This can destroy your Retirement
You have slowly, but surely built a nice nest egg. You are looking forward to a long retired life. You have a nice mix of assets, a mix of income streams, and you are confident that age 60 to end of life is well planned. Is there ONE thing which can completely destroy your retirement and make you dependent on somebody? Yes, there is.
Long Term Illness / dependence which requires nursing – Long Term Care – as it is called in the USA. Sadly India does not have Long Term Care Insurance and you will be on your own. You would be on your own and your spouse could help you. Now if you have no children, and no nephew / niece who want to help and your spouse has predeceased you, welcome to the bad, bad world.
Sounds dangerous? impractical? will not happen to you? Sure, hope not, but at least be aware of the implications…
Staying at home or in a geriatric ward of an old age home is going to get very expensive. Recently I saw the shortage of nurses in the WORLD. It is huge – especially in Europe and USA – both countries with a rapidly aging population and ability to pay well. So we are going to be competing in the international market for old age care.
I am translating this cost to about to Rs. 50,000 per person per month. So assuming you require this for about 5 years, you will require about Rs. 50,000*12*5 = Rs. 30,00,000. There is not enough data about how long you will require this – in the sense there is not generic data, so the assumption of 5 years.
This amount is largely being drawn out of your retirement corpus. Hopefully LTC insurance will be introduced in India over the next few years, but let me warn you – the premium will be really high. LTC insurance is very expensive even in USA – where it has a longer history and a much record keeping track record.
The best things that you can do is to take proper care of your health (there is nothing you can really do to prevent Parkinsons or Alzheimers except pray). Be prepared for it mentally, physically and financially. Remember if this has to happen to you and your spouse cannot manage complex financial transactions, you will be left with 2 poor options – tax inefficient too – annuities and bank fixed deposits. So you need to have a big corpus that assumes at least about 20% taxation.
What all can you really do?
- accept that some illness / disease / fall can confine you to bed
- that will involve somebody having to assist you with simple daily operations which you have been doing for 70+ years
- for women it could mean a change of how you dress
- even for men it could mean wearing a gown instead of a payjama
- institutional care could be impersonal, do not have any expectation
- your spouse may need counselling on how to cope
- you may need counselling on how to cope with the illness/ trauma care
- your children with all good intentions MAY NOT be able to help you
- we have no clue how a Reverse Mortgage amount will be treated in your hands
- Geriatric care is very difficult to find, and if you have community, caste or geographic bias, you are doomed
- your mind may be active and your body may not co-ordinate making you VERY angry with the world
- Meditation may help
- death maybe a better solution, but you could live till 97 with the illness
Sorry, I will be happy if somebody can give this a happy twist.
sai
This is a very possible scenario for the present middle class India. Real life case – My father passed away recently and was in the ICU of a reputed hospital for a month; the tab came to about Rs. Five Lakhs which is highly subsidized by his ex-employer BHEL – present generation will not have such benevolent employers. We explored long term care options in Hyderabad; a decent one costs about Rs. 3,500 PER DAY, so the Rs. 50,000 per month projected by Subra is actually a bit conservative and not at all fanciful.
Bottomline is that end-of-life care in India is going to get very expensive and our generation, which probably will be the first Indian generation without extended family support – will have to be prepared for it.
A heartfelt thanks Subra for all the unvarnished home truths that you bring to light.
Sendhil, PenguWIN
Sir,
Very useful blog and really appreciate your courage and eagerness to educate people on the facts of life, however sad it might be. I haven’t come across bloggers like you and typical bloggers want to only tell nice and positive things to others and not all essentials
Umang
So sad to read this article. Its true, medical/care costs in old age could wipe out savings of the old and their childs. It could be a huge problem to both the ageing and their wards. Earlier children used to take care of their parents but do not know about future. I wish to die (Euthenasia any one supporting) in case I suffer such disease and empty coffers of my beloved family.
lakshminarasimman
even my enemy should not face the situation you envisioned
but truth is truth
VK
Could something trigger the readers of your blog to eventually come together to start something of an “assisted living” centre?
It’s a bit too early for me to comment anything along those lines, but, if my time & resources permit, I certainly will start one such centre even if it is on a small scale to begin with. Have been studying some models in my spare time and will hopefully have more clarity in another 5-10 yrs. Will be sure visit some centres in the US when I am there next time.
Tarun
@Umang: I am for Euthansia – I have seen my grand parents live to 90+and in his last 5 years my grandfather used to lament that he has stayed overtime on earth. I think people should have the right to die gracefully. Its not just about monetary cost of keeping oneself alive, its also from a self esteem point of view. I would prefer to be dead than a dying invalid. ( Apologies in advance to any one who may feel offended by support for euthanasia)
Bhushan
I hope I am right with my following observation.
I have spoken to some people and have checked how their parents/ in-laws or uncles and aunts had died (totaling only about 25-30 people). I will put the dead people in two groups:
1 – Those who spent 5-15 years of their last years with illness or regular medication and had to depend on family for help. In most of the cases, last 1 to 3 years have been hell where they needed help for doing basic things. All these people had lived a life without any exercise. They lived for 55-85 years, but their last 5-10 years were similar.
2 – Second group. These lived for 65-85 years, but they did not die on hospital bed. Even the day before their death, they were doing all their work by themselves. They mostly died in sleep or suddenly while doing some work. The common trait of all these people was that they were doing gardening or house cleaning, walking in the morning and evening (sometimes night) or yoga or working in temple/NGO EVERY SINGLE DAY. They kept themselves busy with these daily activities till the last day.
I have also slowly started doing few yoga asanas and found that it makes me feel relaxed and refreshed. I hope I will not have to depend on anyone in my last few days. I suggest everyone do something like yoga/gardening/daily walks to keep their body in good condition.
Regards,
Bhushan.
Grandad
Two interventions that will prevent / delay Alzheimer’s disease: meditation and aerobic exercise.
Bharani
This is one of the best posts I’ve read here. Fortunately for me, haven’t come across such case in my family, but definitely suffered month-long ICU for my grandfather.
Totally agree that this can happen to anyone.
The other thing to do is ensure nurture good family values in our children and pray that they are able to take care of us after 70.