Retire on 3k per month thoughts...

[retire@40]

Roll the dice - 11 years no health insurance...Total portfolio maybe 1 mil ex house, cars, misc real estate.

Just curious if you have these assets protected God forbid you need a major operation costing say $100K. Or is your plan to pay the $100K out of pocket if the situation arises?

Although I am in my mid 30s, I've wondered about getting a complete physical exam at the end of age 63 and canceling my health insurance which would probably save me a few thousand dollars a month by then and let Medicare kick in at 65.

 

[parnass]

...Although I am in my mid 30s, I've wondered about getting a complete physical exam at the end of age 63 and canceling my health insurance which would probably save me a few thousand dollars a month by then and let Medicare kick in at 65.

Whenever I think about the risks of dropping health insurance, I am reminded of unplanned injuries or illness, like an indigent motorist driving into me when I'm out walking or bicycling.

 

[unclemick]

I couldn't afford both health insurance and ER - it wasn't a choice. With passage of time and a rising stock market in the 90's, eligible for earrly SS in 7 mo.'s - may or may not go shopping for a high deductible.

Remember - the women were covered and 'their' retirement would not be derailed if I lost/spent my entire portfolio. It would've pissed me off - of course, but that was the gamble I took.

 

[Zipper]

If you are a smoker unclemick, all bets are off!

You're playing against a stacked deck.

 

[John Galt]

Unclemick is still my hero. My DW smokes. I have
never smoked cigarettes (except as a teen) but I
understand the appeal. I could start smoking today
and enjoy every one. I will not though. I am a
hypochondriac, and that would add to my angst.
Bottom line.................so far skipping the health insurance since 1998 would have saved a ton of money.
I don't have the guts. I admit it.

JG

 

[gayl]

I forgot to mention in my 36K per year dollars to spend for my wife and I that I will be golfing more, thus getting better and winning untold amounts of cash from my golf buddies.
Perhaps even turning pro as I refine my game and get
my handicap down a bit...  :

This is why I feel that fallacy of 60-80% of pre-retirement income needed is just that ... a fallacy. I am living on 100% of what I spent while working, invested the rest. And some months it takes almost every penny leaving me only 250 to save. My hobbies : are a lot more expensive now and I have a lot more time for them.

However, it is still done on less than 3k per month b/c I own my own home under Prop 13.

 

[LEX]

A Few thoughts on the valuable reference provided by Nords;

The American medical system is really just a form of collatoral confiscation through collection agents and lawyers.  Unless you have >1.5MM IMO you have to insure and pay more than its worth so as avoid bankruptcy, or become judgement proof, taking steps that are in the same category of moral questionability as those routinely used by the insurance companies and their de facto hospital systems, say by hiding assets and placing property that is not in your name (say a trust or corporation or a son or daughter you trust).  Those of you who have been through a divorce have an advantage in how post medical financial collections work thier way through the courts.  

There are three standards of medical care in the US:

1) Free for those that are judgement proof

2) Very expensive and marginal for many who have acted responsibly, followed the "Rules" and insured, hoping the health policy will insulate them from a six figure "wallet extraction" post care, and

3) world class for the truly rich who can act as their own insurer.

I have close friends who are practicing Doctors here in Phoenix who will attest to this tiered status. The most common example of level one are the illegal alliens form Mexico who can walk into any hospital and get treatment.  The law requires the rendering of emergency aid.  Then they disappear into their ranks, without any way to collect judgements for the care.  They will bring their whole families into the ER waiting room and pre-empt paying patients with "level two" status.  Then there are those on welfare...they are better cared for than the media would have you believe.  Then there are those with real skin in the game.  Its always reassuring to be waiting in the ER with a serious injury, and prior to being seen by the nurse or, if you are lucky, a trained Doctor,  having to fill out what is basically what debt collection lawyers call a confession of judgement prior to being seen by a Doctor.  The illegals can't even read this form of technical english, don't care, and have fake ID anyway, so they just waltz right in.  Folks such as many on this board who actually saved and attempt to be responsible for themselves put all their assets on the line when they enter a hospital.  The level three folks have thier own doctor make arrangements and worry about the room decor as if it were a suite in a medical hotel.  

Its become a true nightmare for the modest but responsible American citizen attempting to live a decent retirement.  I wonder if it is actually easier for me to catch a flight to Iraq or some other US subsidized zone and get free medical care paid for by my tax dollars than to afford health insurance premiums and attempt the same at home.  It all really pisses me off!!!

 

[PL]

The American medical system is really just a form of collatoral confiscation through collection agents and lawyers.  Unless you have >1.5MM IMO you have to insure and pay more than its worth so as avoid bankruptcy, or become judgement proof, taking steps that are in the same category of moral questionability as those routinely used by the insurance companies and their de facto hospital systems, say by hiding assets and placing property that is not in your name (say a trust or corporation or a son or daughter you trust).
...

Its become a true nightmare for the modest but responsible American citizen attempting to live a decent retirement.  I wonder if it is actually easier for me to catch a flight to Iraq or some other US subsidized zone and get free medical care paid for by my tax dollars than to afford health insurance premiums and attempt the same at home.  It all really pisses me off!!!

I pay $240 (2005 rates, in my mid-40s, single) per month for a pretty good coverage individual plan through Kaiser Permanente Northern California.

If you're basically healthy it seems to me that coverage is available at realistic prices. (And that $240 is after many years of large increases). I've got a friend who is a Doc. at Kaiser and that also gives me some confidence in their system.

Altogether, health insurance is a pain, but is certainly is not a barrier to ER...

 

[Nords]

It's called "medical tourism".

I wonder if it is actually easier for me to catch a flight to Iraq or some other US subsidized zone and get free medical care paid for by my tax dollars than to afford health insurance premiums and attempt the same at home.  It all really pisses me off!!!

Iraq might work, but Thailand is probably "better".
http://www.businessweek.com/@@*sVgk4QQwOwhygAA/magazine/content/04_07/b3870074.htm or http://www.csmngt.com/medical2.htm

 

[Beachbumz]

I just applied for health insurance with Humana in Florida. The rate for both of us is $175 month for a 5000 deductible (separate $500 ded for prescriptions) and a dr copay. We are both 37 and in basically good health, except for a couple of minor things. I'm taking cholesterol medicine and have "gout". I didn't think the gout thing was a big deal, but Blue Cross would not even consider the application since I had an attack within the last 12 months. That's what I get for being honest, I didn't even go to the doctor! It will be interesting to see what Humana does.

Bottom line, health insurance is not that expense at a young age if you {can} get it when you are healthy.

 

[John Galt]

For much of my working life I had BC/BS health insurance
and liked it, especially in Michigan where it was always
welcomed by providers and where so many had it.

About 5 years ago I tried to get an individual Blue Cross
policy. I thought my health problems were pretty minor
and wouldn't have minded a rider to exclude certain conditions. I applied twice. They wouldn't touch me.

JG

 

[JWV]

I have close friends who are practicing Doctors here in Phoenix who will attest to this tiered status.

I will agree that there is stratification of health care but it goes much deeper than what side of the border you came from. A lot depends on what you know and who you know whether you are white, brown or purple with pink stripes. I cringe to think about what situations people without knowledge of health care, billing and insurance must sometimes find themselves in. Anyone who thinks that everyone gets the same care is deluded.

Also, I believe most ED/ERs triage as to severity of complaint. That's not to say that these depts are not clogged with all sorts of people who don't really have an emergency and EDs have become the clinic for many people. However, I would venture to guess that in the most cases, the most emergent get seen first.

Judy

 

[Martha]

And let's not forget, that emergency rooms do no provide drugs or ongoing care for chronic conditions. You will not get chemo in the emergency room. You will be treated for an asthma attack but won't get the drugs to treat the asthma to prevent the next attack.

With asthma, an increasing common condition, I cannot buy insurance except through my employer or on a risk market.

 

[MetryOp]

Last year my total expenses were a bit over $37k, but this included about $10.5k of extraordinary expenses. Health insurance now runs about 20% in my average yearly expense of ~$26k.

I'm a single male, age 47, and my health insurance premium is up to $441 per month for a major medical policy with $2,500 deductible. I shopped around but with a history of cancer (acute leukemia) within the last 5 years, nobody will touch me. The health insurance company I'm with, I started in 1991 at $39 per month premium. I'm glad I had coverage when I came down with leukemia. The insurance company paid out about $250k. My doctor said that was the lowest amount for my illness she'd seen due to my otherwise excellent health. That helped me avoid the complications that can accompany the cancer.

I cringe every month when I pay that premium, but I'm lucky to have it and thankful to be alive.

MetryOp

 

[haha]

Metry-Op-- congratulations on beating the cancer. And Happy New Year!


Mikey

 

[John Galt]

This is mostly for retireat40. You mentioned getting a
complete physical at 63 and then (depending on results)
winging it until Medicare kicks in. I have had the same thought. Also thought about "going bare". I wish I had now, but of course that is hindsight. Re. "complete physical", I've had them, but
I am not going to do that again unless I am feeling the grim reaper over my shoulder. I have spent enough time with doctors
and had enough tests. So far, they have cured very little.
Most of what ails me is chronic and I get more help on the
Internet than from my doctors, in most cases. Plus,
every time I have a check up they want to run more tests
which turn up more stuff to "check out", which results in
more doctors and tests, and more stuff to worry about, ad nauseum. If I get something really terminal, I expect I'll just lay in extra bourbon and
read some good books. "Resting comfortably" is my story,
and I'm sticking to it 'til the end.

JG

 

[R Kirch]

Every day we see more and more companies that are
downsizing and laying folks off. A lot of these people will
never get high paying jobs again-THUS- prices of things
will have to come down or the stuff the rich guys make
will have no one that can afford to buy them, thus creating a snowball effect. Overstock causing more layoffs. I won't be buying a new car anytime soon, nor will a lot of folks that have lost their jobs, look out auto industry. Therefore, I think that 36K a year is quite reasonable amount as I believe things will get cheaper.So there!

 

[Martha]

Living on $36,000 a year. I decided that now that I am part time and as practice for retirement, I would reduce my draw at work to $3000 a month. What I didn't think about was that I deduct 15% for 401(k) from each check, $333 each month for flex plan (new glasses and dental work for both this year), income taxes and $230 a month for health insurance premium. I am paid twice a month. My first paycheck was $632. Ack! I need to rethink this. My stingy husband however thinks that this should be plenty to live on.

 

[ESRBob]

Martha,
Does this mean your 36k didn't include the health insurance, health savings account, taxes and whatnot? (Aside from teh 401k savings). Or is it just a question of getting the right amounts into the right checking accounts etc.

I always wonder whether people are really counting all their annual expenses when they calculate or think about what their living expenses (except for those who log everything in quicken-- they know!).

In particular, amortizing costs of predictable but infrequent purchases (car, house painting, major applicances), taxes, and adding in costs of money management fees -- (the SWR models are all based on asset class returns before fees, and let's not forget the funds own internal brokerage expenses which you _never_ see).

If you are well below a 4% SWR then I'd say don't worry too much about this stuff, but if you are right up against the limit (as I am) then it becomes more important to really do your calculations right.

 

[JOhn Galt]

Interesting that just a few years ago I could blow through 36K "like Grant took Richmond". Now, we would
be "livin' large" on that amount to cover a whole year!

JG

 

[Janie]

For anyone who has had difficulty finding health insurance due to a preexisting condition, I would suggest your best option is finding a public-sector job. Hold it for 5 years (if you're keen to retire) or to the minimum retirement age, and you'll be able to retire and keep your benefits.

I recently began working for a university and health insurance is free (for me; would be an additional charge to add husband, but he has insurance thru his employer). There is NO preexisting clause.

 

[Benjamin Smith]

John,

I am generally a big fan of your posts, but I do not understand your analogy re: "...like Grant took Richmond." From my reading of the history of that War, Grant had a very hard time taking Richmond. Was that your meaning?

 

[John Galt]

Just a test to see if you were paying attention. My
mother (or someone in my family) used to use that
line all the time. I got tired of correcting them. You are correct and my anology was
not. It just popped into my head so I used it in place
of some other battle which Grant won in a walk (none comes to mind at the moment). Anyway, Richmond hung in there until the end. In fact, I believe that Washington
was menaced more often during the war.

JG

 

[Martha]

Martha,
Does this mean your 36k didn't include the health insurance, health savings account, taxes and whatnot? (Aside from teh 401k savings). Or is it just a question of getting the right amounts into the right checking accounts etc.

Being an owner of a business, even a part time owner, how much I take out is somewhat in my control until bonus time (when calculations are made as to what we are actually entitled). Therefore, when I told our accounting department I wanted a draw of 36,000 a year, accounting deducted from that amount taxes, my 401(k) contribution, flex benefits and insurance payments. This is what reduced my purported 36,000 a year to 632 dollars twice a month. Therefore, my exercise in pretend retirement didn't work. However, it will be an interesting exercise in frugality.


:-/

 

[charlie]

It's the unpredictable expenses that bite!

We just finished fixing a water line leak under
our slab foundation ..... have not got the bill
yet but it will be in the neighborhood of $2500.

Not covered by home insurance of course.

Cheers,

Charlie