Uh oh---anxiety after one week of FIRED!

[tangomonster]

If you've read my previous posts, you'll know that I'm a worrier---Rich nailed it when he referred to a Chicken Little attitude! That's why I needed a lot of convincing from you all that we could retire on 4 million. We live a simple lifestyle (120K condo, paid for, homebodies who mainly stay home and read and watch Netflix DVDs).

Retired a week ago and already feel like a new person without all the stress. DH stopped taking antidepressants
because he no longer needs them!

But the stressor that won't go away is health insurance.
Last year I got a BC HMO high deductible ($10,000) policy that was $120 a month. DH couldn't qualify for it and had to get a conversion policy that is about $700 a month.

Today I already received a notice from BCBS that my policy will be raised to $150 a month---over a 20% increase. Still affordable. But 20% increases for both our policies over the next 13 years until we get Medicare is very scary. Right before Medicare kicks in, we may be paying $100,000 a year for health insurance!

Since we have no heirs to live our money to, I guess it's okay if we deplete our net worth to pay for insurance---
but I want to have at least some left by the time we get Medicare to pay for other living expenses.

It's not so much scary not to be earning a salary any longer.
We were only bringing home $4500 between the two of us, and we earn more than that in interest a year. It's just the health insurance. But I don't see how we could have worked until we were 65 just to get employer health insurance, with the stress we were feeling in our low-paid, high-stress jobs.

Just need a little reassurance that it will be okay....

 

[crazy connie]

Relax and sip something cool. You can always take classes at a Community College and get a Student Health plan. Or, there are the McJobs with bennies. Really we are all in the same flumox here. My health plan from a fortune 100 company is under seige as well. This is a national disgrace.

 

[Leonidas]

Connie's right about we are all in the same boat. I've got BCBS HMO and my pension planner said I should plan on 10% annual increases for quite a while.

 

[Cut-Throat]

Connie's right about we are all in the same boat. I've got BCBS HMO and my pension planner said I should plan on 10% annual increases for quite a while.

I wish I were in that boat! - $4 Million and you're worried?

If you want to worry - Think about this - You stand a much better chance of getting an incurable disease than going broke paying for health insurance!

What you should be worrying about is being a miser! I mean how much money do you want to die with?


These continued posts are an insult to the rest of these people on these forums. A 4% withdrawal on $4 Million is $160K per year. If you are that bad with math, I'm amazed that you managed to accumulate this much money. If you are trolling, the act is starting to wear pretty thin.

 

[JPatrick]

Got an umbrella policy??
If no, that's the direction I'd take with my worry.

 

[Leonidas]

I wish I were in that boat! - $4 Million and you're worried?

If you want to worry - Think about this - You stand a much better chance of getting an incurable disease than going broke paying for health insurance!

What you should be worrying about is being a miser! I mean how much money do you want to die with?

Nope, not worried. Just agreeing that we're all facing rising health insurance costs and it doesn't look like it will change anytime soon.

 

[Cut-Throat]

Nope, not worried. Just agreeing that we're all facing rising health insurance costs and it doesn't look like it will change anytime soon.

I was not talking to you. I was talking to the original poster. I used your quote to remind everyone that we're talking about $4 Million here.

 

[macdaddy]

For a one time flat $500,000 I will guarantee you a (legal) spot on my company's health insurance plan (BCBS) until medicare kicks in. I take cash or money order.

 

[Rich_by_the_Bay]

Well, at least you're worrying about something real .

Do you have a medical savings account to go along with your high-deductible health policy? If not, and if one is available, a couple grand into that every year should help a bit, and it's tax deductible, to boot.

If not, with your nice nest egg, why not just put away $50k or $100k of your own money over the next year or two somewhere pretty safe, like municipals, or short-term bonds or even a CD ladder. In your mind you can reserve this for health use only. Pretend it doesn't exist otherwise. Might give you some reassurance.

Finally, and not to be facetious, you seem to have good insight into your own worry-wort nature. You can work on that nicely, too. Try the "dummies" book on meditation by Bodian, for example. Now that you have the time you may find that it helps you enjoy your freedom a little more.

However much this health insurance thing affects all of us, it will affect you less than the pack because you are wealthy.

 

[unclemick]

Yup

Retired on 300k that's k - no health insurance 1993 - 2005.

A little worry keeps you on your toes.

THIS IS NOT RECOMMENED FOR ANYONE ELSE!!!!

No health insurance and no job - ie stay ER'd or go back to #%*!.

heh heh heh heh heh heh - luckily I was healthy and totally ignorant of the odds. BC/BS at 178/mo 5k deductible now. Two years to Medicare.

 

[Mwsinron]

Yup

Retired on 300k that's k - no health insurance 1993 - 2005.

A little worry keeps you on your toes.

THIS IS NOT RECOMMENED FOR ANYONE ELSE!!!!

No health insurance and no job  - ie stay ER'd or go back to #%*!.

heh heh heh heh heh heh - luckily I was healthy and totally ignorant of the odds. BC/BS at 178/mo 5k deductible now. Two years to Medicare.

Never tell me the odds!

 

[TromboneAl]

I agree with cut-throat.

Just make sure your health insurance covers mental illness, and you'll be all set. Don't post on this anymore, please, or I will be forced to insult you a seond time.

 

[GTM]

Tango, If you are uncomfortable with $4 million being enough money to support your lifestyle how much money would you feel was enough.

Would $6 million give you piece of mind?
or $10 million.

Probably not, so your fear is of the unknown not what you already know and there is never going to be enough money to ease that worry.

 

[haha]

You boys are rough. 

I like that she posts, because I like to see someone with $4miilion who isn't too coy to mention it right up front.

¡Salud, Tango!

 

[Cut-Throat]

You boys are rough.

I like that she posts, because I like to see someone with $4miilion who isn't too coy to mention it right up front.

¡Salud, Tango!

I like that she posts too. But this same old topic has been beat to death by the same poster. So either it's a troll or she's mentally disturbed

 

[unclemick]

Hmmmm

Possibly just jitters - it's a big mental transition.

heh heh heh - someone I know(not mentioning any names) - kept 50 pristine copies of his resume in his file cabinet for years alongside his DRIP plans - even though he 'knew' he wasn't going back to work. Moi? nah. heh heh

 

[Nords]

But this same old topic has been beat to death by the same poster.

Like fishing... or surfing, eh?

 

[sgeeeee]

If you've read my previous posts, you'll know that I'm a worrier---Rich nailed it when he referred to a Chicken Little attitude!  That's why I needed a lot of convincing from you all that we could retire on 4 million.  We live a simple lifestyle (120K condo, paid for, homebodies who mainly stay home and read and watch Netflix DVDs).

Retired a week ago and already feel like a new person without all the stress.  DH stopped taking antidepressants
because he no longer needs them!

But the stressor that won't go away is health insurance. 
Last year I got a BC HMO high deductible ($10,000) policy that was $120 a month.  DH couldn't qualify for it and had to get a  conversion policy that is about $700 a month. 

Today I already received a notice from BCBS that my policy will be raised to $150 a month---over a 20% increase.  Still affordable.  But 20% increases for both our policies over the next 13 years until we get Medicare is very scary.  Right before Medicare kicks in, we may be paying $100,000 a year for health insurance!

Since we have no heirs to live our money to, I guess it's okay if we deplete our net worth to pay for insurance---
but I want to have at least some left by the time we get Medicare to pay for other living expenses.

It's not so much scary not to be earning a salary any longer.
We were only bringing home $4500 between the two of us, and we earn more than that in interest a year.  It's just the health insurance.  But I don't see how we could have worked until we were 65 just to get employer health insurance, with the stress we were feeling in our low-paid, high-stress jobs.

Just need a little reassurance that it will be okay....

Well . . . the leading cause of bankruptsy in the US is unpaid medical bills, so I will treat your question as if you are serious. You could try being a little more proactive. Try applying some analysis to your fears and see if that comforts you. Look up your health costs for the past several years. Include premiums, out of pocket expenses, health products, etc. Calculate your average annual expenses. Estimate the average annual increase you think might be reasonable. Use a spreadsheet and estimate your annual healthcare costs for the next 30 years.

Then estimate what a portion of your nest egg is likely to produce (on average) over the same period of time. Adjust the nest egg portion until it covers all expected expenses. Then you can sit that amount of your nest egg aside and live off the rest using a conventional ~4% withdrawal rate.

As an example, an initial $6000 per year healthcare expense that inflates at 12% per year can be offset by a $350,000 nest egg that earns an average of 7% over 30 years.

Use your own numbers and build a spreadsheet. If you really can't live with the result, go back to work . . . or seek help.

Seriously, analysis can often trump fear. If it can't, you need to take action.

 

[tangomonster]

Yes, JPatrick, we do have an umbrella policy---with the way we worry, we got an umbrella policy years ago.

And CutThroat---I'm not a troll! Or mentally ill! But we most likely are paying more than you do for health insurance---and have 13 years to go to Medicare. Although our overall expenses are low, when we are in our sixties, before Medicare, we could need to withdraw more than 4% a year because the yearly premiums could be over $100,000 if they keep going up 20% each year.

Also keep in mind that my parents lived into their nineties. The safe withdrawal rate thing is for 30 years. We've retired at 52. May have 40 more years of living to fund.

For those who have ridiculed my worries: how many of you are getting pensions? How many are totally funding their retirements, as we are?

 

[crazy connie]

Yes, JPatrick, we do have an umbrella policy---with the way we worry, we got an umbrella policy years ago.

And CutThroat---I'm not a troll!  Or mentally ill!  But we most likely are paying more than you do for health insurance---and have 13 years to go to Medicare.  Although our overall expenses are low, when we are in our sixties, before Medicare, we could need to withdraw more than 4% a year because the yearly premiums could be over $100,000 if they keep going up 20% each year.

Also keep in mind that my parents lived into their nineties.  The safe withdrawal rate thing is for 30 years.  We've retired at 52.  May have 40 more years of living to fund.

For those who have ridiculed my worries:  how many of you are getting pensions?  How many are totally funding their retirements, as we are?

No Pension here. Took the money and ran. Company still teetering on verge of BK. Insurance now on chopping block. Will do what I need to, when I need to, and try to enjoy the days. I know there is no "'free-lunch" or guarantees in life. Try to make the best decisions on a daily basis and hope the Gods smile upon me. Will go for McJob or Student Heath Insurance if and when needed. I can not solve the health care crisis and have the majority of other Americans in the same boat with me. Only when we collectively engage will we be able to effecuate sweeping changes. Just my 2 cents.

 

[astromeria]

tango, I have similar fears. While that didn't stop me from retiring on 1/3 of your wealth, DH is still working (at a low-stress job with lots of time off) to provide group health and let our stash grow a little longer.

I control the fear pretty well by making backup plans. For example, our basic expenses are less than 3% of our portfolio (this includes $1500/month for health care). The frills add up to another 2%, which will be provided by Social Security eventually, but I have a CD ladder to cover SS-level payments from now to age 62. If necessary, I could maintain this CD ladder after DH's retirement (or turn it gradually into something a little more liquid) to provide additional health funds, even though I already have a large emergency fund. We could also downsize our mortgage-free house, manage on one car, and so on.

 

[Martha]

Tango, do the analysis and then forget about it for a while.

It will take some time to adjust to being retired, especially as you are a worrier.

 

 

[Rich_by_the_Bay]

Also keep in mind that my parents lived into their nineties. The safe withdrawal rate thing is for 30 years. We've retired at 52. May have 40 more years of living to fund.

Tango,

First, you are not paying more for health insurance than many others here. $1500 per month is not unheard of, as Astro knows.

Second: a 4% SWR is probably good indefinitely. If you need even less, you are very unlikely to ever have to tap out your savings. You are there. I repeat. You are there. It's yours to enjoy as long as you avoid any really bad decision.

Nuf said .

 

[ERD50]

Well . . . the leading cause of bankruptsy in the US is unpaid medical bills,

That study is often misquoted. The unpaid medical bills were not necesarily the cause of the bankruptcy. They just lumped anyone with an unpaid medical bill into that category.

Not that it isn't a major problem for some, but that report throws it all out of wack.

http://www.nationalreview.com/comment/heriot200502110735.asp

Buried in the study is the fact that only 27 percent of the surveyed debtors had unreimbursed medical expenses exceeding $1,000 over the course of the two years prior to their bankruptcy. Presumably 73 percent — the vast majority — had medical expenses during that two-year period of $1,000 or less. Had that figure been recited up front, it would have been obvious that the proportion of bankruptcies driven by unmanageable medical debt was nowhere near half.

There is much more debunking in the full article.

Oh, it's OK with me if you don't like the 'National Review' - look at the content and see if you disagree with what is reported, rather than where it comes from. It has been reported elsewhere, but it is tough to Google this due to the repetition of the article without the critique.

-ERD50

 

[Scrooge]

But the stressor that won't go away is health insurance. 
Last year I got a BC HMO high deductible ($10,000) policy that was $120 a month.  DH couldn't qualify for it and had to get a  conversion policy that is about $700 a month. 

Today I already received a notice from BCBS that my policy will be raised to $150 a month---over a 20% increase.  Still affordable.  But 20% increases for both our policies over the next 13 years until we get Medicare is very scary.  Right before Medicare kicks in, we may be paying $100,000 a year for health insurance!

Well, ordinarily it would be a perfectly reasonable thing to worry about. However, let's do the math to see how it affects your specific situation.

You are starting out with $10K/y budgeted for health insurance purposes plus whatever out of pocket expenses you may incur. Assuming 20% increases on top of regular inflation:

Years - Premiums ($K) - Cumulative ($K)

1 - 12 - 12
2 - 14 - 26
3 - 17 - 44
4 - 21 - 64
5 - 25 - 89
6 - 30 - 119
7 - 36 - 155
8 - 43 - 198
9 - 52 - 250
10 - 62 - 312
11 - 74 - 386
12 - 89 - 475
13 - 107 - 582

So that's $475K total that you will have to pay in today's dollars or $582K if you count another year (just to be on the safe side). Fairly significant, but still only $0.5mil out of $4mil, so it won't affect your retirement. If you up 20% to 25%, it puts the total at $678-859K, which should still be perfectly manageable.