28. Frank

This scenario and others subtitled with a generic man’s name are fictitious. However, they are based on accumulated understandings about husbands either depicted in literature or real life.

My name is Frank. My wife’s name is Jean. We are worried about money.

And a possible future without enough of it.

Jean and I are nearing retirement. Neither of us are in good physical health. And we both have family members who died of dementia.

Probably Alzheimer’s.

I’m already seeing evidence that Jean may be heading in that direction. Confusion, forgetfulness, frustration. And she is only a year older than I am.

I am a technician in a local HVAC company, and Jean is physically disabled. I have decent medical coverage and a good 401(k) plan. And other savings accrued from a previous job. That total is now about $275,000. 

Jean has no benefit package from years of serving as a church secretary. She does receive about $1200 a month from the Social Security Administration.

One daughter still lives with us. She is employed full time by the city library and makes $13.50 an hour.

One of our sons is in the navy. The other is a graduate student in biology and receives a stipend as a research assistant. Neither is a financial burden for us.

However, we can never look to our children or other members of the family to financially assist us. Our daughter might be able to help in the home, but she plans to become independent like our sons.

Our parents are deceased. We inherited small amounts from them and are careful to invest those assets. Currently that accumulation is about $175,000.

Our house is mortgage-free but old and requires considerable maintenance. Taxes and utility bills are about average. Both old cars we drive are paid for but must be insured and re-licensed every year.

And occasionally repaired.

Jean and I would like to travel and are trying to figure out how to do that when I retire. But some types of travel are expensive, so we are not letting ourselves get excited about it.

And I will not be eligible for Social Security until 67. My employer might keep me on the job two years after the standard retirement age, but much depends on my health and how responsible I will need to be for Jean’s care.

Although my eligibility for Social Security begins at 67, we will receive Medicare when I turn 65 in two years. Jean will also receive payments, in addition to what is already available because of her disability.

At about $500,000, our inheritance and my 401(k) accumulations seem healthy.  After I turn 67, Social Security will pay us both a total of $3800 monthly. And Jean will continue to receive $1200 a month for her disability.

The monthly gross income from Social Security will come to $5000. Or an annual income of about $60,000. Our other assets are the $500,000, the value of the house, and the two cars. In the current market the house is worth about $200,000. And I have a full life insurance policy with a death benefit of $50,000.

We talked with an estate planner. She thought we were in good shape as we contemplated retirement. We would be covered by Medicare Parts A and B. And be able to buy a supplemental insurance policy for a reasonable monthly premium.

The estate planner believed we could use some of our savings for travel without risking too much. Standard medical needs could be easily taken care of. Drugs, doctor visits, hospitalization, rehabilitation if needed. Even Hospice services would be mostly covered by Medicare and our supplemental insurance.

There was only one unknown. Caregiving for one or both of us should we contract Alzheimer’s. A fiscal swamp since Medicare does not cover extended professional in-home or full-time residential care.

Intermittent care, yes. But NOT full-time care.

Either extended in-home or full-time residential care is costly. For example, if Jean’s Alzheimer’s progresses so quickly I cannot take care of her at home with or without help, we could be looking at an extra monthly outgo of $5,500 for residential care.

And that was the cheapest I could find.

Jean might share a room with someone else in a facility that has a resident-to-staff ratio of twenty to one. A top-rated facility would cost as much as $8000 a month. Some cost more.

Annually that comes to an outgo of between $66,000 and $96,000.

Alzheimer’s is different for every patient. Behavior patterns. How fast the individual deteriorates. When the person requires additional staff help for managing everyday activities.

Many challenges.

Contracts usually provide for increases due to inflation. Additional fees if more staff services are required.

In brief, with so many variables, it is difficult to predict costs.

What if I budget an annual amount of $75,000 for covering costs in a moderately good facility, and Jean hangs on for four years? The cost calculates to a total outgo of about $300,000.

Assuming I do not also contract Alzheimer’s.

While the half million dollars we have in reserve once seemed enormous, it could melt away in a few years.

In a worst-case scenario, Jean could need care for over five years. And our children would need to find a way to cover costs for my care.

In a short time, we could descend financially from a responsible middle-class couple to dependency on federal and state resources.

Medicaid.

Our state has not approved something called “Medicaid Expansion,” which means the rules for using government support are both stringent and limited.

Our daughter and estate planner are examining all options. Together we have approached the local chapter of the Alzheimer’s Association, the state’s AARP unit, and a new program sponsored by the National Association of Area Agencies on Aging: Dementia Friendly America.

It is comforting to know some organizations are interested in us, as we walk through the decision-making minefield.

But even they cannot assure we will enjoy the “golden” years worry free. 

 Continue to seek ways to take care of yourself.

©2020 Stu Ervay – All Rights Reserved

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