What is the best age to retire?

[Gailete]

Tom, In many ways the LTC insurance companies feeds into people's fears that somehow if needed they won't get the care they need if they do have to go into a nursing home. Many people never need to go, some only go for the last stages of an illness, long term unskilled care is the most costly, but at least in my state, there are proceedures for paying for the help. It may mean though that savings will be used, and evenutally the home is sold, but at least in my state this is set up in a fair way. The spouse that still lives at home is allowed a reasonable amount to live on and the house may need to be sold after the surviving spouse dies to help cover the cost that welfare has spent on the person's care.

I know some try to get around losing the house by giving it to the kids and giving assets to their kids, but if they do that and two months later one of the couple has a stroke and needs to be in the nursing home, the state 'looks back' and sees that they gave the house away, they will assume that was down to hide assets and can take the hosue evenutally anyway. However is a couple gives their house to a kid ten years before one of them ends up in a nursing home, then they house remains the kids property. The excuse some people give for trying to hide assets is they don't want the government getting their property. Well actually, the government is only going for what is owed to them for the care they rendered, not to line the states pockets. It is only fair that a person pays their bills and expenses as much as possible.

But all this can vary from state to state, so it is something that you need to talk to someone official about the rules and investigate it thoroughly. The person NOT to ask is the insurance salesman!

[sv2007]

What are the important considerations that we need to keep in mind when we decide on the age to retire?
I hear many people say that they postponed their retirement till later so they can save more money and enjoy comfortable retirement. By the time they retire, they are too old to enjoy their savings. On the other hand of you retire too early, you might end up with no money; the life expectancy is much longer now and we live longer than our granddads. What are the important considerations that we need to keep in mind when we decide on the age to retire?

I don't think you should look at age; instead, look at your financials.

We know how much we spend and we know that once we retire we want to maintain pretty much the exact same life style but with extra money for things that we've been putting off due to lack of time. Once our investments return higher than our expenses; we know we can retire.

For people with less savings where you must figure in principal to finance your retirement, I'd suggest to hold off retirement if possible. But I'm a conversative guy.

[Like2Plan]

It still scares me, but what's one to do?

I wish I knew. DH and I have had LTC insurance for quite a few years now. Our premiums are quite a bit less than what you were quoted, but it turns out the ins company can ask for a rate hike and possibly make it unaffordable in the future. (So much for locking in the protection at an affordable rate. )

We keep paying because we are in that middle area where we have some assets, but not enough to really be in the self insure category. What we are trying to prevent is getting into a situation where the first spouse that needs skilled nursing care impoverishes the surviving spouse. Our second concern is that we don't want to burden our child. I don't think the coverage we have will cover the entire cost of LTC, but I believe it will help a lot.

One strategy that I have seen is to reduce the LTC insurance premiums is to increase the waiting period for benefits.

[LivingAlmostLarge]

Right now the lookback is 5 years. And many people put things into trust to get around it. But trusts are not always the best when they are irrevocable versus revocable. Not sure what the differences are but my mom said money people saved should be used for their care. She's seen too many families use the money instead of for the person care blown on crap. And then the person who saved all this money is treating CRAPPY and put into the worse nursing home and left to die when they thought they were "saving" for the kids. This happens more often than not.

[Gailete]

Right now the lookback is 5 years. And many people put things into trust to get around it. But trusts are not always the best when they are irrevocable versus revocable. Not sure what the differences are but my mom said money people saved should be used for their care. She's seen too many families use the money instead of for the person care blown on crap. And then the person who saved all this money is treating CRAPPY and put into the worse nursing home and left to die when they thought they were "saving" for the kids. This happens more often than not.

Absolutely! I've heard people that actively are trying to hide potential assets so if mom or dad go into a nursing home, that all their savings and assets are not available. What they seem to be bypassing is the thought of why should the government pay for someone's stay in a nursing home when they had successfully hide $100 of thousands of dollars so the kids would get it instead? The process in PA from when I was still working (I don't know any changes over the last 10 or so years) was fair to everyone. People paid what they could from their assets. People were allowed $30 (at that point) per month from their SS checks to pay for personal things like hair dos, clothes, treats, etc. If someone had a lot more assets, then they can pay their bill and have whatever spending money they pretty much want or their kids can put in their accounts.

@Like2Plan--my FIL paid his premiums for years until they went up to over a thousand a month. It just wasn't feasible. So the nearer you are to possibly collecting, the more the premiums will shoot up. He would have been better off to have put those premiums into a savings vehicle of some kind, even at 1% interest, he still would have had more cash for a nursing home than those premiums which he now has nothing to show for it. Seems like the only people that get to possibly collect on them are those that are perhaps in their 50's that have an terminal illness and have to go into a home for care. But trying paying a LTC premium when you are already 80!