes that money can dwindle down over time . if it is your insurance money for you or a spouse that insurance money needs to be pulled out of that volatile mix , not spent down as part of your living expense money and it has to be available and kept in low yielding investments .

otherwise you are not really doing anything other then calling your portfolio self insuring .
 
mathjak107 said:
what most people who self insure do IS NOTHING . they basically have a pile of money in a portfolio that generates their income in retirement .

it may be in a 40/60 50/50 or 60/40 portfolio ....

drawing even 4% of it inflation adjusted to live assumes under worst case outcomes that money can dwindle down over time . if it is your insurance money for you or a spouse that insurance money needs to be pulled out of that volatile mix , not spent down as part of your living expense money and it has to be available and kept in low yielding investments .

otherwise you are not really doing anything other then calling your portfolio self insuring .
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If I'm trusting a 40/60 50/50 or 60/40 portfolio as my lifeblood for living expenses in retirement, then that same type of portfolio should be trustworthy enough for long term health expenses or anything else life would throw at me. If I end up losing everything with one of the safest portfolios there is, then so be it. If that type of portfolio fails me, chances are I would be losing my home anyway. There would be millions of people in a world of hurt should that happen. You can't get blood from a stone.
 
if you are drawing 4% inflation adjusted , that assumes that 4% which a married couple is consuming pretty much covers their living expenses perhaps with ss and pension . to throw an additional load on it of up to 14k a month for god knows how long will leave the stay at home spouse well underfunded . in most cases

to really self insure you need to pull a large sum out of that portfolio and not count on living on it so it is their for long term care ... basically you need to plan a life around a lot less income when you self insure properly ... that is why our estate attorney says his practice is dominated by the self insurers .

once the realization hits that the stay at home spouses income has to be drastically slashed to cover their living costs and their home and life still cost almost as much and as much as 14k a month at the same time for a home they go in to panic mode. there is not a big drop in costs for the stay at home spouse.

it is really difficult for us to act like an insurance company when the crap hits the fan unless we plan and think like one in advance .
 
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mathjak107 said:
if you are drawing 4% inflation adjusted , that assumes that 4% which a married couple is consuming pretty much covers their living expenses perhaps with ss and pension . to throw an additional load on it of up to 14k a month for god knows how long will leave the stay at home spouse well underfunded . in most cases

to really self insure you need to pull a large sum out of that portfolio and not count on living on it so it is their for long term care ... basically you need to plan a life around a lot less income when you self insure properly ... that is why our estate attorney says his practice is dominated by the self insurers .

once the realization hits that the stay at home spouses income has to be drastically slashed to cover their living costs and their home and life still cost almost as much and as much as 14k a month at the same time for a home they go in to panic mode. there is not a big drop in costs for the stay at home spouse.

it is really difficult for us to act like an insurance company when the crap hits the fan unless we plan and think like one in advance .
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I'm not sure where you get $14K a month from or what it includes. Most estimates I have seen of LTC costs outside of what is covered by medicare is $3-$5K per month depending on the illness. In my case, I do not qualify for a LTC policy due to my R/A, and the payout vs. premium cost of a critical care plan is boderline on whether it's worth the investment. This is why I'm thinking of self insuring with an IRA or some other investment, I really don't have another choice. Also most reports I have seen say that the majority of people do not use long term care for more than a year. They either die or get better and go home.
 
gary1826 said:
My neighbor put their assets into their kid's name. They told me this was to protect their assets from being taken from Nursing Homes.
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What you're trying to avoid is asset depletion before Medicaid kicks in.

This is a complex move in that if you do it without a certain amount of elapsed time before admission to a nursing home, you'll be rejected by Medicaid and your family will wind up paying the nursing home out of pocket. You'll need an attorney to set up trusts should you go that route.

https://www.agingcare.com/articles/strategies-to-protect-money-from-medicaid-175434.htm
 
JimW said:
I'm not sure where you get $14K a month from or what it includes. Most estimates I have seen of LTC costs outside of what is covered by medicare is $3-$5K per month depending on the illness. In my case, I do not qualify for a LTC policy due to my R/A, and the payout vs. premium cost of a critical care plan is boderline on whether it's worth the investment. This is why I'm thinking of self insuring with an IRA or some other investment, I really don't have another choice. Also most reports I have seen say that the majority of people do not use long term care for more than a year. They either die or get better and go home.
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it depends where you live . my buddy is in a local home here in long island with parkinsons . it is 14k a month ... he is just winding down depleting his own assets this month . medicaid takes over next month

https://www.seniorliving.org/nursing-homes/costs/
 
AnnieA said:
What you're trying to avoid is asset depletion before Medicaid kicks in.

This is a complex move in that if you do it without a certain amount of elapsed time before admission to a nursing home, you'll be rejected by Medicaid and your family will wind up paying the nursing home out of pocket. You'll need an attorney to set up trusts should you go that route.

https://www.agingcare.com/articles/strategies-to-protect-money-from-medicaid-175434.htm
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very risky move , there is a 5 year look back ... the kids can be sued if creditors come after them for something , as well as divorce between the kids can be a problem .

trusts are a whole other problem for the stay at home spouse .. plus what does a spouse do when you put all their money in your kids name ?
 
mathjak107 said:
very risky move , there is a 5 year look back ... the kids can be sued if creditors come after them for something , as well as divorce between the kids can be a problem .

trusts are a whole other problem for the stay at home spouse .. plus what does a spouse do when you put all their money in your kids name ?
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Agree it's risky, but that's what he's referring to in the OP.
 


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