I agree totally with this. Go go years tend to be during the years you are in your 60s. I’ve seen many friends that I thought were in good shape to continue those years well into their 70s don’t due to reason or another- chronic condition/illness, disease diagnosis, etc. I would say if you have the resources to retire, to consider going earlier than later. Not too many folks on their deathbed state they wished they had worked longer…
My wife and I bought LTC policies thru my old employer when we were around age 55. The policies offered were modestly priced as a group offering thru a top 3 financial institution, with no physical required. At the time i felt that we could likely self insure long term care, but was not certain. We purchased a “middle of the road” daily benefit, thinking this would help keep premiums down, while softening the blow to our portfolio should one or both of us need LTC. Fast forward 11 years, the premiums have only increased when I’ve elected to accept the periodic inflation adjustment offered. I’m glad we have the policies, as I feel they give us possibly better quality of life in a managed care setting should we need it. Both my parents entered an assisted living facility in their mid 80s. My Mom was able to file a claim on her LTC policy which covered nearly all of the cost of the ALF which ran nearly $10,000/month. The claim ended up paying for nearly 3 years, and bought her top level medical care when she needed it most.
I’ve used ST T Bills purchased on the secondary market with durations of 1-3 years. If held to maturity you will receive the YTM as stated at purchase (however they will fluctuate in vale before maturing). I also hold positions of IBonds and TIPs (also purchased on secondary market), as well as a high yield bond fund. I allocate this mix based on my Investment policy statement.
Dick, if the goal is to simply get most income each month (when it may (or may not be needed most), for most couples with lopsided lifetime earners, the higher earner delays til age 70. However, this may be a somewhat simplistic view for some couples that may need the SS benefit earlier to avoid depleting a retirement nest egg below what may be considered comfortable for their circumstances. I also think the PV of benefits may also impact whether age 70 is still the optimal scenario for what I previously described for lopsided earners- our household is in that category. I just re-ran OSS (last ran it about 2 years ago) because of this discussion, and am finding it's telling me the optimal claiming age for me is 67 years 10 months (much lower earning spouse will be age 70 then). I'm guessing the large inflation bump in benefits of a few years ago, along with the current higher rate environment is "fine-tuning" my claiming age to be a few years earlier than planned. I did run the alternative strategy of me claiming at age 70, and it's calculating a lifetime PV of about $7,500 less than claiming 26 months earlier. This result is having me rethink my original strategy (suggested by OSS) of claiming at age 70. Lot's to think about, especially tax planning. We were starting to "prune" some IBonds purchased in 2001 to smooth the tax brackets we will be in prior to RMDs kicking in, as well as managing the IRMAA threshold if possible. Another factor for my household is I did delay SS all the way to age 70, and I pre-deceased my spouse, she would get my much higher benefit. IMO, this is the most significant factor to consider delaying to age 70. Just my 2 cents!
John, we received a similar result as you several years ago. My spouse is 2 years older and lower earner, and claimed just before age 65. I’m waiting til age 70, at which time my spouse will, get about a 50% bump from the spousal benefit over what is currently being paid. If I recall, if the lower earning spouse claims their benefit early, the spousal benefit is reduced at such time the higher earning spots starts their benefits. I thought this was generally why the lower earning spouse would claim around age 65|66 in the OSS program.
Jonathan, your comment is generally correct when looking at high home prices (in relation to locational incomes). When the percentage of taxes and insurance of an overall mortgage payment starts to rise over 25% of a mortgage payment, I believe that it will give potential home buyers pause to buying- especially if homeowners insurance rates are increasing at rates that are far outstripping inflation, and not knowing what the future of the market for insurance will be (like in many areas of FL). In recent decades, high real estate taxes were in some markets dampening home affordability, and now with runaway homeowners insurance in some markets, this may prove to add to the challenge of homeownership. I don't think the real estate market has historically seen markets where taxes and insurance have represented more that 15-20% of overall mortgage payments in widespread areas.
Dick, I believe this will become an impediment for younger generations considering a home purchase- especially in areas more prone to impacts from climate change. It may be cheaper in the long run to be a lifelong renter in many housing markets, given the high cost of housing, and the layering of tax and insurance costs. It doesn’t make sense to own, when renting is significantly cheaper, and mobility is also much easier should a job opportunity present itself in an area with a better commute, or in a different state. i live in a coastal area (not directly on the coast), and have seen insurance rates increase 8 fold over 20 years, while taxes have only increased 4 fold. I suspect the multi-million homes directly on the coast (which are seeing huge insurance spikes), will eventually be devalued in coming decades due to the enormous cost of insuring them, along with the impacts from coastal storms. I’ve already seen this start to play out in some areas more prone to erosion.
Good post Cathleen. I would only add that in some circumstances/families, the late stage elder care may happen to pass on to the oldest child in the family which could be the oldest son (happened to me!). I happened to be the only retiree amongst my parent's children when both my parents started experiencing significant health declines at the same time- they figured I had the time because I was retired! I found the information in your post somewhat eye opening, and also spot on in many respects. I've been supporting both or at least one of my parents going on 5 years now... My wife and I plan to utilize a CCRC setup when one or both of us may start to suffer medical declines. We hope to make the choice to enter one for ourselves, and not be asked by our daughters to consider the move. We see the challenge in doing so will be getting the timing right due to many CCRCs in our area having long waiting lists. We expect both our daughters (we have no sons!) will be involved in some aspects of our support if we have a slow decline in health as we've seen with my parents. One day at a time...
Kristine, I've also witnessed this food insecurity in the community I retired to 6 years ago. We live in a relatively high cost coastal community with many seasonal jobs that don't offer a steady year round paycheck. Young families not only find it challenging to find affordable housing, but the lack of good paying year round employment also makes it tough for some families to make ends meet. Fortunately, there are robust food pantries in the area that fill the gap for most if not all of these families. It was quite an eye opener to visit a local pantry and hear the stories of their typical client, which was likely to be a neighbor on my street...
For retirees, I would add- look at the networks available for rehab facilities and the PT/OT available annually. I found out that a top notch Medicare Advantage Plan (sponsored by past employer) limited options for a family member, while original Medicare did not. This is in spite of the MA plan not limiting regular medical providers to a network. Fortunately, was able to switch this family member back to original Medicare for more robust coverage. Medicare also does not micromanage progress in a rehab setting like non-Medicare providers.
Comments
I agree totally with this. Go go years tend to be during the years you are in your 60s. I’ve seen many friends that I thought were in good shape to continue those years well into their 70s don’t due to reason or another- chronic condition/illness, disease diagnosis, etc. I would say if you have the resources to retire, to consider going earlier than later. Not too many folks on their deathbed state they wished they had worked longer…
Post: What wisdom can you share?
Link to comment from February 10, 2025
My wife and I bought LTC policies thru my old employer when we were around age 55. The policies offered were modestly priced as a group offering thru a top 3 financial institution, with no physical required. At the time i felt that we could likely self insure long term care, but was not certain. We purchased a “middle of the road” daily benefit, thinking this would help keep premiums down, while softening the blow to our portfolio should one or both of us need LTC. Fast forward 11 years, the premiums have only increased when I’ve elected to accept the periodic inflation adjustment offered. I’m glad we have the policies, as I feel they give us possibly better quality of life in a managed care setting should we need it. Both my parents entered an assisted living facility in their mid 80s. My Mom was able to file a claim on her LTC policy which covered nearly all of the cost of the ALF which ran nearly $10,000/month. The claim ended up paying for nearly 3 years, and bought her top level medical care when she needed it most.
Post: How Are You Planning to Pay for Potential Long Term Care Expenses?
Link to comment from February 4, 2025
I’ve used ST T Bills purchased on the secondary market with durations of 1-3 years. If held to maturity you will receive the YTM as stated at purchase (however they will fluctuate in vale before maturing). I also hold positions of IBonds and TIPs (also purchased on secondary market), as well as a high yield bond fund. I allocate this mix based on my Investment policy statement.
Post: Bond Index Funds or Something Else?
Link to comment from January 29, 2025
Dick, if the goal is to simply get most income each month (when it may (or may not be needed most), for most couples with lopsided lifetime earners, the higher earner delays til age 70. However, this may be a somewhat simplistic view for some couples that may need the SS benefit earlier to avoid depleting a retirement nest egg below what may be considered comfortable for their circumstances. I also think the PV of benefits may also impact whether age 70 is still the optimal scenario for what I previously described for lopsided earners- our household is in that category. I just re-ran OSS (last ran it about 2 years ago) because of this discussion, and am finding it's telling me the optimal claiming age for me is 67 years 10 months (much lower earning spouse will be age 70 then). I'm guessing the large inflation bump in benefits of a few years ago, along with the current higher rate environment is "fine-tuning" my claiming age to be a few years earlier than planned. I did run the alternative strategy of me claiming at age 70, and it's calculating a lifetime PV of about $7,500 less than claiming 26 months earlier. This result is having me rethink my original strategy (suggested by OSS) of claiming at age 70. Lot's to think about, especially tax planning. We were starting to "prune" some IBonds purchased in 2001 to smooth the tax brackets we will be in prior to RMDs kicking in, as well as managing the IRMAA threshold if possible. Another factor for my household is I did delay SS all the way to age 70, and I pre-deceased my spouse, she would get my much higher benefit. IMO, this is the most significant factor to consider delaying to age 70. Just my 2 cents!
Post: Open Social Security – interesting finding on optimization and mortality tables
Link to comment from January 14, 2025
John, we received a similar result as you several years ago. My spouse is 2 years older and lower earner, and claimed just before age 65. I’m waiting til age 70, at which time my spouse will, get about a 50% bump from the spousal benefit over what is currently being paid. If I recall, if the lower earning spouse claims their benefit early, the spousal benefit is reduced at such time the higher earning spots starts their benefits. I thought this was generally why the lower earning spouse would claim around age 65|66 in the OSS program.
Post: Open Social Security – interesting finding on optimization and mortality tables
Link to comment from January 14, 2025
Jonathan, your comment is generally correct when looking at high home prices (in relation to locational incomes). When the percentage of taxes and insurance of an overall mortgage payment starts to rise over 25% of a mortgage payment, I believe that it will give potential home buyers pause to buying- especially if homeowners insurance rates are increasing at rates that are far outstripping inflation, and not knowing what the future of the market for insurance will be (like in many areas of FL). In recent decades, high real estate taxes were in some markets dampening home affordability, and now with runaway homeowners insurance in some markets, this may prove to add to the challenge of homeownership. I don't think the real estate market has historically seen markets where taxes and insurance have represented more that 15-20% of overall mortgage payments in widespread areas.
Post: A new glitch in retirement planning to consider
Link to comment from December 26, 2024
Dick, I believe this will become an impediment for younger generations considering a home purchase- especially in areas more prone to impacts from climate change. It may be cheaper in the long run to be a lifelong renter in many housing markets, given the high cost of housing, and the layering of tax and insurance costs. It doesn’t make sense to own, when renting is significantly cheaper, and mobility is also much easier should a job opportunity present itself in an area with a better commute, or in a different state. i live in a coastal area (not directly on the coast), and have seen insurance rates increase 8 fold over 20 years, while taxes have only increased 4 fold. I suspect the multi-million homes directly on the coast (which are seeing huge insurance spikes), will eventually be devalued in coming decades due to the enormous cost of insuring them, along with the impacts from coastal storms. I’ve already seen this start to play out in some areas more prone to erosion.
Post: A new glitch in retirement planning to consider
Link to comment from December 25, 2024
Good post Cathleen. I would only add that in some circumstances/families, the late stage elder care may happen to pass on to the oldest child in the family which could be the oldest son (happened to me!). I happened to be the only retiree amongst my parent's children when both my parents started experiencing significant health declines at the same time- they figured I had the time because I was retired! I found the information in your post somewhat eye opening, and also spot on in many respects. I've been supporting both or at least one of my parents going on 5 years now... My wife and I plan to utilize a CCRC setup when one or both of us may start to suffer medical declines. We hope to make the choice to enter one for ourselves, and not be asked by our daughters to consider the move. We see the challenge in doing so will be getting the timing right due to many CCRCs in our area having long waiting lists. We expect both our daughters (we have no sons!) will be involved in some aspects of our support if we have a slow decline in health as we've seen with my parents. One day at a time...
Post: The Oldest Daughter Dilemma
Link to comment from December 23, 2024
Kristine, I've also witnessed this food insecurity in the community I retired to 6 years ago. We live in a relatively high cost coastal community with many seasonal jobs that don't offer a steady year round paycheck. Young families not only find it challenging to find affordable housing, but the lack of good paying year round employment also makes it tough for some families to make ends meet. Fortunately, there are robust food pantries in the area that fill the gap for most if not all of these families. It was quite an eye opener to visit a local pantry and hear the stories of their typical client, which was likely to be a neighbor on my street...
Post: Helping Our Neighbors by Kristine Hayes Nibler
Link to comment from December 23, 2024
For retirees, I would add- look at the networks available for rehab facilities and the PT/OT available annually. I found out that a top notch Medicare Advantage Plan (sponsored by past employer) limited options for a family member, while original Medicare did not. This is in spite of the MA plan not limiting regular medical providers to a network. Fortunately, was able to switch this family member back to original Medicare for more robust coverage. Medicare also does not micromanage progress in a rehab setting like non-Medicare providers.
Post: What I learned in 50 years about selecting and using health insurance-tips to consider-RDQ
Link to comment from December 23, 2024