The full $120,000 a year is in your plan, but enter care as a milestone instead
Why $39k: your chart is set to Today's dollars (its title ends with (Today's Dollars)). It shows what $120,000 at 85 will buy in today's money. Switch Display to Future dollars and the bars read $120,000.
Where to enter it: an Extra Withdrawal is a fixed dollar amount, so $10,000 a month stays $10,000 at 85 and pays for much less care than it does today. A milestone expense is entered in today's dollars, grows with inflation, and follows your wife's age:
- 1In the Milestones box, click Add Milestone.
- 2Choose At an age, set Whose age to Spouse and Age to 85.
- 3Under Then do this, choose Add an expense: $120,000, Recurring (per year), 4 years.
- 4Delete the long-term care row in Extra Withdrawals, so the care is not counted twice.
About five minutes. Each change saves itself.
Where the $39,000 comes from
Here is the same row in our example plan: Chris and Jamie, with Long-term care entered in Extra Withdrawals at $10,000 a month from age 85 to 88.
The card holds exactly what you typed: Start age 85 and End age 88 1, and $10,000 Monthly 2. That is $120,000 in each of the four years, and the plan withdraws all of it.
The box's own description says what it is built for: "One-off and repeating lumps on top of your regular spending, like a big trip or replacing the car."
Now the Extra Withdrawals chart, both ways:
Today's dollarsWhat $120,000 at 85 buys in today's money
Future dollarsWhat the plan withdraws
| At age | 85 | 86 | 87 | 88 |
|---|---|---|---|---|
| Future dollarsWhat is withdrawn | $120,000 | $120,000 | $120,000 | $120,000 |
| Today's dollarsThe same money, in today's terms | $51,067 | $49,483 | $47,949 | $46,462 |
Your chart's $39,000 is the same sum for your plan. Either age 85 is further away for you than for Chris, or your plan uses a higher inflation rate: either way, the further away the year, the bigger the gap between the two views.
Why it matters for care costs
Today's dollars is not just a different way of counting here. It shows a real gap in the plan. An Extra Withdrawal takes the amount you type in every year it runs, with no increase for inflation. So:
If $10,000 a month is what care costs today, the row covers about a third of it by the time it is needed. For an expense that rises with prices, you want an amount entered in today's dollars that the plan grows for you. That is what a milestone expense does.
Add long-term care as a milestone
A milestone marks a moment in your plan, such as your wife turning 85, and can add an expense from then on. Milestone actions are part of Planner+.Planner+
Open the milestone editor
Find the Milestones box in the settings panel (use Jump to if you cannot see it) and click Add Milestone. Give it a name, such as "Long-term care".
Tie it to her age
Under When does this happen? choose At an age. Set Whose age to Spouse 1 and Age to 85 2. The line below shows the month it happens.
Add the expense
Under Then do this, choose Add an expense 3. Enter the yearly cost of care at today's prices 4: $120,000 for $10,000 a month. Switch on Recurring (per year) instead of one-time and set Duration in years to 4 5. The blue line confirms it, then click Add Milestone.
Remove the Extra Withdrawal
The milestone now carries the care, so delete the long-term care card in Extra Withdrawals with its bin button. If it was your only card, you can switch Extra Withdrawals off in the Add box instead.
The milestone appears in the box's list, with a sentence that says what it does.
Check it in your results
The Spending chart shows the care as Milestone Expenses, on top of your regular spending. In Today's dollars it now reads what you entered: $120,000 a year.
The bars run from Chris's birthday to his next one, and Jamie turns 85 in March, so her four years of care fall across five of his bars: $30,000 (three months), then $120,000 for three years, then $90,000 (nine months). Four full years in all, $480,000 at today's prices. In Future dollars the same care reads about $300,000 a year: $120,000 of today's care after nearly 30 years of 3.2% inflation.
Good to know
Care costs often rise faster than prices in general
A milestone expense grows at your plan's inflation rate (Inflation % in the Returns and Allocations box). Care costs have historically risen faster. To allow for that, enter a little more than today's cost, or use a Budget row with its own inflation rate (next card).
If your spending comes from a budget
If Use Budget in the Retirement Spending box is set to one of your budgets, you can add care there instead. On the Budget tab, open Common Expenses, choose Healthcare, and add Long-term care (late life). It is in today's dollars and rises 5% a year. Its start and end ages are yours; to follow your wife's age, start the row on a milestone set to her age. Use the budget row or the milestone expense, not both.
When Extra Withdrawals is the right tool
- A known bill in fixed dollars: a set payment that will not change.
- Moving money: taking a set amount out of one account into cash or a brokerage account.
- Its Start age and End age are the ages of the first person in your plan (the Primary, usually you), so "85" there means when you are 85. A milestone has Whose age.
A long-term care policy
If you hold a long-term care insurance policy, enter only the part of the cost it will not pay. Add its premium to your spending for the years you pay it.