What should I do with $43,000?
August 3, 2012 12:09 PM   Subscribe

What should I do with $43,000? This needs to last the rest of my life.

Long sad, pitiful story-suffice to say no one would want to be me. I'm 59 yrs old, have cancer and 2 other serious maladies that have lost me my job in sales. I was wonderfully adept at my career until I began to bleed and vomit all over my company car and customers. I received SSDI (disability) immediately ($1288/mo.USD) but private LTD fought me tooth & nail for a measly settlement of $43,000 which needs to last until death, [which I can make happen in a NY minute and have seriously thought about doing so]. I have no family support, no friends that care and no advocate to give advice. Taking all precautions prior to leaving work, I saved enough to last 9 months of living expenses but am running out and have a $1000 deficit per month after paying $660 for COBRA and $1000 mtg. I don't know if I should sell my house and walk away with my (perfect) credit intact, go without insurance and health care or fight for my home. Rent would cost me about the same for 1/4 of the living space. I have a psychiatrist and counselor, but not a soul to help me make these paralyzing life decisions. Moving is a daunting thought because physically I am too sick to do this alone. Called: AARP, disability.gov, HUD.gov, Dept for the Aging, credit counselors, Chas Schwab, Quicken Loans, LinkedIn, Twitter, ad nauseam. 1.) What should I do with the settlement? 2.) Should I sell my home and break even with good credit? 3.) Should I refinance to pay only $200 less per month (I can do that now) I am NOT eligible for HAMP or HARP since I'm current. 4.) Close one eye and fart?

Addendum-I'm a good woman with a sh***y life. I volunteer for the poor and at VA hospitals, I write grants for free and would give the shirt off my back if you needed it. I don't deserve this but it is what it is. I just don't know what to do!
posted by ~Sushma~ to Work & Money (24 answers total) 11 users marked this as a favorite
I am so sorry you are experiencing so much hardship.

How long until the Medicare benefits linked with your SSDI kick in? Because it seems like the COBRA is what's killing you.

How much equity do you have in your home currently, and how much do you owe on your home? That would make a big difference in whether selling made sense or not.

Does your municipality or county have a Council on Aging or similar? They can help you even though you're only 59 because you're on disability.
posted by Sidhedevil at 12:17 PM on August 3, 2012 [4 favorites]

So, if you're on SSDI, Medicare is going to kick in at some point, right? So there's a limited number of COBRA payments left to worry about. If mortgage payments and rent would be the same, and you're going to be on Medicare soon, it seems like it wouldn't be worth it to sell the house to get money to pay for health insurance.
posted by XMLicious at 12:20 PM on August 3, 2012 [1 favorite]

I'm so sorry you've this whole mess to deal with. You say you've written grants - I work for a major non-profit and we have a full-time job grant writer. It seems like the kind of thing one could do part-time, and maybe even from home.

It doesn't seem to me that giving up your home would be worth it. Do you have enough room that you could take on a lodger?
posted by noxetlux at 12:23 PM on August 3, 2012 [4 favorites]

Best answer: I hesitate to suggest this -- but have you considered sharing your plight in any public way, e.g. with media? I think you need some help, and people are very, very responsive when this kind of trouble has a face and a voice.

I am also so sorry about this, and hoping you'll maintain your connection with your community here, meaning all of us.
posted by bearwife at 12:25 PM on August 3, 2012 [3 favorites]

Best answer: You're probably going to wind up spending around $1,000 a month on housing regardless, so you may as well stay put there.

Also, previous answerers are right: if you're on SSDI, you should be eligible for Medicare any day now. That'll save you hundreds of dollars a month.

And not to sound too morbid about it, but if you're bleeding and vomiting everywhere... exactly how long is this money supposed to last? A year? Two years? Ten? If it's only a year or two, heck, just be frugal and use it to cover your expenses. You're probably set. If it's ten years or even five, that's going to be a problem.

The fact that you only got $43k as a settlement for LTD suggests to me that the actuaries over there didn't think your life expectancy was all that great. If they're right, you may not be as badly off financially as you think. Just stick the money in a checking/savings account and slowly burn through it.

Lastly: look into Medicaid. You're probably not eligible right now--too much cash on hand--but as you start to get towards the bottom of that barrel, you'll probably qualify. A significant chunk of every state's Medicaid budget goes towards nursing and long-term residential care, and eligibility is determined based on income, not age. I'd start looking into that now so you can figure out how to make that transition before it's an emergency.
posted by valkyryn at 12:28 PM on August 3, 2012

Since you own your house, can you rent out a room to help defer some of the costs?
posted by bottlebrushtree at 12:31 PM on August 3, 2012 [9 favorites]

Are you terminal? How long is "the rest of your life" likely to be? That seems important information in decided how best to make the money last. If cancer+2 other serious maladies don't actually affect your lifespan, the rest of your life could still be a very long time.
posted by missmagenta at 12:33 PM on August 3, 2012 [2 favorites]

I don't know if this service is part of the "ad nauseam" you mention in your post (and I hear you on that -- it gets hard to tell all of these places apart), but here's a Virginia state program that purports to serve as a guide to the services that are out there for senior citizens and adults with disabilities: Virginia Easy Access.

The topics that Virginia Easy Access tackles include: community supports; emergency preparedness; financial help; housing; legal rights; transportation, and veterans services.

I don't live in Virginia, so I can't vouch for this program, but I hope it can be a resource to you during this tough time. You will be in my thoughts, and I echo bearwife in saying that your online community wants to help you and will be there for you.
posted by virago at 12:35 PM on August 3, 2012 [1 favorite]

Don't want to add another mountain of research and paperwork, but if you're saying that you only stopped working nine months ago do you maybe qualify for Obamacare's Reinsurance Program for Early Retirees? As I understand it, that pays for some of the health insurance costs for people who retire at age 55 or older but don't qualify for Medicare yet.

It would be something you'd have to get your former employer to apply for - it's not the retiree themselves who sets it up - but if everything works out the impression I got was that claims could be submitted all the way back to your retirement date once all the details are settled. I am kind of fuzzy on the specifics though, don't count on anything I said here, because it's something I came across doing research to help my parents that didn't pan out for us, hence I didn't get into it very deeply.
posted by XMLicious at 12:37 PM on August 3, 2012 [4 favorites]

I realise you're distressed but you need to provide the clearest information you can to get the most help you can here. What XMLicious said, or "what is your situation with COBRA/Medicare?" It seems like being relieved of the COBRA costs will go a long way here. And, are you expecting to live for 5 years, 10 years or the next 40 years?

Additionally, your mortgage is 1K per month but how much do you owe on your house? Because if you have a low loan to value ratio, a reverse mortgage might be a really good solution for you. Otherwise, if you want to stay in the house, God yes take the refinance; you need all the pennies you can save. Or, if you are nearly at the end of your mortgage, you could pay it off and remove that 1K per month from your outgoings.

Alternatively, while that mortgage is 1K, I assume you also must pay insurance and property tax, as well as repairs, none of which you would need to pay for in a rental. You actually might be best advised to take some of this 43K and pay movers. There seem to be some very nice 1 bedrooms in your area for $750, less in town if you don't want a complex. In general, however, with few friends and no family I would be setting aside that $43K for home nursing care.
posted by DarlingBri at 12:43 PM on August 3, 2012 [2 favorites]

Best answer: Here's a possible plan:

- Stay in your house. You know it, you're comfortable in it, it's cheaper than moving and renting a new place. You're sick and the stability and comfort is almost certainly worth it. Take out a second mortgage if you need to. This will give you more security in the short term, and higher payments won't make that much of a difference if they are spread over the next 30 years.

- If you have room: Find a lodger who can either pay rent or provide services to help you in exchange -- someone who can take you to appointments, help you sort out your bills, cook dinner, etc. This will take a lot of the pressure off and also -- if you pick the right person -- give you a sense of community. You have posted here before with wonderful stories from your life; I'm sure you can find a younger person who needs a place to stay who would love to help out in exchange for lower rent and would also be a great social support.

- Debt. Most of us are afraid of it because we have a long time on this planet to deal with it. If your life expectancy is short, I'd start taking on debt (if you need to) after you refinance your house. This will be a problem for your creditors, not you.

- Health insurance. As others mentioned, Medicaid will start kicking in when your income/assets get lower. SSDI should start before then. What do your contacts say about this?

- Part-time work. If you feel comfortable, post or link some of your skills as a grant writer. Perhaps someone here can help you. This seems like the ideal work for someone who is ill but can be productive in front of a computer for short periods of time.

- Keep in touch with us!

Please respond back if some of these parts don't work so we can update and help more. Knowing your life expectancy and insurance information would help a lot.
posted by 3491again at 12:45 PM on August 3, 2012 [18 favorites]

Bearwife and bottlebushtree are both supplying good suggestions:

1) Take a renter (you can even make a deal for someone with experience as a caregiver, advertising via Craigslist)

2) Start contacting the media, and use your experience as a grantwriter to frame your case

With a caregiver, you can attempt to use such time and energy as you have to make yourself a one-person info clearinghouse for people in your position... which, in turn, will make it much more likely that the media will want to focus on you.
posted by darth_tedious at 12:53 PM on August 3, 2012

> I am NOT eligible for HAMP or HARP since I'm current.

"If you're not behind on your mortgage payments but have been unable to get traditional refinancing because the value of your home has declined, you may be eligible to refinance through MHA's Home Affordable Refinance Program (HARP).

I was never late on a payment and I did this on my slightly(?) underwater house and changed from an ARM with an interest-only option to a fixed/30 "normal" mortgage with a much better rate.

One requirement:
"The current loan-to-value (LTV) ratio must be greater than 80%"
posted by morganw at 2:27 PM on August 3, 2012

One thing to consider with a house is:

1. More space is more to clean and keep up with. Not so easy if you're sick.

2. As the Homeowner, you're responsible for all the extra expenses associated with upkeep. How much do you spend on all of that? Lawn care, gutters, etc. You may need a new roof, or boiler or any of a number of expensive things. Let's not get into taxes and insurance and all the other stuff that inflates your mortgage payment.

3. Smaller living space, smaller utilities.

One you sell your house, nothing says you have to stay in your community. You can move to a cheaper place to live. Florida, or some other area you might like.

I'd look into a nice 55+ community, perhaps one with assisted living associated with it. Here you WOULD find others in a similar situation, as well as social workers and a support staff.

You don't need to be a hero here. It seems like you're pretty close to accepting this devastating life change, you just need a gentle shove into something you may not have considered.
posted by Ruthless Bunny at 2:34 PM on August 3, 2012

I'm sorry for your situation.

If you are absolutely certain you are going to die soon and don't have any heirs you want to leave anything to, perhaps a reverse mortgage makes sense here?

Then you get money up front but zero equity when you die.

Although I think those are limited to folks aged 62 or over.
posted by MonsieurBon at 3:26 PM on August 3, 2012

I'm sorry to hear of your situation.

There is a 24-month waiting period for Medicare to kick in after Social Security disability benefits are granted - how close are you to this? Because when it does kick in you won't need to pay COBRA.

SS Disability also allows one to earn a limited amount over and above the amount paid as long as the amount isn't "substantial." Link to relevant part of the SSDI website. So you may be able to parlay your grant-writing abilities into a few hundred extra per month.

I would definitely look at taking in a boarder, perhaps someone who can function as a live-in helper in exchange for reduced rent - if not for personal care, then for housework, errands, etc.

How important/necessary is pristine credit for you now? If you don't expect to live many more years, and don't have someone you absolutely positively have to leave money to, then maybe it's time to max out credit cards and take out a home equity loan. Debts don't pass on to next of kin so if you run up huge debts and then die your creditors will be SOL.
posted by Rosie M. Banks at 4:01 PM on August 3, 2012 [1 favorite]

I've known a couple of people who themselves were slightly but disability-recognized physically disabled. They were high-functioning enough to help other physically and developmentally disabled and ESL people with "odd jobs" at regular appointments (and being in Canada, people with disabilities have a monthly stipend to pay for such help) to supplement their monthly grant from the government. One common complaint was being able to make rent despite living austerely and having a lot of help.

Is there a community of such people in your area of nearby towns? Perhaps having somebody like that as a lodger at a very discounted rent could be a co-beneficial situation. Or advertise in urban areas in other parts of the state and see if someone would like to relocate.

That is one of the few reasons that I can think of for you to move - if you can trade your current domicile for someplace in an area where you can tap into a network of like-situated people, then it might make sense to sell and relocate.
posted by porpoise at 5:41 PM on August 3, 2012

I like the idea of refinancing your mortgage. Use whatever you can as collateral - maybe even some of that 43K. Lower your monthly payment as much as possible and find a part time job and a roommate if you need to.

I'm not sure what state programs you might be on, but do you have a case worker? If there's a way you can find someone to help make sure that you're receiving all the benefits you can that would be helpful. My mom was a case worker for people on disability and SS for the last 15+ years. What are your options re: Social Security? You sound like you have enough years of work that you might be eligible for something.

Please Memail me if you'd like. My mom's going to visit me next week and I can run some questions by her if you want (she's in NH, so your state would help too).
posted by bendy at 1:32 AM on August 4, 2012 [1 favorite]

Best answer: In my son's case it took 18 months from being granted disability status to being eligible for Medicare. He is eligible for Medicaid because all the help we give him is under the umbrella of a Special Needs Trust. We put a small house in the trust and enough money to provide for property taxes, home repairs, and home insurance. His disability check covers utilities and food.

Get in touch with a lawyer to establish the trust and place all you own in the trust. This will qualify you for Medicaid, which will pay absolutely for all your Medical expenses. What you will be giving up is control of the trust: the trustees will disburse income from the trust. You should choose the trustees carefully, but there are banks and financial advisers who specialize in this. You absolutely should pick at least one trustee whom you absolutely trust to be the overseer of the trust, perhaps somebody you have known in your volunteer work, or even a Mefite. His job would be to make sure you do not get cheated: it is not hard and it does not take a lot of time.

Your job is to take care of yourself and to try to enjoy your life. Try to share your difficulties with the people around you. I'm often surprised by the kindness of total strangers. Memail me if you need to talk or if you need more information about the special needs trust.
posted by francesca too at 3:39 PM on August 4, 2012 [1 favorite]

Response by poster: First, I'm brought to tears by the care expressed by you, I never expected this.

MORTGAGE: Some more facts- I owe $108K (@5%) on 1st mtg. $41K (@4%) on 2nd-I took that out to make accommodations for my disabled son who has since left. The rent he was giving me just covered utilities. The house is worth about what I owe-just about even. LTV is not 80% I'm right at the edge. I've contacted local agencies and they have no federal or state funding to assist (I live in a rural area). The boarder idea is brilliant, however I didn't get any permits hence it's illegal for me to formally rent out the "room" (apartment) I built for my son but am willing to take the chance on doing so. THANK YOU!

HEALTH: I'll be eligible for Medicare on Jan. 2014. My disease is a smouldering myeloma which can trigger MM any time. I go to oncologist 2X a year for bone marrow biopsies to see how it's spreading. (currently 1% bone infiltration) It's painfully stressful. Anyway I lived longer than I thought because when I was diagnosed I was an elite athlete (at 50) and otherwise healthy. Due to the stress of the job and contracting Lyme/Malaria I became crippled by RA and fibromyalgia which cascaded into deep clinical depression due to the pain and stress.

JOBS: I've been looking for part-time work for years. I have to be near a bathroom and cot to rest so at-home work is best. I take painkillers regularly. Still looking, and am hopeful that with this last issue solved I can concentrate on being whole to an employer. Presently I'm broken but have an incredibly good talent for helping people.

MEDIA: Funny that-I'm a writer. I'm mortified that my family has abandoned me, they are wealthy and live in another world completely. A close family member could help with the stroke of a pen but is more concerned with her next European trip then helping me. She told me if I become homeless she has a room for me and feels like all of this is my fault. I'm humiliated and would rather people remember me as the resilient humanitarian I am not as a poor sick stupid woman my family thinks. I wouldn't even know how to approach my fellow journalists with this story, however at this point it would be on my list so that perhaps others can learn.

NUTS & BOLTS: I don't have the resources to move, nor the strength, although I've been looking for 2 years-the task is physically overwhelming! The apartments DarlingBri suggested are nice but no elevator and in a bad neighborhood, I looked at them earlier this year. Nice of you to look for me!
posted by ~Sushma~ at 7:59 AM on August 5, 2012

Response by poster: Great news-I got my renter back- $525.00 a month, plus I can count his income as part of mine for a refinance. Again, my deepest appreciation to all of you that are helping me. My prayers are with you and your gentle work.
posted by ~Sushma~ at 9:35 AM on August 5, 2012 [1 favorite]

A couple more ideas: if you volunteer at the VA is there any way you could wrangle that into a part-time job? Get to know an administrator or someone with some hiring power. Just guessing since you work at the VA, have you been in the military or a military dependent? There may be benefits there for you.

Volunteering at a for-profit hospital maybe? They may have a relevant part-time position for you.

Grant-writing experience sounds valuable in these times when non-profits are strapped for cash. This may be something you can do part-time or even from home. (oops, that was already suggested.)

Anyway, I'm glad to hear that your renter is back. You sound like a lovely, compassionate person. I hope that your luck changes and that your generosity comes back to benefit you in some way.
posted by bendy at 3:14 PM on August 5, 2012

This is all great news! It sounds like through the refi and the renter, you can just about make ends meet until January, and then once you can dump the COBRA you'll be in much better shape. I would obviously use part of your settlement to get from here to there.

You need to be scrupulous about not doing anything to out your SSDI at risk but if you have internet and can write and you need to earn just a few hundred dollars per month, you can probably do this. There have been a bunch of "how can I earn 200 a month writing online?" questions and you could ask again next week for an updated answer.
posted by DarlingBri at 4:32 PM on August 5, 2012

A warning on refinancing is that in some states that have deficiency judgement protection (in California it's 508e & 458), that protection might not apply to a refinanced loan. If you refi now and have trouble paying later & want to sell short, the refinanced loan might not be considered "purchase money".
posted by morganw at 1:26 PM on August 9, 2012 [1 favorite]

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