No woulda, coulda, shoulda's. Recently became POA for an in-debt sibling, newly widowed with a level of dementia needing institutional care running about 5k per month with 3k SS income only. Presently have 210k available to make up 2k monthly difference for care. How do I invest to make this money last as long as possible? Currently in 4.2-4.7% Treasury ETF's but need ideas for better returns considering factors of time and risk.
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How to Stretch the Money?
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Last: 12 hrs ago by QuatroLong
Sorry to hear that. How old is your sibling? How long do you think you need to stretch the money? If all things were to remain equal (costs and returns) what you have would cover about 11 years, but generally things don't stay the same. You could invest in an S&P/total market fund but sequence of return risk could be a problem. Would a potential heir be willing to float some of the money in that instance?
I thought medicaid covered once a person's assets are stripped down and I wouldn't think it would be your assets but your siblings
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Incredibly sorry to hear about your position and hand being dealt.
While I'm assuming I'm much younger than you, I've been in a similar situation where my FIL had Alzheimer's and required a level of care that financially my MIL could not come up with. So we stepped in and helped cover the monthly shortfalls.
It's painful quite frankly and there is no good alternative. Your worst factor is the monthly coverage is not pegged to a term so it can change by month quite drastically over a short period of time. Just a simple fact with the level of care within the AL/AZ facilities.
However, I think a HYSA or a treasury is the best course of action. Because the money could be at risk if you seek alternative investments. If your risk appetite could make sense of paying the $2k out of pocket in the event of a shortfall or downturn, maybe investing in the S&P500 could make sense. Even then, your risk tolerance would have to be pretty high.
Personally, I'd recommend alternative solutions if possible. Can you obtain Medicaid or Medicare? Can you get into one of the facilities covered by that? I hate to say it but you being a sibling could be a silver lining in that you are not legally obligated to care for them as a dependent, so you can try to find alternatives while ensuring they aren't going to a Happy Acres type facility. I just know they means making up the difference.
Perhaps maybe even a solution of bring them into your house but using the $3-5K to provide full time care taker support?
I know my uncle Randy had Alzheimer's and he had someone dedicated to him as a full time care taker. But my uncle Randy also worked for Mortorala building the technology within side winder missles, so he may have been secretly loaded and could afford it.
While I'm assuming I'm much younger than you, I've been in a similar situation where my FIL had Alzheimer's and required a level of care that financially my MIL could not come up with. So we stepped in and helped cover the monthly shortfalls.
It's painful quite frankly and there is no good alternative. Your worst factor is the monthly coverage is not pegged to a term so it can change by month quite drastically over a short period of time. Just a simple fact with the level of care within the AL/AZ facilities.
However, I think a HYSA or a treasury is the best course of action. Because the money could be at risk if you seek alternative investments. If your risk appetite could make sense of paying the $2k out of pocket in the event of a shortfall or downturn, maybe investing in the S&P500 could make sense. Even then, your risk tolerance would have to be pretty high.
Personally, I'd recommend alternative solutions if possible. Can you obtain Medicaid or Medicare? Can you get into one of the facilities covered by that? I hate to say it but you being a sibling could be a silver lining in that you are not legally obligated to care for them as a dependent, so you can try to find alternatives while ensuring they aren't going to a Happy Acres type facility. I just know they means making up the difference.
Perhaps maybe even a solution of bring them into your house but using the $3-5K to provide full time care taker support?
I know my uncle Randy had Alzheimer's and he had someone dedicated to him as a full time care taker. But my uncle Randy also worked for Mortorala building the technology within side winder missles, so he may have been secretly loaded and could afford it.
If all of the pertinent factors in the OP are accurate, the SS and the 4'ish% treasuries have you in a position to stretch the $210k for about 10 years or so not counting inflation and taxes. Granted the interest rates could fall during that time but just trying to look at it surface level.
If you go beyond that, Medicaid is tailor made for situations like these.
Sorry you're going through this.
If you go beyond that, Medicaid is tailor made for situations like these.
Sorry you're going through this.
Regarding Medicare/Medicaid, don't presuppose they address long terms care needs for otherwise eligible seniors like my 76 year old sibling with dementia. Medicare of course is insurance that can cover some immediate institutional care needs up to a point but it is not long term in practice or intent. Medicaid (state run) is the safety net for those having an income less than $2901 (single person for 2025) so sibling would not qualify with SS in excess of 3K. There are "doughnut holes" everywhere. There are few answers to this dilemma and we have an aging population that needs some creative financing solutions to care needs besides very expensive long terms care insurance and governmental eligibility. I personally carry long term care insurance and annuities to address the issue,but everyone's situation is different as my "surprise: sibling demonstrates.
Thanks for comments and thoughts..they have been helpful.
Thanks for comments and thoughts..they have been helpful.
People often confuse the Medicare/Medicaid aspect of long-term care so don't hold that against the posters.
The Medicaid cutoff is around $2,800/month. Depending on her exact SS payment she might miss it but something to consider is which SS check is she on? Hers or a former spouse's check? I can't remember the rules on changing from one to the other but if she's on the bigger of the two checks, and it's possible to switch options X numbers of years later, AND you were desperate for financial assistance once the $210k runs out, then maybe inquire about swapping her to the lower of the two checks (if that's even an option), to qualify for the more-valuable-at-that-point Medicaid payment.
As it stands, with the SS and the $210k, she's got enough to carry her for a decade at conservative rates of return. Not to sound crass, but in her current health state, that's likely going to be long enough. Good on you for trying to plan ahead with all of this but you may just be in a "wait and see" window when it comes to what you'll need to do (if anything) a decade from now.
The Medicaid cutoff is around $2,800/month. Depending on her exact SS payment she might miss it but something to consider is which SS check is she on? Hers or a former spouse's check? I can't remember the rules on changing from one to the other but if she's on the bigger of the two checks, and it's possible to switch options X numbers of years later, AND you were desperate for financial assistance once the $210k runs out, then maybe inquire about swapping her to the lower of the two checks (if that's even an option), to qualify for the more-valuable-at-that-point Medicaid payment.
As it stands, with the SS and the $210k, she's got enough to carry her for a decade at conservative rates of return. Not to sound crass, but in her current health state, that's likely going to be long enough. Good on you for trying to plan ahead with all of this but you may just be in a "wait and see" window when it comes to what you'll need to do (if anything) a decade from now.
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I would be looking to contact an attorney/firm that specializes in Medicare/Medicaid and long term care planning.
THIS IS THE ANSWER.
Really, there may be some things that can be done.
Really, there may be some things that can be done.
Agree with this too. Ask about a Medicaid annuity.Illustrious Potentate said:
I would be looking to contact an attorney/firm that specializes in Medicare/Medicaid and long term care planning.
What kind of debt? I wouldn't bother paying any of it. Gotta prioritize.
Is there any home equity to leverage some way?
Is there any home equity to leverage some way?
He is a male sibling in telephone contact but that I had not seen in 10 years. I have a family law attorney who has done POA's, wills and other legal instruments needed for me to manage this circumstance, Attorney is good and knowledgeable of Miller Trusts, Medicaid eligibility etc.---which may be needed in future--but can't give investment advice regarding the 210K we obtained from sibling house sale and which is the focus of my main concern at present. I'm leaning towards a conservative Schwab robo-invest with an 8 year period estimated monthly payout that would more than make up difference between his 3k SS and 5k plus institutional care cost. Would be about the same return as a 10 year immediate annuity but with more flexibility (and risk).
Assume there are no kids here that could help take care of him for, collectively, a year or something? Just getting that one year while your brother may still be manageable might make his $210k stretch quite a bit further when he isn't manageable at all. This situation sounds like a nightmare to have dropped in your lap.
matureag said:
He is a male sibling in telephone contact but that I had not seen in 10 years. I have a family law attorney who has done POA's, wills and other legal instruments needed for me to manage this circumstance, Attorney is good and knowledgeable of Miller Trusts, Medicaid eligibility etc.---which may be needed in future--but can't give investment advice regarding the 210K we obtained from sibling house sale and which is the focus of my main concern at present. I'm leaning towards a conservative Schwab robo-invest with an 8 year period estimated monthly payout that would more than make up difference between his 3k SS and 5k plus institutional care cost. Would be about the same return as a 10 year immediate annuity but with more flexibility (and risk).
There is a form of immediate annuity which used to be available through specialist brokers - impaired risk immediate annuities. They in essence give someone credit for being in poor health that impacts their expected mortality (meaning the insurer won't have to pay as long as for a healthy 76 year old). You release medical info to them, and they tell you what your enhanced payment will be. It can be significant - sometimes even double the payment or more. It's worth checking out with your medicaid advisor.
Stive said:
People often confuse the Medicare/Medicaid aspect of long-term care so don't hold that against the posters.
The Medicaid cutoff is around $2,800/month. Depending on her exact SS payment she might miss it but something to consider is which SS check is she on? Hers or a former spouse's check? I can't remember the rules on changing from one to the other but if she's on the bigger of the two checks, and it's possible to switch options X numbers of years later, AND you were desperate for financial assistance once the $210k runs out, then maybe inquire about swapping her to the lower of the two checks (if that's even an option), to qualify for the more-valuable-at-that-point Medicaid payment.
As it stands, with the SS and the $210k, she's got enough to carry her for a decade at conservative rates of return. Not to sound crass, but in her current health state, that's likely going to be long enough. Good on you for trying to plan ahead with all of this but you may just be in a "wait and see" window when it comes to what you'll need to do (if anything) a decade from now.
I guess I'm among the confused.
Long term care would cost more than 2800 per month
But if someone makes $2800 per month or whatever the dollar amount is, they get nothing from medicaid because they hit a cutoff $ that would not pay be enough anyway
The "confused" part that I was alluding to is that Medicare only pays for long-term care for three months (100 days) and that has to be after a hospital stay and involve the rehab for whatever they were in the hospital for.
Medicaid is the long-term care safety net for the poor. You have to be, essentially, completely out of money to qualify, they pretty much get to pick the facility your loved one is placed in, etc.
And surprise: some things in government don't add up. To qualify for Medicaid you can't have more than $2,800 a month of income, but many Social Security checks are higher than that. But $3,000 won't buy you a full time slot in a nursing home these days. So there's a gap. The OP's family member makes too much on his government check to qualify for the government safety net. But the government check is too small to buy what the safety net is supposed to provide. And round and round we go…
Medicaid is the long-term care safety net for the poor. You have to be, essentially, completely out of money to qualify, they pretty much get to pick the facility your loved one is placed in, etc.
And surprise: some things in government don't add up. To qualify for Medicaid you can't have more than $2,800 a month of income, but many Social Security checks are higher than that. But $3,000 won't buy you a full time slot in a nursing home these days. So there's a gap. The OP's family member makes too much on his government check to qualify for the government safety net. But the government check is too small to buy what the safety net is supposed to provide. And round and round we go…
Doesn't a person have to be insolvent for 5 years before becoming eligible for LTC Medicaid? That rule is designed so elders can't give away their assets just to qualify for Medicaid.
1. You need to listen to your attorney.
2. If it were me I'd keep half where it is to pay the bills and invest the other in the market. VOO or similar. If the math is correct you should have 5 years, there aren't too many 5 year losing markets so sometime in that time frame you can sell and have a decent profit.
1. You need to listen to your attorney.
2. If it were me I'd keep half where it is to pay the bills and invest the other in the market. VOO or similar. If the math is correct you should have 5 years, there aren't too many 5 year losing markets so sometime in that time frame you can sell and have a decent profit.
Chad Reed at Livens & Reed is really good for this exact thing.
https://www.livensreed.com/attorney/chad-reed/
https://www.livensreed.com/attorney/chad-reed/
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