Please be sure to check into the details… While I understand that there is a typo in the actual text (1959 birthdays are affected), the intent is slightly different than what I had been reading.
Two steps in age of first RMD: 73 and 75 based on year of birth.
Here is a good summary of what is coming:
https://www.fidelity.com/learning-center/personal-finance/secure-act-2
Not thrilled about having to put my catch up contributions into a Roth when the time comes. But it is what it is.
This is a great summary of the Secure Act provisions, including the possibility of 529 to Roth IRA transfers to beneficiaries
Has anyone here purchased long term care insurance? Who did you use and how much did you pay? TIA!
I have LTC through TransAmerica. It goes up a bit every year. It’s about $1,600 for 2023.
My LTC is via NY life. It is about $80 per month, I recently turned 50.
One America has an LTC policy that includes a payout option you cannot outlive. The people I know who bought one had family history that led it to be a good option and paid a one time premium.
We have Genworth, purchased in our 50s through an employee plan. It’s in the range of $100/month each. Coverage is up to $6000/month, with a cap ($200k?) - no cost of living adjustments. Current plans are not as good as they were years ago, so most of our friends have opted to not purchase LTC.
Those LTC premiums are not bad! I’ve heard prices much higher per month. I know Dave Ramsey advises looking into LTC insurance at 60 ( think Suze Orman too?) - I’m a few years away from that but great to have the plans mentioned. I saw my parents need much care at the end of life and LTC would be helpful in a similar scenario…
We got interested in LTC after attending a retirement planning class. There we learned that the policies can cover in-home care too, ie in some cases delay or prevent the need for nursing home. (When helping my mother with her LTC policy, I did learn that daily max is less for in-home care… in that case $100/day instead of $200).
$100/day for in-home care won’t cover much. Based on the rates we found for FIL a couple of years ago, it would only cover about 4 hrs through a service. We didn’t look at trying to contract someone on our own. Also in our area I would say demand greatly exceeds available caregivers.
I got John Hancock at age 60. I need to call my agent, as prices rising and I have a choice between 2 paths. .
If I were to consider LTC, I would definitely look into this. It’s pretty interesting.
My biggest concern with an LTC company would be ease of getting approved to use benefits. My FIL had a rough time with that with his LTC. He had Parkinson’s & had a heck of a time getting approved. My MIL has a different LTC company than he had. It was tough getting her approved, but not as difficult as with FIL - she was already in AL. The staff there were helpful in getting her approved.
Yes, definitely need to go with a well rated company.
Tis true. But it would help take the sting out of expense. At that point, likely other expenses (like travel and restaurant meals) would be lower.
The hard thing about in-home care is that if a person isn’t mobile at night, they need care all night long - you have to have someone there to help lift them out of bed/clean up if you are going to have a functional life yourself (as a caregiver) during the day. A few hours could help. It’s tricky!
In a way, an almost ideal scenario would be for people in nearby, independent homes to share the services of an in-home caregiver. With my parents, I learned you don’t need the person there every moment of 24/7, but they need to be available within, say, 10-15 minutes if assistance is needed.
I just think the (woefully deficient) models for elder-care we have today need revision, somehow…!
I looked at this a decade or so ago. At the time, it seemed to me that the insurers had gotten burned with policies that turned out to be far too generous. As such, every year, they cut back on new policies. As a consequence, it seemed like newer policies were inferior to self-insuring – they just did not pay that much in the event you needed long-term care.
There were some interesting hybrid products, but they were laden with heavy fees that were largely hidden.
There may be much better policies now, but I think the industry’s prior experience probably leaves them pretty gun-shy.
I think the LTC policies are still lackluster compared to the original ones. Not surprised most people don’t pursue it. We liked the peace of mind of having it for husband (older, also larger so awkeward for me to care for alone), taking advantage of the employee group plan. Then a few years later we got another policy for me, but this time paying $7(?) a month more to have a clause that allows me to get all my money back (without interest) if there is ever a rate increase that makes it not worth it for us. So far no rate increases. Of course with no COL increases, it has diminishing value.
@Jolynne_Smyth - You make good points. I think the home care option would work best in the times before there is 24x7 need. I had that situation with my mother after we moved her to our house. (It turned out to be only a week here before she died. And there was hospice care available too. I could have used help a few hours a day for the months prior when I was visiting her once or twice a day. But she was not ready to have strangers around, and I was worried about Covid risk in 2020).
We have Genworth purchased when we turned 50. It is $$$ (about $170/mo. pp). 90 day wait. Currently 4-year max. payout at $8000 max. per month. When purchased, we were advised (but not promised), that LTC premiums had never risen, and they didn’t – until we turned 60. Then they started to rise substantially about every other year.
We have the option of an investment refund (no interest) at any increase. Each time, we reviewed our options w/ our financial advisor, who always told us to keep it as-is, because new policies were not nearly as good. Not sure if that advice was self-serving or not (If we ever need it, it keeps more of our money invested under advisor management, rather than paying out to LTC).
Our intent was never to have the premium cover ALL LTC expenses, but rather to supplement savings, so that neither spouse or children had issues with trying to afford “better” care (assuming better means costlier). I know so many who regret that their LTC investment is never utilized, but also hope this is yet another insurance we never need.
We have re-adjusted the premium over the last few years. One very good perk of our policy is that it has an automatic 5% inflation increase each year. For awhile, the benefit was growing much faster than inflation, so we started to lower the rising benefits, to effectively freeze the premium increases.
A major concern, however, is wondering if it will really be there if/when we need it. When purchased, Genworth was very highly rated. Not so much now. I’ve also read complaints about difficulties qualifying for aid, but don’t know if this is common complaints or outliers.
We also got Genworth back in our late 40s. One thing I remembered was our policies were tied together in value so second user would have limited funds. And our premiums were different because DH had a smoking history.
DH passed from a quick (not smoking related) cancer in 2012 so now the full value is for my benefit. Premiums are rising but similarly FA says keep it.