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Not so cheerful study results
Old 03-27-2009, 08:42 AM   #1
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Not so cheerful study results

BOSTON (Reuters) – Healthcare costs are chewing up more of retirees' savings in the United States, with a 65-year-old couple retiring this year needing $240,000 to cover medical costs over the rest of their lives, a study showed.

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U.S. retiree healthcare costs seen up this year
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Old 03-27-2009, 08:44 AM   #2
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What a headline. Right up there with "the sky is blue" and "the sun rose in the east yesterday"...
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Old 03-27-2009, 10:28 AM   #3
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What a headline. Right up there with "the sky is blue" and "the sun rose in the east yesterday"...
Good one, more poetic than I was thinking.

My health care premium for one person multiplied times 25 = 164,000, so frankly this story is not all that scary. Many of us on this forum make sure we have enough in our PFs to cover those expenses.
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Old 03-27-2009, 11:20 AM   #4
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Well it will get better when we get universal health care. Right.
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Old 03-27-2009, 11:32 AM   #5
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Well it will get better when we get universal health care. Right.

Um, I don't think so. We'll have a basic level of care, but the most advanced, cutting-edge will suffer. This is why wealthy people in countries with socialized medicine still come to the U.S. for life-saving treatment.

Rather than universal health care, I'd be more inclined to push preventative medicine (e.g., exercise, diet, etc...) I've heard that preventative medicine can prevent or delay 30%-40% of the most common diseases that strike later in life. Such a drop in treatable conditions would probably result in savings of hundreds of billions of dollars a year. Unfortunately, most people would rather take a pill than lift a dumbbell.

U.S. Preventive Medicine - U.S. Preventive Medicine: Healthcare Savings More if Productivity Taken Into Account

According to the 2007 Milken Institute report, An Unhealthy America: The Economic Burden of Chronic Disease, the implementation of a national effort focused on prevention, early detection and chronic disease management could save the country hundreds of billions annually, with savings surpassing a trillion dollars annually in about 15 years.
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Retirees Need $240K Savings to cover Healtcare
Old 03-29-2009, 01:51 PM   #6
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Retirees Need $240K Savings to cover Healtcare

Kinda a staggering number. Data from new Fidelity study for 65 yr old couple with life expectancy of 17 for DH and 20 yrs for DW. The $240K is in ADDITION to Medicare coverage. Estimated cost for retirees has gone up 50% since 2002.

Not sure if the 4% withdrawal strategy has this type of cost in it.

Full article at Inside Fidelity
Related article at WSJ (free)
Retirees May Need Even More Money for Medical Expenses - The Wallet - WSJ

This article added that "What’s even more sobering than the big chunk of money involved is what it covers-–and what it doesn’t. Mr. Patel says that 29% of those savings are needed by the average couple to pay premiums for Medicare Part B, which covers doctor visits and other outpatient costs, and the Medicare Part D prescription-drug plan. Another 41% goes toward Medicare copayments, deductibles and other cost-sharing provisions. The remaining 30% goes toward prescription-drug costs not covered by Medicare Part D"
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Old 03-29-2009, 02:18 PM   #7
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Kinda a staggering number. Data from new Fidelity study for 65 yr old couple with life expectancy of 17 for DH and 20 yrs for DW. The $240K is in ADDITION to Medicare coverage. Estimated cost for retirees has gone up 50% since 2002.

Not sure if the 4% withdrawal strategy has this type of cost in it.
If the $240K Is the amount needed to cover the costs with a basic SWR of 4%, then that's ~$10K/year, which isn't too terrible, since you will probably still have most of the principal at the end. But if they mean you will use up $240K over a 20 year period and have nothing left, that sucks. What if you live longer. Then the number would need to be potentially much higher. I really don't want gov't run universal health, but at the same time things can't go on like this. Most people won't make it, and will then drain the resources of the remainder even more.
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