Retch The Grate
Full time employment: Posting here.
So, one of my big questions marks for my FI planning is health care costs. Between insurance premiums and out of pocket payments it seems like I need to expect a huge number that gets even larger after I retire.
I'm skeptical that Medicare will persist in being sufficient coverages, so I'm assuming I need to fund my own care for my entire life, and my horizon is out far enough that the years of outsized rate increases seem to imply it will cost more than anybody can afford... Clearly there is some point where it simply isn't affordable.
Anyhow, that leaves me juggling things like estimating $5000 a year for paying all of a high deductible + an additional $3000 a year in premiums, to figuring I need $1500 a month to cover out of pocket expenses as well as massively inflated premiums (my perception of insurance costs for older folks is more in the $400-500 a month range already with plenty of inflation to occur before I am at FIRE stage).
Anybody have thoughts or suggestions for the long term look at medical expenses, and how to figure out what is reasonable to budget for? If I use my low estimate of $8k, and the 4% SWR it needs $200,000 to fund that portion of FIRE (not including the fact that I have to pay taxes on the income which means it needs even more supporting it), but if I take the upper number and a the paranoid SWR of 3% it turns into $600,000 which is a big jump in portfolio size to have to reach...
I'm skeptical that Medicare will persist in being sufficient coverages, so I'm assuming I need to fund my own care for my entire life, and my horizon is out far enough that the years of outsized rate increases seem to imply it will cost more than anybody can afford... Clearly there is some point where it simply isn't affordable.
Anyhow, that leaves me juggling things like estimating $5000 a year for paying all of a high deductible + an additional $3000 a year in premiums, to figuring I need $1500 a month to cover out of pocket expenses as well as massively inflated premiums (my perception of insurance costs for older folks is more in the $400-500 a month range already with plenty of inflation to occur before I am at FIRE stage).
Anybody have thoughts or suggestions for the long term look at medical expenses, and how to figure out what is reasonable to budget for? If I use my low estimate of $8k, and the 4% SWR it needs $200,000 to fund that portion of FIRE (not including the fact that I have to pay taxes on the income which means it needs even more supporting it), but if I take the upper number and a the paranoid SWR of 3% it turns into $600,000 which is a big jump in portfolio size to have to reach...