Author Topic: I have brain cancer that will likely take my life before retirement. Need advice  (Read 7324 times)

Acg

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I'm 33 years old and have inoperable brain cancer that will likely take my life at some point (baring any medical advancements or miracles).  I'm married and have twin 1.5 year old babies.  Obviously if I pass it will be extremely hard and sad to say the least. I know I can't control much of this this but I'd like to try to setup things for my family as much as possible in the event that the worst happens.  The last thing I want is for my wife to be worrying about finances so I wanted to bring this to you all to see what your thoughts and suggestions were.

A little about our situation.  We live in New York City in a rent stabilized apartment which is an amazing price by NYC standards although I know it would sound astronomical to many of you.

We make about $180k combined.  Spend about $2k per month on childcare. We have about $130k liquid in checking/savings.  No credit card debt or any other debt except a small $3k federal school loan that is only at 2% interest.

I have about $140k in a traditional 401k and another $40k in my Roth IRA. My wife has about $50k in her Roth IRA.

We have 529 accounts setup for each kid.  We only set them up with small recurring contributions of $25/each in the beginning and as a result, the accounts only have account values of $700 each right now.

I got diagnosed before I was able to take out a life insurance policy unfortunately.  I have a small one through my employer that would pay out a death benefit of only $100k.  I also have a long-term disability plan that would pay me $60k annually.

Lastly, I've looked into social security survivor benefits.  Right now my family would get $4,800/month if I were to pass away.

Let me know if you need any more info.


Im sure I'm not thinking of everything so please share any thoughts you have.  I had a few specific ideas/questions. Thanks:

We were thinking about starting to look for a home to purchase in the suburbs.  Is that a foolish idea given my circumstance?  I was thinking it would be nice for my wife if we were able to buy something and pay it off aggressively so she didn't have too much of a housing cost burden if I were to pass.

Any thoughts on what vehicles I should be using to save for retirement?  Does it matter in terms of traditional or Roth? Is one more advantageous if I pass and my wife inherits it?  Anything else to consider here?

I just bumped up the 529 contributions to $75 per kid/month.

With my school loan, I had always planned on just paying the minimum payment each month which would pay the loans off in April 2019.  I'm thinking speeding things up a bit and doubling the payment so it's totally paid off in a year.  I know I should just be paying the minimum each month since the interest rates are so low but I just don't want my wife to be on the hook for anything in the unfortunate case of me passing away suddenly.
« Last Edit: April 18, 2017, 10:50:03 AM by Acg »

Reynolds531

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I'm sorry.

I know your first reaction is to provide. But I think if you're living sensibly that's enough. Your wife can make money for the rest of her career. What your family can't make more of is time with you. I would say squirrel away money and make no major changes unless you can get some clarity on the future.

Catbert

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I'm very sorry for your situation.

Double check what happens to your SLs when you die.  I *think* that they disappear upon death if they are Federal loans w/o a co-signer.
If so, no sense paying more than the absolute minimum.

I wouldn't rush to buy a house in the suburbs. Would it really cost less than your rent stabilized apartment?  Will she always stay in the NYC area?  Maybe a lower COL area would be better for her in the long run.  Buying/selling houses have a lot of associated costs.  What will she be able to afford on SS plus her earnings?

I'd work on coming up with a straw budget for what her income will be. 

Acg

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Double check what happens to your SLs when you die.  I *think* that they disappear upon death if they are Federal loans w/o a co-signer.
If so, no sense paying more than the absolute minimum.

I wouldn't rush to buy a house in the suburbs. Would it really cost less than your rent stabilized apartment?  Will she always stay in the NYC area?  Maybe a lower COL area would be better for her in the long run.  Buying/selling houses have a lot of associated costs.  What will she be able to afford on SS plus her earnings?

Thanks for bringing that up.  I thought student loans weren't able to be forgiven upon death but apparently that is only applicable to private loans.  Federal loans are forgiven upon death.  Thanks.

The thing with our housing situation is that our rent stabilized apartment in the city is a 1 bedroom and we put up a temporary wall in our lives bing room to make a small nursery for the boys.  They're going to out grow it in a few years and we'll need to move out then.  We won't be able to find a deal this good, we've been looking but can't find anything in our price range.  We'll always live in the NYC metro area, her mom lives here too so we'll want to be close.

Ayanka

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Hugs, I am sorry about your circumstances. If I were in your shoes, I would make an appointment with a lawyer or notary specialized in these kind of cases (not sure what would be apply) and maybe someone specialized in this kind of cases in the financial sector. Because in this case the advice from a professional might be worth the fee.

albireo13

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I'm so sorry to hear of this.  I'm glad to see you are thinking ahead.

Think hard about a home investment. Keep it modest. Even if you pay down mortgage aggressively, your wife will still have to deal with annual property taxes and the cost of home ownership.   This may be a lot to deal with for a widow with young kids.

Hang in there.

MishMash

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I'm so very sorry.   Spend the money, take the time you have with your family and create some memories.  Do the treatments. 

A friend of mine in NYC was also diagnosed last year (a month after giving birth) with an inoperable brain tumor.   They took out what they could and she's been going through a targeted radiation treatment that is surprisingly working at shrinking the tumor.  It hasn't been easy, she had a few close calls after the surgery but her prognosis right now is much better than it was last year at this time.

Some things from the passing of my father.  Make sure your wife's name is on all of your accounts, and that she is the designated beneficiary for each.  Also, my dad had created a "when I pass" book.  In it he had all of the accounts, where they were located, passwords etc.  Also had a list of people to call and phone numbers (like SS office), an outlining of his funeral wishes, copies of his birth certificate and SS card, an explanation of how to do the probate and what forms needed to be delivered where, and letters to each of us.  In the cloud of grief, that thing was a life saver. 

MishMash

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Also, a note on the house.  If you are going to Sloan Kettering for treatment, it would be much better for you to keep the apartment, it will be easier for your wife to visit you in the hospital, easier for you to to return home after treatments vs slugging it on the path. 

homestead neohio

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Wow, very very sorry to hear about your diagnosis.  As a father of twins, I can't imagine what you are going through.

My advice is see an estate planning attorney in New York.   There may be many low-cost ways of avoiding probate, or minimizing what goes through probate.  Agree to go through all accounts/policies and ensure your wife is on each account jointly, or assign her as sole primary beneficiary and the twins as secondary beneficiaries.  Ensure you have a last will and testament in place.  Do what you can to keep the life insurance you have.  You can pre-plan and pre-pay for your funeral expenses depending on what the prognosis looks like.

I agree it is important to do what you can now to provide for them in the event of your passing, but also it is important to create memories.  Don't get so caught up in earning or optimizing strategy that you are not present for dinner on an average Wed night, or seeing family for a holiday dinner.

Acg

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Thanks for all the replies.  I left out an important detail in the original post that I'm going to edit to add back in - it complicates things a bit.  My type of brain cancer is very rare and I'm writing the book so to speak so they're not quite sure what my prognosis will be.  I was diagnosed almost 4 years ago and at the time they weren't really sure what to tell me regarding prognosis.  They told me I could live another 20-30 years but there was also always a chance of it recurring and starting to grow again - they just don't know.  Since my diagnosis, the tumor has shrunk a little more than 50%.  I'm feeling good right now (knock on wood) but you never know what the future holds. I guess my problem is that I want to seize the day and live life with my family but at the same time I want to think about the future with things like buying a home due to the chance that I could live another 20-30 years, I don't want to feel like I did the wrong thing.  Its tough.

protostache

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Buy a 20 year term life insurance policy for your wife if she doesn't already have one. Today. Right now.

honeybbq

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Buy a 20 year term life insurance policy for your wife if she doesn't already have one. Today. Right now.

+1

I am very sorry about your situation. You are doing the right thing by planning as best you can. If your family needs it, there are a variety of cancer support groups that you can get information from. Your wife may benefit from it, too. There are lots of things we can learn from others in groups such as these.

Does your wife want to move to the suburbs? Any chance her mom would want to move in with your wife and children in the event you pass?

Acg

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Buy a 20 year term life insurance policy for your wife if she doesn't already have one. Today. Right now.

She got one before our kids were born.

Christof

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i'm truly sorry. I lost my mentor to brain cancer a decade ago and it did change my life... In his case he went from normal life (just with headaches) to funeral in a few weeks, so not exactly like your case... fortunately.

What I learnt is that when brain cancer grows it can have sudden impact on the brain. Make sure your wife knows everything she needs to know, because one day you might not remember these things anymore, but clearly know you should remember them. That adds a lot of stress to an already very stressful situation.

Don't spend all your time preparing for the perfect future if that doesn't leave you a great present. They will quickly forget all the bad moments and only remember the good moments. Don't focus on the bad ones, only the good ones.

Your wife will adapt, your kids will adapt. A life in a small home that is safe is easier for most, than life in a big home that is at risk of being taken away.

Sure, a nice home not at risk is nicer than a small home, but make sure it works under all circumstances. You might not be able to make even the first payment. Make sure the mortgage works with just her salary in addition to daycare for a couple of years and use your salary only for extra payments to speed up repayment.

nouveauRiche

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I wanted to add this little tidbit: 

If you do buy a house, I would NOT pay down the house aggressively.  I would direct that extra money to a "house payoff account".  When the balance in the account is enough to wipe out the remaining mortgage, you can decide about paying off the house.

Paying extra money towards the mortgage each month ties the money up without reducing the house payment at all.

Best wishes to you & your family.

Miss Piggy

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Regarding the life insurance policy you have at work: does your employer give you the option to increase your coverage each year? My husband's last two jobs enabled him to do that, and he always increased it as much as he possibly could. Now he has $600,000 worth of coverage--not bad for someone who is otherwise uninsurable. With both policies, he exercised the "portability" (that may be the wrong word, technically) option and took the insurance with him after he left the jobs. We now pay for the coverage out of pocket, but I am very happy to do so.

Laserjet3051

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ACG:

I know your question was financial in nature but the most valuable gift you can give your family is time spent with them and love. They will cherish this far more than any fiscal gift. Not suggesting to neglect setting them up financially for the future, but please be mindful if any such $ plans reduce the amount of time you spend with them.

Best wishes to you.

purple monkey

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Since you are in a medical state, you might want to talk to folks that have had tumor shrinkage with high doses of alternatives.
Mechoulam the Scientist video on YouTube
« Last Edit: April 18, 2017, 08:09:26 PM by purple monkey »

Paul der Krake

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It sounds like your family would be covered pretty well if you were to pass soon, but as you are probably aware the Social Security survivor benefits do disappear when your twins become adults.

It's probably the early adult years that would be the hardest to account for, so the best thing you can do is continue saving as you enjoy your remaining days the best you can.

pbkmaine

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If your family is happy in the rent-stabilized apartment, there is no need to buy a house. I was a financial planner for years, and one of the biggest mistakes I saw widows make was to sacrifice liquidity to have a paid-off house. Houses are expensive and time consuming, especially when you are used to living in an apartment.

MayDay

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My uncle dealt with cancer, lived in Manhattan, and kept his UES studio while mostly living in his house on LI.

I don't know if that would be an option, but he was definitely glad to have it when he had appointments in the city and wasn't feeling well.

But if they think you have 20-30 years, and you don't want to live for that long in a one bedroom with four people (I wouldn't!) then of course it might make sense to move. I'd just try really hard to keep the costs low enough for your wife to afford whether that is a 2 bedroom rent controlled apartment or a house.

I agree with the PP that instead of paying it off, put aside the extra payments in a house payoff account.

nottoolatetostart

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I am so sorry to hear this. I have no other advice as previous posters had great ideas, just wanted to chime in to say sorry.

Trifle

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Regarding the life insurance policy you have at work: does your employer give you the option to increase your coverage each year? My husband's last two jobs enabled him to do that, and he always increased it as much as he possibly could. Now he has $600,000 worth of coverage--not bad for someone who is otherwise uninsurable. With both policies, he exercised the "portability" (that may be the wrong word, technically) option and took the insurance with him after he left the jobs. We now pay for the coverage out of pocket, but I am very happy to do so.

This.  There are some ways to get life insurance even with a cancer diagnosis.  You can sometimes increase existing coverage, as Miss Piggy notes, or sometimes with a new job you can sign up for coverage with no medical requirements/exclusions.   That's what I did.  I was diagnosed with cancer in 2015, but with my new job in 2016 I signed up for 600k of life insurance even though I'm 'uninsurable'.   You also may want to check whether you can pay extra to bump up your short and long term disability policies.   Statistics show that folks usually do live long enough in a disabled state (not able to work) to benefit from those. 

Hugs and best of luck.
« Last Edit: April 19, 2017, 10:52:25 AM by Trifele »

chrisgermany

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So sorry to read about your diagnosis.
I would refrain from buying a house in the burbs if your and your wife's support network is in the city.
I would only change locations to get closer to such support network, like friends and family.
You might get some input, even support, from Randy Pausch's "Last Lectures", available as book or online.
All the best to you and your family!


Heroes821

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So sorry to hear about your situation.  My father had a similar situation, but I was already an adult at the time.  With kids that young the only recommendation I can give you is to make videos.  Talk to the camera and tell them things. Make one for every birthday. Make one for graduating high school or college.  Find a way to make sure there are back ups of these videos.

With a good support system and the frugal lifestyle your family probably already possesses, they will figure out the financial difficulties.  In the time now spend it with them. Make positive memories.

Vindicated

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So sorry for your circumstances, but so happy for your Mustachianism.  You're in good shape financially, and I agree with others that your focus should be on your family.

I wish you many years of good health!

Cpa Cat

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Just chiming in to add to the chorus of "don't buy a house." It's highly likely that either your house-related needs will change prior to your passing (proximity to hospital, stairs in your home, etc) and that your wife's house-related needs will change after you pass (proximity to work, change of job, proximity to family). It seems like there's very little benefit to locking yourselves into home ownership and all its related costs and tasks at this point in time.

Bobberth

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I'm very sorry to hear about your situation. I don't have much to add, but one thing for your wife to be aware of is if/when you pass, she can either do a spousal rollover of your IRA or she can choose to inherit the IRA. Most spouses do the spousal rollover where basically your IRA becomes hers-can't take money out before age 59.5 without a penalty. If she inherits the IRA, she can take RMDs (or more as needed) over her life expectancy with no penalty, just taxes. Inheriting as a spouse isn't well known and it could make a difference for your survivors IF they would need the cash. The best course of action for the long run would be the spousal rollover and let the balance grow but it may be something you discuss with her about their short term needs if/when.


raven2963

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I'm very sorry.

Most life insurance policies have an option to cash out immediately (while you're still alive) if you have been diagnosed with a condition which will claim your life.  This may be worth looking into! 

I wish the best for you and your family.

BlueHouse

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My dad died when my mom was 35, with 5 kids under age 11. I was the youngest. Dad had good life insurance, but even when you think you understand all the variables, things change that can affect even the best laid plans. (Inflation ate up the money soon after dad died)
The things that were important to our family:  spending time together. Making memories. Making sure we felt secure and safe. The last two years of my dad's life are most of my memories of him because he was always there. Doing things with us. When he couldn't do the physical anymore, he was still there and it mattered so much.
I would not put another penny toward 529. Kids can find a way to pay for education. I would put as much money into making sure your wife has whatever she needs to take care of those kids. My mom was able to remain a SAHM until the youngest of us was in HS.  This made us feel safe.

We did move after my dad died. We moved to be closer to family so there was more of a support system for us, but mostly for my mom, who needed it desperately. Everything about losing a parent sucks, but kids are resilient. Your spouse is having everything she planned for ripped out from under her and she'll have two kids to care for on top of it. So I would ask wife where she wants to live and if you have family nearby, then all the better. If you can find a LCOL area with low crime, that's what I'd do. Kids without parents usually have more time to get into trouble. My mom put us in a school where 99%of kids went to college, regardless of income. Now I realize how important that was. The expectations just redirected our energies to positive activities.
Good luck.