aging gently

As I spent some time in an assisted living facility last week I thought about aging and money. Here are the two most important concepts I came away with:

  1. At the end of your life, money and things are not important. Having friends and family and a rich store of memories will be more important than whether you ever owned a boat. This is the Hallmark Card thought that people bring up when talking about old age and death.
  2. That having been said, the end of your life is a lot nicer if you have some money. I’m not talking about nicer in the sense of having HBO. I’m talking about having a nurse who’s going to change your bedpan when you ring the bell rather than being in an institution where they let you sit in your own crap for three hours because they are understaffed.

I really cringe from time to time thinking about how much money I am hoarding for some far-off "retirement". Unless my savings rate and return rate spike up dramatically in the next 10 years I’ll still work until my mid-60s regardless of what I do now. And of course I could get hit by the mythical bus any day, rendering much of my planning for my sunset years irrelevant (except of course in that these savings would help out my family, but I have life insurance for that and frankly even with savings and insurance Bubelah would have to go back to work). So the ugly little thought creeps into my mind that maybe I should be enjoying this money today. Not buying the latest plasma TV, necessarily, but spending it on a fancy private education for my son, or on illuminating vacations (pyramids, Great Wall, safaris) or on a beach home in Florida. With the amount of money my wife and I save it wouldn’t be an insignificant amount of extra money if we stopped saving tomorrow. That extra money would alter our lifestyle.

However, I think about what I saw last week and realized that if you don’t have lots and lots of money, things can go south quickly. I saw a very nice assisted living complex, filled with relatively happy looking seniors. There was a very pleasant restaurant-style cafeteria, activities and a very pleasant physical complex with bright halls, cheery rooms and clean surroundings. All of this comes at a price; my best understanding was that it runs more than $5000 a month in an area of the country where that is no small amount. To put that in perspective, to generate $5000 per month in net income would require a nest egg of $1,300,000 earning 6% interest (no sure thing unless you want lots of risk). “That’s not so bad”, you think. That means $5000 for basic care. No drug co-payments, no hospital stays, no extra assistant care – all of that is extra. “That’s fine, Medicare will cover that,” you say. I hope you are right, after all of your “fun” 60s and 70s and giving gifts to the grandkids and traveling to Spain and whatnot, just for a place to live. $1,300,000 in the bank when you are 80, for the sake of argument.

All of that might not even be that terrible except:

  1. One or both of us might live far longer due to advances in medicine. Already people are living longer and longer due to artificial hearts, drugs, surgery, you name it. If I live to be 105, or 20 years past what I expect, won’t I run out of money? What happens when I’m 97 and the bank account is tapped out? I hope my son or other potential future children could help, but I may need care past what they could easily provide at home. What then? What if something even more ridiculous happens in the next 20 years (a cure for cancer, for example) and people start living to 120? 130?
  2. One or both of us might have health issues, draining our savings. This might be as simple as needing additional nursing care for non-life-threatening conditions, or as awful as a long lingering illness.

So let’s assume that $2 million (a random large number) would last for 30 years after I reach 65 (remember, 20-25 years for me and 30-35 for Bubelah). How is it even remotely possible to think of saving for 40 years, 50 years of quality living? Is it possible? I sometimes doubt it, particularly considering costs may dip at first when we’re in our 60s and in decent health (assuming we don’t take that super-luxury cruise to Europe), but will probably spike back up again as health problems mount. Could you ever start drawing down on principal to boost your monthly income? Even if you don’t, the principal will rot away with inflation. 40 or 50 years is a long time to hope for $1,300,000+ to carry you. You would have to draw the principle down and hope that the month you drew out the last $18,000 (inflation, remember?) was the month you died.

I don’t know what the answer is. Maybe the answer is spend it while you’re young and hope that this country does something about elder care before you get there yourself…

6 comments

  • I think there’s a point where life is not neccesarily living. I don’t believe in suicide, but I don’t think every means should be taken to keep people living a low qualify life. I hope when I’m at the age, I’ll have the grace not to ask for extreme medical care.

  • Thanks dong. I agree – there’s definitely a point at which quality of life falls below a minimally acceptable point, and our country has got to get comfortable with that idea. How to address it, I don’t know – assisted suicide, living wills, etc. Hard to say, but a good point.

  • As a nurse friend once told me, elderly people facing this issue don’t have to commit suicide. They can just quietly stop taking their medicine and let nature take its course. That’s a hard thing to advise anyone to do, but I hope I can remember it when I’m at that stage of life and my quality of life has diminished to such a low point that I don’t want to continue.

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  • If you watch OutThereTV, or listen to Allan Watt, from Canada, you learn that China is the “ideal state” and the earth can comfortably support only about 500-million people. There is not necessarily one all-encompasing plan, but among the smaller ones, we have persistent con-trails, spraying barium into the atmosphere, which tends to give elderly in Florida the sniffles. Folks have developed Prozac for arial dispersal. Fluoride, taken internally, leads to more docile people & creation of porous, brittle bones.

    Baby-boomers are starting to retire. Laws & policies will be made to accomodate this surge of elderly, so techniques will likely already be in place when you are nearing your life’s end. Simply do what everyone else does. The S&L bailout helped people that got into trouble “doing like everyone else.” Similarly, this Mortgage bailout eventually should do the same.

    If your child lives on his/her own, for a couple of years, so only their own, meager income is used to calculate “financial need” they likely will qualify for a grant to cover their tuition, at most state-funded universities.

    People are not usually upset about legal immigrants, like the ones arriving at Dulles airport, since they are treated about equally.. having to pay income taxes, and abide by the same laws. Their sorrow comes from illegal immigrants coming in, being treated at public facilities without helping pay for the services through taxes, which are not withheld by their employer who is paying them sub-standard wages, and not withholding taxes. That keeps the local wages low.

    Ross Perot was right when he said when NAFTA passes, you will hear a sucking sound as manufacturing jobs move south of the border, where minimum wages & OSHA expenses are avoided. The same is true concerning China being given Favored Trading Partner status in the mid-1990s. We have no trade tarriffs, so everyone in the U.S. buys the cheap foreign goods.

    Federal Reserve Notes are owned by international banks. Their “value” is backed by the Gross Domestic Product of the USA. As manufacturing jobs are sent out of the country, we are effectively exporting the “security value” of the Federal Reserve Notes, making them worth Less than before, so we have inflation.

    This devaluation likely will drive us into becoming the North American Untion. Just as Britain’s population had 70-percent vote to NOT join the European Union, their lawmakers added them into it, anyway. The same can happen to the USA. After all, it was in 1913, near a congressional break, that the Federal Reserve system was wiggled into law, to take us off the gold-standard, and onto the unsecured, FRNs as our money.

    Each time we print Federal Reserve Notes, those are bank-notes, debts the USA owes to the bankers of the international Federal Reserve, to whome we pay interest, funded by taxes, merely for the privelege of using their bank-notes.

    Your value to the world system is your value to the community. So, serve your community (and don’t keep it too much of a secret.) Maintain your extended relationships, since they are part of your community. And I agree, don’t watch the news, too much. It is true, “with much knowledge comes much sorrow.”

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