Yeah, I mostly trust our pensions. They are very well funded, and I think it’s harder for companies to do their funny business with pensions nowadays. A small portion would be covered by the PBGC, but I don’t trust that to be maintained. Think we might take the option of getting an increased benefit till 67, then dropping down to a lower level when we take SS. That is, if SS is still available at that point for us.
It may not be a “pretty good bet” but it is one indicator of the chances of living longer. Some cancers have a genetic link; breast cancer, for example. Hypertension appears to run in families.
Of course, the key is how healthy are you today? Many 65-year olds are taking 3/4 prescriptions; that is probably not great health status. How is your weight? (Americans keep getting heavier, and are the most obese in the western world; not good for COVID, btw.)
I’ve already outlived my father, and my mother died at 98. I could die anywhere in between.
My mother spent the last 24 years of her life in assisted living or nursing home, so my worst case scenario is pretty bad and pretty expensive. If DH is still alive and able to care for me, I could avoid some of those expenses, if necessary. I also try to take better care of myself than my mother did.
DH is a fed govt EE and qualifies for early retirement at this point, though he’s not quitting any time soon. We’ll get retiree medical coverage, but we have to pay for it. It’s currently on the order of $550/mo.
My understanding is that we could then decline Medicare B and D. However, with my medications, we may go the belt and suspenders approach and carry our current plan plus Parts B & D. If my chemo gets dropped from a Medicare formulary, we would be in big trouble, and I don’t think we could retroactively pick up H’s employer medical coverage.
@CountingDown, You are correct, you must keep the federal medical or it is lost. Currently FEHB is required to have medication benefits included so no need for Part D. That was the advice I was given.
For many, their life expectancy is much greater with those drugs than without. One reason we have a longer life expectancy than our grandparents is due to the advancement of pharmaceuticals to combat the effects of aging. Some conditions, like hypertension, can just happen as one ages.
https://hpi.georgetown.edu/rxdrugs/# indicates that people age 50-64 fill an average of 13 prescriptions annually, and those age 65-79 fill an average of 20 prescriptions annually.
https://assets.aarp.org/rgcenter/health/rx_midlife_plus.pdf indicates that regular users of prescription drugs take an average of 3.31 (age 50-64) or 4.45 (age 65-74) different prescription drugs daily.
Well sure, but neither are the point. Having to take a handful of prescriptions regularly will definitely improve quality of life, and perhaps some longevity, but still a much lower probability as someone healthy, taking no drugs, living into their 90’s.
And the family link with hypertension has been known for years. Does it just happen on a rare occasion, of course, but again, that probability is much lower than having a family history and compounding that by poor health habits (being overweight, heaving alcohol consumption, smoking, etc.).
For many people, resting blood pressure is inversely correlated to the amount of exercise one gets. Unfortunately, many people exercise less as they get older, so that may be a cause of hypertension increasing with age.
I always put in 98 as expected age. Had two grandmothers live into their late 90’s and a grandfather who smoked and died at 88. My Dad is 84 and climbed the Acropolis last year with us ( no complaints on the way up or down).
Like many on this thread, we believe in education. It got us a great life and spending money on the best possible education was always the most important criteria. For our kids, most of moving to an expensive town was the public school education. When it came time for high school we sent our oldest to an expensive excellent school. We paused as the financial factor was high but thought of it in terms of opportunity cost. Yes, it’s expensive but like a great college education pays off slowly and for many decades. Don’t regret it. Sending the next one off this year.
It’s interesting to think how much of a kid’s values derives from their parents. Despite always having a great income, we’ve never wasted money. My spouse gets upset if food is thrown away and I like my car to go over 150K miles. I know, for me, it’s thrift from not having much growing up. But for our kids, something intangible has stuck. The oldests’ first Summer job this year resulted in 98% of the money being saved. Kid spent most of the Summer working and raising money for a charity. This is the same kid who at 8 thought up the idea of the all you can eat lemonade stand. You stop and donate what you want to Wounded Warriors and take what you like. Only a handful of people got the evil eye from my kids. They had taken too much and given too little.
I’m convinced my kids will earn what they need to get the life they want. Maybe things will change as life is unpredictable. For the moment though I’m not planning on telling our kids to expect anything. I’d give them equal shares in anything. Their decisions about career and life are theirs alone so I wouldn’t adjust for choices they made.
@ucbalumnus Re: Mortgage. It’s likely we’re not getting more $ by having a tiny mortgage. It just makes us feel good to write off something. Actually, the CPA advised that going forward it might make sense to have other things to write off ( like rental income). My spouse wants no part in that. But I might be open to it in retirement. I think having lots of various investments isn’t a bad idea given how things can change. The CPA and FA said it’s also good to have lots of cash outside of 401K plans so one can optimize taxes. That’s a long way out but seems a good piece of advice.
IF I gift my son a sizable amount to buy a home in his current area, I will definitely make it a loan, for possible 10 years. I do have LTC, and unfortunately, lots of whole life insurance. (But you cant talk me into annuities )
My parents died in their early 80’s, so I don’t have the fears that many of you have about living a very long life. I don’t wish to downsize into a small box, and I do want the luxury of hiring an aide, when needed.
I do feel for anyway, be it their parent or partner, who develops dementia in their 60’s.
Another finance question. I have a car I’m very happy with. I had done a big deal and my wife suggested that I buy a nice car as a reward. Two motivations there. In addition to wanting me to treat myself which I don’t often do, she observed that among friends in our age group/social milieu, a surprising number of the men either bought themselves a sports car or had an affair that split up the marriage. So, she jokingly said she was all for a red sports car. I wanted a Tesla Model S but didn’t have a garage and so decided to buy a lesser but still very nice car.
I drive it very little as I switched to working from home several years ago. I used it a lot to go the the airport for business travel (which I did 2-3 weeks a month prior to COVID), to visit my mother in NJ (she now lives in Memphis so not driving that far), and to meet people in the city for lunches and dinners, and for general around the area driving (to local farm to pick up CSA). When I purchased it, I recognized that repair costs, if they are needed, are very high with this brand so I purchased a warranty that lasted 5 or 6 years. It has now expired. I just got an offer for another 3 years at supposed 30% off the normal price (didn’t know it could be extended). Normally, I ignore extended warranty items.
I’d be happy to keep the car for at least another three years. Great handling. Incredibly comfortable seats for long drives.
How would you think about an extended warranty?
Is the warranty transferrable?
What are the typical repair needs for this vehicle? When (milage) do they typically occur? How much of those repairs are covered by the warranty?
With your limited driving, I’d be inclined to take my chances.
What has been the repair history of this car for the past 2 years. Has the frequency and extent of repairs been accelerating? Can this type of car be easily serviced at a generic mechanic shop vs the dealer? What is the trade in value today vs 3 years from now? Maybe a new car is a better option?
I have never been a fan of extended warranties. Seller is making a profit on them. So you are basically gambling with the odds stacked against you. If you otherwise would have liquid funds to pay for the repair, I do not think its worth it. If you don’t, maybe its worth the gamble though more likely there should be a different vehicle option.
if you are work-from-home and don’t drive much anymore, I would not extend the warranty.
The usual talk about car extended warranties on car forums is that (a) they are very expensive relative to the expected cost of repairs on the car, and (b) some extended warranty companies do their best to avoid paying claims that the car owner believed would be paid, or go out of business to avoid paying claims.
My own thought is that if I am considering buying a car, the idea of buying an extended warranty is basically a belief that the car is unreliable and expensive to fix, which makes the car undesirable to buy in the first place.
I would do a little research on the types of warranty issues that may be likely to come up and how the coverage would handle. Then is it a better risk for you to bank the extended warranty cost and pay out of pocket if something comes up? See if Consumer Reports talks about any particular ‘weaknesses’ on your vehicle model and year.
@shawbridge - Are ya sure that you would not prefer upgrading to a new Tesla? Just kidding.
I’d buy the warranty. There is a particular point in time where everything starts to go.