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WHEN I RETIRED, I thought about creating a website and writing about my retirement. I looked into what it would take to build a site and have someone edit my work. The more I thought about it, the more I realized the only ones who would probably visit my site would be my sister, brother-in-law and maybe a few curious friends. It wouldn’t be worth the time, effort and money—especially when HumbleDollar offers all the benefits an unknown and inexperienced writer needs.
Meanwhile, I saw a video of Bruce Springsteen, the 73-year-old musician, falling on stage during a concert. I’m not surprised. Although he looks to be in great shape for his age, as you get older, you’re not as agile. The reason I bring this up: Falling is one of my greatest concerns.
I’m also in my 70s and my doctor warned me about staying upright. As you get older, your bones aren’t as strong and falls can be more dangerous. An elderly woman in my neighborhood fell. I never saw her again. Her house was eventually sold. The fall might not have killed her, but it surely turned her life upside down.
My doctor cautioned me that, since I’m so active, I’m at a higher risk of falling. She told me to include sufficient amounts of vitamin D and calcium in my diet, and to perform weight bearing exercises to help keep my bones strong. I’m like other folks, who think they aren’t going to fall and hurt themselves—until they do.
My cousin Pat fell recently and hurt herself. She’s recovering and currently not as mobile. She and her husband have been looking at continuing care retirement communities, or CCRCs, that provide multiple levels of care as your needs change. Although their daughter is close by, they feel there will come a time when they might need more help.
She mentioned that they looked at one CCRC, where it costs $250,000 to purchase a condo and the fees were about $8,000 a month. The CCRC will pay their moving expenses and the monthly fee covers most of their expenses, including 30 meals per month, weekly housekeeping, home repairs, homeowner’s insurance and transportation. In fact, she says they do so much for you that her husband is afraid that he won’t have anything to do if they move there.
What really caught my attention is that, if you need long-term care—including memory care—later in life, they would guarantee a place for you at another on-site location. More important, they wouldn’t kick you out if you ran out of money.
Running out of money is another concern I have as I get older. My wife and I have a comfortable retirement. Our fixed monthly expenses are low and our Social Security benefits can easily cover them, without us having to tap our investment portfolio. But I also realize how financially devastating a major health crisis can be. When my mother had a heart attack and needed 24-hour care, I thought I might need help taking care of her. Here in California, where we live and where my mother lived, the cost of a caregiver was $27 per hour in 2019. I can’t imagine what it is today.
Caregiving costs can add up quickly, especially if you don’t have family and friends to take care of you. My wife and I don’t have long-term-care insurance. I don’t have much faith in the insurance companies when it comes not only to premium increases, but also to getting approved for benefits when you can’t perform two of the activities of daily living, such as bathing, dressing and eating, or when you have serious cognitive impairment. Fern, my mother’s friend, had long-term-care insurance. After three years, she exhausted the coverage and had to move out of her house. It may not be the silver bullet for everyone.
Our plan is to self-fund our long-term-care needs with our Roth IRA accounts, while living off the rest of our assets. But when I think about those lifecare communities that my cousin talked about, they might be a good deal at a reasonable price for some folks. But I can’t see us moving to one or, at least, not yet. We love where we live. We’re going to take our chances and stay put for now, because our friends are here.
Friends are very important to me. I found that out when my wife left for six weeks to take care of her mother. It was lonely without her. But it would have been much worse without friends to keep me company. I got a glimpse of how the elderly are at an increased risk of loneliness.
When my mother passed away, I notified her few remaining friends. One of them was Helen. My mother and her were friends for almost 50 years. Helen lived by herself and was homebound because of her mobility issues. But her son lived nearby if she needed help. She also had a few other family members who would visit occasionally. When I told her that my mother passed away, she cried. I felt sorry for her, because I knew what my mother’s death meant to her. It meant the loss of her last remaining friend, and one less person to talk to.
Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. Check out his earlier articles and follow him on Twitter @DMFrie.
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Life is so counterintuitive, “doctor cautioned me that, since I’m so active, I’m at a higher risk of falling.” But it is being so active that keeps one active longer. We sell the house because of the stairway figuring that in the future we won’t be able to negotiate the stairs. But the stairs are what is keeping us mobile longer!
Actually people who are more active are less likely to fall!
A simple balance exercise is to stand facing your sink, bend on leg up, find your balance point then lift your hands up 6 inches above the sink. Try to balance as long as possible on one leg. If you can’t regain your balance with the weight bearing leg then grab the sink. Then switch legs. Perform for 5-10 minutes once or twice a day.
When you can balance for one minute without losing your balance. Perform the exercise with your eyes closed.
I think what my doctor was trying to tell me is that the more active you are, the more opportunities you have to fall. The exercise you suggest is very good for improving your balance. I do it often.
Just remember that CCRCs are no guarantee against falling. My wife’s elderly (89) year old aunt fell while walking for exercise within a hallway of her building. Two broken wrist, one broken arm, a broken pelvis, two broken collarbones, and a shattered right leg that had to be pinned with rods after 6 weeks of special medications to increase bone density, and then 4 more months of rehab and she was ready to go home with her daughter. The doctors said they believed she hooked her tennis shoe on the carpet and it threw her off balance and she hit the radiator and then the floor. So no matter how young or old, be careful. Of course, her injures may have been exaggerated by the osteosclerosis that she has had for years.
One reason I’m moving to a CCRC is that if a similar disaster occured to me, I’d be able to recover in the Assisted Living and Skilled Nursing facilities on site. (I don’t remember seeing carpet in the public areas in mine, I’ll check, doesn’t sound suitable for that kind of facility.)
The LTC industry really messed up by overpromising and underdelivering. Humbledollar readers who like to plan and bought stand-alone policies regret the rising expenses. Older readers hear that the policies are expensive and plan to self – fund because that seems like a panacea as no expenses- but no insurance. For my retirement my best research was into hybrid LTC insurance. Like other readers I didn’t believe- and if I hadn’t researched myself would have just tried to save a pile of money and hope I don’t fall. Meanwhile I bought a hybrid LTC policy and play pickleball – which leads to other injuries!
Very affecting article, Dennis. Thank you for tapping into a number of my insecurities.
I’m surprised that your doctor told you that activity increases your risk of falls. I’ve always believed the opposite, but being very physically active perhaps I’m biased towards exercise. I noticed a year ago that I was stumbling and losing balance more often, and I’ve responded with increased activity — as soon as I finish this comment (and my glass of Vitamin D milk), I’m off to my new tai chi class. I did my first session last week and was amazed at the balance displayed by even the oldest and heaviest participants, who have been doing it for years. The class is costly, but I consider it fall prevention insurance.
As for LTC insurance, we looked at it once — and never again. I guess my much-younger wife is my policy. But we have no kids and no fallback plan, so there’s some uncertainty about what our lives will look like in 15 years. I think about that more often now.
Stumbling! I arrived at my CCRC two years ago. I noticed that even when I walked on the level paths, sometimes the front tip of my left shoe would catch and drag a bit. I tripped on an uneven sidewalk slab walking back from town, causing a FOOSH (fall on outstretched hand) break in my right radial cap (thankfully small, healing fast with only some PT). Then I found this easy exercise to strengthen the tibialis anterior muscle at the shins. Even at only once a day, not a single toe drag since!
I’d add never walk in flip flops! Have a strap around the back of your foot in any sandles you wear.
When we signed my wife up for Medicare supplement, I asked rep about LTC insurance and he said we should self insure. So that is what we have done. My pension and our SS should more than cover one of us in SNF. But we want to live in our house as long as possible. We have many friends who have moved to assisted living. My sister is in an upscale assisted living facility and seems unhappy there.
At 80 and 78, we are hoping for the best. Our son lives nearby and will help with home maintenance and repairs as we need them.
My dad is in AL in IL, expect to pay 6500-8000/mo. He needs assistance with some daily living tasks, as well as being offered his medicine. (He has no sense of time.)
Are there no CCRCs in your area? There are several in mine, even more if you include for-profit operations. The one I chose was only five miles from my house, and there’s another even closer. I hope to make new friends, not lose old ones, and as you point out, old friends may leave you.
If you think it might be an option, and you are in your 70s, you may need to get on a wait list soon. Wait lists in my area are getting really long as the baby boomers age – when I signed up in 2019 the wait for a one bedroom apartment was four years and now it’s seven. A two bedroom is over ten. Also, the kind that promises not to throw you out (there are others) generally requires you to be able to live independently when you move in.
I’ve known 2 instances where after a serious fall the person was never the same and ending up dying within 18 months. One case was off a step-stool getting a suitcase down in the garage, and the other was tripping over a rake that the wind had dislodged into the path around the house. I think your caution of falling is well founded.
Dennis, all those years in the business and no pension from Boeing?
I have had LTC insurance for 35 years. Now the premiums are ridicules and increase at 25% or more a year. Do I give up and lose all those premiums? I feel trapped.
Richard, I felt trapped, too, after 16 years of rising premiums that I began paying at age 49. But then I examined total cost relative to coverage — perhaps if you do that too, you will feel better. My total premiums have been $22,500 to date, for a maximum lifetime coverage of $849,000. In this context, the cost seems quite fair. I plan to continue with the policy though I am bracing for annual premiums that will soon exceed $3,000.
I remember thinking stand-alone policies seemed underpriced and it didn’t make sense to buy something where the insurance company could continue raising rates if costs went up. That’s why I opted for a hybrid policy that appears more expensive but in reality was priced fairly.
Having taken some actuary classes early in my professional training, I saw some early warming signs on LTC insurance pricing in the early 2000s. So my wife and I decided to ostensibly “lock-in” our LTC premiums at ages 33 & 34. We opted for a 6 month waiting period before benefits begin (self-insuring for 180 days seemed manageable) but opted for a lifetime benefit and a compound interest rider option on our daily room benefit. Both our set of parents have health history that dictated we might well have a need to actually used this coverage as soon as our early 60s.
I referenced our “locked-in” premiums in jest, because we (like most LTCI purchasers) have seen annual increases in our LTC premiums since the mid-2010s, when the reality of underpriced policies based on real claims experience began hitting all LTC insurers very hard. They can’t raise just our premiums, but they can raise rates rates on all customers insured under our policy series. Thankfully, the impact of the increase for us is less severe, given that our baseline initial premium used to calculate the increases was established in our early 30s. Not sure what we’d have done had we waited to buy coverage in our 50s, like many do. I suspect we would have likely would have bought a hybrid Universal Life policy with LTCI rider instead.
Sunk cost fallacy?
Thanks Dennis, great insights in this article. I am also wary of long-term-care policies, for the reasons you mentioned. My in-laws paid into their policy for many years. During my father-in-law’s final illness, it took a while before it dawned on anyone there was an opportunity to tap the benefits. Before they were approved and available, he passed away. Like you, my plan is to use our Roth IRAs as the final financial backstop in case of a future long-term care scenario. I’d rather pay the “premiums” to myself and my wife than fund an insurance company that may or may not be there if we need it.
All my life I’ve looked at stairs, curbs, and steep hills, as entertaining obstacles for my enjoyment as I move from point A to point B. I jump off curbs, I run up and down stairs and hills. The only concession I’ve made to age is that I no longer jump over fences. My fall is coming!
I am doing Roth Conversions yearly to build up our Roth accounts to 1M to be use as LTC if needed. I think its a great idea as LTC insurance is quite costly with limited benefits and many carriers leaving that business
I wonder if one million would be enough? I guess it depends on the costs, which are unpredictable, and how long you live. Would that even be enough for a CCRC?
You may want to use pre-tax funds for long term care as the cost is tax deductible. Using Roth funds would be a waste of the tax deduction.
“Using Roth funds (for long term care cost) would be a waste of the tax deduction.”
This is actually a pretty valid reason for not performing Roth conversions to shrink pre-tax accounts all the way to zero. LTC can be frightfully expensive, and whenever it’s needed it can gobble up large chunks of money in a hurry. Better to have a tax deduction than not, in that case.
However, for many lesser medical expenses, using Roth balances can be a good idea, since a withdrawal from a pre-tax account can cause Social Security income that was not previously taxed to become taxable, thereby negating the deduction. Or better yet, using an HSA balance would be ideal, but unfortunately, not too many people have access to one of those.
Dennis, if you do move to a new place, make sure it has a comfortable place to write. Congratulations on your 100th article.