Who Do I Go To For Retirement Planning Help?
July 30, 2017 9:21 AM Subscribe
I've come to realize that I'm saving for retirement out of fear: I don't know how things work - specifically social security and health care - so I'm currently, well, saving *everything*. A recent - my 1st - health issue has also made me realize how quickly hospital bills can add up. Rather than books or blogs or government websites or random advice from colleagues, is there someone I can just pay to give me a clearer picture of what to expect, plans I could be making now, and primary gotchas to consider?
I'm 45, have worked in the US for 15 years, and contribute to a 401K and max out my Roth annually. I've always had health care from my employer, so I don't know how health care works when you don't have an employer. I'm also from a country where health care is free, and can't work out if I'm being over-dramatic by considering moving back to my home country for retirement for free health care - not just because it's free, but because I know how it works vs investing my retirement health care in a system which feels obfuscated and I'm not convinced would help me should I run out of $$$'s.
I'm 45, have worked in the US for 15 years, and contribute to a 401K and max out my Roth annually. I've always had health care from my employer, so I don't know how health care works when you don't have an employer. I'm also from a country where health care is free, and can't work out if I'm being over-dramatic by considering moving back to my home country for retirement for free health care - not just because it's free, but because I know how it works vs investing my retirement health care in a system which feels obfuscated and I'm not convinced would help me should I run out of $$$'s.
I would start by looking at a financial advisor with a local credit union, which should offer a free consultation if you are a customer. If your 401k is with a big place like Vanguard or Fidelity, they also have free advisors.
You will also need to understand the system in your home country, including any residency requirements to qualify for health cover or retirement benefits, as well as how the US Social Security system works (after 10 years working here, you are eligible to receive social security) and in particular how you can access that if you leave the US.
Honestly, for background reading and an easy place to answer general questions about the system, I would recommend Reddit.com/r/personalfinance. Read all their wiki and FAQ material on retirement.
posted by the agents of KAOS at 10:35 AM on July 30, 2017 [3 favorites]
You will also need to understand the system in your home country, including any residency requirements to qualify for health cover or retirement benefits, as well as how the US Social Security system works (after 10 years working here, you are eligible to receive social security) and in particular how you can access that if you leave the US.
Honestly, for background reading and an easy place to answer general questions about the system, I would recommend Reddit.com/r/personalfinance. Read all their wiki and FAQ material on retirement.
posted by the agents of KAOS at 10:35 AM on July 30, 2017 [3 favorites]
I'm also from a country where health care is free, and can't work out if I'm being over-dramatic by considering moving back to my home country for retirement for free health care
This isn't being dramatic. This is living the dream. Seriously. If this is an option for you, and if you don't have any compelling family ties here like close family who couldn't come with you, it would make no sense not to do this.
posted by bleep at 10:39 AM on July 30, 2017 [8 favorites]
This isn't being dramatic. This is living the dream. Seriously. If this is an option for you, and if you don't have any compelling family ties here like close family who couldn't come with you, it would make no sense not to do this.
posted by bleep at 10:39 AM on July 30, 2017 [8 favorites]
Medicare (or whatever go old people one is ) is similarish to most free health care plans, you do have to pay some but its pretty good. My European parents are happy with it. The problem is if you want go retire early or lose your job prior to age 65. If that happens and you are in poor health you will be royally fucked. This is why most Americans die with no assets, no matter how much they earned in their lives. And if they raise the age for benefits to 70 you'll have to work till 70 full-time to have health care. This is why I'm actively looking for work in my home country right now. My parents retired here and many of their upper middle class friends have gone broke over their or their kids health care of mental health or divorce. None of my relatives at home have.
posted by fshgrl at 11:23 AM on July 30, 2017
posted by fshgrl at 11:23 AM on July 30, 2017
The problem is if you want go retire early or lose your job prior to age 65. If that happens and you are in poor health you will be royally fucked. This is why most Americans die with no assets, no matter how much they earned in their lives.
The major thing here is that Medicare does not cover assisted living. Medicaid covers assisted living, but only once you've spent down all your assets. (Not including things like personal belongings, but usually including your house unless you have a spouse still living in it.) If you will need that kind of care at some point, you will either have to pay for it out of pocket, which is super expensive, or be prepared to spend down. By and large, most people aren't in a particularly bad place at age 65, but they will run out of assets before the end because of expenses outside the realm of what's covered by Medicare.
In general, I'd say, OP, do you actually have connections in the US that give you a reason to stay here? If you have a spouse and children here, if you have a community here that you're very close to, there's no reason to panic. But if you don't have particularly close ties, and you don't have people who will be here with you to help advocate for you during that time, moving may make more sense. A lot of these processes aren't that bad if you're navigating them with your adult children but would be a lot more challenging alone, especially if English isn't your first language.
posted by Sequence at 11:49 AM on July 30, 2017
The major thing here is that Medicare does not cover assisted living. Medicaid covers assisted living, but only once you've spent down all your assets. (Not including things like personal belongings, but usually including your house unless you have a spouse still living in it.) If you will need that kind of care at some point, you will either have to pay for it out of pocket, which is super expensive, or be prepared to spend down. By and large, most people aren't in a particularly bad place at age 65, but they will run out of assets before the end because of expenses outside the realm of what's covered by Medicare.
In general, I'd say, OP, do you actually have connections in the US that give you a reason to stay here? If you have a spouse and children here, if you have a community here that you're very close to, there's no reason to panic. But if you don't have particularly close ties, and you don't have people who will be here with you to help advocate for you during that time, moving may make more sense. A lot of these processes aren't that bad if you're navigating them with your adult children but would be a lot more challenging alone, especially if English isn't your first language.
posted by Sequence at 11:49 AM on July 30, 2017
Small correction for fshgrl. Medicare starts at 65. SS (retirement income) is different depending on when you were born. For me it is 67, at least for full benefits. But there has been no talk to my knowledge of delaying Medicare benefits past 65.
posted by jtexman1 at 11:52 AM on July 30, 2017
posted by jtexman1 at 11:52 AM on July 30, 2017
If you will need that kind of care at some point, you will either have to pay for it out of pocket, which is super expensive, or be prepared to spend down.
Long-term care insurance is also an option, but it can also be pricey and my understanding is that the market is shrinking somewhat (i.e., as insurers have found out just how expensive long-term care actually is). My MIL (in her mid-80s) has dementia and is in an absolutely top-notch memory care facility that costs something like $8000/month, which is possible only because she purchased a LTC policy in her 50s and she kept up with the premiums religiously.
posted by the return of the thin white sock at 12:11 PM on July 30, 2017 [1 favorite]
Long-term care insurance is also an option, but it can also be pricey and my understanding is that the market is shrinking somewhat (i.e., as insurers have found out just how expensive long-term care actually is). My MIL (in her mid-80s) has dementia and is in an absolutely top-notch memory care facility that costs something like $8000/month, which is possible only because she purchased a LTC policy in her 50s and she kept up with the premiums religiously.
posted by the return of the thin white sock at 12:11 PM on July 30, 2017 [1 favorite]
My parents friends haven't even hit the assisted living stage of life yet but yes, they will all have to spend down all assets and be on Medicaid. This means they cannot leave anything to their kids, if they have anything left. The typical progression for my Mom's friends was divorce in 50s --> series of underpaid jobs while using assets to help children who are struggling ---> health issues ---> unemployment ---> lose house to foreclosure---> living with adult children in late 60s/ early 70s while providing child care or working retail and neglecting health ---> ??
posted by fshgrl at 12:16 PM on July 30, 2017
posted by fshgrl at 12:16 PM on July 30, 2017
> The major thing here is that Medicare does not cover assisted living. Medicaid covers assisted living, but only once you've spent down all your assets.
Should read:
"Medicare does not cover nursing home care, with one minor exception. Medicaid covers nursing home care, but only once you've spent down all your assets."
Neither program pays for assisted living, in most states. (Medicaid coverage does vary some, from state to state.) Assisted living is almost always a self-pay option, thus available only to those who have the means to pay.
posted by megatherium at 1:44 PM on July 30, 2017
Should read:
"Medicare does not cover nursing home care, with one minor exception. Medicaid covers nursing home care, but only once you've spent down all your assets."
Neither program pays for assisted living, in most states. (Medicaid coverage does vary some, from state to state.) Assisted living is almost always a self-pay option, thus available only to those who have the means to pay.
posted by megatherium at 1:44 PM on July 30, 2017
bunderful's suggestion of LearnVest appears to be a good one (although I have no experience with them myself) - I checked their pricing and they offer fee-only financial planning services.
Fee only financial planning services are better than "free" ones because the free ones make money off what you invest in, and thus cannot offer you an unbiased viewpoint on what your investments should be, in your best interests. Although I am a big fan of Vanguard and would highly recommend it as an institution to invest in, financial advice that you get for free from Vanguard will be about Vanguard investments. If you have the money to spend, and it sounds like you do, you will get a more comprehensive and useful financial plan from a fee only financial planner of any type, LearnVest or not.
posted by treehorn+bunny at 2:30 AM on July 31, 2017 [1 favorite]
Fee only financial planning services are better than "free" ones because the free ones make money off what you invest in, and thus cannot offer you an unbiased viewpoint on what your investments should be, in your best interests. Although I am a big fan of Vanguard and would highly recommend it as an institution to invest in, financial advice that you get for free from Vanguard will be about Vanguard investments. If you have the money to spend, and it sounds like you do, you will get a more comprehensive and useful financial plan from a fee only financial planner of any type, LearnVest or not.
posted by treehorn+bunny at 2:30 AM on July 31, 2017 [1 favorite]
You might check with your employer -- mine offers free sessions with retirement planners that know our specific plan, and I found it super useful (and not at all up-sell-y). YMMV, but it's worth checking out if it's free/easy to access at least as a first source of info.
posted by rainbowbrite at 10:18 AM on July 31, 2017
posted by rainbowbrite at 10:18 AM on July 31, 2017
As treehorn+bunny says, fee-only financial planners are a great way to go. I recommended Garrett Planning Network to someone once and they've been very happy with their planner.
posted by kristi at 10:47 AM on August 3, 2017
posted by kristi at 10:47 AM on August 3, 2017
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This offers some information on how US health care works for retirees.
posted by bunderful at 10:30 AM on July 30, 2017