The Rest Home Problem

Retirement, Ahhh the land of fulfillment. Everyone is wondering why New York sent Corona virus patients back to rest homes.

Let’s figure it out. You retire and later on when you get really old you have a stroke or get Alzheimer’s; you have a problem. Nursing homes cost $50.000 to $140,000 a year for complete care. Now if you are married, the other spouse may be in good shape, not needing the services. Paying for the service could deplete you family’s retirement savings very fast. In most states you don’t have to sell the house to get Medicare benefits for your spouse.

Usually the first step is the rest home, and then it progresses to the nursing home. Most of these places have to make a profit. So, if you have run out of funds, they try to unload you onto a Medicare home. The wait times to get in are ridiculous. If at any time you come down with an emergency health issue; heart attack, stroke, influenza or Corona virus, the hospital will accept you for treatment.

Once their situation has been addressed by the hospital, they try to ship them back to the rest home they came from. If the person is indigent, the rest home doesn’t want them back. And in some states like New York, the governor made a point that the people had to go back to the rest home they came from, otherwise they became wards of the state. The real issue was who had to pay for the person’s expenses. Gov. Cuomo did not want to fund it. And by State government decree, he inadvertently killed about 4,000 rest home patients by returning recovering corona case patients back to their rest home.

The other problem here is one that escapes most people. 50 years ago, interest rates ranged between 6 to 13 percent. And most people who saved for retirement were getting about 8 percent on their savings and their nest egg doubled every 9 years. So, today, it isn’t surprising to see retired people with savings of one million dollars. The catch is, the money no longer returns 8% interest or 80K per year, maybe about 10K. This is where seniors are getting ripped off, very low artificial interest rates.

The real question that needs to be asked, did risk leave the market? Increased risk implies higher interest rates. 1 to 2 percent return on your savings has to be a joke. The market has no risk? Is this even possible?

If the government wanted to tax someone with money how can they do it? One, by taxing the total amount saved or by printing more dollars that makes the saved dollars’ worth less. By reducing the interest rates to 1% the government is taxing savers about 7% on their money in the bank. Notice how clean this is, you don’t have to ask anyone how much money they have in the bank, the saver just get less interest.

So, if you are a senior in retirement, you get hit twice, no real interest on your savings and inflation on your savings of about 8 to 12 percent a year. And of course, you’re too old to do anything about it. And if you did, your lawsuit would outlive you. You don’t buy green bananas when your 85.

We have a new group of people in the mix, the young adults. To them cigarettes have always been $8.00 a pack. They are not about to save any money; the miracle of compound interest is dead. They will go out and buy a home, and the government loves that, more taxes and the taxes increase with the homes “value.” The old people (like me) can warn them about cigarettes costing 25 cents a pack way back when-- and that has a name “inflation.” “But grandpa that was a long time ago, times have changed.”

So, we the seniors can see that there are no future incentives to save with these very low interest rates, and now we know why our plans for retirement no longer deliver the interest rates we anticipated 40 years ago. If we live to be 85, we have a very good chance to run out of our savings if we have to go into a rest home. The governments artificially set low interest rate is stealing from those who have saved money, the people who saved for retirement. Congress knows that they can’t tax people that are broke.

If all the banks want to pay is 1 percent, convert your holdings to gold silver and platinum. Nobody on the internet can steal your savings if it is in a deposit box. It is invisible nobody knows you have it. There is absolutely no reason to have a bank account for savings, the present inflation rate of 12 percent will eat you alive (mostly in the medical field). The Government is counting on everyone to contribute to an IRA or 401 K to save on income taxes. Forget that, cigarettes will be $140 a pack when the young retire. Congress cannot print gold and silver. People need to realize that there is no risk buying precious metals. There is a risk on holding on to savings long term, the return is not there.