[2020] A little stock market sense

[Brett]

I had a heated argument awhile back on the Wyndham page. I had mentioned how I refused to put money into a 401K plans so I can get match money. There were crappy choices of mutual funds I did not want. The same holds true for many people. Only a few people have 401K plans where they can choose anything they want.

So instead I chose a Roth IRA and my own non-IRA account where I can harvest tax losses. Where I will not have a RMD and my withdrawals will not be treated as ordinary income.

People think I am crazy. But when they are crying when their 401K is crashing, I am making money because I have choices they do not have. A few weeks ago, the market was down 386. I was up 0.21%.

While it's true that some 401k plans do not have a low cost stock index mutual fund everyone should at least put in the minimum for the employer match, otherwise you're just leaving money on the table


"The most common partial match provided by employers is 50% of what you put in, up to 6% of your salary. In other words, your employer matches half of whatever you contribute but no more than 3% of your salary total. To get the maximum amount of match, you have to put in 6% of your salary."

 

[RENTER]

While it's true that some 401k plans do not have a low cost stock index mutual fund everyone should at least put in the minimum for the employer match, otherwise you're just leaving money on the table


"The most common partial match provided by employers is 50% of what you put in, up to 6% of your salary. In other words, your employer matches half of whatever you contribute but no more than 3% of your salary total. To get the maximum amount of match, you have to put in 6% of your salary."

You are correct if you can do both a 401K and another type of account. But most people cannot and can only pick one. If they chose a crappy 401K just to get a match, it costs them in the long run.

 

[RENTER]

2 stories that may make you think about your 401K plan. These stories were told to me by my investment partner who convinced me to stop putting money into a 401K at my company.

The first is not about a 401K but a 403B which is similar. That is for government workers. He would tell his friends who were teachers that their plan sucked and he would not touch it in a million years. Limited choices and high expenses. A few later, the NYC teachers union was caught taking bribes pushing those plans on their teachers.

Then the second story is about a lady he met who was crying. When he asked her why, she said she was the owner a company and all her employees were getting wiped out with their 401K plan. He said to her let him guess what company and 5 investments they had. He was correct and she wanted to know how he knew. He said because everyone has the same thing and everyone is getting wiped out. He said someone is taking bribes. She said there were no bribes, that she made the selection.

He asked her why did she not use companies like Vanguard, Fidelity and Schwab. She said she did talk to them, but she did not like their attitude.

He then asked her what business courses she took to help her be informed so she could make a sound decision. She said she did not. She was a psychology major.

 

[Brett]

2 stories that may make you think about your 401K plan. These stories were told to me by my investment partner who convinced me to stop putting money into a 401K at my company.

The first is not about a 401K but a 403B which is similar. That is for government workers. He would tell his friends who were teachers that their plan sucked and he would not touch it in a million years. Limited choices and high expenses. A few later, the NYC teachers union was caught taking bribes pushing those plans on their teachers.

Then the second story is about a lady he met who was crying. When he asked her why, she said she was the owner a company and all her employees were getting wiped out with their 401K plan. He said to her let him guess what company and 5 investments they had. He was correct and she wanted to know how he knew. He said because everyone has the same thing and everyone is getting wiped out. He said someone is taking bribes. She said there were no bribes, that she made the selection.

He asked her why did she not use companies like Vanguard, Fidelity and Schwab. She said she did talk to them, but she did not like their attitude.

He then asked her what business courses she took to help her be informed so she could make a sound decision. She said she did not. She was a psychology major.

You are correct if you can do both a 401K and another type of account. But most people cannot and can only pick one. If they chose a crappy 401K just to get a match, it costs them in the long run.

Anyone can have non-tax deferred investment accounts. 401K plans operate under ERISA rules with fiduciary responsibilities and most (maybe 99.999%) of financial advisers recommend contributing to the employer's match limit.

Anything above that, sure go ahead and invest outside the tax-deferred plan in a low cost stock index mutual fund like Vanguard or Schwab

 

[RENTER]

Anyone can have non-tax deferred investment accounts. 401K plans operate under ERISA rules with fiduciary responsibilities and most (maybe 99.999%) of financial advisers recommend contributing to the employer's match limit.

Anything above that, sure go ahead and invest outside the tax-deferred plan in a low cost stock index mutual fund like Vanguard or Schwab

sorry I do not agree with you as does the creator of the 401K who regrets creating a monster. Other experts say only the wealthy benefit from it.

What is the average salary $60,000% The average 401K match is 3.5% or $2100. Most of those under $60,000 are going to take the money early and pay penalties on it.

Those financial advisors are not curious enough to do the math down the road taking into account
1. the taxes
2. the limited choices
3. the high fees
4. the penalties for early withdrawal which many people do

To determine if the free match is worth it.

Many have investments with high fees.

Many if they do leave their hands off the money and are succesful will be put into a higher tax bracket at the end. Many will have their social security taxed because of the RMD's.

All will not be able to harvest tax losses

So sorry I do not think the $2100 match for most is worth the effort. If anyone has a financial advisor who thinks this is a foolish post should reconsider who they are using. It is not foolish. Nothing is for free and there is always a cost.

You may not agree with me and still do want that $2100 free money. But I and others don't and we have watched how it has become a disaster for many as the creator of the 401k points out.

 

[SmithOp]

I think I agree with @RENTER about crappy 401k choices. My wife and I both worked for state govt, and it was even worse with them because there was no match (that was in our pension contribution), and they put the management of the 401k accounts out to bid every three years! So every three years our funds were moved to a different crappy mutual fund manager (low bidder). They allegedly tried to align the swap with funds we already had.

I left the govt job in my 40s and luckily my new employer had the 3% match and the 401k was in Fidelity. I rolled everything over to Fidelity and have had much better choices since then.

 

[RENTER]

I think I agree with @RENTER about crappy 401k choices. My wife and I both worked for state govt, and it was even worse with them because there was no match (that was in our pension contribution), and they put the management of the 401k accounts out to bid every three years! So every three years our funds were moved to a different crappy mutual fund manager (low bidder). They allegedly tried to align the swap with funds we already had.

I left the govt job in my 40s and luckily my new employer had the 3% match and the 401k was in Fidelity. I rolled everything over to Fidelity and have had much better choices since then.

that is more common then you think. Especially with the teachers. When I did their taxes I would just shake my head looking at the crap they had. They all had the same funds that the NYC teachers union was caught taking bribes putting their teachers in those funds.

Also, I want to make another point. Any financial advisor who recommends a 401K match and who does not consider the fact that their clients are going to raid the 401K and pay penalties, lives in delusional la la land.

That is how i knew what they had. I had to report their 1099-R info on their taxes because of their withdrawals. The financial advisor and 401K salesperson were making the money and I was getting the grief when I had to tell them how much they had to pay because of a early withdrawal.

They would tear up their tax return in my face and said they would find someone else. One was a boyfriend to a female friend of mine. I hated the guy but she plead with me to help him. Like the fool I am, I did and he tore it up in my face and said he will find someone to fix it.

He never did. How did I find out? She called me crying. The IRS took what he owned out of her bank account because she had put his name on her bank account. Gets even better, She had broken up with him when he tore that return up in my face but never took him off the account.

 

[billymach4]

I had a heated argument awhile back on the Wyndham page. I had mentioned how I refused to put money into a 401K plans so I can get match money. There were crappy choices of mutual funds I did not want. The same holds true for many people. Only a few people have 401K plans where they can choose anything they want.

So instead I chose a Roth IRA and my own non-IRA account where I can harvest tax losses. Where I will not have a RMD and my withdrawals will not be treated as ordinary income.

People think I am crazy. But when they are crying when their 401K is crashing, I am making money because I have choices they do not have. A few weeks ago, the market was down 386. I was up 0.21%.

Not sure how old you are? Not going to argue. But you are leaving money on the table.
You can't time the market either. My employer match not something to sneeze at either.

Anyway my point with age is that once you are 59 1/2 you can take a distribution from your employer 401k regardless of the crappy choices. You can take the distribution and roll it over without penalty to your choice of investments. Yes I said distribution with a roll over while still employed and continue to take the 401k match.

You can do this a few times per year. Already done it this year and will continue to do so.

 

[Brett]

sorry I do not agree with you as does the creator of the 401K who regrets creating a monster. Other experts say only the wealthy benefit from it.

What is the average salary $60,000% The average 401K match is 3.5% or $2100. Most of those under $60,000 are going to take the money early and pay penalties on it.

Those financial advisors are not curious enough to do the math down the road taking into account
1. the taxes
2. the limited choices
3. the high fees
4. the penalties for early withdrawal which many people do

To determine if the free match is worth it.

Many have investments with high fees.

Many if they do leave their hands off the money and are succesful will be put into a higher tax bracket at the end. Many will have their social security taxed because of the RMD's.

All will not be able to harvest tax losses

So sorry I do not think the $2100 match for most is worth the effort. If anyone has a financial advisor who thinks this is a foolish post should reconsider who they are using. It is not foolish. Nothing is for free and there is always a cost.

You may not agree with me and still do want that $2100 free money. But I and others don't and we have watched how it has become a disaster for many as the creator of the 401k points out.

I would suggest anyone looking at this thread and needing 401K financial advice go to a CPA, Certified Financial Planner, Enrolled Tax preparer, Attorney, etc

..

 

[RENTER]

Not going to argue anymore. I laid out well thought reasons why not to invest in a 401K which the creator of the 401K regrets that he ever created.

There are certain types of people in life. People who just do what everyone else does and those who are curious in life. People who do what everyone else does will accept that the 401K is the best way to go without analysis of all the facts to determine which was the best way to go in the end.

These are the same people who will never understand why people like me believe paying for VIP was worth it. That is because people like me and my partners are curious and think long term and we consider different things they did not.

We get the same crap about how investments. That we are crazy. Except we never lose money and get our revenge posting pictures of our investments making money on the days the stock market is getting crushed. That is because we were curious and do things others never consider.

Same thing with the 401K's we got out, invested our way and never looked back. Oh by the way, those people I talk about who are not curious in life, probably own a target fund which were badly hit last year.

A curious person would look into what that target fund owns, see what went up and went down and then recreate it themselves so they can cherry pick the winners. A curious person during a stock market crash would look for what went up and not down and make sure it is part of their portfolio to protect them during crashes.

A curious person would not just invest in the 500 index. A curious person would invest in all 11 sectors of that index. A curious person would then invest in all the sub sectors of those 11 indexes.

A lazy person will say it is to much work. Yeah right. It takes 6 hours to build and 5 minutes a day including signing in to rebalance to keep equal amounts in all the investments.

I have 100 investments of equal amounts. 50% stocks, 25% bears and 25% treasury t-bills including rising rate treasuries. This is what curious people do and why they can beat the match. Good luck finding a financial advisor or a 401K who does this.

 

[CO skier]

I would suggest anyone looking at this thread and needing 401K financial advice go to a CPA, Certified Financial Planner, Enrolled Tax preparer, Attorney, etc

Definitely not go to RENTER for financial advice.

 

[Brett]

Definitely not go to RENTER for financial advice.

.... yeah

 

[RENTER]

One more thing if you think all Fidelity 401K plans are the same, they are not. it depends on what your company allows. I prefer ETF's but if there are none, I will use a mutual fund.

I play the bulls vs the bears. Selling the winners to buy the losers. So I use an energy bull ETF. I did use an energy bear ETF but it no longer exists, so I have to use the mutual fund. I have found that Fidelity 401k's differ on how to use it.

Some do not allow it.
Some require $15,000 to open
Some require $1,000 to open

Schwab requires $100 to open but only allows fractional trading on the stocks in the 500 index where as Fidelity allows it on almost everything. So I use both.

Now for those who think, I do not know what I am doing. Someone I know lost her husband. He was not a curious person so he parked everything into the Fidelity Growth and Income against my advice.

He died in 2005. I helped her and I broke it up into a growth fund and Treasuries. It was a good move because in 2008, the growth and income fund dropped 50%. My move saved her because she would have run out of money before she died in 2014. She was able to live off the treasuries until the market rebounded.

Unf. the same could not be said about her home. She had to sell her $450,000 house for $190,000. Once he died, she was under attack by her alcoholic daughter and drug addicted grandson who were constantly stealing from her. So she had to move away from them and moved into a independent living residence which she was able to pay for because I had made that move and divided up the growth and income fund.

$450,000? Yes for those with no memory who are drooling over housing prices today. That was about the average price in 2005-2008 before the crash. Most homes are only back to those levels.

When she sold the home, I put it into REITS to collect the dividends to help her pay for that independent living room.

 

[frytard]

sorry I do not agree with you as does the creator of the 401K who regrets creating a monster. Other experts say only the wealthy benefit from it.

What is the average salary $60,000% The average 401K match is 3.5% or $2100. Most of those under $60,000 are going to take the money early and pay penalties on it.

Those financial advisors are not curious enough to do the math down the road taking into account
1. the taxes
2. the limited choices
3. the high fees
4. the penalties for early withdrawal which many people do

To determine if the free match is worth it.

Many have investments with high fees.

Many if they do leave their hands off the money and are succesful will be put into a higher tax bracket at the end. Many will have their social security taxed because of the RMD's.

All will not be able to harvest tax losses

So sorry I do not think the $2100 match for most is worth the effort. If anyone has a financial advisor who thinks this is a foolish post should reconsider who they are using. It is not foolish. Nothing is for free and there is always a cost.

You may not agree with me and still do want that $2100 free money. But I and others don't and we have watched how it has become a disaster for many as the creator of the 401k points out.

Getting in this conversation a bit late but I agree with the other poster of taking the match as it is free money.

Could you give me a summary of your strategy? Are you recommending a Roth IRA Tax free forever or something else?

I personally do both matching and a Backdoor Roth IRA every year. Also your point about number 1 - Are you referring to Taxes in the future at retirement? It is Tax Deferred now as well. Number 2 Limited choices are bothersome but again tax deferred and free money into these account. 3. I agree the fees are high. I was shocked when American Funds had like a 2-3 Percent Fee when a ETF/Index Vanguard is 1/5 that or so. However, they were still returning as high as the S&P 500 so I didn't mind. 4. This is a point that wouldn't matter which investment they had. This would be with your strategy or any other. when people need money they arent making enough or aren't planning enough for their lifestyle.

Also even in my Roth I am more of agressive investor from the norm. I do Covered Calls alot and only 50% of my IRA is in Index/REITs. the other 50% I do individual stocks that i follow and have a covered call strategy to keep buying more shares and if so happens it is in the money at the time i just rinse and repeat with other stocks if my analysis of the stock is over valued or rebuy at a downswing and repeat.

 

[RENTER]

Getting in this conversation a bit late but I agree with the other poster of taking the match as it is free money.

Could you give me a summary of your strategy? Are you recommending a Roth IRA Tax free forever or something else?

I personally do both matching and a Backdoor Roth IRA every year. Also your point about number 1 - Are you referring to Taxes in the future at retirement? It is Tax Deferred now as well. Number 2 Limited choices are bothersome but again tax deferred and free money into these account. 3. I agree the fees are high. I was shocked when American Funds had like a 2-3 Percent Fee when a ETF/Index Vanguard is 1/5 that or so. However, they were still returning as high as the S&P 500 so I didn't mind. 4. This is a point that wouldn't matter which investment they had. This would be with your strategy or any other. when people need money they arent making enough or aren't planning enough for their lifestyle.

Also even in my Roth I am more of agressive investor from the norm. I do Covered Calls alot and only 50% of my IRA is in Index/REITs. the other 50% I do individual stocks that i follow and have a covered call strategy to keep buying more shares and if so happens it is in the money at the time i just rinse and repeat with other stocks if my analysis of the stock is over valued or rebuy at a downswing and repeat.

I stopped investing in a IRA in the 80's. I am good at investing and I realized that I would not be in the low tax bracket like I was then when I retire because of the RMD's. The RMD's would make my social security taxable which is what is happening to the surprise of many today. Plus you had to worry about politicians raising taxes in the future.

Many give credit to Clinton for balancing the budget and blaming Bush for ruining it. That is incorrect. The credit goes to people like me and the Roth IRA named after a Republican Senator.

When they created the Roth IRA in 1997, they gave you 4 years to pay the taxes when you converted from a IRA to a Roth. I had all my clients convert and take the 4 years to pay the taxes. When those 4 years were up, that is when the balanced budget disappeared. There were other factors involved such as the dot.com crash and 9/11.

Those who did not today are complaining about the RMD's and the taxes they have to pay. So when considering if the match is worth it, you have to consider the taxes you pay in the end. If you had limited choices and high fees, was the match worth it vs having a Roth or a non-retirement account were you can harvest tax losses to control your taxes.

Harvesting tax losses means selling something for a loss and using it to offset your gains. Then buying it back. But because of wash sale rules, you cannot buy it back for 31 days. However I play the system to get around the wash sale rules and it is perfectly legit because i am not buying the identical thing.

I play the sectors. I have a bull and bear fund for different sectors. One of those funds are going to be down. Each month I look at what fund is down the most. Then I sell it to create the loss. But I cannot buy that sector again for 31 days. But what I do is buy the top stock in that sector so I still have exposure to that sector. Then 31 days later I sell that stock and buy back the whole sector. Then I look for which fund is down the most and play the game again.

As far as what to put it, I do not deal with wealthy people. I deal with people whose salaries range from $30,000 to $60,000. So they do not have much to invest. If they just do the $7,000 in the Roth and KEEP THEIR HANDS OFF IT, they will have $473,000 in 25 years. Way more then the average $112,000 today.

Being curious I then added the $2100 average match to it and $9100 over 25 years will be $615,000. The question everyone has to ask for themselves is that $143,000 extra worth the
1. limited choices
2. no access before 59 1/2 which is why the average 401K is $112,000 because of all the early withdrawal penalties
3. RMD's that push them in higher tax brackets or tax their social security. For a $615,000 account that would be about $22,000. May not be enough to push most into a higher tax bracket but will make their social security taxable.

One more key factor to consider. If they want to leave something to their kids. With a 401K or IRA they will will inherit the full amount with no step up. They have to take distributions and pay taxes on it.

For a Roth IRA, they have 10 years to take it out and it is tax free

For a non-retirement account, the cost basis step up is $615,00 at the time of death is $615,000 and taxes due only on those profits over the $615,000. Off course this if figured differently for each investment. But be warned the Democrats want to get rid of this rule.

If you gift it, the cost basis is what it was worth when you bought it and not when you die.

So there are lot of things to consider when deciding rather than dismissing someone as a fool for not wanting the match. The only correct answer is what is good for that person and for me, freedom is more important then free money.

As for options, I want no part of that. i keep it simple, own as many different sectors as I can and keep equal amounts in each. Takes the gambling out of it by letting the market tell me what to sell. When I have 10% profits, I trim the top and build the bottom, thus selling high and buying low except for when I am harvesting tax losses.

What I do is not for most people because I do not think like most people. Which is why the owner priority period had no effect on me. Because I was booking where others weren't. I wanted no part of holidays , popular events or popular resorts. I studied what goes on in America and knew where and when to book where there was no competition for rooms.

When the salesperson was trying to convince me to buy VIP they told me I could rent out Daytona for the Race, Orlando for Christmas and Easter, New York for New Years Eve, New Orleans for Mardi Gras. I said no way. Shocked them when I said I know a better way.

So I bought because I know why the average 401K is only $112,000. I am going to rent out for an event that occurs 52 weeks a year in all 50 states that keeps those 401K's down. I was proven right the 1st week.

 

[rapmarks]

I don’t get this cost basis step up at date of death of $615000. Are you saying it is limited to $615,000? When was this instituted?

 

[RENTER]

I don’t get this cost basis step up at date of death of $615000. Are you saying it is limited to $615,000? When was this instituted?

I made a mistake typing. The cost step up basis is the $473,000 and not the $615,000. The cost step up basis has always been there. There is no limit. It is the value of assets at the time of death,

I got to the $473,000 by investing $7,000 a year for 25 years earning 7% in a non-retirement account. The $615,000 is if I raised it to $9100 a year in a 401K if I add in the average $2100 match. Cost step basis does not apply to the $615,000 because it is treated as ordinary income which is taxed higher than capital gains with the $473,000.

Another perfect example how some people screw themselves to get something for free. Many people move their home into their children's home so they can get Medicaid. Has to be done 5 years before they apply. So say after 5 years they apply and they die several months later. So they received several months of free Medicaid and nursing home care.

Then when their children sell the home, their cost basis is the value of the home at the time their parents bought the home plus any improvements. If they inherited, the cost basis is the value of the home at the time of death.

Don't forget, the home is no longer in the parents name. So unless their kids are living in it, it is no longer a primary residence and not eligible for the $250,000/$500,000 homeowner exemption.

Just another example how one generation does not learn the mistakes of the previous generation. Because it was a major headache for the kids of the greatest generation. That is because that is what they did. Put the home in their name.

Problem was that the Greatest Generation bought their homes for $10,000 in the 1950's and gifted it to their children. They were being sold for $450,000. So capital gain taxes were due on $350,000. Just remember that when you hear a politician try to divide us by saying low capital gain taxes are only for the rich.

If they inherited the $450,000 house and sold it the next day, no taxes would be due because there is no gain.

Same story with those who thought they were getting something for free having their credit card debt eliminated. Happy campers until they received 1099's from the banks. Off course I was the one who got grief for it when I told them they owned thousands of dollars in taxes. Some owned tens of thousands.

 

[Brett]

I made a mistake typing. The cost step up basis is the $473,000 and not the $615,000. The cost step up basis has always been there. There is no limit. It is the value of assets at the time of death,

I got to the $473,000 by investing $7,000 a year for 25 years earning 7% in a non-retirement account. The $615,000 is if I raised it to $9100 a year in a 401K if I add in the average $2100 match. Cost step basis does not apply to the $615,000 because it is treated as ordinary income which is taxed higher than capital gains with the $473,000.

Another perfect example how some people screw themselves to get something for free. Many people move their home into their children's home so they can get Medicaid. Has to be done 5 years before they apply. So say after 5 years they apply and they die several months later. So they received several months of free Medicaid and nursing home care.

Then when their children sell the home, their cost basis is the value of the home at the time their parents bought the home plus any improvements. If they inherited, the cost basis is the value of the home at the time of death.

Don't forget, the home is no longer in the parents name. So unless their kids are living in it, it is no longer a primary residence and not eligible for the $250,000/$500,000 homeowner exemption.

Just another example how one generation does not learn the mistakes of the previous generation. Because it was a major headache for the kids of the greatest generation. That is because that is what they did. Put the home in their name.

Problem was that the Greatest Generation bought their homes for $10,000 in the 1950's and gifted it to their children. They were being sold for $450,000. So capital gain taxes were due on $350,000. Just remember that when you hear a politician try to divide us by saying low capital gain taxes are only for the rich.

If they inherited the $450,000 house and sold it the next day, no taxes would be due because there is no gain.

Same story with those who thought they were getting something for free having their credit card debt eliminated. Happy campers until they received 1099's from the banks. Off course I was the one who got grief for it when I told them they owned thousands of dollars in taxes. Some owned tens of thousands.

I'm not sure that people routinely gift their homes to their children.
My parents were in the 'greatest generation" and didn't gift their home but they did accumulate assets that were eventually inherited

 

[rapmarks]

I'm not sure that people routinely gift their homes to their children.
My parents were in the 'greatest generation" and didn't gift their home but they did accumulate assets that were eventually inherited

Husband and I had 65 years teaching, my sons at 25. Never have I ever heard of a school district offering to match an IRA and I don’t know anyone who pulled funds out of IRA early.
yes, I understand his point about tax brackets being lower when you put the money in, then when you are retired.
if he has been investing since the eighties, he should have a lot of money.
gifting home to children, I have friends that did it. It is a really stupid move. the friend doesn’t know the difference between Medicare and Medicaid.

 

[RENTER]

I'm not sure that people routinely gift their homes to their children.
My parents were in the 'greatest generation" and didn't gift their home but they did accumulate assets that were eventually inherited

Then you do not live in my world. It must be nice to live in such a world. Because people in my world do it to get Medicaid and nursing home care. They can only own $2000. There are exceptions if a child lives with you.

Just got off the phone with someone in tears. She has to put her mom in hospice, and it costs $500 a day. That is why they move the house out of their parents name to their children's name. Not just the house but all assets. Or they put it in a trust.

Again it must be nice to live in the world some of you do. One mentioned how great his 401K plan was and he could select anything. To bad others do not have that benefit.

Before you ask why doesn't she bring her home, she has to work and cannot find adequate help with the long term care policy they have. A problem many people in my world have.

 

[ScoopKona]

Then you do not live in my world. It must be nice to live in such a world. Because people in my world do it to get Medicaid and nursing home care. They can only own $2000. There are exceptions if a child lives with you.

My grandmother was forced to completely bankrupt herself for this reason. Only when she was indigent could she qualify for the assisted living she desperately needed.

She didn't have a trust or a competent financial advisor. What happened to her, and a few other members of my family, motivated me to be nothing like them.

 

[rapmarks]

My mother went into hospice care in 2012 at cost of $18000 a month. Unfortunately I caught A lung infection when visiting her because I planned to move her home and hire help as soon as I recovered After I saw what it was like. The social worker told us there was not a bed for Medicaid in the entire state and if we thought my mother would run out of money to apply right away because it would take two years To be approved.

my husband fell and broke multiple bones and needed rehab in Wisconsin and two years later in Florida. Insurance would pay for rehab, but no one would take him because he had dementia . I had to self pay At a facility with a lessor level of care. But my friends sister also had dementia and within three days was approved for Medicaid and found placement in Wisconsin. So they would Not take Medicare patient, but would take Medicaid.

 

[RENTER]

My grandmother was forced to completely bankrupt herself for this reason. Only when she was indigent could she qualify for the assisted living she desperately needed.

She didn't have a trust or a competent financial advisor. What happened to her, and a few other members of my family, motivated me to be nothing like them.

Sadly, many people are not like you and do not learn the lessons from those who did go thru it. I am sorry your family went thru it.

 

[RENTER]

Husband and I had 65 years teaching, my sons at 25. Never have I ever heard of a school district offering to match an IRA and I don’t know anyone who pulled funds out of IRA early.
yes, I understand his point about tax brackets being lower when you put the money in, then when you are retired.
if he has been investing since the eighties, he should have a lot of money.
gifting home to children, I have friends that did it. It is a really stupid move. the friend doesn’t know the difference between Medicare and Medicaid.

You probably won't believe this, but I know people who pulled money out of their retirement accounts for Taylor Swift tickets.

 

[ScoopKona]

Sadly, many people are not like you and do not learn the lessons from those who did go thru it. I am sorry your family went thru it.

I also learned that a company can simply take away their employees' pensions. That was the one that really lit a fire under my [posterior].