how to retire early

[SultanofSwine]

Road has hit many of the big points on LTC but I will chime in and hopefully fill in a few of the blanks.

Avg stay in a nursing home is 2.5 years and avg use of home health care is around 4.

Premiums are not locked for the life of the policy. And they will go up just like homeowners and car insurance go up as well. They do that because of the claims experience of the insurer. Keep in mind that in industry terms LTC is still a very young arena. Rates are based on claims experience, claims expectations and policy retention rates among lot of other variables. The things I listed are steadily being adjusted as more historical data is available.

Just as a frame of reference John Hancock pays roughly 1.5 million per day in claims. People keep and use this insurance.

40% of the care provided annually in this country is to people between the ages of 18 and 65.

With the advent of the Partnership program, people now have the ability to protect assets from a medicade spend down by having a qualifying LTC policy. For every dollar of LTC care paid for by the policy, a dollar of personal assets are protected against the spend down requirements.

All of the stats I have seen indicate that at age 65 the odds of having a long term care event before death are 7 in 10. That ranks second only to death as far as insurable risk are concerned to my knowledge.

LTC is no different than most other types of insurance, you should have a plan and know why and how much risk you intend to transfer.

LTC is not what I would consider cheap insurance. That is because the odds are high that you will use it. Compare that to term life insurance where the odds are low that most people will use it and the cost makes a little more sense.

You should talk to your advisor about LTC whether you ultimately decide to purchase or not. Depending on the the situation and client, there are a number of ways to reduce the net cost of coverage such as ownership, pooling care, tax benefits. Again, those things are going to be situation specific and your situation will be different from your buddy at the coffee shop.

[Road_Hog]

Road has hit many of the big points on LTC but I will chime in and hopefully fill in a few of the blanks.

Avg stay in a nursing home is 2.5 years and avg use of home health care is around 4.

Premiums are not locked for the life of the policy. And they will go up just like homeowners and car insurance go up as well. They do that because of the claims experience of the insurer. Keep in mind that in industry terms LTC is still a very young arena. Rates are based on claims experience, claims expectations and policy retention rates among lot of other variables. The things I listed are steadily being adjusted as more historical data is available.

Just as a frame of reference John Hancock pays roughly 1.5 million per day in claims. People keep and use this insurance.

40% of the care provided annually in this country is to people between the ages of 18 and 65.

With the advent of the Partnership program, people now have the ability to protect assets from a medicade spend down by having a qualifying LTC policy. For every dollar of LTC care paid for by the policy, a dollar of personal assets are protected against the spend down requirements.

All of the stats I have seen indicate that at age 65 the odds of having a long term care event before death are 7 in 10. That ranks second only to death as far as insurable risk are concerned to my knowledge.

LTC is no different than most other types of insurance, you should have a plan and know why and how much risk you intend to transfer.

LTC is not what I would consider cheap insurance. That is because the odds are high that you will use it. Compare that to term life insurance where the odds are low that most people will use it and the cost makes a little more sense.

You should talk to your advisor about LTC whether you ultimately decide to purchase or not. Depending on the the situation and client, there are a number of ways to reduce the net cost of coverage such as ownership, pooling care, tax benefits. Again, those things are going to be situation specific and your situation will be different from your buddy at the coffee shop.

Listen to this guy.  He brings up a lot of points that I agree with and has some extra stats at his disposal, of which I don't have access. 

I'm glad you brought up auto and homeowners insurance, because those markets are performing in very unusual ways right now. 

Companies are under a lot stress right now from different angles.  Low interest rates may be great if you're purchasing or refinancing home.  But at some point, things are going to have to change.

[HognotinMemphis]

Listen to this guy.  He brings up a lot of points that I agree with and has some extra stats at his disposal, of which I don't have access. 

I'm glad you brought up auto and homeowners insurance, because those markets are performing in very unusual ways right now. 

Companies are under a lot stress right now from different angles.  Low interest rates may be great if you're purchasing or refinancing home.  But at some point, things are going to have to change.

One thing that needs to change is that everyone, including pension plans and insurance companies, should stop basing every financial decision on getting a 8 to 10% return. Not going to happen any time soon.

[IronHog]

Road has hit many of the big points on LTC but I will chime in and hopefully fill in a few of the blanks.

Avg stay in a nursing home is 2.5 years and avg use of home health care is around 4.

Premiums are not locked for the life of the policy. And they will go up just like homeowners and car insurance go up as well. They do that because of the claims experience of the insurer. Keep in mind that in industry terms LTC is still a very young arena. Rates are based on claims experience, claims expectations and policy retention rates among lot of other variables. The things I listed are steadily being adjusted as more historical data is available.

Just as a frame of reference John Hancock pays roughly 1.5 million per day in claims. People keep and use this insurance.

40% of the care provided annually in this country is to people between the ages of 18 and 65.

With the advent of the Partnership program, people now have the ability to protect assets from a medicade spend down by having a qualifying LTC policy. For every dollar of LTC care paid for by the policy, a dollar of personal assets are protected against the spend down requirements.

All of the stats I have seen indicate that at age 65 the odds of having a long term care event before death are 7 in 10. That ranks second only to death as far as insurable risk are concerned to my knowledge.

LTC is no different than most other types of insurance, you should have a plan and know why and how much risk you intend to transfer.

LTC is not what I would consider cheap insurance. That is because the odds are high that you will use it. Compare that to term life insurance where the odds are low that most people will use it and the cost makes a little more sense.

You should talk to your advisor about LTC whether you ultimately decide to purchase or not. Depending on the the situation and client, there are a number of ways to reduce the net cost of coverage such as ownership, pooling care, tax benefits. Again, those things are going to be situation specific and your situation will be different from your buddy at the coffee shop.

Good lawyer+Good planning>LTC insurance


Or you could just man up and wonder out into the woods when your molars are gone.............

[Singha Hog]

One thing that needs to change is that everyone, including pension plans and insurance companies, should stop basing every financial decision on getting a 8 to 10% return. Not going to happen any time soon.

This = gosh awful truth.

Some of the "experts" claim the next shoe to drop will be underfunded pensions.  I know in each company's 10-K they lay out assumptions and balances for pension plans.  One thing I look for is what rate of return they are assuming.  It is amazing to see that some are figuring in 10% returns.  From what I've read and learned from people with a lot more experience than myself is anything over 7% is very much overly optimistic.

I wish there was some way I could scan for a list of companies that are assuming 10% or greater returns and are already running a pension deficit.  Unfortunately I don't know of a way to do this other than download the 10-K of every company and manually pull out the info.  That might take a while :-)

[IronHog]

This = gosh awful truth.

Some of the "experts" claim the next shoe to drop will be underfunded pensions.  I know in each company's 10-K they lay out assumptions and balances for pension plans.  One thing I look for is what rate of return they are assuming.  It is amazing to see that some are figuring in 10% returns.  From what I've read and learned from people with a lot more experience than myself is anything over 7% is very much overly optimistic.

I wish there was some way I could scan for a list of companies that are assuming 10% or greater returns and are already running a pension deficit.  Unfortunately I don't know of a way to do this other than download the 10-K of every company and manually pull out the info.  That might take a while :-)

They are all underfunded.

Barring a complete meltdown of society many baby boomers will live to be 90+.   None of the pensions have that factored in??

[SultanofSwine]

Good lawyer+Good planning>LTC insurance


Or you could just man up and wonder out into the woods when your molars are gone.............

Not sure I follow your good lawyer/good planning comment...if you are referring to using gifting and trust to protect assets, I agree a lot can be done there to protect assets but the timelines are getting longer and everything I am hearing is that there will be a continued push to further extend them. That still doesnt address the real cost of paying for care and the resulting reduction in assets to do so. I'll use my own LTC policy as an example, assuming a 4% compound inflation protection and a 5% inflation rate in the cost of care, if I pay premiums on my policy for 30 years, I will only need to receive care for 110 days to have fully recovered my basis in the policy. My policy has a 5 year benefit period which leaves 4 years plus a couple hundred days or around of care at the max benefit level that I didnt have to spend a dime on. I havent bothered to figure the IRR on that because frankly I dont care but my guess is it beats treasury bonds. That 1700+ days of free care would cost on avg in AR around $300,000 in todays dollars and cost environment. Inflate that at 5% for 30 years and it's a pretty sizable number.

Again, like any type of insurance, the decision is about how much risk a person is willing to accept and how much they would prefer to transfer given the asset under consideration.

[IronHog]

Again, like any type of insurance, the decision is about how much risk a person is willing to accept and how much they would prefer to transfer given the asset under consideration.

Personally as long as I can think I'll never have a need for LTC insurance.


That type of living might be for some, but not me.  I'll just die when I can't live at home.

[HawgWild]

Personally as long as I can think I'll never have a need for LTC insurance.


That type of living might be for some, but not me.  I'll just die when I can't live at home.

IH - Good luck on avoiding ALS and stroke. It's always been a nightmare of mine to be trapped in a body that didn't work. And, SOS, I find little comfort in knowing that my LTC policy has me set up for 5 years in a nursing home. I'm just saying..........

[IronHog]

IH - Good luck on avoiding ALS and stroke. It's always been a nightmare of mine to be trapped in a body that didn't work. And, SOS, I find little comfort in knowing that my LTC policy has me set up for 5 years in a nursing home. I'm just saying..........

Think I could will myself to die if it came to that.


I've seen old men do it.........you know the kind.

[HawgWild]

Think I could will myself to die if it came to that.

I've seen old men do it.........you know the kind.

I saw my mother do it.

[SultanofSwine]

IH - Good luck on avoiding ALS and stroke. It's always been a nightmare of mine to be trapped in a body that didn't work. And, SOS, I find little comfort in knowing that my LTC policy has me set up for 5 years in a nursing home. I'm just saying..........

Or home or an assisted living facility if heaven forbid the only thing wrong with you is frailty.

[SWarkansasman]

Make sure you average 12%?  OK, if it is that easy,  lets up that return to 50% , making sure of the return and retire before 50 , no use wasting time.   

[HognotinMemphis]

The problem with your line of thinking is the harder things get the more the basics matter.  Memphis is an example of how failed policy is crushing the republic with welfare and entitlements.

---------------
IPhone?  In demand, good company, etc.  Want, not a need.

100 acres of rice ground outside Stuttgart?  Every baby born into this world puts more stress on an overburdened agriculture system.  That dirt is not going to zero unless the water runs out.


You have been conditioned to believe paper money, stocks, bonds, etc. makes one wealthy.  When the economy resets those that are holding the land that creates food will once again be masters of all.

By the way, if an iphone is a want, why do I see homeless people with them? Why do I see thousands of people who make less than $20K per year with them? And I'm not talking about teenagers. Some used to say A/C was a want, not a need. Now it's a need. Same for cable TV. Another point, you can't invest $10K or $20K in farmland. You can't diversify in farmland either unless you are already very wealthy and can buy farmland all over the country. Diversifying in equities is simple. Sort of tough to move farmland too, especially compared to equities.