Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 08:27 AM   #21
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 1,375
Re: Uh oh---anxiety after one week of FIRED!

tango, I have similar fears. While that didn't stop me from retiring on 1/3 of your wealth, DH is still working (at a low-stress job with lots of time off) to provide group health and let our stash grow a little longer.

I control the fear pretty well by making backup plans. For example, our basic expenses are less than 3% of our portfolio (this includes $1500/month for health care). The frills add up to another 2%, which will be provided by Social Security eventually, but I have a CD ladder to cover SS-level payments from now to age 62. If necessary, I could maintain this CD ladder after DH's retirement (or turn it gradually into something a little more liquid) to provide additional health funds, even though I already have a large emergency fund. We could also downsize our mortgage-free house, manage on one car, and so on.
__________________

__________________
You can't always get what you want, but if you try sometimes, you might find you get what you need.
astromeria is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 08:36 AM   #22
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: Uh oh---anxiety after one week of FIRED!

Tango, do the analysis and then forget about it for a while.

It will take some time to adjust to being retired, especially as you are a worrier.

*
__________________

__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 08:52 AM   #23
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by tangomonster
Also keep in mind that my parents lived into their nineties. The safe withdrawal rate thing is for 30 years. We've retired at 52. May have 40 more years of living to fund.
Tango,

First, you are not paying more for health insurance than many others here. $1500 per month is not unheard of, as Astro knows.

Second: a 4% SWR is probably good indefinitely. If you need even less, you are very unlikely to ever have to tap out your savings. You are there. I repeat. You are there. It's yours to enjoy as long as you avoid any really bad decision.

Nuf said .
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 10:38 AM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,263
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by sgeeeee
Well . . . the leading cause of bankruptsy in the US is unpaid medical bills,
That study is often misquoted. The unpaid medical bills were not necesarily the cause of the bankruptcy. They just lumped anyone with an unpaid medical bill into that category.

Not that it isn't a major problem for some, but that report throws it all out of wack.

Quote:
http://www.nationalreview.com/commen...0502110735.asp

Buried in the study is the fact that only 27 percent of the surveyed debtors had unreimbursed medical expenses exceeding $1,000 over the course of the two years prior to their bankruptcy. Presumably 73 percent — the vast majority — had medical expenses during that two-year period of $1,000 or less. Had that figure been recited up front, it would have been obvious that the proportion of bankruptcies driven by unmanageable medical debt was nowhere near half.
There is much more debunking in the full article.

Oh, it's OK with me if you don't like the 'National Review' - look at the content and see if you disagree with what is reported, rather than where it comes from. It has been reported elsewhere, but it is tough to Google this due to the repetition of the article without the critique.

-ERD50
__________________
ERD50 is online now   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 10:47 AM   #25
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 473
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by tangomonster
But the stressor that won't go away is health insurance.*
Last year I got a BC HMO high deductible ($10,000) policy that was $120 a month.* DH couldn't qualify for it and had to get a* conversion policy that is about $700 a month.*

Today I already received a notice from BCBS that my policy will be raised to $150 a month---over a 20% increase.* Still affordable.* But 20% increases for both our policies over the next 13 years until we get Medicare is very scary.* Right before Medicare kicks in, we may be paying $100,000 a year for health insurance!
Well, ordinarily it would be a perfectly reasonable thing to worry about. However, let's do the math to see how it affects your specific situation.

You are starting out with $10K/y budgeted for health insurance purposes plus whatever out of pocket expenses you may incur. Assuming 20% increases on top of regular inflation:

Years - Premiums ($K) - Cumulative ($K)

1 - 12 - 12
2 - 14 - 26
3 - 17 - 44
4 - 21 - 64
5 - 25 - 89
6 - 30 - 119
7 - 36 - 155
8 - 43 - 198
9 - 52 - 250
10 - 62 - 312
11 - 74 - 386
12 - 89 - 475
13 - 107 - 582

So that's $475K total that you will have to pay in today's dollars or $582K if you count another year (just to be on the safe side). Fairly significant, but still only $0.5mil out of $4mil, so it won't affect your retirement. If you up 20% to 25%, it puts the total at $678-859K, which should still be perfectly manageable.
__________________
Scrooge is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 10:57 AM   #26
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by ERD50
That study is often misquoted. The unpaid medical bills were not necesarily the cause of the bankruptcy. They just lumped anyone with an unpaid medical bill into that category.

Not that it isn't a major problem for some, but that report throws it all out of wack.

There is much more debunking in the full article.

Oh, it's OK with me if you don't like the 'National Review' - look at the content and see if you disagree with what is reported, rather than where it comes from. It has been reported elsewhere, but it is tough to Google this due to the repetition of the article without the critique.

-ERD50
This all refers to a Harvard study about medical issues and bankruptcy.* The study abstract says:

"In 2001, 1.458 million American families filed for bankruptcy. To investigate medical contributors to bankruptcy, we surveyed 1,771 personal bankruptcy filers in five federal courts and subsequently completed in-depth interviews with 931 of them. About half cited medical causes, which indicates that 1.9-2.2 million Americans (filers plus dependents) experienced medical bankruptcy. Among those whose illnesses led to bankruptcy, out-of-pocket costs average $11,854 since the start of illness; 75.7 percent had insurance at the onset of illness. Medical debtors were 42 percent more likely than other debtors to experience lapses in coverage. Even middle-class insured families often fall prey to financial catastrophe when sick."

A subsequent review through the US Trustee's office of bankruptcy petitions showed 78% of bankruptcy petitions list medical debt of less that $5000. So it is difficult to figure out how much medical bills contribute to bankruptcy.

However, there are plenty of people that have so little that garnishment of wages resulting from a $5000 medical bill can send them into bankruptcy.* Also, even if medical bills are paid by insurance, the medical problems can mean loss of time from work that might not be paid or even the loss of a job.* Also, people live on such tight budgets that the slightest little slip can mean a bankruptcy.* So if you are living on the edge, anything can tip you over.

But of course, this doesn't apply to Tango, who is living far from the edge.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 12:41 PM   #27
Full time employment: Posting here.
tangomonster's Avatar
 
Join Date: Mar 2006
Posts: 756
Re: Uh oh---anxiety after one week of FIRED!

Thanks everyone (with the exception of Cutthroat, with your lovely comments about my being a troll or mentally ill and beating to death on this topic---with only 44 posts and some on other topics, I didn't think I was posting too much). Just needed that reassurance, but I think I'll be okay. Had lunch with a former co-worker and realized I made the right decision to RE since I wasn't even interested in hearing any of the gosspi or news about work!

Scrooge, your analysis was similar to what I came up with myself, so I really appreciate that. I came to the same conclusions, but didn't know if I was using faulty logic or numbers. And you're right- $500,000 is a lot of money, but so worth it to have 13 years of freedom!
__________________
“It is not a sign of good health to be well adjusted to a sick society”.------Krishnamurti
tangomonster is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 01:04 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,380
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by tangomonster
And you're right-* $500,000 is a lot of money, but so worth it to have 13 years of freedom!
It is also impossible that real medical costs could escalate 20% per year for the next 13 years. While you could pay for it, almost no one else could- and that includes giant corporations that buy it in bulk.

Some time ago I did an analysis that showed that it is mathematically impossible for a service sector which is part of the overall economy to grow markedly faster than the other parts taken in the aggregate.

If I use a 20% rate of increase for healthcare, and 5% for the economy as a whole, healthcare becomes over half the economy in just 10 years or so.

You head it here first-if something can’t happen, it won’t happen.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 01:16 PM   #29
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 473
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by tangomonster
And you're right-* $500,000 is a lot of money, but so worth it to have 13 years of freedom!
Well, it's all relative. $500K is a lot of money to most people with average incomes, which I believe described you as well while you were practicing LBYM. However, it's only 12.5% of your retirement money and you can easily live off 87.5% of what you have. It can be hard to accept that $500K is nothing to worry about, but one way of handling it would be to set it aside and say "OK, from now on we are living off out nest egg of $3.5mil. The rest is earmarked for health care."

Also, if you are a worrier, you may want to get out of any potentially volatile investments now that you are done with the "saving" phase. Inflation-adjusted 1-2% on $3.5mil is $35-70K/year, which should cover your apparently basic needs nicely while preserving your capital.

Quote:
It is also impossible that real medical costs could escalate 20% per year for the next 13 years. While you could pay for it, almost no one else could- and that includes giant corporations that buy it in bulk.
Although it's true that real medical costs can't realistically rise 20% for everybody for the next 13 years, they may well rise very rapidly for a randomly selected couple depending on its pre-existing conditions and other parameters. And that on top of the fact that rates are generally higher for 64 year olds than for 52 year olds.
__________________
Scrooge is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 01:33 PM   #30
Full time employment: Posting here.
tangomonster's Avatar
 
Join Date: Mar 2006
Posts: 756
Re: Uh oh---anxiety after one week of FIRED!

Scrooge, we're not in any volatile investments (our days of individual stocks are over, just mutual funds---don't know if you consider some growth funds volatile, like we have Fidelity Diversified International, but at least it's not in just one country/region). Even though we're risk-averse, we realize that we need to continue to keep half the portfolio in growth even in retirement.

I geuss at some point, as the premiums get up to $100,000 a year, we will need to decide if we want to just self-insure and pay completely out of pocket since our medical expenses would be unlikely to be close to $100,00 (hopefully not!). The issue would be catastrophic events---
We like our umbrella policy under our homeowners policy---for a few hundred dollars a year, we're protected to 4 million. If only we could find a similar health insurance!

Time Magazine a couple of months ago had an article about medical tourism. Looks pretty tempting and a lot of companies are beginning to arrange it. An example was cardiac surgery in India for a total of $9,000---would have been more like $60,000 here! Supposedly many of the doctors are US and UK trained (and 25% of doctors practicing in the US are not US trained). Could be worth considering....
__________________
“It is not a sign of good health to be well adjusted to a sick society”.------Krishnamurti
tangomonster is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 02:11 PM   #31
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 473
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by tangomonster
Scrooge, we're not in any volatile investments (our days of individual stocks are over, just mutual funds---don't know if you consider some growth funds volatile, like we have Fidelity Diversified International, but at least it's not in just one country/region).
We are talking about http://personal.fidelity.com/product...html?315910802 , right? If so, it's an international stock fund and can be volatile. Nothing wrong with that, just something to keep in mind when balancing volatility, risk aversion, long temr returns, etc.

Quote:
Even though we're risk-averse, we realize that we need to continue to keep half the portfolio in growth even in retirement.
The good thing about your situation is that you probably don't need to any more. You could put all your money in 4 week T-bills and still be fine. Whether that's what you want to do is up to you to decide

Quote:
I geuss at some point, as the premiums get up to $100,000 a year, we will need to decide if we want to just self-insure and pay completely out of pocket since our medical expenses would be unlikely to be close to $100,00 (hopefully not!).
I would be very careful with self-insurance. To quote SteveR:

Quote:
Hospital bill for two visits; one visit for surgery and a four day stay.
Second visit a few days later due to a complication for and additional 6 days.
$97,500

Surgeon fee $17,800
__________________
Scrooge is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 02:58 PM   #32
Thinks s/he gets paid by the post
 
Join Date: Feb 2006
Posts: 1,183
Re: Uh oh---anxiety after one week of FIRED!

Novel idea time... Head into the local mega non-profit hospital facility (i.e. university med school type) and ask to meet with the philantrophy department. I bet you could strike a deal to create a lifetime healthcare plan in return for a healthy non-revocable testamentary trust. Would be great if you could get them to provide services to FIRE'd only! Also, might be very advantagous tax wise if structured with annual donations? I leave that to the tax pros to discuss/debate. Just one of many novel thoughts from my mind!
__________________
crazy connie is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 03:13 PM   #33
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by crazy connie
Novel idea time... Head into the local mega non-profit hospital facility (i.e. university med school type) and ask to meet with the philantrophy department. I bet you could strike a deal to create a lifetime healthcare plan in return for a healthy non-revocable testamentary trust. Would be great if you could get them to provide services to FIRE'd only! Also, might be very advantagous tax wise if structured with annual donations? I leave that to the tax pros to discuss/debate. Just one of many novel thoughts from my mind!
Connie,

It's an admirable thought and they would be glad to take your money, and you might even get VIP treatment. But hospitals are pretty stretched financially, too, and besides they only handle one aspect of health care. Lots are out of their control: professional fees, outside labs, etc.

And remember that even a single catastrophic illness can end up costing half a million bucks.

Still, I like the way you thing... .
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 03:28 PM   #34
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by Rich_in_Tampa
Still, I like the way you thing... .
C'mon, Doc. Get a room...

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 03:43 PM   #35
Thinks s/he gets paid by the post
 
Join Date: Feb 2006
Posts: 1,183
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by REWahoo!
C'mon, Doc.* Get a room...

Nahhhhhhhhh he can save his money. I have not the desire to play with anothers spouse. Now when I find a single FIRE man... Paint your own picture!!!
__________________
crazy connie is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 03:46 PM   #36
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by REWahoo!
C'mon, Doc. Get a room...
Hey, I'm up to my a#$ in blood and guts, here. Every try typing with one hand while you're doing CPR with the other? Huh?

PS: actually, it was one of those days with wall-to-wall meetings and paperwork, and almost no patient care. Can't wait til tomorrow when I can return to stomping out illness.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 03:48 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by Rich_in_Tampa
Every try typing with one hand
What kind of medicine do you practice?
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-02-2006, 04:52 PM   #38
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Re: Uh oh---anxiety after one week of FIRED!

Rich actually has his medical transcriptionist typing up his "notes" into the forum. Problem is, he's got that messy Dr. handwriting that no one can read! Hence all the misspellings...
__________________
justin is offline   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-03-2006, 10:48 AM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,457
Re: Uh oh---anxiety after one week of FIRED!

How could premiums get up to $100,000 a year and yet medical expenses be less than that?

If premiums were $100,000 a year - no one could afford it!

I think you need to rachet down the worst case scenario here and then set aside funds.

Really 13 years to medicare ain't that long.

Now long term care could cost $100,000 a year - but since you wouldn't be spending much on anything else, maybe that is no big deal. Might put a pinch on the spouse though!

There you go - worry about your potential long term care costs.

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Re: Uh oh---anxiety after one week of FIRED!
Old 08-03-2006, 11:22 AM   #40
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 473
Re: Uh oh---anxiety after one week of FIRED!

Quote:
Originally Posted by audreyh1
How could premiums get up to $100,000 a year and yet medical expenses be less than that?
Premiums reflect your insurance company's likely future expenses. Since the OP's DH has had some medical problems, including cancer and neurofibromatosis, their insurance company estimates that these expenses can be significant and structures its premiums/benefits accordingly.

Quote:
If premiums were $100,000 a year - no one could afford it!
Well, it's not like everybody's premiums will be $100K/y 13 years from now. However, if you have pre-existing conditions that make it likely that your health care expenses will be significant, then the money to pay for them will have to come from somewhere, either from your own premiums or from other people's premiums.

There are "guaranteed issue" and "community rating" states where the law generally mandates equal premiums regardless of pre-existing conditions, which is a good deal for people who have them. If the OP had less money in the bank, then moving to one of these states might be worth considering. However, laws change all the time, so it wouldn't be a 100% guarantee and, besides, the OP should be able to absorb the extra cost.
__________________

__________________
Scrooge is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Professor Fired Over Va. Tech Discussion - Victimhood dex Other topics 3 04-24-2007 03:59 PM
Update week two of my 13 week sentence in Newark,NJ newguy88 Life after FIRE 14 09-17-2006 04:44 PM
The week time stood still cj Life after FIRE 21 04-28-2006 10:32 AM
My Wife's retirement, week one laurence Life after FIRE 9 04-24-2006 05:54 PM
FIREd people we have met preben Life after FIRE 48 03-31-2005 02:12 PM

 

 
All times are GMT -6. The time now is 10:39 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.