Financial planning and PCa

Probably not a good sign of positive mental attitude but how have most of the folks around retirement age come to grips with various time dependent retirement strategies since you found you have PCa? By this, I mean things like postponing social security now for higher payments in the future that have long payback periods to make it worthwhile, say 12 years.

My pre-retirement planning was based on 25 years and the odds of that happening just went down a notch. I do find myself spending money sometimes now thinking I can’t take it with me which is probably not a good strategy for the long run or PMA. Do you live for today financially and skip the longer term options or still go for it like business as usual?

Hasn't changed our financial planning.

I am planning to live a normal life span. I just feel you cannot live your life assuming you are going to die, unless you are clearly terminal. You can live a very long time, with this disease.
I am going to retire this year (age 69), but will hold off one more year, taking Social Security at age 70

a bit off topic, but just an FYI, depending on your age and your wife's age, you may be able to file A restricted application. Meaning filing based on a spouses record.
If for example, you are both at full retirement age ( , you can file to take 66 for most of us) one of you files and starts benefits, the other files for spousal benefits, which is half of the spouses benefit. you continue that until age 70, while your own benefit continues to grow at 8% per year, At age 70 you take your own benefit. This strategy significantly reduces the break even time of waiting. The catch is you have to have been born before 1954.

In any case, i think unless you have a really serious case, you live your life with optimism, and that goes for financial planning as well. That doesnt mean you dont plan for your eventual demise, for example, estate planning is important, but that is regardless of whether one has prostate cancer.

With all that said, one must be cognizant of one's personal situation. If one had for example, stage 4 pancreatic cancer, i wouldn't recommend they plan financially for a 30 year retirement, and just live in la-la land.

I "retired" at 64. Or better said, I walked away from an increasingly difficult work environment which had no hope of improving.

So for years I've been putting the max possible into 401K and health savings. Years ago I had IRAs that got shuffled around as I changed companies.

I decided to sort it all out. Got a will done on the company legal plan, and transferred a lot of little bits of retirement money into a single management. Mostly tax exempt stuff, and a forced annuity due to an early employer.
I applied for Social Security (yes, "early") and applied for disability because of the repeated returns of my PCa. That was approved, and will stay with me until 66, at which point it will merge and increase the monthly base. I see no reason to wait to take SS, lest I drop dead of a heart attack from the Lupron and chemo.

I'm making a point of spending no more than I did before "retirement", and am burning only that amount from current accounts. I've managed to get 20 months along without touching investments.

I'm planning to retire at the end of March. This March. It's the end of my company's fiscal year, and just kind of works out ok for me. I won't be 62 until October.

I've done a detailed budget, looked at what our income will look like, and so on. We'll be ok, even having to pay for health insurance out of pocket. I'll pick up COBRA from my company for 18 months. Sometime along there my wife will go on Medicare so it won't be as bad as it might be.

I plan to take my Social Security at 62. Well, maybe a couple months later because I will have made enough by the time I retire to hurt my Social Security payments if I take any this year. I'll probably start it in January 2020. My breakeven is around 12 years, as many have found. To be honest, with my diagnosis it seems better to retire earlier and take money earlier than later. I'm still buying green bananas, and my present medical status is pretty good. Perhaps I'll beat the odds. People do.

Another thing I did that I suggest for all -
Review every single insurance policy and verify the beneficiaries. Things have changed in 51 years of work for me, and where I want my money to go has changed as well.

A last little thing - I had forgotten that I had some old Savings Bonds. All of them had matured, and stopped drawing interest. So I cashed them all out in my last (short) year of work (less tax). A simple thing to do while you are alive, almost not worth the trouble for an executor

I took social security last year at 68 when my PC was diagnosed. I had planned to wait until 70. A GAO report indicated that taking SS early works out about the same as waiting. Even with the 8% annual reward for waiting people die before they can collect. My mother-in-law just died at 89. She set up a trust which worked out great for her children, no probate. Although, my wife still has a lot to manage as the Trustee. "Death is nothing to us. We shall not be conscious after death any more than we were before birth." Titus Lucretius Carus, On the Nature of Things. Still having things worked out for your children and family is a nice way to leave this world. I am still working part-time as a consultant I will probably retire at 70. Working provides me some structure, although I have a lot of books I would like to read too. We also have dogs and cats, that have kept us close to home, but doing a little traveling might be nice in the future. I am almost done with Sherwin Nuland's book, How We Die which everyone should read. I also read George Sheehan the Final Race when I was trying to decide on treatment. At the time, I was more concerned with the potential side effects than killing the cancer. As a runner who was in great shape I was not convinced even with unfavorable intermediate that treatment was needed. I changed my mind.

69 yrs., marathon runner, 44 3D-CRT/IMRT Radiation delivered via 3D-CRT in 1.8 Gy minimum dose fractions to a total of 79.2 Gy., 10.5.18. PSA .012, 8.12.18, 1.42 June 18, 2018 (Lupron 5.21.18 & 8.15.18), 12.7 May 2018, 13.7 Jan. 2018, 2.1 May 2012. SpaceOar 9.6.18, testosterone <.7, 8.15.18, Tot Mayo 19 ng .17 testosterone Free 6.18.18, Gleason 3+4=7 involving 15% of the right apex and 15% of the right mid, 3+3=6 prostate cancer involving 5% of the left base. Pathology interpretations by John Hopkins, UNM Cancer, and SF Path 3+4=7 or 4+3=7 MD Anderson Proton Center w/o %. T3 MRI w/ contrast 1.8 lesion left side 5P, Neg. Bone Scan. Prolaris test 3.5 consistent with intermediate and a PTEN test negative.

Just to clarify,
Other posters have noted that we can’t usually predict our life expectancy and there was also encouragement not to plan our lives around our demise. I agree and I am optimistic. 🙂

But, as alluded to by Redwing, my break even point with SS is about age 74. As someone who is starting Lupron/Zytiga at age 59, planning to retire at age 62 is a no-brainer.

Who knows, I may make it 74. If I do, I will be happy to lose some SS payout.

Mumbo said...

Prato - Good plan, I am still working on when to take SS which is why I bring this up with my wife retiring in six months. I am familiar with the file and suspend technique but my younger wife screwed that up for us. All we can do is have her take her own SS this year and then get her my spousal benefit after I apply for benefits while I am delaying to date..

Mumbo, just a point of info, maybe for anyone else who might read this... file and suspend is something completely different from Restricted application. With file and suspend, one spouse applies for benefits, then suspends payments. This option is no longer available to anyone regardless of age or date of birth. Restricted app still is. When i went down to the SS office and told them what i wanted to do, they told me i couldn't do it. I had to explain to the person that this is not file and suspend. She had to go to her supervisor, even after i showed her the literature that explained it. The supervisor had to make it a teaching moment for her which i thought was funny, but sad.

Good luck. Do sensible planning, but at least in this case, don't "live like you were dying" despite the song.

A couple of articles that may be relevant for some, and maybe presenting info useful for planning purposes.

First article. There are lots and lots of discussions on the web on the future solvency of Social Security, and what kinds of things can (or need to be) done to improve it. This one seems helpful:

https://www.nolo.com/legal-encyclopedia/social-security-benefits-retirement-32416.html

From it:

"... around 96% of the workforce is currently covered by some sort of Social Security plan."

"Are Social Security benefits in trouble? The short answer is "Somewhat." This is because the next decade will see the largest drop in worker-to-beneficiary ratios in history, as baby boomers begin to retire. The problem gets compounded when you consider that people's life-spans are growing longer, the birth rate is declining, and the cost of living is only going up."

But also:

"If retirement is right around the corner, you probably have nothing to worry about when it comes to your Social Security benefits. The problems described above are highly unlikely to affect current retirees or even those who plan to retire in the next ten years. The SSA has also stated that it has no plans to cut current benefits."

It goes on to say that the outlook for 25-to-35 years olds is less certain, with a 25% reduction in benefits possible if nothing is done now.

Some solutions, such as "prefunding", or "... other solutions like infusions from general revenue and increases to payroll tax" are considered, and the article closes with:

"Social Security is seen as too important of a safety net for millions of American workers to risk losing. If small changes to the Social Security system are made now, they'll go a long way toward ensuring that drastic measures don't become necessary in the future."

Second article. Not everyone here has a state-funded pension in his future, of course, but if you do, or if your spouse does, then this seems to be a good article evaluating the relative health of the fifty state pension plans:

https://taxfoundation.org/state-pensions-funding-2018/

It says the rankings "... show the funded ratio of public pension plans by state, calculated by measuring the market value of state pension plan assets in proportion to each state’s accrued pension liabilities."

Unfortunately, Illinois and Kentucky are bringing up the rear, but New York, Wisconsin, Tennessee and some other states appear to be in especially good shape.

My retirement planning was guided more by financial and employment needs than by my PCA. My wife and I had a business for nearly a decade in the 1990s with a handful of employees and contractors writing, illustrating, managing subscriber newsletters in partnership with a university and a direct-mail marketing company. I quit a corporate job when this opportunity came along through my wife's freelance writing connections. It was great fun while it lasted, we rented office space a half mile from home and we and our staff brought our dogs to the office - and for a while one staff member's iguana. My wife and I often worked 80 hour weeks, which was ok with us because we were both perfectionists having fun with creative projects. But by the early 2000s the pool of people willing to pay for direct-mail subscriptions plummeted thanks to the internet and no one anywhere figuring out how to get paid for internet content.

Long story short, I went back to a corporate job for a decent corporate salary and a year later was diagnosed with prostate cancer at age 54. After surgery I thought I had a reasonable chance of being cured. I was wrong. But nonetheless the PCA didn't affect my financial planning nearly as much as my need to pay off debt (we hung on to the business a year or two too long) and to maximize 401k investments. For the next decade until I retired I put in the maximum every month, collected the maximum employer match, and had extra income withheld from my pay to cover my wife's taxes on freelance income. My wife and I also spent that decade maxing out my employer's dental insurance plan having ancient fillings replaced with crowns etc. My wife came into an unexpected small inheritance - ancient stock in her father's name (he'd died in the 1950s) that no one knew about. It was enough to pay off what was left on the mortgage and buy a new car when I retired with a bit left over to add to our 401k savings. The end result is we are reasonably ok though moderate in our expenses - dinners and movies out, summer trips with our camper trailer - but not trips to Vegas or Super Bowl tickets. But we are way better than either of us would have thought in 2000 when our business was spiraling down the drain and our credit card balances were spiraling upward.
Jim

Mumbo said...
Prato - Understood, my wife’s b-day is Dec 1954, does that screw that up like you previously mentioned? Seems like that was the problem when I looked at options before.

Yeah, unfortunately the birth date Dec 1954 does eliminate the opportunity

I consider waiting till age 70, a form of longevity insurance so to speak. Obviously some will need it and some Walmart