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Post by steelpony10 on May 18, 2023 11:05:52 GMT
I “managed” (learned by trial and error, ha,ha) 2 portfolios one up to 35 years, 1982-2017. Since that is all I know that works for sure because I lived it, I use the same old investing technique with modifications for my wife and I.
Anyway in our case I consider long term 10-15 years a time period I’ve entered when considering my longevity so I stopped investing. With 55% equities, cash and a muni fund held in reserve I (or someone) could just convert any or all for sudden permanent monthly income needs like assisted living, home healthcare, memory care, LTC etc. which further delays or slows spend down in our case due to the high monthly cash return from CEF’s.
I would like to hear if others plan ahead like this and what that plan might be.
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Post by mnfish on May 18, 2023 12:21:44 GMT
www.consumeraffairs.com/health/long-term-care-statistics.html steelpony10 , You mention LTC a lot so it obviously is on your mind. I'm sure there are other articles but I would assume the stats are close enough. Here's some things that I took away from it - Women spend 2.5 years in long-term care on average, while men spend an average of 1.5 years in long-term care. So, are we average or above or below? - Nursing home costs do vary by state. As of 2020, Texas $5k per mo and Alaska $37k (MN $7.5k) - Nearly half of adults over 65 won’t require long-term services or support - 14% of people over 65 spend 5+ years in LTC - LTC Insurance - 44% of individuals ages 70 to 79 are rejected, according to the American Association for Long-Term Care Insurance. - In 2017, long-term care insurance paid out more than $3 billion total in claims to over 100,000 individuals. That's an average of $30k per individual. The unknown is how much in premiums those 100k persons paid but i bet the insurance cos made a profit. How to invest for it? IMO, it doesn't really matter. Your plan is just as good or bad as the next one. My personal experience is different from yours. My dad died at home and my mother spent 6mos in a facility at $6.5k per mo. on private pay. My lady friends' mother is on year 5 with her SS and Medicaid paying the bill. Her aunt spent her life savings of over $400k in 5 years before SS and Medicaid took over. My personal experience tells me to keep investing as I have been, enjoy today and gift to my kids and grandkids now due to a 5 year look-back if one does spend a significant amount of time in a nursing home.
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Post by Chahta on May 18, 2023 12:59:28 GMT
I am not obsessed with investing for heirs. If they get something so be it. The great “spend down” will be using my savings to pay for LTC. I currently live from SS and my taxable account which is saved cash, interest and CGs. When RMDs start in 2 years they will be transfers into my taxable account. However if I survive my last parent (me 71, her 93) I will inherit more than I need. If the market disintegrates and we lose it all then who knows? I plan to keep investing as I have been.
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Post by uncleharley on May 18, 2023 13:14:06 GMT
I had a plan that has worked so far, but I am very nervous about having enough money for LTC. Longevity and Inflation have skewed the assumptions I used when I chose to retire 17 yrs ago. When I retired, I was expected to die 3 to 5 yrs ago. Well, here I am at 80, in better health than when I retired, and just experienced another round of high inflation. The latest round of inflation has driven the costs of LTC to higher-than-expected levels and I could live to 100 given the level of health care I have and the healthier lifestyle. Consequently, I have shifted about 15% of my IRA away from buy to hold dividend payers to leveraged ETF's and individual stocks in the hope that I can boost my net assets high enough to be comfortable with. I rely on SS and a pension for my daily living expenses.
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Post by Chahta on May 18, 2023 14:04:45 GMT
I had a plan that has worked so far, but I am very nervous about having enough money for LTC. Longevity and Inflation have skewed the assumptions I used when I chose to retire 17 yrs ago. When I retired, I was expected to die 3 to 5 yrs ago. Well, here I am at 80, in better health than when I retired, and just experienced another round of high inflation. The latest round of inflation has driven the costs of LTC to higher-than-expected levels and I could live to 100 given the level of health care I have and the healthier lifestyle. Consequently, I have shifted about 15% of my IRA away from buy to hold dividend payers to leveraged ETF's and individual stocks in the hope that I can boost my net assets high enough to be comfortable with. I rely on SS and a pension for my daily living expenses. Way to go getting healthier. |
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Post by uncleharley on May 18, 2023 16:04:32 GMT
I had a plan that has worked so far, but I am very nervous about having enough money for LTC. Longevity and Inflation have skewed the assumptions I used when I chose to retire 17 yrs ago. When I retired, I was expected to die 3 to 5 yrs ago. Well, here I am at 80, in better health than when I retired, and just experienced another round of high inflation. The latest round of inflation has driven the costs of LTC to higher-than-expected levels and I could live to 100 given the level of health care I have and the healthier lifestyle. Consequently, I have shifted about 15% of my IRA away from buy to hold dividend payers to leveraged ETF's and individual stocks in the hope that I can boost my net assets high enough to be comfortable with. I rely on SS and a pension for my daily living expenses. Way to go getting healthier. Thank You!! All I had to do was retire from a high stress job, divorce a high stress wife, move to a drier climate, and marry a cook. Regular exercise also helped. lol |
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Post by Fearchar on May 18, 2023 16:28:38 GMT
Keeping healthy has got to be the best approach to avoid LTC cost. That includes both physical and mental.
Divorces are tough, but sometimes the best solution.
Sitting at the computer is probably not the healthiest thing either.
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Post by Fearchar on May 18, 2023 18:09:44 GMT
Keeping healthy has got to be the best approach to avoid LTC cost. That includes both physical and mental.
Divorces are tough, but sometimes the best solution.
Sitting at the computer is probably not the healthiest thing either.
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Post by steelpony10 on May 18, 2023 19:22:21 GMT
mnfish , Chahta , uncleharley , Fearchar , Well I’m a big believer in fate, luck and chance. I knew someone in the industry at one time. She told me the odds favored not being in my worse case situations. I Just saw them twice, a random event for sure. Well it gave investing a direction anyway.
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Post by FD1000 on May 18, 2023 19:44:32 GMT
I “managed” (learned by trial and error, ha,ha) 2 portfolios one up to 35 years, 1982-2017. Since that is all I know that works for sure because I lived it, I use the same technique with modifications for my wife and I. Anyway in our case I consider long term 10-15 years a time period I’ve entered when considering my longevity so I stopped investing. With 55% equities, cash and a muni fund held in reserve I (or someone) could just convert any or all for sudden permanent monthly income needs like assisted living, home healthcare, memory care, LTC etc. which further delays or slows spend down in our case due to the high monthly cash return from CEF’s. I would like to hear if others plan ahead like this and what that plan might be. The best way to learn is not by trial an error: this is what I have done. 1) Do a lot of tests to see what worked in the past. Basic math should be your main tool. The numbers must work. 2) Acknowledged that the past was slower with less option. I don't pay attention to what happen prior to the 80s. Things change all the time. Flexibility is the key. 3) Watch and pay close attention to others. It's an excellent way to avoid mistakes. If something is not practiced by many, it's probably not for most investors. If high distribitions is so great why we don't have thousands of funds/ETF practicing MLP, CEF, Preferred, and other high-distribution funds. 4) I decided a long time ago that if I managed my portfolio well, it will take care of most problems. I can control my portfolio, not others. This is why I never invested in 529, most annuities are not a good choice, LTC is too expensive + holes 5) I don't believe in stagnant portfolio, especially in retirement. 6) If your portfolio is big enough, you can make it with 20/80 to 80/20 and have mistakes a long the way. 7) It doesn't matter what % you own in high-distribution vehicles. The only way to access a LT portfolio is based on TR=performance + portfolio size. In retirement, risk-adjusted portfolio is a lot more important. Most can't effort to lose a high % in early retirement. This item has lead me from the start in 1995, retirement in 2018 just after 23 years, to a very nice portfolio now. |
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Post by FD1000 on May 18, 2023 22:55:29 GMT
mnfish , Chahta , uncleharley , Fearchar , Well I’m a big believer in fate, luck and chance. I knew someone in the industry at one time. She told me the odds favored not being in my worse case situations. I Just saw them twice, a random event for sure. Well it gave investing a direction anyway. I never believed in the above in blue. I have done a lot of research, analysis, planning, and executing for decades. Sure, if you crossed the street and a truck hit you, you would probably die. Investing is definitely not luck. If you invest $1000 monthly (and increase with inflation) in the SP500 for 40 years, you will have a nice portfolio. * At age 15, in 1972, I quit my liberal arts high school and join a technical school in Israel to study IT. It was the first year they teached it. * I graduated in 2 majors, Computer Science + Economics/Finance in just 3 years. I was just an average student (the class had many military intelligence with IQ>140), all planning and hard work. * Worked all my life to age 61 in IT in technical positions + low-middle management positions. I had to stay current and employable. I retired when I had enough. * Moved the family to the USA in 1991 at my mid 30s. We came here with the kids + only $6K + 5 suitcases. After lots of research we settled in ATL, GA. It wasn't a popular IT place, but IMO the right place for the next 3-4 decades, while we passed on NY and CA. The internet didn't exist then. * Bought the first house at only 50% of what we can afford. Then, the second and much bigger house, again, below our means. * That allow us, to travel with the KIDs at least 3 weeks annually and why visited 49 states + saved enough. In the last 15-16 years it's mostly abroad. It was mostly done in 3 starts hotels + free breakfast (Fairfield, Holiday Inn express, Hampton Inn) + good planning. * Starting in 1994, we sold our American cars, and since then bought only new ones from Honda, mostly Accords + Toyota Camry and held mostly for 10 years. My minivan is 17 years old. Had to replace our 10 years old Camry last year, because of an accident. * Taught myself investing. I never believed in diversification. Beat the SP500 for 15 years straight, then 5 more. It's all ( here) 1995-2000: over 90% in VTI + the rest in SP500 growth 2000-2010: beat the SP500 by 10% annually. 2010-2018: my stock funds matched the SP500, PIMIX beat bonds easily. 2018-2022: Retirement, beat the SP500 by over 1% with SD about 2.5 (SP500 SD>18 and 3 times loss of 20+%). Is the above luck? |
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Post by mnfish on May 19, 2023 11:08:03 GMT
I think we're all pretty lucky that the SP is up 500% since 2008. I've owned ORCL since 1995 and it's up 2,400% since then. When my dad died in 1989 my mom inherited his portfolio which had a large position in XOM that he had owned since who knows when. I do know that it's up 3,500% since he died with reinvested dividends.
What's not luck is that we chose to save and invest. I know plenty of people my age who chose not to.
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Post by FD1000 on May 19, 2023 12:03:53 GMT
I think we're all pretty lucky that the SP is up 500% since 2008. I've owned ORCL since 1995 and it's up 2,400% since then. When my dad died in 1989 my mom inherited his portfolio which had a large position in XOM that he had owned since who knows when. I do know that it's up 3,500% since he died with reinvested dividends. What's not luck is that we chose to save and invest. I know plenty of people my age who chose not to. Investing isn't based on luck. The decision to invest is logical. Either you are one of the lucky entrepreneurs, or you invest in the most successful companies in the world. All you got to do is invest $1000 monthly (and increase based on inflation) in SPY/VOO/VTI for over 40 years and you will have a nice portfolio. No guessing is needed. Investing $1000 monthly at 8% annually for 40 years = 3.49 millions. |
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Post by yakers on May 19, 2023 15:05:38 GMT
Wife & I (75&72) have a 'relatively' affordable LTCI policy offered to Federal retirees. It covers 3 years only but that is statistically enough. We have pretty adequate assets and I am in a fraternal orgnization which takes care of needy members should that arise. I see the LTCI as part of my estate plan/cash management. I could probably self finance but LTCI makes planning more rational.
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Post by catdog on May 20, 2023 15:54:59 GMT
One advantage to saving for long term care is having greenbacks to wave under the nose of the facility. While none will admit it, having someone paying full boat for care is more desirable for the facility than what medicaid offers. My mother was able to take the last spot at a county nursing home in northern New Hampshire. It was during peak covid and they could not find help. It cost $9300 per month in late 2021 and early 2022. She was there for nine months and the care was personal, loving and overall excellent.
My mother was fiercely independent and lived a healthy lifestyle. She passed five months shy of 90 and was nice enough to leave me some cash.
Catdog
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Post by FD1000 on May 20, 2023 17:21:58 GMT
LTC insurance doesn't justify the price and loopholes. There are always exceptions.
A much better option is to INVEST your money as part of your total portfolio. My portfolio was never broken by goals equal a certain %, a good example is the bucket approach that I never liked.
The goals dictate the risk-adjusted returns I'm looking for and that result in selecting funds. I don't have INCOME portion or growth portion or LTC portion.
At retirement, 2018, I dedicated an imaginary $500K for LTC, this was based on 5 years for both of us at $100K per year. The $500K is a lot bigger now.
Healthy life is always a better option, and many times cheaper. Don't buy processed food, or at least diminished it by a lot, and prepare your own food. I know how to cook, but it's not my favorite thing and why most of my recipes are up to 15-20 minutes preparation, I don't care how long in the oven.
How to stay out of processed food? most of the healthier products are near the walls (outside perimeter) of the supermarket. Think fruit, vegies, meat, cheese. Most things in boxed are in the middle, processed, more expensive, and not healthy.
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Post by johnsmith on May 20, 2023 20:55:18 GMT
How to stay out of processed food? most of the healthier products are near the walls (outside perimeter) of the supermarket. Think fruit, vegies, meat, cheese. Most things in boxed are in the middle, processed, more expensive, and not healthy. Excellent advice. I've managed to get down to only shopping the edges except for - ice-cream & cookies. I'm addicted to sugar! Working on it though  |
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Post by Deleted on May 20, 2023 21:52:47 GMT
On processed food, I avoid anything with preservatives, hydrogenated vegetable oils, flavor enhancers, added colors, corn syrup and added sweeteners.
I also avoid all soda (coke, pepsi etc.)
few exceptions - breakfast cereals, cookies and ice cream. On cereals we have recently shifted to MORNING SUMMIT cereal from Costco which has much less chemicals than others it seems.
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Post by FD1000 on May 21, 2023 3:10:35 GMT
How to stay out of processed food? most of the healthier products are near the walls (outside perimeter) of the supermarket. Think fruit, vegies, meat, cheese. Most things in boxed are in the middle, processed, more expensive, and not healthy. Excellent advice. I've managed to get down to only shopping the edges except for - ice-cream & cookies. I'm addicted to sugar! Working on it though Chocolate is a must, I eat it daily. Ice-cream for me once a week. On vacation, we have a tradition of eating 2-3 scoops of ice-cream(depend on size) for every lunch. |
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Post by Mustang on May 21, 2023 22:30:54 GMT
Investing isn't based on luck. The decision to invest is logical. Either you are one of the lucky entrepreneurs, or you invest in the most successful companies in the world. All you got to do is invest $1000 monthly (and increase based on inflation) in SPY/VOO/VTI for over 40 years and you will have a nice portfolio. No guessing is needed. Investing $1000 monthly at 8% annually for 40 years = 3.49 millions. That is perhaps one of the most unrealistic investment strategies I've ever heard of. It is a pure pipe dream for most people. I retired at 60. Subtracting 40 would have put me at 20. I was an E-3 in the Air Force at the time and made $167 per month. A year later after making E-4 I made a whopping $306 per month.
Let's go back 40 years from now. I was a 1LT with a wife and kid. I made around $1,716 per month. A couple of years later it was two kids. A funny thing about wives and kids, they like to eat. (Note: Thanks to inflation that same E-3 would have made $705 per month.)
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Post by Mustang on May 21, 2023 23:03:25 GMT
I “managed” (learned by trial and error, ha,ha) 2 portfolios one up to 35 years, 1982-2017. Since that is all I know that works for sure because I lived it, I use the same old investing technique with modifications for my wife and I. Anyway in our case I consider long term 10-15 years a time period I’ve entered when considering my longevity so I stopped investing. With 55% equities, cash and a muni fund held in reserve I (or someone) could just convert any or all for sudden permanent monthly income needs like assisted living, home healthcare, memory care, LTC etc. which further delays or slows spend down in our case due to the high monthly cash return from CEF’s. I would like to hear if others plan ahead like this and what that plan might be. I have a little longer view of long term. 10-15 years would work for me but I need at least a 25 year payout for my wife. My wife is younger and women live longer.
I think mid-term portfolio management is just making sure your withdrawal strategy is staying close to plan. My plan is to use fixed dollar withdrawals adjusted for inflation using the 4% Rule method. I have set up 5 year checkpoints. If the portfolio hits those checkpoints then everything is fine. For example, the withdrawal should be 4% of portfolio value for a 30 year payout period, 4.5% for 25, 5% for 20 and 6% for 15. If it doesn't hit those targets then the withdrawal strategy needs to be modified.
No plan survives first contact with the enemy (reality). No matter how much you plan reality has a tendency to bite you. After that you have to innovate and adapt.
Since I believe our portfolio should be used for us and if anything is left over for the kids - fine. If not, that's fine too. Our kids are doing fine on their own. The best thing that we can do for them is to not become a burden. I hope by dividing investments into different sleeves (retirement, LT care/emergency and inheritance) that we do not become a burden. |
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Post by steelpony10 on May 22, 2023 1:26:15 GMT
Mustang , Well from the people I talked to during Stagflation and how they managed their assets during that time and my experience for many years with two sets of parents I was focused on one parent in LTC and one living outside for a three year period. I’m really touchy about anyone reliving that stress and like you my wife is younger. That’s why I’m not too worried spending anything within reason less then that situation because I tipped income towards overkill. My compound calculator gives me a range of $150-$200k per year for LTC if I reach age 90. My supposed high octane equity section on reinvestment since the 80’s is supposed to take care of that. My back up plan is more CEF’s leading to slower spend down instead. Bottom line for a survivor there’s no problem for one. Time will tell how that might work out. The whole process is out of my hands and I’ve learned to live with that part for now. As you mentioned I’ll give it to age 85 if I’m around to deal with actual reality then. By mid retirement I’m referring to the go go years, the slow go years and the no go years. The slow go years (mid retirement) meaning ages 75-85. I guess I was looking for any mid course corrections based on reality up to that point. We’re aiming towards certain target dollar amounts. I check where I stand each year then adjust if needed based on present facts. So far I’m also pleased with our result and how easy it is to manage our goals to date.
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Post by steelpony10 on May 22, 2023 2:02:31 GMT
I think this thread has devolved into a healthier lifestyle once retired. I would guess that would be too little too late. At some point genetics and past bad habits take over. Personally I’m done compromising my lifestyle for anyone else. Anything reasonable with occasional splurges is for me.
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Post by Chahta on May 22, 2023 3:23:31 GMT
I think this thread has devolved into a healthier lifestyle once retired. I would guess that would be too little too late. At some point genetics and past bad habits take over. Personally I’m done compromising my lifestyle for anyone else. Anything reasonable with occasional splurges is for me. I agree! Ice cream once a month! Splurge! |
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Post by FD1000 on May 22, 2023 11:07:56 GMT
Investing isn't based on luck. The decision to invest is logical. Either you are one of the lucky entrepreneurs, or you invest in the most successful companies in the world. All you got to do is invest $1000 monthly (and increase based on inflation) in SPY/VOO/VTI for over 40 years and you will have a nice portfolio. No guessing is needed. Investing $1000 monthly at 8% annually for 40 years = 3.49 millions. That is perhaps one of the most unrealistic investment strategies I've ever heard of. It is a pure pipe dream for most people. I retired at 60. Subtracting 40 would have put me at 20. I was an E-3 in the Air Force at the time and made $167 per month. A year later after making E-4 I made a whopping $306 per month.
Let's go back 40 years from now. I was a 1LT with a wife and kid. I made around $1,716 per month. A couple of years later it was two kids. A funny thing about wives and kids, they like to eat. (Note: Thanks to inflation that same E-3 would have made $705 per month.)
The mean family income is around $100K. This household can easily save $1000 monthly. Invest it for 40 years at 5% (8% - 3% inflation) and you get close to 1.5 million in today's money. Remember, the LT performance of the SP500 is over 10%, I used 8%. You can do a lot better as we did, I posted on another thread. Learn STEM, or a crafty handy man (A/C, plumber, mechanic) or at least work in healthcare, you will make more money and can save more. In the 90s our household made around $100K and we saved more than $12K annually, we still vacationed for several weeks, ate at restaurants, and bought new vehicles, and we had kids too. I started investing in 1995 and retired after 23 years, in 2018. It's called compounding and being frugal. In my case I did very well in the market, otherwise it would take another 10 years. We paid for our kids first degree. When my daughter told us she wanted to study liberal arts BS, I told her she isn't going to university unless she selected a subject that we think can make money. She had to compromise and majored in 3 subjects, 2 were BS, the 3rd was cognitive science, she finished her PhD in that making now more than $100k for the US government and loves her job. She and her husband can retire with enough money after just 15 years, but they probably will work 20+ years. All their money is invested in VOO+QQQ. BTW, they have 2 kids. It's all about the right decisions, planning, executions, and hard work. |
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