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Fidelity RIP question
Old 01-06-2015, 02:33 PM   #1
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Fidelity RIP question

In another thread, people were mentioning HealthCare being part of FIDO RIP, and healthcare being calculated with 7% inflation rate, etc, but I cannot find where to put Healthcare expenses. I can tick "Megacap or other supplemental healthcare insurance" or "Long-term care insurance" under "Have You Budgeted for Insurance" in the expense part of the RIP, but ticking them or not ticking them do not to do anything (It still calculates my plan with the default 2.5%.) I cannot afford a 7% inflation rate in addition to the default 2.5% anyway, but I wanted to see where you add Heathcare to the RIP.

Also, I might split and add a discretionary expense to the essential but it doesn't seem to do calculation any differently? Am I missing something here?

Thank you very much.
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Old 01-06-2015, 02:48 PM   #2
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It's under Your Situation-> Expenses then tick the radio button for "Detailed Living Expenses". There's a budget worksheet to fill out. It's in there.

Edit to add:if you split out essential from discretionary and had the same total, the only thing that changes is your withdrawal spreadsheet breaks those out in separate columns. Hope that helps.



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Old 01-06-2015, 03:01 PM   #3
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I ignore the healthcare recommendations in RIP and put my own estimate of total healthcare expenses in a lump sum on one line under the healthcare section. I also ignore the discretionary versus essential calculation they do as I already know these numbers. For healthcare estimates, I've performed mock ups on several medicare provider sites, and studied polls and threads on the BH forum. On average, annual costs were around $5K per individual, which matched my mock ups.

Medicare inflation has actually slowed in recent years do to the introduction of the ACA, and is projected to slow more for retirees due to the total closure of the prescriptions "donut hole" (in 2020 I believe). Until that date, the donut hole is being phased out, although I don't recall the exact formula.

Total healthcare costs are actually held down by medicare usage for retirees. Up until approximately the mid-2000's, medicare premium inflation was increasing at around 7% yearly, but that has slowed in recent years. I am personally only calculating 7% increases in medicare premium increases, and even that is probably generous. You may think otherwise.
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Old 01-06-2015, 07:16 PM   #4
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Quote:
Originally Posted by Options View Post
On average, annual costs were around $5K per individual, which matched my mock ups.
That is what I'm using. There are articles saying retirees Social Security benefits will be consumed entirely by Medicare. I think those are unrealistic. People would just go without health care before they'd go without food, clothes and shelter, and many upcoming retirees will not have much more than Social Security. I can't see people living on the streets just so they can make their Medicare payments.
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Old 01-15-2015, 07:32 PM   #5
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Thank you all for your responses and sorry that I didn't respond until now. I got busy and I forgot I even asked this question here. I did check out the breakdown on FIDO RIP, and now I know how to put the healthcare information in, but yeah, I don't know how anybody could afford a 7% increase (I certainly can't) so I will just put in my own estimate.
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Old 01-15-2015, 09:02 PM   #6
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Originally Posted by tmm99 View Post
Thank you all for your responses and sorry that I didn't respond until now. I got busy and I forgot I even asked this question here. I did check out the breakdown on FIDO RIP, and now I know how to put the healthcare information in, but yeah, I don't know how anybody could afford a 7% increase (I certainly can't) so I will just put in my own estimate.
I am only factoring in 7% medicare part B premium increases, and that's probably too much, given that premium increases have slowed with the advent of the introduction of the ACA. I am definitely not factoring 7% overall healthcare inflation increases annually. That' not even sustainable, IMO. As I said, based on my readings, overall annual healthcare budgets for individuals were around $5K annual, although I'm using $6K to be a bit conservative.

Hope this helps.
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