Downsizing in retirement, my own observations, Part 3: rent or own?

I wanted to follow some followup on the questions I posed May 13 about seniors qualifying for rental housing or condo purchase after selling an oversized house.  Many of the issues I had to “preview” relate to the fact that I was living in a 1949-built house owned legally by my (late) mother’s trust, not technically by me.  But I do have the powers as the sole acting trustee.

I’ve had conversations with two separate high-end modern high-rise properties (both built in the 70s-80s) and both told me that they would rent to a retired senior who could demonstrate more than sufficient assets in a checking account (one that will not lose principal other than from making actual payments) to cover the term of a lease.  Lease amounts tend to lead to lower monthly rents for longer terms, but rental prices are set algorithmically daily based on supply and demand in a specific geographical area;  most corporate large landlords use these automated processes to set rents.

There is a possible risk that a lease would not be renewed (as if the renter could not come up with the same reserve guarantee for a renewal, or if a building were sold for condo, or if market rent spiked suddenly).

I did wind up purchasing a condo for about one-third of what the house sold for, even allowing for extra expenses (and replacing a heat pump compressor immediately on me).  Mathematically, it is likely that the remaining gain in liquidity will last longer (allowing for property taxes and condo dues, and some repairs) than a larger amount would spent entirely on rent.

As I indicated on my (personal) “Notes” blog in a recent post, there can be restrictions on how the liquidity gain in a trust (irrevocable in the name of a parent or ancestor) is spent.  Some trusts discourage the sale of an estate house (on the theory it should stay in the family) or try to prohibit downsizing real estate holdings unless there is a specific special need on the part of a trustee or beneficiary.  I found that a condo purchase for cash in the name of mother’s trust seemed to be OK with everyone (at one time I wanted it to be in another trust in my own name only).  This might not have been the case had a mortgage been necessary.  (A reverse mortgage might be allowed.)

Special needs are met in a variety of senior housing developments for rent (sometimes purchase).  Some offer meals and have HUD-subsidized rents.  Typically there is a qualification formula that includes a specific percentage of the person’s total assets (I think it is 0.8% per year right now) to count as income.  This arrangement is certainly subject to the whims of policy (Congress or the administration).  There are other high-end properties (like Goodwin House in northern Virginia) that require a large deposit to rent, but then allow move-in to an assisted living unit when that becomes necessary.  Use of trust money for the trustee’s own special medical needs sometimes requires medical supervision, monitoring and approval.

The general lesson from all of this on trusts is that they are “convenient” for someone inheriting an estate in usually avoiding probate court.  But they often restrict how liquid assets (beyond the distribution instructions to other family inherit-ees), are used, and impose fiduciary responsibility on the trustee that discourages further distributions (other than providing some income to beneficiaries) until after the trustee’s own death.  They usually are quite serious about the trustee’s being able to handle to unpredictable possibility of his own needs (like stroke, Alzheimer’s, etc.)

There was somewhat of a reversal in the expectation that, after closing on the sale, there would be a period of time before I picked a property to buy.  In exchange for a higher initial sales price, I accepted an arrangement where I had only three weeks to leave after closing. But I also picked out the condo much sooner and there was an arrangement to make sure funds would move properly in the split settlement with two title companies.  This agreement could not have worked in a situation where a senior goes on a waiting list to get into a HUD-subsidized unit because of a special need.

There was less time to look at a large number of possible purchase properties than I had anticipated in my own mental “preview”. (This excluded looking a possibly cheaper properties in other cities — unless I went through the complications of living in an extended stay place for a while and keeping everything in storage.)  You normally can’t look at a (used) property without a realtor making an appointment and generally need to have a “done deal” on your own sale first.

Condo purchase did encourage a condo property policy (which is slightly more expensive when a trust owns the condo) and security system installed by the cable company.  Once again, a very distant reflection of the network neutrality debate:  telecom companies should be able to tailor specific packages and service add-ons for individual consumers as long as they allow all lawful Internet content to be available for those who want it.

(Posted: Thursday, Nov. 30, 2017 at 12:30 PM EST)


Other people’s children

I saw a Facebook post recently from Arvin Vorha, a mathematics educator and Libertarian Party candidate for the Senate from Maryland, which read “If you didn’t produce a particular child, your financial responsibility to that child is zero.”

Oh, is that the real world?  How often to childless people wind up raising the kids of siblings after family tragedies? (That was the premise of the WB series “Summerland” that started in 2004.)  Or there is the premise of “Raising Helen” where raising a child is a requirement for a inheritance, although that sounds fair enough.

There is also a practical issue that, for a family or for a “people”, having children and being able to raise them is an important capacity.  A lot is said about population demographics or “demographic winter”, especially by the alt-right, which warns that populations with foreign values (read Muslim) will take over the political lives of western countries because they have more kids and at younger ages, without waiting for ideal circumstances (education and perfect job) according to narrower libertarian notions of personal responsibility.

In the workplace, at least back in the 90s, there were a few occasions where I worked overtime without pay when someone else had family issues or was having a baby.  How does that play into the paid family leave debate?

And then, when I talk on Facebook about how cheap my own health insurance was when I was “working” in my long track IT career, and I was flamed about my own privilege, for having my establishment employers subsidize my insurance with tax-free benefits. Well, they could have paid me more instead,  Then the flamethrower wrote something like “You must not have kids.”

Right, not having procreative intercourse with the opposite sex is indeed an indication or moral inferiority, a lower deserved size in life?  Is that what this means?  Is that what the equality debate is about?

Indeed, the backside of the demographics debate is the “cost” of eldercare of an aging population.  I found out two decades ago how easily I could be “conscripted” into this world, and then play the privilege card by hiring immigrant caregivers.

Then there are all the debates about race and genetics, which some see as offensive (Wade’s “Troublesome Inheritance” and Murray’s “Bell Curve”). But it seems that things cancel out if better-educated people have fewer children.

I do have to add one extra detail:  Susan Collins (R-ME) has mentioned “my” idea of using reinsurance in the revised health care play (to cover pre-existing), and Rand Paul (R-KY) wants individuals to have the same bargaining power by getting together as employees of big companies or union members today. Trump, as a businessman, has to have pondered these ideas, right?

Here’s a legacy post about the demographic winter issue, referring back to a 2007 “Manifesto” (decree from “on high”) by Carlson and Mero, “The Natural Family” as well as Phillip Longman’s “The Empty Cradle“.

(Posted: Monday, July 17, 2017 at 2:30 PM EDT)

Maybe TrumpCare can work, if you do all the homework; Trump leaves out anti-gay language in today’s religious freedom EO

Once again, we’ve seen two controversies today that in some ways relate to how people care for each other or “their neighbors” in a free society.

Here’s a sample criticism of the GOP’s plans to return to state high risk pools in the American Health Care Act that passed the House today, 217-213, a column by David Lazarus, contact reporter, “The GOP’s big lie: Healthcare bill protects people with ‘pre-existing conditions’”.

I think you could make the GOP plan work if you pump enough money (through the states) to support increased premiums for those in the group, with subsidies that most people (except the wealthy) would need to make the premiums reasonable.  They would need to be actual supports or payments, not tax credits (as many have no taxes).  But for the most extreme cases (like the hemophilia case mentioned) would also need public reinsurance to cover the claims.  Even people without pre-existing conditions can have extreme claims from accidents (the Christopher Reeve problem), so a reinsurance mechanism sounds necessary

The fact is, in a society that values human life, it has to be paid for somehow.  The general experience with other western democracies is that most people are more comfortable with the idea of funding the more extreme and misfortune-driven needs with taxation, or public funds.  If we had a Canadian single payer system, health care wouldn’t be so controversial. We’d be used to it.

Otherwise, we have to face the issue of “moral hazard”.  In the insurance world, it’s always problematic to force companies to group coverages to force people to add coverages that they personally will never need, to pay for someone else’s risks, when they buy an insurance product.  I think there is a good analogy with property insurance (homeowner’s and autos).  Imagine if umbrella insurance (covering identity theft and social media liability risks) were required to be part of every homeowner’s policy. But that’s where Obamacare-style thinking could have been headed.

Yes, there are counter arguments when it comes to healthcare, such as gender parity (and it takes two to  tango).  At the end of life, women tend to live longer and need more services (although this is complicated by Medicare and all other issues in eldercare).

I had first rate health group insurance when I worked for ReliaStar and fell in a convenience store in 1998 in Minneapolis.  I kept full salary, got the experimental surgery I needed immediately at the University of Minnesota (and a medical supply company donated the device because it wanted to demonstrate it), recovered completely, as back to work in 3 weeks, and walking without crutches at an Oscar party in about two months, and was covered 100%.  Yes, insurance companies do a better job than average of taking care of their own employees, almost as if we were professional sports players. Yes, there is some cherry picking.

So, as a song(Yul Brynner singing) in “The King and I” reads, this is all “a puzzlement”.  Trump, Price, McConnel and Ryan have some more work to do and more problems to solve. But Donald Trump has insured his own employees for years, as do his two sons now.  I would think he would be familiar with how reinsurance works.

On Trump’s religious freedom EO, allowing religious organizations more freedom to endorse political candidates: Most of “us” are relieved it does not contain the provocative language pandering to the most extreme religious notions, which make other people’s personal lives everyone’s business. My more detailed story is on a legacy blog here.

TrumpCare (or “Repeal and Replace) would have to deal with touchy situations like lifelong HIV medication and even PReP.

(Posted: Thursday, May 4, 2017 at 7:15 PM EDT)

Guest Post: “How to Avoid Becoming a Financial Burden on your Kids”

Americans are living longer than ever, which means retirement could last 20 to 30 years for some people – maybe even longer.

That’s great for those who remain in reasonably good health and retire with plenty of financial stability.

But lengthy life spans also increase the odds that many seniors will deplete their savings, face debilitating health problems and need to turn to their children for financial help or caregiving.

That’s a far cry from the kind of retirement they dreamt of over the years.

“I’ve done focus groups where one of the chief concerns that comes up is people don’t want to become a burden on their kids,” says Jeannette Bajalia, a retirement-income planner, president of Woman’s Worth® ( and author of Retirement Done Right and Wi$e Up Women.

It’s really too late to do much, though, when you’re 80 and your life starts unraveling.

That’s why it’s important to plan ahead to get your finances and health in the best shape possible, she says. Among some of the points worth thinking about:

• Unanticipated health care costs. It’s estimated that the average married couple will need to pay up to $250,000 in out-of-pocket expenses for healthcare during their retirement, beyond what Medicare and most Medicare Supplements will pay. “We’re beginning to see a lot of cost shifting out of both Medicare programs and private health plans, which means more out-of-pocket healthcare costs,” Bajalia says. “It’s entirely possible that the savings you thought would allow you to travel or to at least pay all the bills could be gobbled up by medical expenses. As you plan for retirement, you should make it a priority to discuss this concern with your adviser so the two of you can look at what options you might have to try to keep that from happening.”

• Long-term care planning. When it comes to aging, consider the possibility you might have to receive home healthcare or live in a nursing home or an assisted-living facility. The costs of such care can be daunting. For example, studies have shown that home healthcare can cost $50,000 or more per year, and nursing home care can run as high as 90,000 per year. “You don’t want your kids to have to pay for that,” Bajalia says. There are ways to prepare, such as buying a long-term care insurance policy or checking with a financial professional to help you develop a strategy for protecting your assets from nursing-home claims, she says.

• Self-care. Not every financial professional may do this, but Bajalia says she believes it’s important to integrate health education and a lot of self-care into a retirement plan. Spending money on preventive health routines to take care of yourself now can help you avoid significant health problems that lead to even costlier expenses later on, she says.  Research is now telling us that longevity is over 70 percent lifestyle.

“I know it’s important to older people that they be able to remain independent as long as possible and not have to turn to their children to help,” Bajalia says. “They just need to remember that careful planning is the route to accomplishing that.”

And one of the planning tools would be to help fund long term care insurance for your aging parents to keep assets in their estates, she says, so long term care is not simply for yourself but for your aging parents.

About Jeannette Bajalia

Jeannette Bajalia, author of Retirement Done Right and Wi$e Up Women, is president and principal advisor of Petros Estate & Retirement Planning, where she has designed and implemented innovate estate-planning solutions for clients and their families. She also is founder and president of Woman’s Worth® , which specializes in the unique needs facing women as they plan for their retirement.

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(Posted: Monday, January 23, 2017 at 6:45 PM EST)

“Moral Hazard”: some of us ask others to pay for our risks

“Moral hazard”, as an economic concept, really has little to do with everyday notions of “moral compass” or “deservedness”.  Rather, it refers to a situation where one party (often an individual person) uses more of a particular resource than he/she/it normally would because another party will pay for part of the cost, without that paying party’s direct knowledge or consent.

At the outset, however, the term seems related to our ideas about personal morality in the context of wealth and/or income inequality, because people often benefit from the unseen sacrifices (unelected costs) born by others.  Politically, the issue does get mixed into Marxist-related ideas about “to each according to his needs”, but also “from each according to his ability” must somehow be compelled.  It gets to be anti-libertarian.

The most obvious area where moral hazard will come up is in health insurance.  Some people will use more health care resources than others because they are inclined to be sicker.  Over a lifetime, age is less of an issue because we will all eventually die and all face increased risk of illness as we get older, so a “morally” appropriate strategy to deal with this problem can be imagined (whether Medicare achieves this is another debate).

Employer-based health insurance, as became common after WWII, tended to use moral hazard because some people in a company used it more than others.  The same is true when you try to regulate the individual market, and especially when you try to compel purchase of insurance, as with the Affordable Care Act (or “Obamacare”).

As an economic principle, when someone with a pre-existing condition uses medical services covered by insurance (without any surcharges) then that person is leveraging moral hazard, whether or not the condition is strictly inherited (genetic), or whether it involves the person’s behavioral “choices”.  As a “moral” (in the other sense) matter, probably most Americans think that genetic pre-existing conditions (like Type 1 diabetes or many childhood cancers) should be covered by the public in some way.  I have suggested that any health care rewrite under a Trump presidency would envision setting un a reinsurance company (public and private) to pay the additional health care expenses attributable to pre-existing conditions, so this issue doesn’t affect ordinary peoples’ premiums (and help lead to the escalation reported in the news shortly before the 2016 presidential election, which may be a bigger reason for Hillary Clinton’s electoral college loss than “the Russians”, fake news, or Comey and email-gate).  But it most be noted that right now, that even with the premium increases, it seems that insurance companies are getting stiffed by the federal government on the pre-existing condition issue (story).

But it is likely that there would be political (and culture-based) disputes on how to cover illness or injury related to behaviors.  The list is long:  cigarette smoking, drug-use, obesity (to the extent that it is perceived as overeating), for openers.  The last two of these behaviors (at least) probably have genetic influences as well as personal choices (the “thrifty gene” in native peoples and obesity and Type II diabetes).  You could add sexual behaviors, such as the “chain-letter” problem in the male homosexual community and HIV.  That aspect is today Themuch less than it was in the 1980s and early 90s, but still, modern successful clinical management of HIV can with protease inhibitors can cost about $60000 a year, or maybe $3 million in the lifetime of a young adult male.  You can also add sporting behaviors that have general social approval, like playing football and concussion risks.

Then, there is gender.  In purely economic terms, gender is the ultimate pre-existing condition.  Women have childbirth expenses and men, literally do not.  Women live longer than men, and their eldercare is likely to cost more (although today custodial care in old age is not normally covered by Medicare but may be covered by long term care insurance, which women are more likely to “use” than men).  Within families, generally husband and wife regard pregnancy as a joint experience and cost.  But in a total insurance pool, childless people would contribute premiums to pay for “other people’s children” (“OPC”).

The next place where “moral hazard” comes into play is workplace benefits, especially the push for paid family leave.  I’ve noted before that it is more “egalitarian” to offer parental leave to both parents than only maternity leave (which is all Trump wants to offer).  Most tech companies offer parental.  It is even more “egalitarian” to include adoption leave, and eldercare leave for caring for parents.  All of this costs a lot (I like charging another insurance premium deduction and making it at least contributory, so workers have to understand what it going on – rather than making employers (or “shareholders”) foot the entire bill out of anti-capitalist sentiment).  A benefit that most workers would eventually use becomes less a “moral hazard” situation.  But part of the paid leave problem is that when someone is out, other workers often do their jobs (even being on call for production problems in the I.T. world) without any more pay, often incurring personal sacrifices and expenses themselves.  Obama has been trying to fix this with new rules about overtime pay for salaried workers, but Trump is likely to roll that back.  But in the worst situation, a single or childless person bears personally some of the cost for a married co-worker’s sexual passion (as in “the Song of Solomon”).

There are other examples of moral hazard, as in finance, with the “securitization” of so many financial instruments (like mortgages), leading to the hiding of downstream risks and unsustainabilities, contributing to the subprime mortgage meltdown and then the financial crisis in 2008.  The bailouts amounted to the processing of moral hazard.

Although not usually viewed in an economic sense, we can relate other issues, like past military conscription (and the deferment history) as “real” moral hazard.  Like it or not, one’s own life (and assets) become behind-the-back bargaining chips for politicians to play.  Likewise, calls for volunteer work often involve a spontaneity that resists examination of the serious risks one is called upon to take to benefit others, and this brings us around from traditional economics to social capital.

Yes, society, starting with the family, expects those of us who are “different” to fit in; talk about “social capital” and “rightsizing”


It’s a given that gender itself is biologically immutable.  I’ve never been a fan of depending on classifying people by “born this way” groups.  But it’s pretty clear that a lot of other characteristics associated with gender are at least largely biological, maybe epigenetic.  That would include sexual orientation and gender identity, which gives you “2**3”  or 8 combinations.  If you add the personality specifications developed by Paul Rosenfels (the Ninth Street Center in the 1970s), that is polarity (psychologically feminine or masculine – again different from all the others) and action bias (subjective or objective), you get “2**5” or 32 combinations.  No language could come close to having 32 pronouns or case endings for all possible gender-related personality combinations. Maybe an alien civilization 1400 light years away (Tabby’s Star, which might have a Dyson’s Sphere around it) could have done this with digital languages and reproductive robotics. “I will accept nothing less.”


Most societies develop expectations about how people with various kinds of dispositions fit in.

A critical question will be, does the society value all “human” or “personhood” life within the group?  If so, it will develop expectations for the way everyone is socialized.  Now some societies (like Nazi Germany in the past) did not value even all of “their own”.  (Sparta in ancient Greece sounds like a good comparison.)  Others, like hyper-communist societies (Maoism during the Chinese Cultural Revolution, and later groups like the Khmer Rouge (of Pol Pot) or today’s North Korea) pretend to achieve “equality” by bringing almost everybody equally low and poor, and then often eliminate the weakest members in Nazi style anyway.  (We could get into a discussion of whether Stalin was worse than Hitler.)

Societies may actually be fairly egalitarian with their own people, but very brutal with any other groups that they perceive as “enemies”.  That could be said of ISIL, where cult-like religion identifies the group.  (ISIL actually has programs for the disabled among their own “believers”.)


For an individual living in any of many cultures in the world today, he or she (up to 32 pronouns, again) is faced with carrying his/her own weight as a member of the group – which can extend concentrically, from nuclear family to extended family, to community, to country, maybe to religious affiliation, maybe to some adult-chosen activist identification.  Ultimately, the ability of the individual to relate well to people in the rest of the world depends both on the politics of the group he/she grew up in – the enemies issue – but also this his/her own personal outreach (becoming a “doctor without borders” being one of the best possible outcomes personally).

But it’s important to understand that most cultures need to expect people to grow up learning to take care of their own first.   That expectation goes along with the historical fact that personal privacy is relatively new (coming with wealth and increasing standard of living) and most families have had to deal with shared family beds and restricted living space, that is, forced intimacy.  In western cultures, some people (like me) will place more emphasis on personally defined accomplishment (and having it recognized) and less on meeting the immediate adaptive needs of others in the family group.  (This gets in to Rosenfels’s ideas about “adaptiveness” v. “creativity” which becomes a digression in itself.)  I behave this way partly because of my own biologically mediate temperament (male, gay, male, feminine, subjective).  But there is a risk that I will take undue advantage of the sacrifices of others in the group who participate more conventionally in building the group’s social capital, and my doing so, while publicly visible with my own agenda (as an “unbalanced” personality) could undermine the social development and relationship building and reslience of others around me.. This brings up the whole idea of “right-sizing“, sometimes mentioned in Christian service settings, but itself almost a moral oxymoron.

The last years of my mother’s life, along with other incidents (documented in my books) showed that intimate engagement with others and providing for them is often expected even without having one’s own children.  The idea that this capacity doesn’t happen until one “chooses” to have children is an over simplification of moral responsibility, and means that “family values” (and the place of marriage) is a lot more nuanced than a lot of us would like it to be.  But, when a sequence like this happens late in adult life, it is much “easier” to deal with for someone who has had and raised his/her own children.

When I was growing up, there was a definite expectation that young men and women needed to learn to develop practical skills in providing for one another at least in part related to gender.  These “skills” would make the eventual appropriation of sexuality to marriage and raising children

Ironically, these skills seem more relevant today was the aged live longer and are more likely to have severe disabilities late in life.  At the same time, there is more emphasis in providing a sense of “value” to those with individual disadvantages through public measures (social media and “gofundme” campaigns) than there was when I was growing up, when disability and inequality were obviously visible publicly, and the prevailing sentiment was that “the natural family” should provide a sense of value through the family’s own internals social capital.

In western societies, most of all the U.S., we value individual initiative and independence, and personalized critical thinking, sometimes to the point that marriage and family, so privatized (the “License expired” idea), gets viewed, especially by political libertarians, as a cultural afterthought.  But the idea that, within a family and concentric groups surrounding it or to which a person belongs, one doesn’t “need” anyone else (because his knowledge makes him/her “better” than those whose lives are more interdependent) can become destructive, and lead the disadvantaged to believe that modern civilization has no moral point (and incite “mass movements” as by Hoffer’s 1951 book “The True Believer“).  I saw this angry point from the radical Left way back in the early 1970s, well before the discontent expressed in today’s religious mass movements. On the other hand, the intellectual singleton (or even “schizoid”) is less likely to be seduced by radical ideology or belief for its own sake, just to “belong”.

A supplementary piece from one of my legacy blogs is “What Other People Want” from January 2016.  David Brooks covered similar territory in the New York Times with a “process piece” that I discussed April 30 while heading for the PA turnpike tunnels.  I guess I have to make sure I don’t go “less bad” myself.


I have an old article from 2005 “Hyperindividualism v. Solidarity” which refers to a Mother Jones article “Are We Better Off? In Search of Common Ground”, current location here.  The magazine cover had read “A Nation of Ones.”

Peter Wehner, in a NYT op-ed “The Theology of Donald Trump” does talk about ideas of personal worth (comparing Christ to Nietzche or maybe Ayn Rand), with a reluctance to elevate the “weak”.

Wikipedia attribution link for drawing of hypothetical Dyson Swarm, under CCSA 3.0.

(Published: July 3, 2016 at 11:50 PM EDT)