Your Most Expensive "Emergency"?

[Danmar]

Emergency fund requirements are different for a retiree than for someone who is still employed. Retirees (as confirmed by most of the posts so far) are generally concerned about household expense "emergencies" or unexpected health or dental bills.

When financial commentators recommend an emergency fund in cash, they are usually thinking of a job loss emergency. For people who are FI, ie retirees, the risks are different and usually a lot more manageable, I think.

 

[Closet_Gamer]

There have been several threads relating to emergency funds and such. As I sit here and type this, I am having a very large hardwood tree removed to the tune of about $3,000. Granted, this is not really an "emergency" expenditure for us but it got me thinking about what would be a true emergency and how much that might cost. I figure that housewise, the most I would be looking at would be maybe $7-10K for complete AC replacement. Most other high costs would be covered by insurance. So...I am thinking the highest expense that I might have to cover would be dental work.

Anyway...what is the largest unexpected (emergency) expense have you had to cover? So far, I am going with $7,00f0 for roof replacement (not really unexpected but our timeline got moved up when it started leaking in more than 2 spots).

I was working at a small start-up. One day my boss walked in and handed out big pay cuts to keep the thing afloat. Mine wound up be a 70% drop in income overnight.

I'm proud to say we managed to run our house cash flow break even for the next 6 months but w/o the emergency fund we'd have really been panic'd.

Last year my wife got bit by a cat. Rabies shots, IV antibiotics, hospital stay. Our OOP was probably around $4k but then we tripped the OOP limit on our insurance as it had already been a pricey medical year.

 

[JoeWras]

Maybe. But then I'd probably need a sump pump to drain the pit.

And I'd be at risk of undermining the foundation footings. Pier footing and outside wall footing are ~11' apart, maybe more like 9' depending on how wide the base of the footing is underground. I've already dug down maybe a foot, but I'd need about 2 more feet to meet code I think, and I'm not sure if having the water heater in a pit would meet code anyway. Then there's the issue of accessing the base of the water heater for maintenance and repairs or something as simple as lighting the pilot (with the piezo trigger) and verifying it's lit (the current mini-pit makes this onerous).

It bugs me that I'll have to spend so much $$$ to get a new water heater but I can't come up with a good alternative solution that wouldn't cost almost as much as a good, clean solution.

And you have a vapor pit, those are dangerous. I don't think a WH in a pit would pass code around here without some sort of intentional ventilation.

And pits in general in the Piedmont area of the SE USA just don't work, sump or no sump.

 

[Sunset]

I could probably do a separate thread about it. Basically, the current water heater replaced the original lowboy one installed in 1972. The current one is very tall, and the exhaust piping doesn't have adequate room to go up and out, so it goes over with a slight down slope then back up and out. Also not a 3' clearance between the exhaust outlet on water heater up to first combustible material on house.
.................
I'm very curious about a cheaper alternative than what I've mentioned.

Why not install a lowboy like originally ?
Or even 2 lowboys joined in parallel , wouldn't really be twice the cost to heat as some folks would immediately think.

 

[scrabbler1]

.... One day my boss walked in and handed out big pay cuts to keep the thing afloat. Mine wound up be a 70% drop in income overnight.

This reminds me of a small "emergency" many years ago. When I first switched from working full-time to part-time back in 2001, my pay schedule also changed from straight salary to hourly. This meant that I would go from being paid when the current pay period ended to being paid on a 2-week lag. So I didn't receive a paycheck for that 2-week pay period and I would go 4 weeks between paychecks.

It didn't faze me at all, much to the relief (and surprise) of my boss who had to break the news to me only after I didn't get my expected paycheck (so I had no advance warning of this). It might have caused a small effect in my budgeting had the missed paycheck occurred just before my major monthly expenses occurred at the start of the month. But instead it occurred in the middle of the month when only my much smaller expenses (phone, cable TV, electric) occurred, so all it meant was that I couldn't invest any of my usual monthly surplus. And when I left the company 7 years later (and ERed), I got that money back in the form of an extra paycheck.

 

[kcowan]

Emergency fund requirements are different for a retiree than for someone who is still employed. Retirees (as confirmed by most of the posts so far) are generally concerned about household expense "emergencies" or unexpected health or dental bills.

When financial commentators recommend an emergency fund in cash, they are usually thinking of a job loss emergency. For people who are FI, ie retirees, the risks are different and usually a lot more manageable, I think.

Yes this is an ongoing problem with most threads. There should be be before/after ID on every poster. I agree that an emergency fund has different definitions and job loss is a crisis whereas medical/dental emergencies are just a planning error. If a retiree does not plan for medical and dental extra expenses, they are not very good planners. But it is a valid extra cost when it happens. But could never be classified as an emergency.

 

[lemming]

My car was stolen and I withdrew $$ to buy another. I had just quit working/lost job because of illness and was doing chemotheraphy treatments and felt like crap.
I waited nearly a month-just renting a car mostly not covered by insurance then bought a used car.
Had already mailed off my keys to Geico when the county police found my vehicle by using a camera that reads license plates as it goes by. Yes you are being watched but sometimes that is good. I can't say enough good about Geico-they were great and I kept my car-they repaired dent and detail cleaned the cigar/drug smoke out. I sold my Hondo Accord back to ENterprise-kind of wish that I kept it and had two cars. My little Volvo 40 was 7 years old at the time. But it is still going 6 years later...expensive to fix tho.

 

[FUEGO]

And you have a vapor pit, those are dangerous. I don't think a WH in a pit would pass code around here without some sort of intentional ventilation.

And pits in general in the Piedmont area of the SE USA just don't work, sump or no sump.

I think you're right. It would certainly raise eyebrows to a home inspector if we ever choose to sell. Also not sure that a plumber would install in such a setup, or that the gas company would bless the install if they ever peeked in my crawlspace.

Why not install a lowboy like originally ?
Or even 2 lowboys joined in parallel , wouldn't really be twice the cost to heat as some folks would immediately think.

I don't even think a lowboy (which would provide the 40 gallon capacity our family of 5 needs) would fit and meet code (3' between top of WH and lowest combustible material). Lowboys run about 3' and I'm dealing with 4.5-5' max from the bottom of my very shallow pit to the subflooring material (plumber said they measure to the subfloor if centered between floor joists).

And I can't find any gas lowboys anywhere. Apparently they stopped making them. An electric lowboy would fit and not have the exhaust issue, but I'd be looking at adding a 40+ amp circuit, and paying 3-4x for electricity vs gas (10 cent kWh vs $0.73 per ccf nat gas). An energy.gov cost comparison calculator suggests I'll pay $500/yr for electric WH vs $200/yr for nat gas (and that's with the less efficient tank WH, not the much higher efficiency tankless WH). $300 per year operating savings by going tankless.

 

[JoeWras]

And I can't find any gas lowboys anywhere. Apparently they stopped making them.

Yep. Efficiency concerns are one reason. The other is the built in vapor combustion baffles I mention. This requires space on the bottom, so essentially any "lowboy" configuration leaves very little room for the actual tank. They are drifting into relic status.

 

[FI by 2024]

Yes this is an ongoing problem with most threads. There should be be before/after ID on every poster. I agree that an emergency fund has different definitions and job loss is a crisis whereas medical/dental emergencies are just a planning error. If a retiree does not plan for medical and dental extra expenses, they are not very good planners. But it is a valid extra cost when it happens. But could never be classified as an emergency.

Failing to plan for dental cleanings and maybe a few crowns over a lifetime might be an error. Failing to plan for yearly checkups and diagnostic tests might be an error. But many medical costs could and should be considered an emergency. My sibling's cancer costs were over $300K in 3 months. An acquaintance suffered a car crash which left her paralyzed and her yearly rehab and nursing expenses are expected to be ~$80K, potentially for the rest of her life. That's the portion not covered by insurance - and she has pretty good insurance. Trust me, many medical costs cannot be planned for and are a crisis.

 

[ESRwannabe]

My largest emergency was when my POS car I had died on me and I needed a new one asap. I bought a nice new car in cash for around $16k something. I'm still driving it (11+ years so far).

When I did have an emergency fund I figured worst case scenario would be that I lose my job and it takes me a year to find a new one, and my car dies and I have to buy a new one in cash, and that I have to move across country to get a new job... For that I figured two years living expenses in cash would be enough.

I don't have cash right now as dividend income from taxable investments covers roughly 75% of current living expenses indefinitely (theoretically) or 100% if I were to expat in Mexico/Thailand/Philippines/etc.

 

[FUEGO]

But many medical costs could and should be considered an emergency. My sibling's cancer costs were over $300K in 3 months. An acquaintance suffered a car crash which left her paralyzed and her yearly rehab and nursing expenses are expected to be ~$80K, potentially for the rest of her life. That's the portion not covered by insurance - and she has pretty good insurance. Trust me, many medical costs cannot be planned for and are a crisis.

I agree that all those examples you mentioned would be "emergencies" or unpredictable costs (due to very low likelihood of occurence). Not sure that I would say "many" medical costs constitute emergencies. I certainly expect myself or someone in my family to be hospitalized at some point during our retirement, but I expect to pay mostly copays, deductibles, and coinsurance up to our out of pocket max ($500 currently; likely to be much higher in the future).

I'd lump long term care at a young age in with these other "emergencies" you list. I wouldn't be shocked to need LTC at 65+ but needing it while I'm in my 30's or 40's is statistically rather unlikely.

 

[Big_Hitter]

I agree that all those examples you mentioned would be "emergencies" or unpredictable costs (due to very low likelihood of occurence).

what happens if they need to take you to a hospital via air ambulance?

that's about $50K and I'm not sure your ACA metal plan will cover it

 

[FUEGO]

what happens if they need to take you to a hospital via air ambulance?

that's about $50K and I'm not sure your ACA metal plan will cover it

Yes, it's covered if medically required (not sure why the fact that it's sold through the ACA marketplace would make a big difference since I think it's minimum essential coverage??). When I called a while ago it was even covered overseas in the case of an emergency (of course subject to being out of network and we might be balance billed).

I guess there is some chance an air evacuation could be deemed non-medically necessary and the responsibility would fall on us to pay for the whole thing. Another example of an emergency. Though for a $50,000 charge, I'd hire an insurance adjuster/attorney to fight to have the claim allowed.

It's actually the very first listed coverage in my policy:

1. Ambulance Services
Emergency ambulance transportation by a licensed ambulance service (either ground or air ambulance)
to the nearest Hospital where Emergency Health Services can be performed.
Non-Emergency ambulance transportation by a licensed ambulance service (either ground or air
ambulance, as we determine appropriate) between facilities when the transport is any of the following:
• From a non-Network Hospital to a Network Hospital.
• To a Hospital that provides a higher level of care that was not available at the original Hospital.
• To a more cost-effective acute care facility.
• From an acute facility to a sub-acute setting.

 

[Big_Hitter]

I guess there is some chance an air evacuation could be deemed non-medically necessary and the responsibility would fall on us to pay for the whole thing.

A 9 mile flight from the ski hill to the hospital is about $50K, whether you break your neck skiing or go off a cliff driving up there. Happens several times a year.

They sell special insurance for it...

 

[FUEGO]

A 9 mile flight from the ski hill to the hospital is about $50K, whether you break your neck skiing or go off a cliff driving up there. Happens several times a year.

They sell special insurance for it...

I'm pretty sure that's covered under the terms of my policy I quoted. Nothing special about it (anyone can apply if you live in my zip code in NC).

It's part of the essential health benefits required as minimum essential coverage by the ACA.