Do any of you have thoughts
on how much spending needs typically increase as we age through our
80s (and maybe 90s)?
We are in our 70s, have a
good handle on current expenses, and enough assets & income to
sustain our current spending indefinitely. But as people get into
their 80s they will probably need to hire more help with things they
do for themselves at a younger age. Everything from house fixing, to
yard work, to taxes, to meal preparation; that is even without
needing assisted living help for activities of daily living (ADLs).
My quick look at an “independent living” community led me to
believe that with one meal a day provided, my net increase in
spending would be about 20,000 per year. (That is the community's
fees minus expenses that go away, such as real estate taxes and some
utilities and groceries.) My guess is that many/most people who move
to “independent living” cut back on other expenses like travel,
but I would prefer not to.
My 82-yr old MIL lives with us, now that she’s sold her long-time home. She has a moderate income of $3600/mo along with a portfolio of slightly over half-a-mil-$. The cost of the nicer CCRCs would be affordable for her although definitely not cheap. She has retiree health benefits that include nursing care but not at-home services, so a CCRC where she can transition from assisted living to full nursing care is the best option for her future.
The buy-in is around $300K and (independent living) rental of a studio is $1300/mo or a 1 bd is $1600/mo. If she didn't have the nursing care benefit then the buy-in and rental costs are about 20% higher. This is for a top-notch facility with good location, full-time nursing staff 24/7 and in-house clinic, free transportation and extensive list of services and classes.
Outside of the buy-in cost, the rental costs are only slightly higher than market and with the supplemental services/bennies of a good CCRC, probably worth it. She doesn't drive anyway, and I can see her needing some sort of assisted living facility within the next 5-8 years. She has serious osteoporosis and any fall is going to create health problems for her.
My MIL's expense are very low. She eats very little, seldom buys new clothes, and has very few hobbies. An average restaurant meal feeds her for two meals usually, she doesn't often manage to finish a whole plate. She's healthy, so has relatively low healthcare costs (and her insurance is extremely comprehensive anyway), which is the "wild card" for most people. If your health is good, your costs as you age remain manageable, especially if you have good insurance to supplement Medicare.
Frankly, I don't know too many people in their mid- to late-80's that travel much. It's tiring and they just start to slow down. Most of my older friends/family (I'm a Boomer age 59), even though fairly healthy, have really cut back on their travel as they start to hit the 85-yr mark - not because they can't afford it, but it becomes more of a hassle than it's worth, for them.
Depending on where you live, assisted living places range from $1500 a month to over $10,000 a month.
No buy in..just rent.
My aunt is 95 and rents her apt, a large one bedroom with small kitchen, microwave & refigerator, sink, etc. No stove, but does get 3 meals a day: breakfast, dinner, and light supper in the evening. Main meal is at noon. Cost less than $2000 a month.
My mother in law stayed in one of the $10,000 a month places with meals, luxury, food on command but a tiny apt. But she was completely cared for.
We can't plan the future, just prepare for what we think will happen. My other relatives in their late 90's still live with their spouses in their own homes with their own big yards and still do most of the work. Perhaps the work is what keeps them young. Their church has volunteers to bring them meals if needed if they are ill. Meals on Wheels is in the community when they don't feel like cooking. With frozen dinners, and easy access to home delivery food, growning old in your own home is a good idea.
No one I know has long term care insurance. Mainly because it is tooooooooo expensive and the chances they will need it are very slim. Also, much of the insurance really doesn't cover much. Just calculate what it might cost and save your money.
I'd rather use Kivorkian's way than deteriorate!
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