Social Security Questions

[disykat]

Yes, everyone should consider long term care insurance. My mom had it. My wife and I have had it for about 10 years. My mom's policy covered all but $300 a month of her long term cost. Her social security easily covered that, and the upkeep on her home which I did not sell until she passed away.

In mom and dad's case, the money they saved over the 10 years they weren't using much of their retirement money will cover it plus more. My husband and I are still looking into it, and I'm encouraging my siblings who aren't as prepared as we are to get it, but it is getting much more expensive than in the past. I agree that Long Term care insurance is a wise move for most, but I don't think my parents situation makes a big case for it.

 

[tvguy]

Are you saying you and your wife have 10 year policies covering LTC?
If not (and you don't mind me asking) what is the approximate length of your policy?

We purchased the policies for 10 years. If you mean how long will they pay for long term care, 36 months after you pay for the first 3 months. The monthly allowance was $5,000 a month 10 years ago, with a 5% inflation factor every year. So it would be more than $5,000 a month now. My mom's care was $4,000 a month 2012-13.

 

[tvguy]

In mom and dad's case, the money they saved over the 10 years they weren't using much of their retirement money will cover it plus more. My husband and I are still looking into it, and I'm encouraging my siblings who aren't as prepared as we are to get it, but it is getting much more expensive than in the past. I agree that Long Term care insurance is a wise move for most, but I don't think my parents situation makes a big case for it.

It's like all insurance. A total waste of money if you don't need it other than buying peace of mind. But if you need it, it can be priceless.

 

[runwad]

We purchased the policies for 10 years. If you mean how long will they pay for long term care, 36 months after you pay for the first 3 months. The monthly allowance was $5,000 a month 10 years ago, with a 5% inflation factor every year. So it would be more than $5,000 a month now. My mom's care was $4,000 a month 2012-13.

I bought a 10 year policy on my DH, will be done paying for it July 2019, can't wait! I have the same terms as you, 36 mos after 90 day elimination period, inflation rider, and I also got a rider that if I had to cancel I would get my premiums that I paid back (forget what that's called???) Plus if DH dies b4 the age of 70, I will get all the premiums back I paid. I'll end up having paid 50k for the policy.

At the time, I thought when I was done with his policy I'd get one for myself, but the costs are prohibitive now for us. Dh has alzheimers that runs rampant in his family, my family tends to die of cancer, so chances are he'll need a nursing home stay before I would.

 

[tvguy]

At the time, I thought when I was done with his policy I'd get one for myself, but the costs are prohibitive now for us. Dh has alzheimers that runs rampant in his family, my family tends to die of cancer, so chances are he'll need a nursing home stay before I would.

Prices are nuts now, not that they were cheap 10 years ago. My Financial Adviser now sells LTC, and he asked to quote a price. He called and said keep what I have. His lowest plan premium is 3 times what I pay now.

 

[vacationer1954]

Prices are nuts now, not that they were cheap 10 years ago. My Financial Adviser now sells LTC, and he asked to quote a price. He called and said keep what I have. His lowest plan premium is 3 times what I pay now.

Yes - the plans have changed radically. The plans offered now have different provisions for annual premium increases and benefit limits that make the plans far less attractive than plotting how you would use the money you save by not purchasing such plans to help out with long-term care costs should you end up incurring them.

 

[tvguy]

Yes - the plans have changed radically. The plans offered now have different provisions for annual premium increases and benefit limits that make the plans far less attractive than plotting how you would use the money you save by not purchasing such plans to help out with long-term care costs should you end up incurring them.

My wife's grandparents had no coverage, and THAT was less attractive than anything I can thing of. All their property had to be sold, and all but a small amount of money had to be used to pay for their care, and after the money was gone, Medicaid stepped in to pay it. Problem was, they had little property to sell. They lived in a small town in Illinois and their house was only worth $12,000. That didn't go very far.

 

[QueenIsabella]

Yes, everyone should consider long term care insurance. My mom had it. My wife and I have had it for about 10 years. My mom's policy covered all but $300 a month of her long term cost. Her social security easily covered that, and the upkeep on her home which I did not sell until she passed away.

LTC insurance works well for some people, but it's not something "everyone" should get. Everyone should consider it, for sure. We plan to self-insure, and are blessed with the means to do so. My MIL had LTC insurance, that she never used. She went into assisted living ~20 months before she died (of a heart attack), but didn't pull the trigger on her LTC insurance, because she was waiting for things to get worse--stroke, cancer, etc. DH/BIL were able to get the LTC people to accept some of her assisted living bills and reimburse them--I think they got ~$50k. She would have gotten much more benefit had she actually filed, but it doesn't matter now.

Unfortunately, a lot of people who would benefit from LTC insurance, simply couldn't afford the premiums.

 

[tvguy]

LTC insurance works well for some people, but it's not something "everyone" should get. Everyone should consider it, for sure. We plan to self-insure, and are blessed with the means to do so. My MIL had LTC insurance, that she never used. She went into assisted living ~20 months before she died (of a heart attack), but didn't pull the trigger on her LTC insurance, because she was waiting for things to get worse--stroke, cancer, etc. DH/BIL were able to get the LTC people to accept some of her assisted living bills and reimburse them--I think they got ~$50k. She would have gotten much more benefit had she actually filed, but it doesn't matter now.

Unfortunately, a lot of people who would benefit from LTC insurance, simply couldn't afford the premiums.

It certain is much cheaper if you buy it when you are younger. It is not different than any other type of insurance, if you have the financial means to cover any expenses, you don't need it. Like my company, they really don't buy health insurance for us, they just hire a company to administer the payment of claims, the company pays all the actual costs. Same with the company auto insurance, we post a bond with the state, but the company just writes a check if there is a claim. Apparently the sum total of the health and auto claims is less than they would pay for insurance coverage.

 

[4kids4karen]

LTC insurance works well for some people, but it's not something "everyone" should get. Everyone should consider it, for sure. We plan to self-insure, and are blessed with the means to do so. My MIL had LTC insurance, that she never used. She went into assisted living ~20 months before she died (of a heart attack), but didn't pull the trigger on her LTC insurance, because she was waiting for things to get worse--stroke, cancer, etc. DH/BIL were able to get the LTC people to accept some of her assisted living bills and reimburse them--I think they got ~$50k. She would have gotten much more benefit had she actually filed, but it doesn't matter now.

Unfortunately, a lot of people who would benefit from LTC insurance, simply couldn't afford the premiums.

I agree it is not for everyone (and I work in insurance). I quoted LTC about 3 years ago and the premium as way more than I expected. DH and I decided to take that premium amount and just increase into our investment accounts. His family has always did homecare for elderly parents/grandparents. Hoping if we ever need any type of LTC we would be able to use a Veteran facility to reduce costs.

 

[antmaril]

I was about 40 when the company I worked for offered LTC insurance. I didn’t even know what it was, but the attorneys I worked for advised getting it and keeping it. At the time, it was about $17 a month. I retired from the company in 2008 with 36 years of service. The LTC continued into my retirement. I am now 67 years old and pay about $40 a month for the coverage. I feel very lucky to have this insurance at that low rate in the event I ever need it. My MIL had Alzheimer’s and was in a nursing home. She bought LTC insurance when she was in her early 60’s (very expensive), and it did help with her expenses. Unfortunately, the nursing home was about $8500 a month and, while the LTC helped, she still went through all of her money and investments before she died.

 

[4kids4karen]

I was about 40 when the company I worked for offered LTC insurance. I didn’t even know what it was, but the attorneys I worked for advised getting it and keeping it. At the time, it was about $17 a month. I retired from the company in 2008 with 36 years of service. The LTC continued into my retirement. I am now 67 years old and pay about $40 a month for the coverage. I feel very lucky to have this insurance at that low rate in the event I ever need it. My MIL had Alzheimer’s and was in a nursing home. She bought LTC insurance when she was in her early 60’s (very expensive), and it did help with her expenses. Unfortunately, the nursing home was about $8500 a month and, while the LTC helped, she still went through all of her money and investments before she died.

That's awesome you were advised to get LTC when the prices were affordable. I don't recall my exact quote, but it was about $300 a month. Also, the company I quoted with was ending their contract with current company and moving to another. So I was advised to purchase under previous company because it was actually better overall. I work in insurance, but not in this area, so I feel I was given good advice. Speaking with DH we thought $300 a month was better spent elsewhere (investments accounts).

 

[4kids4karen]

So what am I not understanding here? Everyone seems to feel l like it's worth taking early. Was talking with DH at work and a guy one pay level over him is also taking it early and is going to keep working. So I came home and looked up his info again on the SSA.gov website where you put in all the data and it gives you the numbers.

Monthly Benefit at age 62 is $1607
Monthly Benefit at age 70 is $2991
Monthly Benefit at age 67 is $2375 <-- Full Retirement.

Following the formula for the penalty if he keeps working his current job, his monthly penalty is $2589.
I did read that once reaching full retirement age they add the penalty back into the benefits. So does that mean at age 67 he is recalculated to get $2589 MORE over the $1607? For a total of $4197? That might make a difference long term.

So if the monthly penalty to pay back each month is $2589, how is he going to get $1607?

I admit I am learning, but based on my numbers I don't know how he would draw a SS check if working? Someone feel free to explain in simple terms since I don't see the benefit and if I am missing something, please let me know.

Note: These numbers are based on his full-time job. His retirement pension or VA disability wouldn't count as income for these calculations.

Replying to myself since there weren't any answers. I told DH to talk to the finance guy he thought was taking the early retirement and still working. Turns out he doesn't plan to work after taking early SS. He confirmed to DH my calculations are right, there are not benefits for him to take early SS if he still plans to work his full-time job.

 

[amcnj]

Yes, she owned her own home. Property taxes were $980 a year. California, home of Prop 13 which benefited folks like my mom who owned her home for 53 years.

Just out of curiosity, do you have any idea what the property taxes are for the current owners of your mother’s house?

 

[tvguy]

Just out of curiosity, do you have any idea what the property taxes are for the current owners of your mother’s house?

$9,073 according to Zillow. The people I sold it to in 2013 were paying $6,605 a year, they remodeled it extensively and sold it in 2014 for $171,000 more than they paid me in 2013.

 

[amcnj]

$9,073 according to Zillow. The people I sold it to in 2012 were paying $6,605 a year, they remodeled it extensively and sold it in 2014 for $171,000 more than they paid me in 2013.

Quite a difference! My mother has been in her home about that same number of years, but unfortunately no Prop 13 there. Her property taxes are thousands more than that latest figure, and for a modest house.

 

[tvguy]

Quite a difference! My mother has been in her home about that same number of years, but unfortunately no Prop 13 there. Her property taxes are thousands more than that latest figure, and for a modest house.

According to Zillow, my mom's house had almost doubled in value since 2013 when I sold it.

 

[Pea-n-Me]

My mom's benefit was $1,250 a month. I managed her finances the last year of her life (2012-13) and her expenses were never more than $700 a month. Social Security covered it all. She also had a $400 pension and a $200 a month annuity and $300 a month required distribution from her IRA. But like I said, my parents lived through the depression, and their mindset was to keep expenses down. She drove one car 27 years, another 14 years, one that was a lemon she only had 2 years, and her car when she passed away was 10 years old.

My 93 yo mother has been subsisting on just her SS (and she's in the Notch!) since retirement and she's made it work, but the only reason she's been able to is because she lives with us and we pay mostly all the bills! Prior to her coming to live with us (25 yrs ago) I researched all of her options and it just wasn't possible for her to live independently on that tiny amount of money per month. (For many years she received just over $800/month!) She is also a child of the Depression and has done an admirable job of managing her money and staying within her budget but I don't think there are too many people who can live independently on that amount (or a little more) completely independently, especially if they live in a high COL area.

The Notch: https://seniorsleague.org/what-is-notch/

Btw some of these articles about the Notch seem to be saying it doesn't exist, but my mother has always gotten informational materials from SS about it explaining why her payments were lower than others', so I believe that it does exist, but perhaps that's for another discussion.

 

[tvguy]

My 93 yo mother has been subsisting on just her SS (and she's in the Notch!) since retirement and she's made it work, but the only reason she's been able to is because she lives with us and we pay mostly all the bills! Prior to her coming to live with us (25 yrs ago) I researched all of her options and it just wasn't possible for her to live independently on that tiny amount of money per month. (For many years she received just over $800/month!) She is also a child of the Depression and has done an admirable job of managing her money and staying within her budget but I don't think there are too many people who can live independently on that amount (or a little more) completely independently, especially if they live in a high COL area.

The Notch: https://seniorsleague.org/what-is-notch/

Btw some of these articles about the Notch seem to be saying it doesn't exist, but my mother has always gotten informational materials from SS about it explaining why her payments were lower than others', so I believe that it does exist, but perhaps that's for another discussion.

If she is 93, according to the article you posted, she is probably outside the notch or in the very tail end. My mom was born in 1923 and I have no idea how it impacted her, but her benefit was $1,250, and she was right in the middle of the notch.. I think the most important lesson of this is how saving just a little when you are young can have when you are old. My dad was born in 1910, and both he and my mom believed, if you couldn't pay cash, you didn't need it. That goes for cars and houses. Of course, my parents first house was really a shack. One bedroom, one bath with a living room on 5 acres that they paid $2,500 cash for in 1950 and over 10 years added on to make it a three bedroom two bath home that they sold for $50,000 in 1960. The paid cash for a new $29,500 house, a new 1960 Buick and a new 1960 Ford and still banked almost $15,000. Just how you live your life

 

[gwynne]

This is a good explanation of the whole SS notch issue and how it was fixed back in the 70's.
https://www.washingtonpost.com/wp-srv/business/longterm/quinn/columns/030299.htm