Is healthcare delaying your retirement decision?

[Carpediem]

Just curious to find out how many of us are in the same HI boat....floating aimlessly in the sea of confusion and uncertainty of what the future of HC looks like. Are you delaying your retirement decision until you have an affordable/workable healthcare solution?

For me, I would retire tomorrow if HI was more affordable.

 

[fh2000]

Yes. DW and I have no pension, so we will have to look into COBRA for 18 months, then look into marketplace for few years. With the uncertainty we are facing right now, we are hesitant to pull the trigger.

 

[2017ish]

We are jumping anyway. COBRA through end of 2018 (If her employer continues offering spouse coverage, at least), then have a bunch penciled in for health in the years after 59. (and also have highly discretionary spending planned, which can be diverted away from more fun and equally expensive endeavors.)

Hopefully we'll have health insurance policies of some type available to us in our present location; otherwise, we could move.

Worst case, we continue working with our inflexible jobs. Second worst case, I could come back to work after having 18 months of highly flexible, longer-stay international travel.

 

[CaliKid]

This is a big one for us. We still have kids at home so it would be expensive. I'll probably keep working, at least in some capacity to get benefits, for more years than I want to. The health insurance is definitely a big factor.

 

[Big_Hitter]

is this a pole?

 

[travelover]

is this a pole?

This is a pole.

 

[euro]

Fortunately, I accumulated retiree health benefits at my mega before I FIRED, so for now we are good unless they decide to pull the plug at some point (not totally unheard of...). We'd be in big trouble as both, my DW and I (as well as one of our two kids) have preexisting chronic diseases to deal with.
We do have the option of moving to Europe, as a worst-case scenario. Well, maybe not THAT bad a scenario, but not our preference at the moment.

 

[Markola]

Yeah, it's a big deal for us. According to this, Individual policies are running $300-$500/ month while family policies are $1000 - $1500/ month. And climbing. I have not looked into the ACA, because we don't plan to FIRE until 2020, so we'll see what the landscape is then. DW is a federal worker and would qualify us to buy into federal insurance then, though changes to current rules might well be afoot in DC.
https://www.zanebenefits.com/blog/bid/97380/faq-how-much-does-individual-health-insurance-cost

 

[Carpediem]

We are jumping anyway. COBRA through end of 2018 (If her employer continues offering spouse coverage, at least), then have a bunch penciled in for health in the years after 59. (and also have highly discretionary spending planned, which can be diverted away from more fun and equally expensive endeavors.)

We could go the COBRA route for 18 months as well but (1) it's basically the same price - or more - as the current ACA offerings we have to choose from, and (2) that would only get me to age 60 - 5 more years to Medicare. To your point though, one would HOPE that the current healthcare debate would be resolved over the next 18 months.

 

[2017ish]

We could go the COBRA route for 18 months as well but (1) it's basically the same price - or more - as the current ACA offerings we have to choose from, and (2) that would only get me to age 60 - 5 more years to Medicare. To your point though, one would HOPE that the current healthcare debate would be resolved over the next 18 months.

Yeah, this COBRA is probably more than an ACA-compliant individual policy here as well (100 employees, bad underwriting history). But wanted to mostly guarantee 2018, as our zipcode may not have compliant individual policies at that point. (Also could go non-compliant policy before deciding to "move," but keeping options open.)

Unfortunately, to set this all in motion, this year we had to switch from my employer's cadillac-type plan to DW's marginally acceptable employer plan, as we are too small for COBRA.

 

[Katiek]

I'd have the right to purchase healthcare through my company until I turn 65. While that's a limited benefit since I'm paying for the whole policy, getting it through a group plan and knowing I'd have coverage is reassuring and I was happy to reach the qualifying age.

 

[rodi]

When I first started planning my ER ACA was in progress of negotiation and not in place (or passed) yet. I was very nervous - especially about pre-existing conditions. I budgeted for 120% of what COBRA would cost.

ACA passed and I got less nervous - but still used cobra for the remainder of the year I retired... turns out COBRA was a better deal since I'd earned enough money to have no subsidies available.

I'm on my third year of an exchange plan and am getting nervous again. But - DH is on medicare now so that has reduced some of the risk. I have no pre-existing conditions. One teenage child had an issue this past year that might be classified as a one-off, or as a pre-existing condition... so I hope, going forward, we'll be able to get insurance with no regard to pre-existing conditions.

I'm fortunate to live in San Diego where we have real healthcare competition and plenty of choices on the exchange. Molina, Healthnet, Sharp, Anthem, Blue of California, and Kaiser Permanente.

 

[FIREmenow]

Yes. If we wait 18 more months (a veritable eternity), we will get ~$500/mo toward healthcare for the next 10 years. Hard to pass up.....

 

[tinlizzy]

Yes. I'm lucky in that I will get healthcare along with my pension until age 65 but the terms have changed in the last 8 years. Free, no lifetime limit, age 50 became $50/$100 per month, no lifetime limit, age 50 became $50/$100 a month, $200,000 annual limit, age 50 became $100/200 a month, $200,000 annual limit, age 52 and finally it's now $200/$400 a month, $200,000 annual limit, age 52. And that's just in the last 8 years in the Midwest. Employees in other areas the age for retire insurance has risen to 55 or 57 with a $500,000 lifetime cap.

 

[Car-Guy]

No, it didn't but that was 5+ years ago. Still wouldn't today. Even with higher rates, in the overall scheme of annual expenses, it's round off in my case. YMMV

 

[Curmudgeon]

Yes, absolutely. We're actually already retired, but if Obamacare goes away, and Congress continues to do nothing about reducing the cost of healthcare (which is a safe bet), then we'll be forced back to work just to be able to afford HC.

 

[InTheSticks]

I retired one year ago. My wife and I are on an ACA plan. Last year, we had 3 choices for companies. This year, one, Anthem BCBS. So, we might not have any choices next year. I told some friends that are in the process of ER that if I was in the position to ER now, I probably would not ER due to HI. I would wait at least one year to see what happens to HI.

Fortunately, January 2019 my wife qualifies for Medicare. That leaves just me trying to find a policy.

 

[Geld ist Freiheit]

Yes.
If the company would continue my HI arrangement until Medicare eligibility, I'd take a VLO tomorrow.

 

[Carpediem]

I told some friends that are in the process of ER that if I was in the position to ER now, I probably would not ER due to HI. I would wait at least one year to see what happens to HI.

^^^ That's exactly my mindset. My current projected ER budget includes over $20k per year for HC and I'm not sure if that's enough so OMY. It's so hard balancing the decision of OMY for HC versus our time in this life is short and precious....and getting shorter everyday.

 

[pb4uski]

When I first retired in late 2011, I planned to pay about $900/month for the two of us... which was my COBRA cost. At the time, I just considered the $10,800/year cost as part of the cost of freedom from work.

It has turned out to be much better. The first two years I was able to have my consulting business buy small employer group coverage through our state Chamber of Commerce at ~$550/month for two IIRC. We had an ACA plan for the next 6 months and then were able to qualify for catastrophic coverage even though we were under 30 and by luck since in our state health insurance is not age rated it is very affordable... currently ~$480/month for two.

Also, luckily, we have both been very healthy and have had less than $3k in claims in any year. No idea what the next few years will be, but Medicare is only 3 years away.

 

[Carpediem]

....since in our state health insurance is not age rated it is very affordable... currently ~$480/month for two.

Is the state you mention VT or FL? We've considered a move to FL just for HC reasons.

 

[Ed B]

The cost of HI has been a big concern for me until very recently. I had considered our company retiree health insurance options to be absurdly expensive with the less expensive choice being a 60/40 split after the $2k deductible is met ($2k/per person). But after seeing what else is out there and after looking more closely at the retiree policy, I realized I could budget for it. It has a $2k deductible but a $4K Out Of Pocket (OOP) max for an individual and $8k OOP max for the family. The premium for family care is $1100 per month this year. That is a lot but I can budget for it. The $4k OOP max is what makes it work for me.

If not for these healthcare expenses my budget for monthly expenses at ER would be about $3600 per month. I am looking forward to a nice boost in disposable income when I hit Medicare age... but that is true for most of us.

 

[Just_Steve]

If it were not for the HI component of my retiree benefits I would still be w@rking.

 

[simple girl]

To a certain degree, it did - I've been really worried about this.

However, we were also motivated to delay hubby retiring until the year he turns 55 so that we can pull from his 401K if our taxable account runs low in the early years. So our delay wasn't just due to healthcare coverage issues.

He turns 55 next year. I've crunched numbers the best I can, and I think we are ready to take the leap. Possible outcomes:

1) Best outcome: subsidies continue and we have more than enough money for HC

2) OK outcome: no subsidies but we can afford the premiums and out of pocket costs (I've run all of my numbers based upon this.)

3) worse outcome: healthcare becomes unaffordable to us, we run too low on money and have to go back to work

4) worst outcome: we delay FIRE and one of us croaks early with a big stash of money we never enjoyed together, ie. we go home with the idol in our pocket...


So, once I realized I can't predict the future and would regret #4 the most, I have become more comfortable pulling the FIRE trigger in 2018. Hubby is in agreement, especially having recently lost 2 co-workers to the grim reaper.

I may continue my part-time gig for a few more years, but I really want hubby to be able to retire. He's worked hard and long enough.

In a game of unknowns, to me, it's about what outcome you would you regret most.

 

[Carpediem]

To a certain degree, it did - I've been really worried about this.

However, we were also motivated to delay hubby retiring until the year he turns 55 so that we can pull from his 401K if our taxable account runs low in the early years. So our delay wasn't just due to healthcare coverage issues.

He turns 55 next year. I've crunched numbers the best I can, and I think we are ready to take the leap. Possible outcomes:

1) Best outcome: subsidies continue and we have more than enough money for HC

2) OK outcome: no subsidies but we can afford the premiums and out of pocket costs (I've run all of my numbers based upon this.)

3) worse outcome: healthcare becomes unaffordable to us, we run too low on money and have to go back to work

4) worst outcome: we delay FIRE and one of us croaks early with a big stash of money we never enjoyed together, ie. we go home with the idol in our pocket...


So, once I realized I can't predict the future and would regret #4 the most, I have become more comfortable pulling the FIRE trigger in 2018. Hubby is in agreement, especially having recently lost 2 co-workers to the grim reaper.

I may continue my part-time gig for a few more years, but I really want hubby to be able to retire. He's worked hard and long enough.

In a game of unknowns, to me, it's about what outcome you would you regret most.

Great post! Thank you.