Wait, that math doesn't add up. What happened to his $75,000/yr from pensions and SS? Why did it stop at age 83? If they didn't stop then he was spending $75,000 + $100,000 every year? $175,000 per year on in home care? That's insane! There has to be a more frugal option.
Living to an old age, drawing on your stache for a loooong time, and increased medical expenses are certainly a concern, but you guys seem to be totally discounting the here-and-now with your able bodied self. What if your dad had died at age 83 with $75,000/yr in pensions and $1M in assets, would you be saying "thank god he spent an extra decade in his 40's working that job and accumulating that huge, unused nest egg"? Hardly. It would be just as much of a tragedy knowing he wasted his 40's working a job for no good reason.
Sorry,
frugalnacho, my tenses got away from me! He still gets his $75K/year income, plus his three medical insurances are still in force. He had them at 83 and he still has them at 94, which has been his saving grace - his income from 83-93 covered all of his monthly expenses... except for the in-home care... and now his income covers all but $1K of his monthly expenses in assisted living.
Over those ten years, he had two stretches, 8-months-long each, in skilled care at $300/day on top of his regular monthly costs. He had 24-hour in-home care for a time when he moved back from skilled care to his "independent living" duplex. So $8K/month was the average. Some months he spent twice that, or more.
Also, from what I understand (he was not terribly forthcoming about the rapid demise of his funds, so we didn't have a good sense of his finances until push came to shove about his housing in the retirement community), he moved his mutual fund money to CDs and money market accounts after my mom's death, so it didn't grow much, and undoubtedly lost $$ to inflation.
Given the downturn in 2008, I can't say that was the wrong decision to make - his money was safe and eroding slowly, not falling off a cliff in the market. He missed the upturn, but it's hard to imagine any credible financial adviser telling a 90-year-old man to invest in index funds with his remaining moolah.
He did many things right - most things, really - over the course of his lifetime. We (his children) didn't live close enough to him to provide the kind of care he needed, so he made decisions that fit his life, and he could afford them... until he couldn't.
And yes, of course there was a more frugal option: he could have moved into assisted living and spent $1K more a month instead of an average of $8K more. He was wildly resistant to that idea. He liked his life the way it was and didn't want to change.
I read recently that resistance to change can accelerate in later years - we certainly saw that with my husband's parents, who flat-out refused to consider leaving their home and both, in fact, died at home. They too had started spending copious amounts of money on private in-home care. After his dad died, my husband sat his mother down and made her go through the finances. Prior to that time, she had refused to discuss money with him. He told her with the 24-hour-a-day care they had been paying for, she would run out of money in three years; with 8-hour-a-day care, her money would last about 8 years; or she could choose something in between. She went with 8 hours a day, which worked very well for her. She died a year later.
Private in-home care is a budget buster. I personally can't wait to move into a retirement community, but I hope when the time comes, I have the sense to make use of the care levels built into the whole retirement community concept, not try to create something that only works for me.
By the way, I realize my tone may sound callous or cold. I want to say that I absolutely adore my dad. He's a WWII veteran, a retired college professor - smart and interesting and kind and charming and warm. And stubborn. ;)
