Good Blog on Unexpected Expenses in ER

[Cheesehead]

I've been following this blogger for awhile, interesting and good advice, similar to my situation. He is smart and frugal, looks at all the angles before leaping (former engineer). This latest post is about expenses that are not playing nice with his plan: LTC, Healthcare, Car Repairs, Unplanned Airline Tickets, etc. Thus far he has been very upbeat but with this post he confesses to his fears of rising costs:

My Retirement Fears - Can I Retire Yet?

Thought you all will find it relevant.

 

[Dreamer]

Wow, I have a lot of these same thoughts. I had my DH read it and his reaction is you just can't worry about these things. What do you want to do, die and leave all of the money to our kids? We do have 2 pensions and social security, Federal health insurance and LTC insurance. I retired from my career job in 06/06 and he stopped working in 05/10 and we have not withdrawn anything from my TSP or his 401K or our IRAs. However, he is not interested in finances at all and I am not as smart as most people here, so I worry about getting our assets messed up someday, because I did not have allocations correct or having too much go to taxes, since I did not pay enough attention to taxes. I grew up poor and do not ever want to be a charity case again. I really like his blog.

 

[NW-Bound]

It's OK to be a bit apprehensive about the unknowns, but I think one can be so fretful that he/she forgets to live.

In the end, as the author concluded,

Ultimately, the only solution, the only antidote to fear of the unknown, is to remain alert. Continue to track your net worth and run retirement calculators. Detect problematic trends early, before they threaten your lifestyle, then take positive action on either the income or expense side, or both.​

And the above in bold is what I plan to do.

 

[kevink]

His blog really is exceptionally clear and worthwhile - as you say Cheesehead, he does a great job of looking at all the angles.

The two biggies he writes about in this post (health care and insurance cost increases and long term care) are huge issues for U.S. retirees that don't get nearly enough coverage even in good books on how to retire that I've read.

My guess is that most who ER will find that their ability to return to the work force will be limited as they age. At the moment I seen zero signs of any movement to contain costs on the health care side, and of course LTC costs in the U.S. for even one person in a couple can easily exceed the SWR on a substantial portfolio.

My guess is that many without a free-and-clear house and $2M plus will find themselves looking long and hard at options they'd not considered, such as overseas retirement.

 

[tmm99]

I haven't read the whole article but do you know where the author moved to?

 

[ShortInSeattle]

Nicely written post. Thanks for sharing.

 

[Midpack]

It is well written (thanks for the link) and I think we all share the authors concerns, though he is selling eBooks. But I didn't learn anything actionable, and that's probably the ultimate message of this forum. When I see people debate 90% vs 95% FIRECALC results or retiring one year vs the next, though they may sound significant, they're minor in the big picture.

No plan can eliminate uncertainty, no matter how many calculations or methods. I know only because I tried for years and ultimately learned there is no possible "right answer." Plans are important, but as the blogger noted (same as NWB above).

Ultimately, the only solution, the only antidote to fear of the unknown, is to remain alert. Continue to track your net worth and run retirement calculators. Detect problematic trends early, before they threaten your lifestyle, then take positive action on either the income or expense side, or both.

 

[ABQ2015]

I haven't read the whole article but do you know where the author moved to?

They retired in Santa Fe.

The author and his wife first moved from the northeast to Chattanooga, TN when their kids were young for a less expensive, better quality of life. For retirement, their initial "short list" was New Paltz, NY; Bar Harbor, ME; Ashville, NC; Chattanooga; Keywest, FL; Ashland, OR; Bend, OR; Lander, WY; and Tucson, AZ. These got nixed due to climate or "proximity." Then the final "short list" was the Sedona/Flagstaff area of northern AZ, northern NM around Santa Fe, or the Colorado Front Range.

It will be interesting to me to see how they like Santa Fe and if they stay. I love NM and if money was no object, Santa Fe would be my first pick of where to retire in the state. But housing in a desirable neighborhood is expensive and the city has some social problems.

 

[nun]

Isn't this just a budgeting issue. If you have tracked your pre retirement budget for a few of years many unexpected expenses should be already factored into your retirement number. Also you should have a substantial emergency fund sitting in the background that you keep for those one off charges.

 

[Options]

Isn't this just a budgeting issue. If you have tracked your pre retirement budget for a few of years many unexpected expenses should be already factored into your retirement number. Also you should have a substantial emergency fund sitting in the background that you keep for those one off charges.

Personally view it as a budgeting issue.

What I did was review all spending categories for the past 15 years and built that into my budget. This was significant because it covered a lot of life changes and unexpected large and not so large expenses. Tracked the past 15 because they mirror closely expected/unexpected retirement expenses.

I also reviewed my personal behavior in response to changes and unexpected occurrences, financial and otherwise. Together these provided confidence that I will overcome just about anything (even very near brushes with death, losing everything financially, starting over, getting it all back and much more, and then being able to retire early).

Of course, as they say in FIRECALC, one asteroid strike and all bets are off...

 

[tmm99]

I see Healthcare listed.

I wasn't following up on the ACA threads here, but aren't people with no earned income normally get a pretty good break on the healthcare cost? Granted we are unsure as to what the increase is going to be in the future, but compared to Cobra extension, isn't it much better now for early retirees?

 

[Mulligan]

I got a very good hold of unexpected expenses in retirement by reading a lot of posts here over the years before I retired, so I prepared accordingly. However, the fact that most of them occurred at almost the same time this past year was a bit off putting to me though.