> Seriously, what is up with people attempting to run out of money exactly on their 95th birthday?
Money does you no good if you are dead. And it does you very little good if you are completely out of it in a nursing home. I don't know of any male relative that has ever lived to 95 years old, and only a small percentage of female relatives.
My parents are in their mid-60s, just started their retirements and they are doing as much traveling as they can while they are still both healthy. I applaud their decision.
> Money ... does you very little good if you are completely out of it in a nursing home
Well, there is the question of paying for the nursing home. The sad reality is that the options offered by our social safety nets at lot less attractive than the options available if you can pay for it.
Unless you are completely out of it to the point of not caring, at which point your loved ones may still care though.
I can't speak to the rest of the country, but that's not the case in NY. It's a complicated story with lots of wrinkles, but the long and short of it is that you can buy a long term care policy of a certain length and then the state (under the medicaid program) will take over payments after that. You don't need to change facilities. In any event, I have yet to visit a nursing home that the word "attractive" would be even in the ballpark of appropriate to use.
Separately, optimizing for being able to pay out of pocket for a top tier nursing home seems like a strange life goal to me. Maybe people really do have that preference, but it looks to me like a lot of people in the greater "personal finance" hobbyist world just like saving for it's own sake. Nothing wrong with that of course, but the sanctimoniousness of this group is a way over the top IMO.
> Separately, optimizing for being able to pay out of pocket for a top tier nursing home seems like a strange life goal to me.
Being able to afford a comfortable life after I am literally too infirm to work is the vast majority of the reason I continue to want to earn money. I'd be really interested if you could persuade me that I am misguided on that!
You are now 60 or 65 or maybe even 70, you're slowing down some, but you aren't too infirm to work. You have a fair bit of savings.
Do you:
1) Keep working until you can't work anymore
2) Retire, but live frugally so that you can be sure if you make it past 95 and need skilled nursing care you'll be able to keep private paying for a top notch nursing home.
3) Build out a retirement budget that assumes you won't make it past 95, make the absolute most of the next decade or so of relatively good health (hopefully!)? Go take that trip you and your wife always dreamed. Lavish your adorable grandchildren with gifts that certainly don't need. Fly business class instead of squeezing your old bones into coach.
Keep in mind that if nothing else you'll still have social security no matter how long you live.
Granted this is somewhat exaggerated for effect, but there's a difference between taking the worst case scenario (a funny way of referring to living a long time) into consideration and letting the tail wag the dog.
> They pay more than 14,000/month! It's like a cruise ship.
I would certainly hope so, considering for 14,000/month you can live on an actual cruise ship with money left over for entertainment and a few other things.
It also pains me to see such luxury spent on the elderly. While you may have a personal attachment to them, the rest of society would do much better with that money spent to educate and help the new generations.
>It also pains me to see such luxury spent on the elderly. While you may have a personal attachment to them, the rest of society would do much better with that money spent to educate and help the new generations.
I don't think we have any reason to believe that this is an unearned luxury lavished on a lucky elderly couple. It appears more likely that this is their own money, saved and invested over their lifetime, and their's to spend how they wish. Furthermore, advanced age is no reason to cast someone off to a bland waiting room. It's not healthy for a society to consider somebody's value limited to their future contribution potential. I'm happy to contribute economically to present-day's elderly folks, not only for my own attachment to someone, but for the social contract that I, too, will be old, and I doubt I'll suddenly just want to stand in the corner.
Even if we take your claim about society being better off if the 14k goes to education (which is some major hand waving), how would you suggest transferring this?
Unless it's completely by choice, congratulations. You've now created no incentive for people working towards retirement to save enough to spend 14k per month. Now, instead of getting that productivity earlier in life and the 14k going to support a cruise ship business, you'll have people willing to just rest with what they've got.
I think there are better ways to prop up education (some having nothing to do with $). No need to shame the elderly who have worked a lifetime and now get to kick back and enjoy it for a little while.
The counter argument is that those 14k enters circulation instead of laying idly on some account. Not an economist, so don't ask me what's the better alternative...
In normal circumstances, money is rarely idle in an account. It is invested into loans and such. The past decade has been at times unusual in that regard though.
I enjoy Logan's Run too, but I'm not sure it's a palatable option for our society. If these fine people are paying their own way, that's $14k/month that's probably paying for a large staff of hard working people (and some administrators). If they've spent down all their money, and the state is paying for it, the state has a maximum, and it's not $14k/month.
In the alternative, where they're paying $2.5k/month, the other $9.5k/month is going to stay in their investment accounts, and when they eventually die, if they have a large enough estate, it'll be subject to the estate tax and society could use it for education or whatever, but more likely it'll just pass to their heirs, which helps the heirs, but doesn't help society that much.
Money does you no good if you are dead. And it does you very little good if you are completely out of it in a nursing home. I don't know of any male relative that has ever lived to 95 years old, and only a small percentage of female relatives.
My parents are in their mid-60s, just started their retirements and they are doing as much traveling as they can while they are still both healthy. I applaud their decision.