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Retire now, or wait for company health insurance coverage?
Old 09-02-2010, 01:21 PM   #1
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Retire now, or wait for company health insurance coverage?

I am currently 53, live in Missouri, and find myself 2 years and 14 days away from being able to retire from my company with their retiree health insurance.

If I retire with my employers health insurance it is currently running around $300 per month with a total out of pocket cost of $3000.00 per person. This is currently a company perk, and as with any company perk they can raise rates yearly, or stop it at anytime.

I have applied for insurance through Blue Cross Blue Shield, and the quote for husband, and myself ran $294 per month with a total out of pocket cost of $5000.00 per person, per year.

I make a decent income, but literally have to drag myself into work. After 25 years in this job the fun of the corporate world is long gone.

This girl is ready to retire, I have a little over 2MM in assets and can afford the deductible, my question is should I retire now, or be 'safe' and work for 2 more years for insurance through my employer?

What would you do?
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Old 09-02-2010, 01:26 PM   #2
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If Firecalc or similar says it is a go, I'd retire. You cannot buy back years of relative youth for any price.
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Old 09-02-2010, 01:34 PM   #3
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Originally Posted by Blackwoodt View Post

What would you do?
First, I'd go far beyond the health insurance question and make sure I had a good handle on all my anticipated annual expenses in retirement. Then I'd run my numbers through FIRECalc and other retirement calculators to see what they told me about my chances of running out of money before I reached my 90-somethingth birthday.

If the numbers looked good, I'd retire. If they didn't, I'd keep working, saving and investing, and keep running the numbers until they did.
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Old 09-02-2010, 01:48 PM   #4
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What REWahoo said.
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Old 09-02-2010, 02:11 PM   #5
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I have applied for insurance through Blue Cross Blue Shield, and the quote for husband, and myself ran $294 per month with a total out of pocket cost of $5000.00 per person, per year.

I make a decent income, but literally have to drag myself into work. After 25 years in this job the fun of the corporate world is long gone.

....
Welcome to the forum, Blackwoodt.

What the others said, they know more about numbers than I do.

I could have dragged myself into work until age 65, MAYBE, but I left at age 61. $600/month for health insurance and about $300/month out-of-pocket is the price of freedom and I gladly/almost gleefully pay it.

What's the story with your DH: retired, working? Is the 2MM total for both of you? Can/would you downsize, lower your expenses, if it would get you there, keep you retired? I find I'm spending less in retirement than I planned to, YMMV.

The fact that you already applied to Blue Cross Blue Shield answers the question, IMO. What does it say to you?
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Old 09-02-2010, 02:46 PM   #6
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If you work for a larger size company, if it were me I would wait and be safe. There have been many stories on the news regardaring rescission, i.e. people with individual policies or small group coverage getting canceled for trivial reasons once the subscriber makes a claim for anything serious.

Supposedly it is now illegal, but will the health insurance companies follow the new laws or look for new loopholes?

In California they are fighting tough state anti-rescission laws.

Insurance Association Files Suit Over New Anti-Rescission Rules - California Healthline
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Old 09-02-2010, 03:17 PM   #7
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Look at the Health care.gov website. Is your company listed as taking early retiree health care money from the program. If so then they very likely will be offering that benefit till 2014 and you could wait the 2 years if you really want to. If they are not taking the money then they may not even offer Retire Health care in 2 years. After 2014 they probably will not anyway whether or not the law is repealed which is another nasty discussion.

Another thing to consider is that if you qualify for private health Ins now and do not live in one of the few guaranty issue states then you really need to think about taking it as you may not qualify tomorrow as your health can change quickly. We pay about $500 per month with a $7000 deductible and the freedom from Mega Cr*p is well worth it.

When running FireCalc be sure not to include the value of your home in the portfolio (assets) just in case you are. There are plenty of threads here on that subject and even the value of second homes that are not rented.
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read the fine print
Old 09-02-2010, 03:41 PM   #8
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read the fine print

The other issue is that, I suspect, your company health insurance is vastly superior to whatever you can buy.

when comparing policies look at the fine print as to what exactly is covered.

You may find that when you really need it that the Blue Cross Blue Shield policy doesn't cover what you need.
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Old 09-02-2010, 04:33 PM   #9
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Welcome, blackwoodt!

Health insurance in general is so up in the air right now, it's hard to know what to do. You are a LONG way from Medicare, which is an argument for staying at work. On the other hand, two years could be a significant portion of your remaining lifespan and is not to be wasted.

If I were in your shoes, and if I was convinced that I was in solid financial shape for retirement, and I was working with a good insurance broker, I'd get the private health insurance and get the heck out of Dodge now.

Best of luck with a hard decision.

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Old 09-02-2010, 07:36 PM   #10
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Welcome to the forum.

I was in exactly the same position at the same age so have an idea of how you feel and how tough a decision you face. But that is it, just an idea of what you are going through, YMMV.

If you are fit and healthy then another 2 years may only be a small percentage of all the years you have left to enjoy. I was fortunate in that I was able to look around megacorp, apply for and get a totally different job within the company, including a move to a neighboring State. However, the new challenge certainly helped to get through that last 2 years and I feel a whole lot better with the company retiree health insurance.

I also greatly increased my exercise program, and along with DW started making serious plans about the rest of our lives. Those 2 years went by pretty well, especially once into the last 6 months.
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Old 09-02-2010, 07:53 PM   #11
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I am in a very similar situation and the other thing I would suggest you consider is the potential "annual rate increase " of subsidized group retiree medical versus private insurance. I think you may find that your rates will go up a lot faster in the private sector than if you are in a group plan - but I could be wrong.

I have, in the past, gone out and checked quotes for private insurnace as if I were my current age, 1 year older, 2 years older, 3 years older etc. The difference in premium each year as you get older (past 55) is pretty scary..... Subsidized group medical, I think, helps reduce this a bit.
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Old 09-02-2010, 08:53 PM   #12
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Health insurance is only one component of your decision and I'd submit that it shouldn't necessarily be the main driver one way or another. If private insurance was going to put you at a huge disadvantage and maybe mess up your entire retirement plan, then keep working, but it doesn't sound like that's the case.

The other thing I have found is that assuming you have your financial plan pretty well set, chances are you'll be just fine moving on to ER. Just because you ER, doesn't mean you quit working your ER plan and tweaking things along the way. That's part of the fun.

I'd never recommend to anyone to keep dragging their butt to work every day if they want to leave, can afford to leave and have a plan to do it.

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Old 09-02-2010, 09:12 PM   #13
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We have an insurance broker who post here regularly and will hopefully be along to give advice on this also. I also hope he will review and comment on my next statement as it is just an opinion from someone with much less knowledge in the area.

If you read the new health care law and the subsides to corporations to provide Early Retiree health Ins you will see those subsides end in 2014. The very long list of big name companies that are taking the money is also available on the health care.gov site. What I see happening is in 2014 these companies will drop Early Retiree health care for all including those that are already on it and then just give those people some money to help pay for the policy they will now be able to buy since they cannot be turned down. My old employer did very close to this a few years ago. This is just an opinion and certainly could be wrong. It also is not in anyway a statement about if this is a good thing or even if the policies will be better or worse it is just my opinion of how this might play out. I welcome others opinions on this idea as to it validity.
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Old 09-02-2010, 11:06 PM   #14
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There is no analytical answer to this question, regardless of what FireCalc or anything else says. It comes down to are you very concerned about safetly, or do you gamble? Many people have retired or been made redundant with fewer resources than you have (me for one!), but things can happen. I have a friend in his early 50s who got some sort of blood cancer that has cost his employer > $1,000,000 so far. He is now done with active chemo, but takes a pill that costs $400/day. Not many individual plans would have seen him through this. Of course it may not matter much in the long term, because he likely will not be around for the long term, but it sure has mattered in the intermediate term.

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Old 09-03-2010, 02:08 PM   #15
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I greatly appreciate everyone's input on my issue. Alan you had an excellent idea, perhaps if I could take on another job function in megacorp the time would pass quickly.

While I would love, repeat LOVE to retire the whole health insurance issue scares me….. I never thought that I would wish to be two years older!
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Old 09-03-2010, 02:31 PM   #16
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I greatly appreciate everyone's input on my issue. Alan you had an excellent idea, perhaps if I could take on another job function in megacorp the time would pass quickly.

While I would love, repeat LOVE to retire the whole health insurance issue scares me….. I never thought that I would wish to be two years older!
Moving is not always an option, but I was ready to take a lower paying job for 2 years to get to that magic milestone of 55 years old to secure health insurance. In my case I went from being a global IT manager with lots of overseas travel to a EE engineer working on a couple of big projects that ended a few months before I was due to retire.

Give it a shot - you don't have to threaten to leave or anything just be honest and say that you are burnt out doing your current job and need a change. After 25 years you probably have lots of company experience that could be applied to other jobs in the corporation.

Good luck with whatever your decision turns out to be.
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Old 09-03-2010, 04:28 PM   #17
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While I would love, repeat LOVE to retire the whole health insurance issue scares me….. I never thought that I would wish to be two years older!
This is my first year of retirement. About three years ago I was in the position of being financially independent but needing to work two more years to qualify for retiree medical insurance as a federal employee. It about half killed me but I did get tough and finished out those two years. So as you can see, your topic is more than a subject of casual conversation to me (and that is true for Alan and some others here, too).

In the present health care crisis I think it is important to have health insurance for the time being if you can manage it, and it seems like insurance companies are less and less accomodating to older clients whose health is declining with age and who wish private insurance. Some people can't get insurance at all, from what I have read here on the board, and others pay high prices.

Even though the health care initiative passed, I still don't feel like I understand it very well and the specific costs are difficult for me to determine. Much of it is not yet in place. So, I think that if I was in the same situation again right now, I would have to just continue working. I wish things were clearer but they just aren't.
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Old 09-08-2010, 12:33 PM   #18
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Thank you W2R, I change my mind every day... stay or go... I must admit that I work for a great company. Because we are in the process of changing software I could work strictly on our data conversion, traveling to our locations across the country training for the next two years, and leave the management part behind.
If only I had a crystal ball....
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Old 09-08-2010, 01:20 PM   #19
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Man, am I glad I don't have to struggle with such issues. What a drag for all American would-be early retirees!

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There is no analytical answer to this question, regardless of what FireCalc or anything else says. It comes down to are you very concerned about safetly, or do you gamble? Many people have retired or been made redundant with fewer resources than you have (me for one!), but things can happen.
True enough ... but really it's a gamble either way. With the benefit of hindsight, the option of continuing to work won't look so safe if, e.g., the o/p gets hit by a bus or drops dead of a heart attack a year from now.

None of us knows what the future holds. As Coach wisely says, "two years could be a significant portion of your remaining lifespan and is not to be wasted".

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Give it a shot - you don't have to threaten to leave or anything just be honest and say that you are burnt out doing your current job and need a change. After 25 years you probably have lots of company experience that could be applied to other jobs in the corporation.
Makes sense. From what I have seen, employees are usually (strangely) unsympathetic to such proposals; but you have little to lose in trying, and perhaps you will be pleasantly surprised.
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Old 09-08-2010, 02:03 PM   #20
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We're in very similar situation to yours except my DW does not work and had cancer so it's almost impossible to get insurance coverage on the individual market here in CA.

I would have pulled the triggered if I know we can get affordable insurance coverage. For now, we're now counting 2014 for the reform to take effect before I call it quit. If not, then we will have to come up with plan B.
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