The Death Lottery

[Meadmaker]

We have a growing problem in America. It probably affects other cultures as well. I call it "the death lottery". Here's how it works.

Here in America, our government sponsored old age pension and health care systems aren't very generous. In order to live comfortably, with basic necessities taken care of, in old age, we are expected to save up money during our working years for use in old age. Since retirement health care might cost a great deal, we really ought to save up a lot of money.

If we don't use up that money, it goes to our heirs, and that's where the "lottery" comes in. If, as is increasingly common, we live to a ripe old age, but experience declining physical and mental faculties as we age, only the extremely wealthy will have any money left at all. Indeed, most children of seniors will be facing a situation where they look at their aging parents and face a very stark choice. They can contribute financially to their parents' care, sacrificing in their own lifestyle, the ability to provide things to their children, and possibly their own retirement security, or they can refuse to do so, and leave their parents at the mercy of the government, which means they will die in destitution, with minimal comfort and care.

If, on the other hand, we drop dead suddenly shortly after retirment, our heirs win! All that money we saved up to support us for many years with very expensive health care can now pass to our middle aged children. Cha-Ching!

It's a very bad situation. Many of us find ourselves looking at our parents (or our in-laws) and hoping for a speedy death.


I don't know if government policy can or should attempt to do anything about this. To some extent, it is inevitable. If people are allowed to accumulate any wealth at all, it won't be a surprise to anyone to realize that the next generation might look forward to a moment when their elders no longer need access to worldly goods. However, because elder care is so expensive in the US, and government provides so little of it, I think our policies exacerbate the problem. I, personally, would like to see more generous old age programs that would pay for such things as "assisted living", even though it means higher taxes and less chance to accumulate wealth.

A lot of people would like to sincerely wish their aging in-laws long, happy, lives. However, they are past the point where good health is an option. Even happiness will be temprered by infirmity, some degree of pain, and growing senility. So, if they did die suddenly, and the childrencould pay off their mortgages, maybe that wouldn't be so bad.

 

[WildCat]

The "solution" for many is to give the money away before they die. You can receive a gift of $10,000 per year tax-free, so many aged parents give this amount to their children every year. Give all your money away before you get that debilitating stroke and the government will pay for your care.

Of course, many people don't do thios for a variety of reasons, and then it all goes to pay medical expenses until exhausted, when the government starts to pay.

 

[jayh]

The "solution" for many is to give the money away before they die. You can receive a gift of $10,000 per year tax-free, so many aged parents give this amount to their children every year. Give all your money away before you get that debilitating stroke and the government will pay for your care.

Of course, many people don't do thios for a variety of reasons, and then it all goes to pay medical expenses until exhausted, when the government starts to pay.

Doesn't fully work this way.

10K / year is a pretty small amount (far less than minimum wage). If you sell a 300K house, it would take 30 years to give that to your descendants.

If you get really sick and need expensive geriatric care, the gov will go after all gifts given over the previous several years (5 I believe) and demand it back.

But seriously, this is a problem which is getting bigger all the time. The whole concept of SS and even socialized medicine was based on lots of young workers, few old people, and mostly moderate end of life medicine. Instead the ratio of young to old is dropping very sharply (both due to reduced birth rates and increased lifespan) and the cost of end of life treatment is rising astronomically (it's not just 'greedy' doctors, the complexity of treatment is becoming so high that the expense during the last few months of life is getting to dwarf the rest of life's medical expense). This won't change till we're willing as a society to put a cost-benefit analysis to medical procedures with little chance of real success.

This

 

[brenn]

If, on the other hand, we drop dead suddenly shortly after retirment, our heirs win! All that money we saved up to support us for many years with very expensive health care can now pass to our middle aged children. Cha-Ching!

It's a very bad situation. Many of us find ourselves looking at our parents (or our in-laws) and hoping for a speedy death.

Seems like something on YOUR mind a lot, that you are projecting on to "many of us."

 

[Meadmaker]

Seems like something on YOUR mind a lot, that you are projecting on to "many of us."

If it is not on your mind, it is because your circumstances have not forced it on to your mind. For an increasing number of people, circumstances have put it on their minds. Jayh got it right. End of life care is very expensive and "end of life" can go on for quite a few years.

 

[WildCat]

Doesn't fully work this way.

10K / year is a pretty small amount (far less than minimum wage). If you sell a 300K house, it would take 30 years to give that to your descendants.

I don't think your house in included for the purpose of receiving indigent care, it's your liquid assets that count. The house could be kept until death, at which point the proceeds can be inherited tax-free.

 

[Modified]

10K / year is a pretty small amount (far less than minimum wage). If you sell a 300K house, it would take 30 years to give that to your descendants.

It's 13K now, so if you have two married children and four grandchildren, you can give away over 100K per year.

 

[Meadmaker]

I don't think your house in included for the purpose of receiving indigent care, it's your liquid assets that count. The house could be kept until death, at which point the proceeds can be inherited tax-free.

But what do you get for "indigent care"? If you had any alternative, would you subject a relative to it?


I've been fortunate to not have to make these sorts of decisions myself. Most of my experience is second hand. My mother works in a nursing home, and she constantly sees families struggling with the problems. I've been fortunate. Dad died suddenly of a heart attack. Mom, at 86 years of age, still holds a part time job, which between that and social security is enough for her to live on without being a financial burden to me and my siblings.

 

[Beerina]

We have a growing problem in America. It probably affects other cultures as well. I call it "the death lottery". Here's how it works.

Here in America, our government sponsored old age pension and health care systems aren't very generous.

FWIW, Social Security wasn't intended to be a comfortable retirement plan. It was intended as "You stupid citizen who failed to save for retirement, we're gonna tax you your whole life so you don't have to eat cat food and beg when you are retired."

 

[Meadmaker]

FWIW, Social Security wasn't intended to be a comfortable retirement plan. It was intended as "You stupid citizen who failed to save for retirement, we're gonna tax you your whole life so you don't have to eat cat food and beg when you are retired."

It's the health care that's the real problem. I don't have a problem with telling seniors that government won't pay enough for their golf outings.

However, when they reach the age that they can't do laundry, or later when they can't even go to the bathroom unaided, there's a lot of labor involved. That costs a lot of dough. If you save up enough to cover for it, you won't be a burden on your family, but on the other hand they will be noting that if you were to die just a bit sooner, things would be more comfortable. The really big problem then occurs for those people who don't save enough to cover for that. Then, they get the minimum care provided, or they take from their children.

Like I say, I don't know exactly what the minimum standard is. I know that I look at my mother's nursing home (where she works, not lives) and I see some fairly spartan furnishings and not a lot of services. She lives in fear of ending up there herself. Nevertheless, she talks constantly of people who have to move out because they can't afford it.

 

[Dr. Keith]

Like I say, I don't know exactly what the minimum standard is. I know that I look at my mother's nursing home (where she works, not lives) and I see some fairly spartan furnishings and not a lot of services. She lives in fear of ending up there herself. Nevertheless, she talks constantly of people who have to move out because they can't afford it.

I had a wealthy cousin who lived in a nursing home in the town where I went to college. I had known her before I went to college a pretty funny older woman who liked to play cards, drink whiskey, and shoot skeet.

After some pleading by my dad I went to visit her in her nursing home. It was in the best part of town, in a palatial building. I would not have been surprised if the estate was shared with a Four Season's resort. Everything about it was the very best. As I waited to be shown to our lunch I thought how happy she must be that she is in such luxurious accommodations.

At first, she seemed happy. She was certainly happy to see me and we were having a nice lunch overlooking a beautiful view. But she hated it there. She hated everything about it and she couldn't hide that for even twenty minutes.

While her situation was certainly the extreme, I've never met anyone who was happy in a retirement or nursing home, no matter the quality.

 

[Travis]

I was in a hospital waiting room awhile back (for someone else obviously) and it struck me how most of the people getting surgery were 65+ getting procedures that cost upwards of $100k that may extend their life 6+ months.

 

[qayak]

I was in a hospital waiting room awhile back (for someone else obviously) and it struck me how most of the people getting surgery were 65+ getting procedures that cost upwards of $100k. . .

As it should be.

. . . that may extend their life 6+ months.

You know that for a fact? You have access to their medical records? At what point is it okay for them to be operated on, when life can be extended for 1 year? 3? 10?

And exactly why do you get to say?

 

[Almo]

This won't change till we're willing as a society to put a cost-benefit analysis to medical procedures with little chance of real success.

I think I have to agree with this.

 

[Skeptic Ginger]

FWIW, Social Security wasn't intended to be a comfortable retirement plan. It was intended as "You stupid citizen who failed to save for retirement, we're gonna tax you your whole life so you don't have to eat cat food and beg when you are retired."

So your assumption is everyone who works makes enough to save for retirement?

 

[Skeptic Ginger]

I was in a hospital waiting room awhile back (for someone else obviously) and it struck me how most of the people getting surgery were 65+ getting procedures that cost upwards of $100k that may extend their life 6+ months.

This is not an evidence based assumption.

What is true is that people use the most medical care in the last 6 months of their lives. These would be people who are near death, not necessarily just 'old' people.

The problem, however, is we can see this in retrospect, but we haven't done a good job of educating families and patients about when it is time to throw in the towel. Doctors want to heal, want to offer hope, want to be able to do something. And patients and their families want miracles from medicine.

Then you have the idiots who believe God wants them to keep the Teri Schiavos of the world alive. And there are other pressures making people feel guilty for pulling the plug on grandma even though there is no hope grandma will get well. So the medical decisions are based on guilt or dogmatic beliefs, not evidence.

I do believe a person with a terminal illness should have the right to fight that prognosis to the end. But we could do a better job on a lot of end of life medical decisions.

 

[Skeptic Ginger]

We have a growing problem in America. It probably affects other cultures as well. I call it "the death lottery". Here's how it works.

Here in America, our government sponsored old age pension and health care systems aren't very generous. In order to live comfortably, with basic necessities taken care of, in old age, we are expected to save up money during our working years for use in old age. Since retirement health care might cost a great deal, we really ought to save up a lot of money.

If we don't use up that money, it goes to our heirs, and that's where the "lottery" comes in. If, as is increasingly common, we live to a ripe old age, but experience declining physical and mental faculties as we age, only the extremely wealthy will have any money left at all. Indeed, most children of seniors will be facing a situation where they look at their aging parents and face a very stark choice. They can contribute financially to their parents' care, sacrificing in their own lifestyle, the ability to provide things to their children, and possibly their own retirement security, or they can refuse to do so, and leave their parents at the mercy of the government, which means they will die in destitution, with minimal comfort and care.

If, on the other hand, we drop dead suddenly shortly after retirment, our heirs win! All that money we saved up to support us for many years with very expensive health care can now pass to our middle aged children. Cha-Ching!

It's a very bad situation. Many of us find ourselves looking at our parents (or our in-laws) and hoping for a speedy death.


I don't know if government policy can or should attempt to do anything about this. To some extent, it is inevitable. If people are allowed to accumulate any wealth at all, it won't be a surprise to anyone to realize that the next generation might look forward to a moment when their elders no longer need access to worldly goods. However, because elder care is so expensive in the US, and government provides so little of it, I think our policies exacerbate the problem. I, personally, would like to see more generous old age programs that would pay for such things as "assisted living", even though it means higher taxes and less chance to accumulate wealth.

A lot of people would like to sincerely wish their aging in-laws long, happy, lives. However, they are past the point where good health is an option. Even happiness will be temprered by infirmity, some degree of pain, and growing senility. So, if they did die suddenly, and the childrencould pay off their mortgages, maybe that wouldn't be so bad.

I'm unclear here. Are saying the government or the public or one's children should provide financial support for their aging parents who have accumulated wealth because having to use that wealth is bad because the kids won't get it?

Or are you only saying if the entire family doesn't have quite enough resources the income earners have to decide how to dole 'not enough' money out?


I'm a 'Progressive'. I think the rich can afford to pay more taxes and should. They have a right to be rich, but the fact the total wealth has been shifting and concentrating at the top in historically larger percentages is an indicator of an unhealthy economy. The quick fix is for the rich to pay more taxes. The long range fix is to raise the skill level, employment opportunities and social well being for the poor.

I think the safety net and society's contribution to the whole should definitely be greater. Too many people believe the myth that the face of welfare is a lazy person who could work but who prefers the dole. They don't see the person who works full time but doesn't make enough money for everything, especially health care. They don't see the person who was laid off and really cannot find a job, even a minimum wage job.

Too many people view any government assistance to individuals as coming directly out of their own pockets. They see that needy person as a personal burden, not as society's responsibility. So the picture they have is, I don't have enough for myself, why do I owe that other person some of my wealth?

Those are false pictures and so is the BS trying to claim any social assistance equals, from each according to his ability to each according to need. The whole society benefits from keeping the whole society healthy. It's fine if you think everyone should buy their own health care. But when a person working full time cannot afford health care, it is not fine.


But if I'm reading that inheritance stuff correctly, Your money should go to your heirs IF THERE IS ANY LEFT. Certainly society doesn't owe you a safety net so you can save your own wealth for your heirs. If your kids are hoping you die before spending their inheritance, that's creepy.

 

[Skeptic Ginger]

I had a wealthy cousin who lived in a nursing home in the town where I went to college. I had known her before I went to college a pretty funny older woman who liked to play cards, drink whiskey, and shoot skeet.

After some pleading by my dad I went to visit her in her nursing home. It was in the best part of town, in a palatial building. I would not have been surprised if the estate was shared with a Four Season's resort. Everything about it was the very best. As I waited to be shown to our lunch I thought how happy she must be that she is in such luxurious accommodations.

At first, she seemed happy. She was certainly happy to see me and we were having a nice lunch overlooking a beautiful view. But she hated it there. She hated everything about it and she couldn't hide that for even twenty minutes.

While her situation was certainly the extreme, I've never met anyone who was happy in a retirement or nursing home, no matter the quality.

People mourn their loss of independence.

My grandmother complained incessantly about the nursing home her broken hip put her into. But when we'd walk in the halls, with a giant grin she introduced us to all the other people there. It was much less lonely than living at home alone. So there were plusses and minuses, it wasn't all bad.

 

[Skeptic Ginger]

...
Like I say, I don't know exactly what the minimum standard is. I know that I look at my mother's nursing home (where she works, not lives) and I see some fairly spartan furnishings and not a lot of services. She lives in fear of ending up there herself. Nevertheless, she talks constantly of people who have to move out because they can't afford it.

There are definitely waay too many nursing homes that deliver substandard care. If that is your concern, it is a valid one.

People moving out because they can't afford it? Medicaid and Medicare cover nursing home care. You have to need the care and in the case of Medicaid, be unable to pay for it yourself. Like I said, I don't agree the government should be paying for a person's medical care to conserve an inheritance for the heirs.

 

[Alt+F4]

10K / year is a pretty small amount (far less than minimum wage). If you sell a 300K house, it would take 30 years to give that to your descendants.

If you get really sick and need expensive geriatric care, the gov will go after all gifts given over the previous several years (5 I believe) and demand it back.

The solution is put the proceeds from the house sale into an irrevocable trust. If the parent(s) live more than 5 years then Medicare can't touch the money even if the parents end up in a nursing home. Perfectally legal.