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Healthcare budgeting for ER?
Old 05-07-2015, 02:29 PM   #1
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Healthcare budgeting for ER?

Hi guys and gals,

I just intro'd myself on "hi I am..." because I was hoping to learn more about how everyone budgets for healthcare in ER? I'm 38 and hope to retire (if everything remains on track &#128556 in 12 years. What I'm struggling a bit with is how to forecast what I will need, in terms of $$, for healthcare? I read an article on CNBC this morning that mentioned needing around $250k, I assume that meant from Medicare age to death...which they said was 87 for me and 89 for my DW. Obviously I assume I will need quite a bit more since I'm trying to retire at 50. Sorry for being long winded but I was just wondering a couple of things.

1) does that figure sound right?
2) how much do you guys plan to spend on healthcare in retirement?

Thanks in advance for any help.
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Old 05-07-2015, 03:37 PM   #2
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Quote:
Originally Posted by valueplayer View Post
Hi guys and gals,

I just intro'd myself on "hi I am..." because I was hoping to learn more about how everyone budgets for healthcare in ER? I'm 38 and hope to retire (if everything remains on track &#128556 in 12 years. What I'm struggling a bit with is how to forecast what I will need, in terms of $$, for healthcare? I read an article on CNBC this morning that mentioned needing around $250k, I assume that meant from Medicare age to death...which they said was 87 for me and 89 for my DW. Obviously I assume I will need quite a bit more since I'm trying to retire at 50. Sorry for being long winded but I was just wondering a couple of things.

1) does that figure sound right?
2) how much do you guys plan to spend on healthcare in retirement?

Thanks in advance for any help.
Is that supposed to be a nominal $250k in future dollars? Don't confuse it and think you need to start retirement with $250k and then not touch it as it grows over the years - because that would then be a very big number! I'd imagine that they are using nominal dollars....which means you'd only need to retire today at age 50 with much less, and as it grows and time goes by, the earnings and principal would pay for your expenses.
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Old 05-07-2015, 04:06 PM   #3
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I am planning on 25k / year for DH and I. I do not reduce it once I hit Medicare age as I believe other expenses, or HC inflation, will take up the slack.

I created my plan using healthcare.gov. I assumed no subsidy and I assumed that both DH and I will hit our out of pocket maximum every year.

In other words, I've budgeted the worst case scenario. I hope to never w*rk again and budgeting for (current) worst case allows me to sleep at night.
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Old 05-07-2015, 04:08 PM   #4
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That $250K estimate sounds like the one from Fidelity. It's been discussed often here. Here's a long thread, a few years old but still relevant Average Health Care Costs in Retirement
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Old 05-07-2015, 04:25 PM   #5
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Unfortunately, health care costs long term cannot be accurately predicted.

Healthcare costs continue to go up faster than general inflation, and it's doubtful it's going to level off. Throw in the recently implemented government mandated healthcare, and the future premiums are expected to skyrocket there.

I hear of healthcare premiums young retirees are paying, and I just cannot believe they can cash flow it. I was very fortunate to have 6 years of great coverage through my company. I went on Medicare supplement last month, and my costs are reducing about $250 per month.

Everyone should have a full physical yearly including a chest x-ray and men a PSA test. Those over 50 should have a colonoscopy every 5 years, and ladies a mammogram and PAP smear yearly. If there are problems, maybe they can be spotted quick.

My wife's uterine cancer was spotted quickly, or she'd be dead. Our niece ignored her healthcare and we buried her of uterine cancer last May.

All you can do is save up as much as you can for healthcare and sit on the money--if it's ever needed. And if you're still working and have a Healthcare Savings Account available--put every cent you can into it.
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Old 05-07-2015, 04:27 PM   #6
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Originally Posted by MooreBonds View Post
Is that supposed to be a nominal $250k in future dollars? Don't confuse it and think you need to start retirement with $250k and then not touch it as it grows over the years - because that would then be a very big number! I'd imagine that they are using nominal dollars....which means you'd only need to retire today at age 50 with much less, and as it grows and time goes by, the earnings and principal would pay for your expenses.

That makes a lot of sense, thx
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Old 05-07-2015, 04:29 PM   #7
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Originally Posted by Live And Learn View Post
I am planning on 25k / year for DH and I. I do not reduce it once I hit Medicare age as I believe other expenses, or HC inflation, will take up the slack.

I created my plan using healthcare.gov. I assumed no subsidy and I assumed that both DH and I will hit our out of pocket maximum every year.

In other words, I've budgeted the worst case scenario. I hope to never w*rk again and budgeting for (current) worst case allows me to sleep at night.

2k a month was about what I was budgeting too..worse case planning is best. Thanks
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Old 05-07-2015, 04:30 PM   #8
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Quote:
Originally Posted by valueplayer View Post
CNBC this morning that mentioned needing around $250k, I assume that meant from Medicare age to death...which they said was 87 for me and 89 for my DW. Obviously I assume I will need quite a bit more since I'm trying to retire at 50. Sorry for being long winded but I was just wondering a couple of things.

1) does that figure sound right?
2) how much do you guys plan to spend on healthcare in retirement?

Thanks in advance for any help.
Is this the article, 3 ways to avoid high health-care costs in retirement

This report was linked, https://www.hvsfinancial.com/PublicF...ta_Release.pdf

It doesn't sound right to me. My experience with elderly relatives is they pay very little with medicare and supplemental insurance. That is more money than most of them have ever seen. Now if it is including assisted living/nursing home expense then that may not be enough. The articles don't seem to give a good account of what the expense actually are.
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Old 05-07-2015, 04:30 PM   #9
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Originally Posted by Bamaman View Post
Unfortunately, health care costs long term cannot be accurately predicted.

Healthcare costs continue to go up faster than general inflation, and it's doubtful it's going to level off. Throw in the recently implemented government mandated healthcare, and the future premiums are expected to skyrocket there.

I hear of healthcare premiums young retirees are paying, and I just cannot believe they can cash flow it. I was very fortunate to have 6 years of great coverage through my company. I went on Medicare supplement last month, and my costs are reducing about $250 per month.

Everyone should have a full physical yearly including a chest x-ray and men a PSA test. Those over 50 should have a colonoscopy every 5 years, and ladies a mammogram and PAP smear yearly. If there are problems, maybe they can be spotted quick.

My wife's uterine cancer was spotted quickly, or she'd be dead. Our niece ignored her healthcare and we buried her of uterine cancer last May.

All you can do is save up as much as you can for healthcare and sit on the money--if it's ever needed. And if you're still working and have a Healthcare Savings Account available--put every cent you can into it.

Thanks for the insight, unfortunately no HSA option for me.
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