How much to save for retirement

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sophie
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How much to save for retirement

Post by sophie » Sat Apr 01, 2023 1:25 pm

Everyone's favorite topic!

A recent WSJ article put this onto my radar - claiming that most Americans have such small retirement savings (median is $266K/person) that we are headed for a disaster. Especially with Social Security set to run out of money in 2033, forcing 25% cuts if Congress does nothing to fix it (which they pointedly are not doing). Worse yet, if the current $7+ billion budget proposal passes, it will hamstring the government so much that it may not be possible to do anything about SS & Medicare in future.

However there's a ray of hope. First, if that measure is per account (which is how it's described) rather than per person, then $266K is a big underestimate. No one has just one retirement account. I have 8 active accounts plus 3 that I emptied out (to try to consolidate some of this mess). I'm interested to know what the total is per person but I doubt that's a findable number.

The related question is how much you actually need. The ERE community has figured out living expenses while healthy, but they ignore the elephant in the room: old age care. I figured out that each person will need $2 million to get through the 10-15 years of home & nursing home care that most of us will face. My mother's current care regimen costs $6500/month after tax deductions, and when she eventually needs 24 hour care the costs will go up to the $15-20K/month range. Proceeds from selling the home can help with nursing home costs for those last few years, so maybe that will reduce liquid savings needs to $1.5 million - but surely not below that. And no, don't count on long term care to save you. The premiums reduce your savings, reimbursement of home care costs is far from certain, and it's typically only good for partial expenses for 2-3 years.

Moving to an apartment near family members, or to independent living/CCRC could help by delaying the need for private care. But other than that, there are no short cuts here. Medicaid is truly a last resort - that means you get to go to a bottom of the barrel nursing home with a bed in a double room, no one to make sure you get fed or showered or help you to the bathroom...anyway, gory details omitted but I think you get the idea.

Anyway - curious to know if anyone's thought of this while setting a "magic" number for retirement.
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Re: How much to save for retirement

Post by glennds » Sat Apr 01, 2023 2:08 pm

sophie wrote:
Sat Apr 01, 2023 1:25 pm
Everyone's favorite topic!



However there's a ray of hope. First, if that measure is per account (which is how it's described) rather than per person, then $266K is a big underestimate. No one has just one retirement account. I have 8 active accounts plus 3 that I emptied out (to try to consolidate some of this mess). I'm interested to know what the total is per person but I doubt that's a findable number.

I'm not sure how meaningful the median is, depending on the distribution. I think it's fair to say we have a wider distribution of disparity than say, a generation ago. The distribution could have extreme wealth on the one end distorting the median from what would otherwise be typical to the average person.

Maybe the statistical mode would be a better illustration? I say this because I think $266K may actually materially higher than the retirement savings that would be common for the average American, but I could be wrong. Especially since you mentioned accounts, which excludes home equity. I'm sure it varies geographically quite a bit also.
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Re: How much to save for retirement

Post by Tyler » Sat Apr 01, 2023 2:21 pm

The bad news is that I think you're overestimating the amount of savings the median person has. I think I found the WSJ article you're referencing, and the $266k figure is the median family net worth for the age range of 65-74. That includes not only all accounts but also home equity. According to this study where the WSJ is pulling their data, the median total family retirement account balances for the same 65+ crowd is just $125k (see Figure 7). So... yeah. Most people really don't save all that much and depend heavily on social security in retirement.

The good news is that I also think you may be underestimating Medicaid when it comes to assisted living. My dad has alzheimers and lives in a nursing home covered completely by Medicaid. His care is awesome. Single room, they always keep an eye on him and make sure he's fed, etc. I feel seriously blessed to have him there. Maybe the situation is different here in Texas, and perhaps he's a special case because of his condition where they're used to providing extra attention. But long story short I don't think it's always as dire as you see in your end of the world.

But to answer your original question, I think you're probably not too far off in your original assessment for a normal person. $1-2 million can provide a nice withdrawal rate (in a normal part of the country) for many years before you eventually deplete it in the last 10 years or so. Whatever Social Security that comes in is gravy. And if push comes to shove, Medicaid is a decent backstop.

Notably, that's an order of magnitude more than the typical family saves. One can take that two ways. First, the typical family is going to have very little money to depend on in their later years. And second, they're still getting by. So if you're thoughtful about your own savings, I would be more encouraged than fearful.
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Re: How much to save for retirement

Post by D1984 » Sat Apr 01, 2023 3:20 pm

Looks like Tyler beat me to it somewhat but yeah, the "average" balance is well above the median balance: Quoting directly from Vanguard's "How America Saves for Retirement: 2022" report (at https://institutional.vanguard.com/cont ... t_2022.pdf ):

"The wide divergence between the median and the average balance is due to a small number of very large accounts that significantly raised the average above the median. Three in 10 participants had a 2021 account balance of less than $10,000, while another 3 in 10 had balances of more than $100,000. Fifteen percent of participants had a balance of $250,000 or more. Because of the skewed distribution of assets, average balances are indicative of participants at about the 75th percentile (i.e., about 75% of all participants had balances below the average, and 25% had balances above).

Average balances are more indicative of the results experienced by longer-tenured, more affluent, or older participants. The median balance represents the typical participant: Half of all participants had balances above the median, and half had balances below.
"

The above-mentioned report goes on to say that the median balance for those at age 55-64 is just under $90K while the average balance is $256K. That median is a bit lower than in the study quoted by Tyler but then again IIRC I believe the Vanguard report only covered workplace defined contribution retirement plans (401Ks and the like) and didn't include IRAs/Roth IRAs.
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Re: How much to save for retirement

Post by Maddy » Sat Apr 01, 2023 6:25 pm

I think we can agree that whatever the figure is, it falls significantly short of the several million dollars you would need to even begin to have choices when it comes to planning for long-term care. And for most of us who are old enough to think about these things, no amount of saving or prudent investing is going to make a meaningful difference. Thanks to Medicaid spend-downs, the guy who works himself ragged to save an extra hundred thousand dollars is not going to fare any better than the guy who doesn't.

Knowing this, I have chosen to live as healthy and enjoyable a life as I can, and if the time comes that my choices are between bad and very bad, I hope that somebody will have the presence of mind to take me out back and shoot me. I honestly think many people feel the same way.

Hi Sophie--great to see you!
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Re: How much to save for retirement

Post by sophie » Sat Apr 01, 2023 6:51 pm

Thanks for posting that Tyler!

I took a peek through the report you linked to, and it still cites figures by account balance, not total of all accounts per person. For example see this sentence:

"The average account balance of those families owning IA plans increased from $79,262 in 1992 to $258,453 in 2019."

I found similar language throughout, whenever the report mentioned dollar amounts of retirement savings. I've noticed that before, it always says things like "the median/average account balance is X".

As far as Medicaid goes, it appears your Mom is incredibly lucky. My aunt is in the best memory care facility my sister could find in her area (northeastern NJ). It doesn't accept Medicaid, and charges $12,000 a month. My sister discovered that my aunt had thrown away all her clothes and had one set of clothes that she was wearing around the clock and was never laundered, was losing weight from never getting help eating meals, and was falling repeatedly. My sister had sent new clothes but they were tossed into a closet and the packages were never even opened. That's when she decided to hire aides to care for her in the memory care home around the clock. From what I've seen & read, this is pretty much how it goes everywhere, but at least this facility is clean & pleasant, and my aunt has her own room. In a medicaid facility, it would be similar except for the clean and pleasant part, and no one can have a single room. Plus, if you're on Medicaid, there's no $$ to pay for private aides. A friend of mind has his Mom in a Medicaid facility, sharing a room of course, and he and his siblings pay for the aides out of their own pockets. Which of course just kicks the can down the road since that's money they're not saving to pay for their own old age care.

I suspect people have been "doing ok" because the generation of current 80-90 year olds worked in the pre-401K era, where you got a pension instead of a company 401K account. That's the "defined contribution" plans mentioned in the report. The switch to 401Ks is still untested when it comes to end of life care on a large scale. If you're right about the $260K figure referring to total retirement savings rather than individual accounts, then there's going to be quite the crisis in another 5-10 years. This would make it even more critical to get ahead of the pack by having enough savings to cover all conceivable expenses, rather than taking your chances with a Medicaid system that is likely to get overwhelmed.

And btw Tyler...I'd really like to find out more about that memory care place your mom is in!
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Re: How much to save for retirement

Post by Tyler » Sat Apr 01, 2023 10:23 pm

sophie wrote:
Sat Apr 01, 2023 6:51 pm
I took a peek through the report you linked to, and it still cites figures by account balance, not total of all accounts per person. For example see this sentence:

"The average account balance of those families owning IA plans increased from $79,262 in 1992 to $258,453 in 2019."

I found similar language throughout, whenever the report mentioned dollar amounts of retirement savings. I've noticed that before, it always says things like "the median/average account balance is X".
Fair enough. I'll have to read it in more detail, as perhaps I missed something by skimming the tables. But in my experience reading these types of studies the totals are way lower than you think.

My dad is in a nice place in the DFW area. It's actually not a dedicated memory care facility but they take very good care of him. Whenever a family member has dropped in unannounced he has always been happy and healthy, often eating in his room after they clearly brought him a meal. I hear he's a relatively easy patient, which helps. I want to say that even without Medicaid it costs 2/3rds of what you're seeing in NJ and is popular enough to have a waitlist. Again, I'm super thankful that he's there. Feel free to PM me if you'd like more details.
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Re: How much to save for retirement

Post by seajay » Sun Apr 02, 2023 7:08 am

My mother, approaching 92, contracted Covid in January 2021, after a fall and fractured hip operation. Covid mandatory isolation brought on vascular dementia (her anxiety/upset was extreme, and family weren't allowed visits, just phone calls). I, her only child/son, cared for her at home up until December 2022 when after another fall and hospital admission she's been discharged into a care home. I was struggling with her at home, 24/7 demand and where paid carers were more often locked out, so not even short breaks. Other family are abroad so no aid there either.

I don't like the care home, the care is excellent, any clothing taken in has to be handed in so they can name tag each item, single room, they do the clothes washing, food is OK etc. however its a bed to chair to bed lifestyle, so 'safe' - but just existing. They do do activities, but mostly chair based exercises/games, so her mobility/strength will decay. In contrast whilst at home I'd take her out to 'dementia clubs' for singing and other activities, social events ...etc.

Basically the care home is a large common room with patio/garden, along side a dining area, with four or so carers on duty at all times along with a nurse, and where they're pretty much sequencing taking each to the toilet in turn. 8am to 6pm or so, before bedding them down. I visit daily, and more often when I walk in most of them are dozing in their chairs, some seem to infrequently have visitors - I suspect dumped in there by family and perhaps once/month type visits, if that.

The general rule of thumb is apparently for a average 4 to 5 year period within a care home, some last just weeks/months, others many years. So whilst you might estimate a average figure its all still a lottery. I'm paying around a $1400/week cost, pretty much all-inclusive other than hair, nails ..etc. That's under low needs nursing costing, predominately just care costs, as dementia onsets so nursing/costs would rise. With the cold winter I've not taken her out for day-trips, partially in fear of if I did I might never get to to agree to go back in again. My hope is that come milder weather that I might do so, at least to break up the days for her, and whilst she doesn't like it in there she's not that disagreeable to it and certainly has changed in having become far less anxious/upset than she was before when in hospital (or indeed at home). Medical advice is that she's settled and that any moves could induce a return of prior anxiety levels.

There are more expensive 'better' homes around, but I'm concerned that a move might do more harm than good, so as of recent still very much undecided. Sometimes more expensive doesn't mean better, just more greed/profits for shareholders, potentially at the cost of poorer actual care/service. Former generations cared for their parents at home, and often neighbours would help each other. My mother lived on a street where front doors used to be left open and neighbours walked in and out, shared/helped. For me, well I hardly know my neighbours and front doors are locked, in a era where its far more common for family to offload care onto others. A cultural transition, where some that are still in the old ways of family providing care can't imagine other families where they pay others to provide care for their elderly family members.

When initially confronted with the situation I did come across potential lower cost but better care options abroad, such as ...

https://www.theguardian.com/society/202 ... d-for-care

which might be a plan-B option if finances were to become strained. Multiply Pound by around 1.2 as a US dollars guide. A factor there however is that you'd have to still be well enough to travel if going down that route. Also whether you might have family that were also prepared to move there with the person going into care.

Personally with first hand insight, not so sure I want to 'get there' myself. Hadn't really pondered the issue before, but now I think I'd be more tempted by the Robin Williams option. Healthy eating and exercise might prolong your life, but if the quality of life is low! Exercising for a hour/day to prolong your life by a hour extra as a 90 something in a chair ... is seemingly a wasted hour. Also seems to me that as each generation pass so the next become more uncaring, for instance I expect that if/when my time came that my offspring would be more inclined to be dumpers/visit once/month or less - being the commonly accepted thing that is done in 2060 or whatever. So maybe don't save anything :) Blow it all, enjoy whilst you can, become someone else's liability if you get to that stage. Or perhaps look to retire to Thailand or suchlike in your 70's/80's.
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Re: How much to save for retirement

Post by sophie » Sun Apr 02, 2023 10:36 am

$5600/month ($1400/week x 4) is already miraculously low cost compared to prices around here. And yeah, I doubt that "better" means anything anymore, because all the nursing homes (including euphemisms such as "memory care") are understaffed, or staffed with "quiet quitters", and that's what's driving the lack of care issues. You might do very well hiring a private aide, even if only a few hours a week, to take your mom for walks and play games with her for some stimulation.

My mother's live in aide doesn't entertain her but does take her out for walks. I think she actually is doing it right, by distancing herself emotionally from my mom with all her rages and hot button issues. She's a minefield of triggers, which I think is true of most dementia patients. When I go to the house, if I want to talk to the aide I have to go outside with her so my mom doesn't hear us. I also found that working remotely while caring for my mom directly at her home doesn't work, because she reacts similarly to zoom or phone meetings. Negotiating that minefield is quite an art, it took me a long time to figure out how to do it. The current aide is very adept at it. Others, who have tried harder to engage my mom and talk to her, don't know how to deal with the triggers and my mother ends up being very mean and nasty to them.

So it's just not possible for a caregiver to also provide environmental enrichment - that has to come from phone calls to friends & family, and visitors. I arranged for someone from my mother's church to visit once a week, and I also get at-home physical therapy whenever possible (Medicare unfortunately limits this to a few weeks a year). I also set up her iPhone with a picture-phone home screen using the Shortcuts app, so she can call people - a mixed blessing to be sure, plus I have to redo it every time the phone updates because they always break the shortcuts for whatever reason. And my brother facetimes her regularly so she can see his kids. I did try to get my mom to a dementia day program in the area, but she reacted badly to that and refused to go - because one of her "triggers" is anyone telling her what to do.

Interesting option to go to Thailand! That rather limits family visits though, and that's one of my mother's special joys. Also my siblings really like to visit her, they fly out every few months. It's certainly a great option for someone with no family, or at least none that care to visit, as long as someone is willing to make that trip with them. In my experience, putting a dementia patient on an airplane for a long flight is a truly daunting prospect. A related option is a CCRC (continuing care retirement community). You pay them a large slug of money, presumably from the sale of your home, and in return they charge monthly fees that are usually pretty reasonable and promise to take care of you for life. You usually buy into these in your early to mid 70s and start out in the independent living apartments, then they transfer you to higher levels of care within the community as your needs change. I'm currently helping a woman in my coop move to a CCRC in Pennsylvania and figure out financing, so I'll get to see what those numbers look like. That may be a useful escape hatch if you don't have the $2 million saved up.
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Re: How much to save for retirement

Post by vnatale » Sun Apr 02, 2023 2:11 pm

I know someone whose mother died a few years ago at 101 years ago.

He kept her at her home. The last few years she needed assistance, so he had aide coverage 24 hours a day. They cooked, cleaned, anything else necessary.

He had pressure from family to put her in a nursing home but he managed not to by doing the above.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: How much to save for retirement

Post by dualstow » Sun Apr 02, 2023 3:11 pm

Really appreciate this thread.
RIP Marcello Gandini
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Re: How much to save for retirement

Post by Xan » Sun Apr 02, 2023 3:21 pm

Re: the CCRC: it sounds like once you're in there's no way out, and if the place starts going downhill you might want a way out. And if all those folks really are captive, there's no incentive for it not to go downhill. Is there any protection against that?
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Re: How much to save for retirement

Post by DogBreath » Sun Apr 02, 2023 3:42 pm

Xan wrote:
Sun Apr 02, 2023 3:21 pm
Re: the CCRC: it sounds like once you're in there's no way out, and if the place starts going downhill you might want a way out. And if all those folks really are captive, there's no incentive for it not to go downhill. Is there any protection against that?
Pretty sure that is not the case. You can generally resell your spot to another oldster if your needs change. I know someone who was in one of these who ended up needing advanced memory care and had no problem getting out.
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Re: How much to save for retirement

Post by barrett » Sun Apr 02, 2023 4:39 pm

sophie wrote:
Sun Apr 02, 2023 10:36 am
A related option is a CCRC (continuing care retirement community). You pay them a large slug of money, presumably from the sale of your home, and in return they charge monthly fees that are usually pretty reasonable and promise to take care of you for life. You usually buy into these in your early to mid 70s and start out in the independent living apartments, then they transfer you to higher levels of care within the community as your needs change. I'm currently helping a woman in my coop move to a CCRC in Pennsylvania and figure out financing, so I'll get to see what those numbers look like. That may be a useful escape hatch if you don't have the $2 million saved up.
This is the route that my aunt & uncle went, moving in their 70s from PA to NC (close to their son), and it worked out well for them. Both ended up needing the higher/highest level of care toward the end of their lives. From my travels & work in PA, there seem to be a lot of CCRC communities there. I don't remember the total amount my aunt & uncle spent but it was definitely way under $2 million (this was for the time period of 2005 to 2020).
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Re: How much to save for retirement

Post by seajay » Sun Apr 02, 2023 5:51 pm

sophie wrote:
Sun Apr 02, 2023 10:36 am
My mother's live in aide doesn't entertain her but does take her out for walks. I think she actually is doing it right, by distancing herself emotionally from my mom with all her rages and hot button issues. She's a minefield of triggers, which I think is true of most dementia patients. When I go to the house, if I want to talk to the aide I have to go outside with her so my mom doesn't hear us.
I did have a great offer some months back for a live-in aide, but sadly Mother wouldn't have anything to do with that. Same for carers - refusal as 'get out - my son will do all of that'. Mood swings turning on a pinhead - junk mail that would be read intently and interpreted in her own mind as being urgent/necessary. TV shows where she'd merge the fantasy into her own real world, or where she'd become upset by the likes of newsreaders looking out at her not answering her. Best son in the world one hour, get out, get out now the next. Odd sounds triggering panic, hallucinations such as rear garden tree branches being men spying and waiting to break in and murder her. Had the odd phone calls at 3am from her bedroom, asking whether it was morning or afternoon. Dozing all day, to not sleep at night and be busily active. Hiding important papers that have always keep safely kept in certain locked desk elsewhere, never to be found again. When are we going home repeatedly asked at times, and after explaining how she'd lived in the same home for 60+ years and going through some of the history/memories - only to be asked when are we going home again 10 minutes later. etc. etc.

Sounds like you're doing a excellent job of managing/coping Sophie. Until you've lived it you just don't realise how difficult it can be to the extent of a all of time consuming and demise of ones own health/happiness. I was truly struggling myself and since she's moved into a nursing home I've have felt much better in many ways other than the struggle with guilt. A neighbour cares for her father at home who is a few years older and she copes very well, regularly seems cheerful, works part time at a check-out desk in a local grocery store etc. socialises etc. but her father doesn't have dementia and is content to be left at home for periods with the TV/radio/newspapers. I left mum during last summer heatwave at around 11am whilst she was asleep in her chair to pop down to the shops for some groceries, and half a hour after having left I received a call from ambulance staff to say they were with mum who had walked out onto the street tarmac and burnt the soles of her bare feet.

One relief is on hearing how much it costs for you it does make our costs seem much more reasonable. Might be relative though - as basically its around 5 times mums state pension amount, but that is for mild nursing based care, for more intense nursing I believe that can increase five-fold or more. At that point however I suspect most aren't even aware of their environment and the fallback of state funded (Medicare I suspect you might call it) would tend to become the only option for multi-year cases excepting for those that had some significant capital reserves. Over here you do have some who pay little/nothing in the chair next to the person who is self fully funding. Much depends upon local council ... comparable to State, a state lottery so to speak, where its great for some, but in other cases where ability to council/state fund is low, where non-self funding can be moved into some pretty dreadful places/conditions, I recall visiting someone in one many years back and considered it not even being fit for a dog.
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Re: How much to save for retirement

Post by seajay » Sun Apr 02, 2023 6:00 pm

vnatale wrote:
Sun Apr 02, 2023 2:11 pm
I know someone whose mother died a few years ago at 101 years ago.

He kept her at her home. The last few years she needed assistance, so he had aide coverage 24 hours a day. They cooked, cleaned, anything else necessary.

He had pressure from family to put her in a nursing home but he managed not to by doing the above.
Over here (UK) and the aide typically gets paid minimum wage of around $13/hour, but you're billed at a minimum $33 or so hourly rate. So getting on for $300,000/year cost rate for 24/7. In some cases they'll insist on two, for the likes of using bed hoists to lift out/into bed etc. safely or other such mobility factors.
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Re: How much to save for retirement

Post by vnatale » Sun Apr 02, 2023 6:42 pm

seajay wrote:
Sun Apr 02, 2023 6:00 pm

vnatale wrote:
Sun Apr 02, 2023 2:11 pm

I know someone whose mother died a few years ago at 101 years ago.

He kept her at her home. The last few years she needed assistance, so he had aide coverage 24 hours a day. They cooked, cleaned, anything else necessary.

He had pressure from family to put her in a nursing home but he managed not to by doing the above.

Over here (UK) and the aide typically gets paid minimum wage of around $13/hour, but you're billed at a minimum $33 or so hourly rate. So getting on for $300,000/year cost rate for 24/7. In some cases they'll insist on two, for the likes of using bed hoists to lift out/into bed etc. safely or other such mobility factors.


Thinking about it more I think it may have only been for a year, he paid them direct (no agency involved), and I think the total cost was about $125,000. It was her money, not his, that was used to pay these costs.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: How much to save for retirement

Post by barrett » Mon Apr 03, 2023 5:11 am

DogBreath wrote:
Sun Apr 02, 2023 3:42 pm
Xan wrote:
Sun Apr 02, 2023 3:21 pm
Re: the CCRC: it sounds like once you're in there's no way out, and if the place starts going downhill you might want a way out. And if all those folks really are captive, there's no incentive for it not to go downhill. Is there any protection against that?
Pretty sure that is not the case. You can generally resell your spot to another oldster if your needs change. I know someone who was in one of these who ended up needing advanced memory care and had no problem getting out.
Not only that, but because a percentage of their clients pass away each year, there are enough new people checking these places out that business will decline if service is schlocky. I visited my aunt & uncle several times over the years and their facility was consistently well maintained.
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Re: How much to save for retirement

Post by vnatale » Mon Apr 03, 2023 7:07 am

barrett wrote:
Mon Apr 03, 2023 5:11 am

DogBreath wrote:
Sun Apr 02, 2023 3:42 pm

Xan wrote:
Sun Apr 02, 2023 3:21 pm

Re: the CCRC: it sounds like once you're in there's no way out, and if the place starts going downhill you might want a way out. And if all those folks really are captive, there's no incentive for it not to go downhill. Is there any protection against that?


Pretty sure that is not the case. You can generally resell your spot to another oldster if your needs change. I know someone who was in one of these who ended up needing advanced memory care and had no problem getting out.


Not only that, but because a percentage of their clients pass away each year, there are enough new people checking these places out that business will decline if service is schlocky. I visited my aunt & uncle several times over the years and their facility was consistently well maintained.


That is what I'd intuitively thought would be the case.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: How much to save for retirement

Post by Xan » Mon Apr 03, 2023 9:18 am

The continuing need to bring in new people to replace people dying makes sense, and that's a reason that service needs to be maintained.

I'm not sure being able to sell your "share" to somebody else is a reason: if service has gone downhill, your share will be worth less, and you won't be able to exchange it for a place where service is good.
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Re: How much to save for retirement

Post by GT » Mon Apr 03, 2023 9:23 am

However there's a ray of hope. First, if that measure is per account (which is how it's described) rather than per person, then $266K is a big underestimate. No one has just one retirement account. I have 8 active accounts plus 3 that I emptied out (to try to consolidate some of this mess). I'm interested to know what the total is per person but I doubt that's a findable number.

Agree - I have always wondered if the level of reporting on this topic is accurate. Unless the Retirment account reporting is tied to an SSN then it is just a WAG.
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Re: How much to save for retirement

Post by glennds » Mon Apr 03, 2023 9:50 am

Xan wrote:
Mon Apr 03, 2023 9:18 am
The continuing need to bring in new people to replace people dying makes sense, and that's a reason that service needs to be maintained.

I'm not sure being able to sell your "share" to somebody else is a reason: if service has gone downhill, your share will be worth less, and you won't be able to exchange it for a place where service is good.
I've never heard of a CCRC that permitted selling or transferring your "share" to another third party. The typical CCRC model is called a life estate. It is personal to the buyer/resident. You are purchasing rights and services for life in exchange for a large up front fee and small continuing maintenance fee or some combination thereof. The CCRC is taking a risk on your lifespan and relying on actuarial tables to do so.
This is why most (38) states regulate them through the Department of Insurance. And in connection with the regulations, they are usually required to disclose audited financial statements.
If you could reach near end of life and then sell your lifetime benefit to someone who is much younger, that would not be very good for the CCRC would it?

EDIT: There are various models and conditions. Some CCRCs will offer a declining partial refund of the up-front payment within a defined time period, say 2-4 years. Others will offer an option to pay a higher up front fee and get some of it back, versus a lower up front fee and none back (kinda like a whole life insurance policy). So it can vary. These are businesses.
Each prospective resident needs to model what the CCRC offers and determine if it is the right fit based on their anticipated needs. Some of what they offer depends on how competitive the local market is.

But I still do not think there is a secondary market where people are directly buying and selling "shares" among each other. However neither have I heard of issues where a resident is "trapped" in a CCRC.
As needs change there will always be ways to deal with them, it just won't be free, but it won't be ransom either.
For someone who wants a set it and forget it solution, a CCRC is a good option. For someone who needs total flexibility and is comfortable with risk, then rent-as-you-go senior living is a better option.
Last edited by glennds on Mon Apr 03, 2023 12:46 pm, edited 1 time in total.
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Re: How much to save for retirement

Post by Maddy » Mon Apr 03, 2023 11:55 am

I'd be curious to know what kinds of promises these CCRCs make with respect to quality of care. Are they definite enough that they could be reasonably enforced?
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Re: How much to save for retirement

Post by glennds » Mon Apr 03, 2023 12:43 pm

Maddy wrote:
Mon Apr 03, 2023 11:55 am
I'd be curious to know what kinds of promises these CCRCs make with respect to quality of care. Are they definite enough that they could be reasonably enforced?
Usually a CCRC is maybe 75% or more independent living, and 25% or less other levels of care such as Assisted Living, Memory Care and Skilled Nursing. The latter three are licensed and regulated under each State's department of health services.

The Independent Living portion is basically concierge housing. The services consist of maintaining the property, the meal service, housekeeping, some level of activities, etc. There is not a lot of health care involved.

If a person cannot be independent, and progresses to one of the other levels of care, the state enforces standards of quality through annual licensee inspections, including responding to complaints as they are made.

Note, some CCRCs do not offer all levels of care.
In addition, many CCRC residents obtain supplemental care through outside providers who come to the CCRC to deliver care to them. For example, home health providers, hospice providers, and private duty aides. And by the way, hospice does not necessarily mean end of life care, it also includes palliative care and chronic disease management that can go on for years.

If a CCRC was blowing it on the service quality in the Independent living, then they would have trouble attracting new residents in the normal turnover process as residents die or leave.
If they blow it on the other licensed levels of care, the State is going to penalize them in any number of ways including Civil Monetary Penalties. And if the State is asleep at the switch, then the local news will pick up a salacious story about nursing home abuse and then the Governor is having to answer, and the Feds are involved. This happens from time to time. Most people don't know this, but the State is under contract with the Feds for many aspects of facility licensing.

Many states have elder neglect and abuse statutes that provide enhanced remedies to plaintiffs so the legal malpractice industry is another reason that low quality providers ought to beware because that state is a lucrative one for suing nursing homes and assisted living facilities. Have you ever seen "Have you or a loved one been injured in a nursing home?" TV commercials from law firms? Now you know why.
Last edited by glennds on Mon Apr 03, 2023 12:50 pm, edited 1 time in total.
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Re: How much to save for retirement

Post by Xan » Mon Apr 03, 2023 12:49 pm

The existence of those commercials indicates to me that this is a serious and ongoing problem, rather than that bad stuff doesn't happen because of the threat of lawsuits.

The fact that terrible nursing homes exist would seem to indicate that the mechanism of state penalties / governor embarrassment is far from comprehensive, and I still don't see any guarantees that a well-run place won't turn into a terrible one over time.
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