Fact is that about 2/3 of Nursing Home patients are on Medicaid. So the savings you have may never be enough if you or your spouse spend years in a nursing home. The ones enjoying themselves and spending their money might actually be the smart ones. And it depends on your SS and annual retirement income as well. Sometimes I wonder if the smart ones are those who blew their money on good times and travel and only had $3,000 left when they hit the nursing home. Half million bucks is only a few years if both parents are in the nursing home. Saving for retirement is a good thing but don’t hoard it once you get there. Chances are the nursing home will get it all in the end. Unless you die before going there.
This is very accurate. We've just realized this for my parents.
My parents need to transition to long-term care very soon. They both have modest pensions and Social Security, and a nest egg over $100K but not a lot over that. With their income paying some of the expenses, they will run out of savings in 3-8 years depending on where they go. Do we think at least one of them will live 8+ more years? Yes, probably.
So, if their nest egg is going to be depleted anyhow, might as well get them the nicest nursing home there is!
My dad has a small life insurance policy, and (gladly) they thought to put their house in a family trust 5 years ago. That life insurance policy will cover the funerals, and the house will be the only inheritance for my sister and I. Not life changing, might pay for 1-2 years of college and that's about it.
So yes ... when you're in early retirement, go ahead ... travel, spoil the grandkids, make memories, give to charity! Or, at least give consideration to that.