Cruise Ship or Care Home? Which would you rather?
When your are in the unfortunate position of having to find a care home for yourselves or a loved one, what are the main factors you consider? Location, reputation, cost, how many restaurants, bars and pools it has?
A well known cruise line are currently advertising a 104 night round the world cruise for just £9269. The costs of long term care may be similar, with research carried out in 2014 showing the average cost of care home fees is £2,375 a month increasing to £3,125 a month for nursing care (source: Lang & Buisson 2013/14). This of course varies widely depending on the where you live, with costs in our area being on average £4,000 a month for nursing care. That round the world cruise is looking more appealing and better value by the moment. You can bet your local care home doesn’t offer casinos or midnight buffets, but your average cruise ship does offer round the clock service and a fully stocked medical centre and on board doctor! The choice is yours..
Why you can’t bank on drawing 4%
Investors can’t assume they will be able to draw 4% a year from their capital for the rest of their lives when they retire, says the Telegraph. Old research said this 4% rate was feasible in the US, but more recent analysis says the number for the UK is more like 2.5%. The problem is that the withdrawals eat into the capital value with the result that when investments falls, a high rate of withdrawal means you risk running out of money. In my opinion the withdrawal rate needs to be carefully reviewed annually depending on personal circumstances by a certified financial planner. A 4% withdrawal rate is entirely dependent on portfolio performance and your personal needs.
More complications for inheritance tax
A new allowance that could give couples a tax-free limit on their estates of £1 million by 2021 is unduly complicated, says the Mail. It spells out all the conditions – a couple would have to own a house worth over £350,000 and would have to leave it to their direct descendants only, which rules out much common tax planning involving life interest trusts. The allowance is intended to come in in stages starting in 2017, but some analysts wonder if the new Chancellor will heed the experts complaining about the complexity and simplify it.