Do we really need $1 million or a few millions USD to retire?

[Odysseusa]

The media usually tells us that we need at least $1 million or a few millions US dollars to retire.

My question is that do we really need that much? If we only have $100,000 or a few hundred thousands US dollars, is it sufficient to live a good and meaningful life?

Thanks.

[MediumTex]

If you can live on $4,000-$6,000 a year, $100,000 in savings should work fine for retirement.

[melveyr]

I am also very hazy on how much it would take for me to retire. I probably spend $4,000 dollars a year on food alone. That means I would need a little over $100,000 saved up just in order to eat (assuming 4% withdrawals).

My plan is just to save as much as I can, and live the life that 4-5% withdrawals will allow for.

[MarySB]

Not to be a wet blanket, but if you need to use a nursing home or assisted living later on in life, you'd better have SEVERAL million dollars. And that's WITH LTC insurance!

At the rate the costs are increasing---over 5% per year---LTC insurance will do you no good. Unless you have the prohibitably expensive 5% cost of living rider. We took out our insurance five years ago, and were talked into 5% simple. At the time, costs were increasing at 3%. So, we figured we'd be fine.

I took out an unlimited policy because my mother had dementia and lasted ten years. She was fine because she was on MediCal.

Middle income people will get squeezed and their LTC insurance will do them no good. (I crunched the numbers!) So, I will be calling my LTC insurance provider on Monday (I just finished crunching the numbers yesterday, so this thread is timely!) to see if I can get a rider on my policy that has 5% compound interest. Otherwise, I probably will be screwed!

Sobering fact  :-[

[Odysseusa]

Thank you, for your analysis. I guess I will work and retire at the same time until the date I die.  ;D

[TripleB]

I've worked for/in LTC facilities. A more humane option would be assisted suicide. I can't imagine wanting to live in one of those.

I also can't imagine extending my employment (and thus reducing my retirement) by several years, in order to build up the capital necessary to pay for stay in a LTC facility.

Would you rather retire at 50, live until 70 and die before dementia sets in? Or work until 60, live until 90, with the last 20 years of your life in a LTC facility?

I'll take the 10 good years in my 50s, rather than 20 shitty years in my 70s. Life is about tradeoffs.

[MarySB]

TripleB,

You make a very good point, especially since you have first-hand knowledge of the LTC industry.

Of course, there are good and bad facilities. My mother was in a group home and received very good care. They really went above and beyond. However, i pulled her out of a nursing home when I saw the conditions under which she was "living". My MIL is in an assisted living facility and receives very good care, as well.

I can't say that ALL are bad. Also, in my opinion, assisted suicide is a rather rash solution to a serious problem with many LTC facilities. Perhaps, some within the industry might work toward change. It's difficult, to be sure, but perhaps the best way.

[TripleB]

I can't say that ALL are bad. Also, in my opinion, assisted suicide is a rather rash solution to a serious problem with many LTC facilities. Perhaps, some within the industry might work toward change. It's difficult, to be sure, but perhaps the best way.

I agree. They aren't all horrible. However, the idea of being confined to a bed, pooping in a dish, peeing through a tube, and having someone who would rather be doing anything else, stand there and rotate my shell of a body every few hours to avoid bed sores, is worse than death, even if the assisted living facility (ALF) was a palace.

If things aren't too bad for me, and I am able to perform activities of daily living, then I don't need to be in an ALF.

This type of care is referred to as palliative care, because you aren't getting better. You are just slowly dying in misery. The highlight of your life is the 1 minute every 4 hours you get rotated in bed and share 30 seconds of small talk with someone who is paid to be your friend. Or if you're really lucky, your grandchildren come by to visit you once every few months, if only to ensure they will be in your will.

[craigr]

I can't say that ALL are bad. Also, in my opinion, assisted suicide is a rather rash solution to a serious problem with many LTC facilities. Perhaps, some within the industry might work toward change. It's difficult, to be sure, but perhaps the best way.

I agree. They aren't all horrible. However, the idea of being confined to a bed, pooping in a dish, peeing through a tube, and having someone who would rather be doing anything else, stand there and rotate my shell of a body every few hours to avoid bed sores, is worse than death, even if the assisted living facility (ALF) was a palace.

If things aren't too bad for me, and I am able to perform activities of daily living, then I don't need to be in an ALF.

This type of care is referred to as palliative care, because you aren't getting better. You are just slowly dying in misery. The highlight of your life is the 1 minute every 4 hours you get rotated in bed and share 30 seconds of small talk with someone who is paid to be your friend. Or if you're really lucky, your grandchildren come by to visit you once every few months, if only to ensure they will be in your will.

My Grandmother moved to Arizona and lived in an assisted living home for a short time. She eventually moved out to her own apartment. When I asked why she said "I got tired of being around old people dying." She would talk about the inevitable ambulance in the middle of the night or morning carrying away bodies. It was depressing. She died on her own terms in her apartment still sharp as a tack well into old age. She was lucky I suppose not to have her mind go like so many others.

This is not a problem with the facility, which seemed quite good. It's just how these things go.

[Coffee]

Most days I pray I can lay in bed and have people leave me alone.  Being able to pee in a bottle without having to bother getting up would be an added bonus. 

It's all how you look at it.

[MarySB]

Yes, some deaths are more miserable than others. I hope I die peacefully in my sleep, preferably in my own home. My father had a miserable death at home. But the hospice staff were wonderful and they made him as comfortable as possible.

LTC insurance pays only for nursing home and, possibly assisted living. So, one would have to need supervision for ADLs or for dementia. In other words, unable to reside safely at home alone.

I, for one, would rather be in my own home. But, the necessity could arise and, better to be in a caring environment than at home where one's safety is compromised. JMHO.

[Coffee]

I wonder if that type of insurance will become more prevalent as the baby boomer generation ages?

I've always wondered about the following: What does a couple with no kids do, as they get too old to take care of themselves?  Say you retire with a couple of million dollars-- are there managed trusts (??) that will manage your money and make sure the convalescent home is doing what they should?  (And making sure they get paid?)

[MarySB]

I wonder that myself, since I am one of the "older"'boomers. I think most people, including me, really don't want to be a burden on our families. And, who's to say that even family members would have our best interests at heart? Throw children from former marriages into the mix and you have a REAL possibility for disaster!

It's a crazy world we live in. No guarantees.

Sometimes, I think third world countries have a better grasp. The community can really count on each other. One of the images that sticks in my mind is a trip I took to Llhasa, Tibet, before it became spoiled by tourism. People are VERY poor, but some of the happiest I have seen. They made even menial work fun. I remember a group of women working together to tar a roof on a very hot day. They actually made it a dance complete with their own voices singing an upbeat song. I'm not sure how it relates to the topic, but it's a picture I don't often see here.

It will be interesting, and a little scary, to see how our futures pan out.

[cabronjames]

I don't know much about the nursing home / assisted living industry, but the little I know I wonder why it is so expensive & the service for the elderly customer often so incompetent given
1 much of the labor cost of its workforce is near min-wage, like $10/hr
2 it is not a cartel/oligopoly type industry, where it is almost impossible for a new business to open a facility & compete.

It seems like this would be an actually competitive aka "free market" industry, where at least a business would gain "market share" by either
- actually providing competent service for the sky-high price
or
-providing the same incompetent service at a ~40% discount

I wonder the same thing about business hours childcare, but even moreso.  It seems that almost any person with a house, that is at home during business hours, & has been a parent themselves (for credibility of having worked with children) could plausibly try a daycare childcare business.  Yet I've heard couples complaining that the lesser-paid spouse's pay is mostly eaten up by the daycare cost.

nursing home & childcare seem like healthcare or food, in that they are near-"necessary" services/products that must be continually purchases, even in a recession.  But nursing home & childcare seem unlike healthcare (pharma, health insurers, & AMA physician union/cartel), in that they do not have a cartel position & aggressive government lobbying/owning to ensure they keep getting paid 50-100%+ more than their peers in any other rich OECD nation.

Am I missing something here?

[stone]

Cabronjames "much of the labor cost of its workforce is near min-wage, like $10/hr"

$10/h x 24h/d x 360d/year=$86400/year. If your have dementia from age 70 to age 110 then costs mount up (ie $3.5M).

I know someone who worked as a careworker for people with dementia some of whom were quite young (60s) and yet couldn't feed themselves, drink water or go to the toilet. They were totally reliant on 24h care.

[cabronjames]

Cabronjames "much of the labor cost of its workforce is near min-wage, like $10/hr"

$10/h x 24h/d x 360d/year=$86400/year. If your have dementia from age 70 to age 110 then costs mount up (ie $3.5M).

I know someone who worked as a careworker for people with dementia some of whom were quite young (60s) and yet couldn't feed themselves, drink water or go to the toilet. They were totally reliant on 24h care.

But the ratio is not 1 worker per each 1 patient, correct?  Even for the patient with the highest needs (110 yr old dementia patient or some such), they do not have "their own" worker that is with them at all times.

I do see your point about 24h care for nursing home service, whereas other services like childcare or education are generally "business hours services".  Eg for each week 24h * 7 day = 168h = 3+X the hrs of "business hrs services" ~max of 50h

[jackely]

I'm 62 and still in the work force.

Not many years ago I looked forward to retiring some day. On days when I had to drag myself out of bed to go to work on Monday morning this is what I thought about to give me peace of mind.

My wife died when I was 50 years old and I was forced to take a couple of years off while I raised a grandchild and recovered my sanity. I had an RV and did a lot of travelling, driving as far as Alaska until I finally got to the point where I felt I could go back to work.

What I can tell you right now as I'm getting closer to the age when most people do it is that I no longer look forward to retirement. I intend to retire when it becomes a necessity to do so.