Is healthcare delaying your retirement decision?

[NW-Bound]

Yes, healthcare cost is a dilemma for early retirees. It may look like a simple choice to work till 65, but I was hit with a life-threatening problem that could end my life long before I get to 65. I am OK now, or it would be a bummer.

If I were not already retired when that diagnosis was made, I would not go back to work at my part-time job when I got out of the hospital. If I did not have enough money, I would pack up and move into a small RV and go down to the river or into the forest, like some RV'ers recovering from potentially terminal illnesses whose blogs I read.

 

[daylatedollarshort]

Our plan is to just retire to Mexico

What Does the Mexican Healthcare System Have to Do with Cooking Videos?Ventanas Mexico

What part of Mexico would you retire to?

 

[Fedup]

Yes, in a way. I am a Fed, and I can't keep my post-retirement health bennies if I retire before I am eligible for an immediate pension at my minimum retirement age, which in my case is 56 years and 10 months of age (about 9 years from now).


I will have 30 years in gov't at age 52, which gives me a full pension at 57, but not the ability to keep health. So, I'll wait until 56 years and 10 months. The uncertainty of having to pay on my own from 52 until Medicare is too risky for me.

If you have annuity, you get to keep healthcare in retirement as long as you are paying for it at least 5 years continuously pre-retirement . You are eligible for retirement at MRA and 10 years. So I think you are qualified.

https://www.opm.gov/retirement-services/fers-information/eligibility/

https://www.opm.gov/healthcare-insurance/healthcare/eligibility/

 

[Big_Hitter]

IMO - lack of pre-65 retiree medical benefits in the private sector and the uncertainty surrounding the future of ACA is a huge cause of job-lock and entrepreneurship-lock

although I expected to see more early retirees as a result of ACA subsidies I'm having difficulty finding something other than anecdotal evidence (i.e. this forum) to substitute facts for appearances

personally, I'm taking a wait and see approach

 

[dixonge]

What part of Mexico would you retire to?

Lake Chapala - a.k.a. Lakeside - Ajijic specifically

 

[littleb]

So you are planning on a compounded 25% increase per year?

I know you will be medicare eligible, but if someone younger used your increase, in just 10 years they would be paying $200,000 a year in premium. Realistic?

No, I am using that 25% increase mainly for 2018. After that we will look at options to get our premiums lower.

 

[daylatedollarshort]

Lake Chapala - a.k.a. Lakeside - Ajijic specifically

We're interested Mexico as an option but haven't been to Mexico very much and don't know a lot about it. Have you lived there before? Any crime concerns?

 

[Gumby]

I asked him why not just retire and stay home until Medicare kicks in?
Is it always the cost of HI that keeps folks from retirement? Or is it also the fact that people don't like spending on HI even if they could by simply giving up some discretionary expense such as travel?

Why would I want to retire and stay home to watch the grass grow?

This is an issue that transcends the health insurance question. It is always true that if I'm willing to give things up both now and after retirement, I could retire sooner. Maybe much sooner. As an extreme example, I could live in a tent behind the supermarket and dumpster dive for food now, so that I could save money and live in a tent and dumpster dive later. It wouldn't take very long to save enough for that and then I could retire lickety split.

I want to reasonably enjoy life both now and after retirement. If delaying to get health insurance means that I get to travel both now and after full retirement, then I'm willing to do that. I appreciate that your calculus may be different.

 

[youbet]

Why would I want to retire and stay home to watch the grass grow?

This is an issue that transcends the health insurance question. It is always true that if I'm willing to give things up both now and after retirement, I could retire sooner. Maybe much sooner. As an extreme example, I could live in a tent behind the supermarket and dumpster dive for food now, so that I could save money and live in a tent and dumpster dive later. It wouldn't take very long to save enough for that and then I could retire lickety split.

I want to reasonably enjoy life both now and after retirement. If delaying to get health insurance means that I get to travel both now and after full retirement, then I'm willing to do that. I appreciate that your calculus may be different.

Wow! I never expected that interpretation! Hee, hee...... Perhaps I misspoke......

My point was that some folks seem to blame HI costs for their inability to FIRE when their retirement budget includes serious discretionary spending which could be whittled down to accommodate FIREing and buying HI with the income they have available. But they seldom mention the discretionary expenses as being the cause of the FIRE delay. It's always the HI.

Let's say you have a $100k retirement budget. $65k essentials, $20k polo ponies and $15k HI. Your projected max safe retirement spending is $90k, so you're short. Most people I run into are blaming the HI and see no reason to reduce the number of polo ponies in the stable. It just seems odd to always blame the HI spending and never mention sacred discretionary spending,, such as polo ponies.

Ref your other points, not really related to the intent of my post, I agree with you. If all the items in your budget are important to you and their utility to you exceeds the aggravation of earning the bux to support them in retirement, by all means delay until you can. I would and I completely agree. But in my example, I'd blame the polo ponies right along with the HI costs. I'd say that HI and polo pony lust is delaying my retirement.

Of course, if you don't have any discretionary income being spent on things you could give up, it's all moot.......

 

[Gumby]

Wow! I never expected that interpretation! Hee, hee...... Perhaps I misspoke......

My point was that some folks seems to blame HI costs for their inability to FIRE when their retirement budget includes serious discretionary spending which could be whittled down to accomodate FIREing with the income they can afford. But they seldom mention the discretionary expenses as being the cause of the FIRE delay.

Thanks for the clarification. I now understand your original point, and I agree. Your friend is just $15k/year short of what he needs to retire, period.

 

[youbet]

Thanks for the clarification. I now understand your original point, and I agree. Your friend is just $15k/year short of what he needs to retire, period.

Yes. But he blames/verbalizes only HI costs. And I sometimes hear that trend here too. Perhaps I'm too sensitive to it or my view of the constraints to achieving FIRE is too broad?

I suspect the reason HI is so often unilaterally blamed is because some folks have a hope/expectation that "someone else" (government? employer?) will provide HI for them whereas they have no hope that someone else will help support the polo ponies.

In any case, I agree with all that HI is expensive and one of the major hurdles to FIRE for most of us. And polo pony lust too........

 

[ShokWaveRider]

Define 'politics' -

If by 'politics' you mean 'any mention whatsoever of elected representatives' then ok, I guess I crossed a line there.

But seriously, talking about how politicians are corrupt and how money influences it all - is that really controversial to anyone at all? It's pretty much across the board and not partisan at all.

Just trying to clarify, not stir the pot, honest...

Anything I may say LOL

 

[broadway]

For me, here in NJ, the property taxes nearly rivals the health insurance premiums without subsidies assuming ACA goes away.

If I was to retire now, I would need nearly $20K for those two alone.
Granted, this is a silver plan, and I would most likely switch to a bronze plan.

 

[Carpediem]

He responded that he just couldn't bring himself to spend $15k of his own money on HI.

This is exactly my DW's reaction to the high cost of HI too. Although she says she is supportive of me hanging it up anytime, I can tell she does not like the idea of paying $15k+ per year for HI one bit.

 

[zinger1457]

If you have annuity, you get to keep healthcare in retirement as long as you are paying for it at least 5 years continuously pre-retirement . You are eligible for retirement at MRA and 10 years. So I think you are qualified.

I believe what kaudrey was stating is that they couldn't retire at 52 years old (with 30 years of service) and keep their healthcare coverage. The earliest they could retire and retain healthcare coverage is at their MRA (56 yr and 10 mo).

 

[rodi]

Let's say you have a $100k retirement budget. $65k essentials, $20k polo ponies and $15k HI. Your projected max safe retirement spending is $90k, so you're short. Most people I run into are blaming the HI and see no reason to reduce the number of polo ponies in the stable. It just seems odd to always blame the HI spending and never mention sacred discretionary spending,, such as polo ponies.

I would argue their essentials is actually $80k... Health insurance is essential spending in my book...


FWIW - I modeled my retirement budget assuming the COBRA value with a 15% increase every year. My work insurance was HMO with fairly low copays... that we'd always just cash flowed. Upon retirement - the first new year we switched to an ACA HDHP... For my spending estimate I assumed we'd hit about 1/2 of the Max OOP - but in order to be prepared I had the full family max OOP set aside... figuring I'd 'refill' that bucket to the top each year... but estimating we'd use 1/2 of the max OOP. I considered this conservative and 'worst case' because we'd had very few medical issues and I assumed we continue to have low health care costs.

That year we maxed out the family OOP with my sons' various sports injuries and an ER visit for my husband.

Last year we were doing GREAT... until our dentist discovered a mass on my son's jaw... Jaw surgery for ameloblastoma had us hit that max OOP for him pretty darn quick.

We're still early in the year but so far we've had a few follow visits post jaw surgery and younger son just had an urgent care visit and a bunch of labs for suspected [-]strep[/-]/[-]mono[/-]/unknown virus. (Just got the 'all clear' on mono today.) I have no idea what medical bills are in front of us.

I now budget for 100% of the max OOP. If we don't spend it - we can roll it over for the next year and spend the extra.

 

[NW-Bound]

I would argue their essentials is actually $80k... Health insurance is essential spending in my book...

... and the big problem is that healthcare is a big unknown that is hard to project and plan for, much harder than the cost of raising ponies. One will need to have large discretionary expenses that can be cut to make room for health insurance if need be. We are all still waiting to see some stability in healthcare costs, which so far is so elusive.

 

[GTFan]

This is a difficult topic to discuss for all of us. It has been a highly charged, partisan issue for quite a few years. That is why, when the discussion covers actual legislative efforts, there have been multiple requests to keep any talk of legislation focused on bills under serious consideration, their specifics and impact.

Personally, I would consider "unhelpful politics" (as it related to this discussion) any comment that attempts to portray, illustrate or highlight a particular partisan view, individual or position in a way that has no bearing on the specifics of the legislation. By unhelpful, I mean it usually is the beginning of the end.

Agreed to some extent. But I would argue that what's more helpful is less pre-emptive strikes against any whiff of politics and more reliance on the smart members here and their judicious use of the 'Alert mods' button. IMO very few threads that have been locked were in any way close to getting out of hand politically, especially with the ACA.

OT sure, but not out of hand.

 

[W2R]

Agreed to some extent. But I would argue that what's more helpful is less pre-emptive strikes against any whiff of politics and more reliance on the smart members here and their judicious use of the 'Alert mods' button. IMO very few threads that have been locked were in any way close to getting out of hand politically, especially with the ACA.

OT sure, but not out of hand.

1.) The posts that result in thread closure are often removed, leaving members with zero basis upon which to make such judgments. Sometimes we leave the offending posts, but more often we completely remove them because we don't want everyone to think that posts like that are common or OK here.

2.) Just as an individual member's lone opinion on thread closures isn't followed, the same is true for mods. We do nothing as lone mavericks and everything by consensus of the mod team (which consists of more than a dozen of the most active members on the board), based on their interpretation of the Community Rules which everyone here agreed to follow. And thank heavens for all of our members, because their reports of posts help to alert us to those that may need some attention.

3.) Check out those Community Rules, especially the parts governing the acceptable ways to address complaints about moderation.

 

[timemoveson]

Supportive friends up north....

Is it ok for friendly and well-meaning Canadians to speak on these threads or do we just have to watch you deal with this very tough and very important subject?

We have many issues with many things in Canada that could be improved with respect to FIRE, but this is one is not near the top of our list fortunately. Our dollar on the other hand....

 

[Meadbh]

Is it ok for friendly and well-meaning Canadians to speak on these threads or do we just have to watch you deal with this very tough and very important subject?

We have many issues with many things in Canada that could be improved with respect to FIRE, but this is one is not near the top of our list fortunately. Our dollar on the other hand....

I think it's more appropriate to watch and listen, but stay silent.

 

[Teacher Terry]

The only reason we were able to early semi-retire is because we have HI through our former employer although it is very costly at 12k/year. Still it appears that many on the ACA are paying more for less coverage. My DH is open to going back to work f.t. but I am not. He is also 5 years younger then me.

 

[Ed B]

Is it ok for friendly and well-meaning Canadians to speak on these threads or do we just have to watch you deal with this very tough and very important subject?

We have many issues with many things in Canada that could be improved with respect to FIRE, but this is one is not near the top of our list fortunately. Our dollar on the other hand....

Is Canada open to Medical tourism? I live to far away but people North of the Mason Dixon line might be eager customers. I seem to remember seeing a documentary a few years back where Canada was desperately seeking to increase foriegn revenue.

https://youtu.be/EY6fp95uGfM

 

[donheff]

I see the "freaking out" thread is closed so I will mention here that the White House has agreed to support funding ACA cost sharing subsidies in the continuing resolution negotiations. Nothing is final yet and this is a short term stopgap but at least an indication that the Administration will not intentionally accelerate instability. I'm still glad I don't need to retire into a long period of pre-Medicare uncertainty but this is bit of a breather.

 

[MichaelB]

Folks, when it comes to health care, tax, and a few other major policy areas, there are still many proposals being floated and looking for sponsors, and the media is keeping them all front and center. Few will make it into committees, and fewer still will actually reach the legislative calendar.

Because of the partisan and political nature of these topics, for major policy areas we ask that E-R Forum discussions focus on actual legislation under consideration. As an example, the recent MacArthur Amendment has been submitted and received lots of media attention, but HR 1628 is not on the legislative calendar. (if you don’t know what those two references are, look here). The same applies to the recent proposal on taxes.

If any of these lead to actual legislation under consideration, we can then discuss and assess how we are affected and what alternatives we have.

The moderator team