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My husband and I are not yet at retirement. We're in our early 50's.
What i'm trying to reconcile is Health Insurance costs (here in Texas).
We have a private policy as my husband has always been self-employed.
We've had this policy since 2002. (covering my husband and me).
I believe we started at approx. $350.00 per month (don't remember the deductible, but was less than the highest possible of $5,000.00 which we are currently at).
Today...we pay right at $600.00 per month with a $5,000.00 deductible.
The premium increased approx. $75.00 per month over the last year with regular increases at least 3 to 4 times a year (Jan., my birthday, June, & my husband's birthday).
At $600.00 per month thats $7200.00 per year plus the $5,000.00 deductible which comes out ot $12,200.00 per year. (mammogram scare in Oct. requiring biopsy that turned out ok - new year for deductible started in January - husband required colonoscopy with $5,000.00 alone for the room....not sure of doctor's chages, anesthelogists charge, lab charge, etc. yet)
That does not include our combined monthly prescriptions (HBP, cholesterol) of approx. $250.00 per month out-of-pocket (after meeting prescript. deductible).
Approx. out-of-pocket Yearly Prescription costs: $2,500.00 plus $12,200.00 = $14,700.00 per year. and continually increasing.
I'm in the process of researching alternatives to our existing health insurance.
After my mammogram scare and the HUGE costs of a routine colonoscopy, I see the value of health insurance but the cost of health insurance / health care might kill us (financially) before any illness!
$14,700.00 is a huge chunk of change to have to come up with every year for health insurance & out-of-pocket expense.
CaTe
This was in today's Dallas paper:
Baby boomers may find bridge to health insurance | Dallas Morning News | News for Dallas, Texas | Dallas Business News (http://www.dallasnews.com/sharedcontent/dws/bus/stories/021208dnbusuninsuredboomers.38b8522.html - broken link)
When you're eligible for Medicare, you'll be a lot better off. I'm on it through disability. I pay $96.40 a month for Part B (covers doctor visits, diagnostic procedures, etc) plus another $51 a month for a Medicare Advantage program that include prescription drug coverage. The one I'm in works like an HMO. I have no copay for most visits and procedures and hospital costs are limited to $100 a day copay for the first 5 days, nothing after that.
The addition of prescription coverage to Medicare two years ago dropped my drug costs from $350 a month to $75. I also get some things from Canada by mail-order. Vitamins, like Iron, aren't covered by Medicare. I was paying $75 for my iron prescription at Sam's Club. I now get it from Canada for half that.
I get excellent coverage now but what a Medicare Advantage company offers changes ever year and it requires a lot of research to find one that provides the best for what I need. I also have to have a session with my doctor each year to hammer out what generics I can use and what name-brands I have to have and which ones are covered by the plan and whether they're tier two or tier three (big difference in cost). Expensive drugs put me in the "donut hole" a lot faster. (Medicare prescription coverage only goes to $2,500 or so of the cost of the drugs. After that you pay full price, unless you're in a plan that provides more coverage.)
I switched plans this year and I've got a lot fewer out-of-pocket expenses than I had last year.
The big holes in Medicare coverage are Dental and Hearing. There's nothing for either and these can be huge expenses as you age.
I always get a good laugh when I see commercials or advertisements about things to keep "seniors" mentally active. I get plenty of mental activity trying to figure out Medicare each year. I'd like to see some of these 20-somethings and 30-somethings try it.
I always get a good laugh when I see commercials or advertisements about things to keep "seniors" mentally active. I get plenty of mental activity trying to figure out Medicare each year. I'd like to see some of these 20-somethings and 30-somethings try it.
LOL That's a good point!
I consider health care and insurance costs to be the wildcard in retirement. Every year it goes up and covers less. And they don't count any health care costs in the cost of living calculations so they can report an artificially low inflation rate.
For those of you that can use generics, look at the list of generics that Walmart can provide for $4 for a 30 day supply. I have a very good plan with my employer my hbp, however, is cheaper by $6 a month if I get it through Walmart and not through the medicine plan through my employer. Hard to believe, but it is true. Just on that drug I am saving $72 every year.
How much do you NET per month while in the workforce and would you say you are living comfortably, making it or struggling?
Is your goal in retirement to live the same lifestyle you have now or do you have bigger plans for what you want to do/own in retirement?
I took a $55,000 hit in my GROSS from working paycheck to retirement pension and I can tell you with no change in my lifestyle, I'm living just fine on my pension doing and buying the same things I wanted/liked when I was working. The primary reason is my net didn't change all that much even the my gross did and some big expenses disappeared.
I also moved to a no income tax state, not because it was a no income tax state but because the things I wanted to do in retirement were there. My rent for a brand new, twice as big apartment is about $317 less per month. My car insurance (same company, same policy, same vehicle) went down about $300 per year. My renters insurance went down. My electric bill is half of what it was where I lived before.
These expenses took the biggest hit in retirement:
1. Gasoline - I moved to a town with everything I like/do on a regular basis is right in the town. Gas prices may be going up but I have a huge savings on gasoline simply because I no longer commute to work.
2. Dry cleaning - I live in play clothes 95% of the time now. This was a big monthly expense when I was in the workforce.
3. Eating out or in for lunch every day - When in the workforce, I bought lunch out or paid for lunch in the cafeteria, bought drinks (coffee/tea/soda) and snacks to eat at my desk. I also was too tired to cook at home a lot so I also bought a lot of takeout at night. While I still might do these things on occasion, it's not 5 days a week I'm spending this kind of money and it adds up.
4. Office contributions for this or that party/gift, flowers, cards at least every other week. Going out to celebrate some office occasion.
5. Buying work outfits. Jeans and tee shirts are just fine for me now.
I didn't have to change my lifestyle for any of the above. But, I never liked to travel so that was not a goal (do more traveling) for retirement. I never liked or acquired expensive things like jewelry, for example, when I was in the workforce so retirement had no impact. I lease a sedan and when the two-year lease is up will probably lease another (same make and model).
I like electronics, software and books. I still buy electronics, software and books. I would say those are my biggest expenses besides food. I like to go to classes. My school costs me $90 per year. Did I pick it for the cost? No, I picked it for the courses. I like to fish from shore. I like to take photos. I like to go to town concerts. I like to discuss politics on the Internet. I like to go to fairs/festivals. Almost all of these things aren't expensive activities but I don't buy/do them because they're cheap. I do them because they are things I like to do. If you have plans to do expensive activities in retirement, you need to consider it.
Off the top of my head, you need to figure out:
1. What is the net pay you are actually living on per month, now?
2. Are you living comfortably, within or beyond your means now?
3. What expenses will go away when you stop working? Any new expenses you didn't have when working like health insurance, maybe?
4. What kind of lifestyle are you looking for in retirement?
5. Will you have enough for an unanticipated event?
6. Are you planning to move to someplace cheaper? What will you save by moving?
Well being that I have many, many years till retirement who knows what will lie ahead. If I get a return of 7% for the next 30 years I should end up with 2.1 million in my 401-K and about 1.1 mill. in my union annuity fund. Who knows, time will tell.
It's funny because my mother, who lives in a little rinky-dink town in the country, has a net income greater than mine, and she doesn't need it - the house is paid for, the taxes are really low, car insurance is low - everything is low.
As long as my parents aren't living on the streets (my father died a couple of years ago), I feel OK. I know it's harder now, and I don't care if I have to live on the streets - not that I want to. But, I was happy that they were able to be comfortable in retirement. It would have killed me, otherwise. None of us kids were able to help at all.
It seems in the old days, the kids were supposed to help their parents, but my parents were much better off than we were!
Do others find that to be true - not as well off as their parents?
Actually my situation is the direct opposite. I came from a "factory" working family. We didnt starve but we were far from living comfortably. Now all the "kids" are in a more comfortable position than the parents. But we are all in professional fields & better off than our parents.
Quote:
Originally Posted by cousinsal
It's funny because my mother, who lives in a little rinky-dink town in the country, has a net income greater than mine, and she doesn't need it - the house is paid for, the taxes are really low, car insurance is low - everything is low.
As long as my parents aren't living on the streets (my father died a couple of years ago), I feel OK. I know it's harder now, and I don't care if I have to live on the streets - not that I want to. But, I was happy that they were able to be comfortable in retirement. It would have killed me, otherwise. None of us kids were able to help at all.
It seems in the old days, the kids were supposed to help their parents, but my parents were much better off than we were!
Do others find that to be true - not as well off as their parents?
My parents were very frugal... They never bought a new car, had cable or took yearly vacations.
Dad wanted to have the home paid off and not have any outstanding debt should something happen to him...
Some people are savers and some are spenders...
Dad was a child of the Depression and that always stayed with him.
My Grandmother was even more frugal... her philosophy was she didn't need anything that she couldn't pay cash for...
You're right - my parents were children of the depression. But, my father used to say that a lot of things were easier in the 50's and 60's because of America's prosperity at the time. Of course, he, and many others had the GI bill, too.
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That's a good point!
