We’re fatFIREd, but I just wanted to comment on our LTC plans since we’re working on them right now. We just applied for LTC insurance, choosing a life insurance policy with an LTC rider. I am 50 and my spouse is 59. I easily qualified, but they rejected his application because he has an autoimmune disorder and takes an expensive biological drug. I was surprised to learn that a pretty high percentage of people are rejected for LTC coverage. For the LTC companies it’s an up or down decision, there’s not wiggle room with underwriting to offset that risk by paying higher premiums, for instance. Learning these two facts kind of soured me on the industry.
Nonetheless, we are going to purchase the LTC coverage for me. It ain’t cheap. We’ll pony up $50K and get about $17k in life insurance (burial expenses) when I die. But, part of the reason is to create a fire wall if I should need care while he’s still alive, and if he’s not, there’s a care coordination piece that’s good to have. We have no children.
In puzzling over how to take care of him should he need LTC before me... we shifted course and have decided to put off drawing Social Security until either FRA or 70 for him, since it isn’t a cornerstone of our plans. Based on current projections, SS for both of us should pull down about $48,000/year. The balance would come out of our savings. I will still have a pretty comfortable life. Not to mention the fact that neither of us will have expensive hobbies or travel plans at that point. I also know that even Medicaid in our state would allow the non-institutionalized spouse to keep the house and car.
We’re currently drawing 3% of our portfolio and have a paid off house. The stache should continue to grow and create more of a buffer for this end-of-life stuff. We are going to meet with our attorney to update wills and power of attorney documents, and get advice on protecting assets in our state if the total shit storm occurs. Really, we’re just trying to make things minimally traumatic for the other. Who cares if we both die with pennies to our name? That’s the ultimate efficient budgeting. I just don’t want the surviving spouse to be living in poverty.
We’re also committed to the idea of moving to a continuing care community at some point to make it easy for us to manage those transitions. We’ll try home care for as long as possible too. We know which ones we like and are doing research. I think it’s so important to know where you would go in advance.
When I was accepted and he was rejected for LTC insurance, I kind of panicked. But even if we could roll back the clock to 4 years ago, before his diagnosis, we weren’t in the frame of mind to buy LTC insurance (we were sorting issues with our own elderly parents) and we were accumulating, not yet FIREd. Shelling out the dough would have hindered us. Moreover, I don’t play the “if we would have just worked longer to save even more” card. It seems kind of perverse to continue working jobs that are no fun and contributing to poor health. I still think we made well-informed decisions based on having “enough” and are living a pretty awesome life right now. If, in my old age I have to read books from the library, shop at thrift stores, ride the bus, soak my own beans, and grow a garden... wait, that’s how we live now. Obviously we travel and do spendy things, but I’ve learned how little material stuff I need to be happy.