"no worries" insurance ?? (55, pension, supplement, long-term)
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I wonder if there is such a thing. Here is what I am thinking...
I retire at 65 reasonably healthy. I will start SS and go on Medicare. I want a policy that will cover anything Medicare doesn't up to and including LTC if necessary and hiding the body when I kick the bucket (cremation and disposal of ashes, though if kids insist they can have them). Single premium - pay up front and if I die the next day they make good money but I am betting I don't. So is there such a thing? It seems like there should be. The price tag might be crazy scary if there is, but I would like to know.
Here is the full thought process behind this. Buy a home outright, probably in a 55+ community in FL using home equity after selling current home. Buy the above mentioned policy with some (hopefully not all) of retirement savings. With no rent (yes, there are HOA fees) and no fear of crazy medical bills, a "poverty level" income from SS should be enough to live on comfortably.
Don't have time to answer properly. Google long-term care annuity and see if that works for you. Insurance company won't keep the annuity value if you die.
Not exactly what I meant. Let me explain another way...
One of the numbers I throw around is $115k from retirement at 65 to death as average cost of your portion of medical bills and cremation (talking ziploc in a cardboard box, not burial in a plot). Fidelity says $220k for a couple is a good estimate for medical; that's where my number comes from. That's their estimate for average, not median, which is likely lower. But the scary thing is it could be $500k or more. So my question is whether any insurance companies sell a policy that looks at your age and other factors and spits out a number that you can pay as a lump sum and never have to worry about what the costs end up being. Like all insurance, it would probably be a bad deal for most of us because we would be sharing risk to help pay the bills of the unlucky few plus let the insurance company make some profit so that someone is there to write checks to my doctor or to a LTC facility if it comes to that.
Now on the surface you would think it has to be a really bad deal, but there are a few reasons it might not be terrible. If I have the money set aside, I would have to be really careful and conservative with it because I might need a big chunk of it to be liquid at any point. An insurance company, OTOH, could invest most of the money with a longer term strategy because they have lots of people to average it across. So they might be able to charge less up front than they pay out on average. Still would not fix the "problem" that most people would be around or below median expenses. I think it is a mistake that insurance is so often looked at as an investment; when I buy term life insurance I want it to be a complete waste of money from an investment perspective.
Check, Medicare may not start until your full retirement age. Probably 66. Part A must start at 65 but only part A.
Cremation is cheap. Shop once you get to you new community.
Don't think you can solve the medical costs with a policy.
There are continuing care communities. These might work for you. Be careful to check finances as they could go out of business. see Continuing care - Wikipedia, the free encyclopedia
Yeah, I know cremation can be fairly cheap. I am not looking for a continuing care community. What I want to do is move to a somewhat active community when I retire, know I can afford to live there and know that if I get an unfortunate surprise and need more medical care, up to and possibly including LTC, it would not wipe me out. Some people go into retirement pretty well prepared and then have a serious illness or accident with a long recovery and at the end of it they get their health back but then have to live in poverty. I want to avoid that or at least find out how much it would cost to avoid it.
And Medicare would start at 65 for me (under 9 years from now).
Normally speaking Part A is free to you. Part A covers most hospitalization.
Part B is for doctors and your cost for Part B will be $104.90/month. Once you start drawing ss benefits they will deduct the Part B premium from your ss benefit amount. If you don't start drawing ss at age 65 you will get an invoice for $314.70 from medicare every three months.
Now it is time for supplements.
When i first started I went with Plan F and if you want a plan where EVERYTHING is covered Plan F is what you want. For one year I had some health issues (back pain, severe) where I had x-rays, an MRI, three epidurals in the hospital, two visits to a surgeon and on top of this several visits to my family doctor. During this time I paid nothing, not even one penny, for anything.
On top of my Plan F I had a plan D which covered medication. For most people a Plan D affords them pharmacy for near next to nothing. I paid $30/month for my Plan D coverage and if it wasn't for one pill I take, Jentadueto, I doubt my total pharmacy would have run more than $100 for the year but Jentadueto is not cheap. Out of pocket it I would have paid somewhere around $500/month but the way the Part D (Cigna) for me works is in January the first three month prescription costs me just short of $500 for everything, The second and third quarter runs around $150 and then the last quarter jumps back up to $500 again.
I pay $360 for Part D premiums plus $1,300 per year for all my medications and it is the Jentadueto that is 90% of it. Not bad, if I had to pay for everything it would be better than $7,000 per year pharmacy so it's a must have for me.
For my Plan F I was paying $141/month and I was happy with it until they upped my rates I went shopping and settled on a Part G plan which is absolutely identical to the Plan F except under the Plan F I have to pay the Medicare $147 annual deductible. That is the only difference.
I am in South Georgia and you need to be aware rates vary around the county and even within a state. The difference between a Plan F in California and Georgia can be shocking so shop around.
Below are some premium costs that will give you an idea:
I had to choose between a Plan F or G. My monthly premiums for Plan F would be $157.94 but if I went with a Plan G my monthly premium would be $136.48 saving me $21.46/month for a total of $257.52 over the course of the year.
Of course with the Plan G I would have to pay the $147 Medicare deductible but even if I do, and I know I will, I will still enjoy a net savings of $110.52 with the Plan G so I took it.
Understand that Medigap policies are standardized... that is a Plan F is exactly identical to the Plan F offered by any other company and so on. Makes shopping easy.
If you go to the How to compare Medigap policies page you will see the only difference between Plan F and G is Plan F covers the Medicare Part B deductible which is $147.
Two things I especially like about either Plan F or G is the foreign travel insurance. It isn't a lot, the lifetime benefit is only $50,000 and they pay only 80% leaving you with 20% but what happens if you have a real medical problem in the Bahamas while on a cruise? Hopefully it is enough to get you home.
Plan F and G also cover Part B excess charges.
With a Plan F you will never have excess charges so i don't know where you are getting the six figure sum for health care.
As far as long term care I am looking into that myself.
I wonder if there is such a thing. Here is what I am thinking...
I retire at 65 reasonably healthy. I will start SS and go on Medicare. I want a policy that will cover anything Medicare doesn't up to and including LTC if necessary and hiding the body when I kick the bucket (cremation and disposal of ashes, though if kids insist they can have them). Single premium - pay up front and if I die the next day they make good money but I am betting I don't. So is there such a thing? It seems like there should be. The price tag might be crazy scary if there is, but I would like to know.
Here is the full thought process behind this. Buy a home outright, probably in a 55+ community in FL using home equity after selling current home. Buy the above mentioned policy with some (hopefully not all) of retirement savings. With no rent (yes, there are HOA fees) and no fear of crazy medical bills, a "poverty level" income from SS should be enough to live on comfortably.
Anyway, is there such a thing?
55+ communities in FL have a preponderance of stupid high HOA fees. Many are more than your mortgage payment would be. Be advised.
In addition, there have been a lot of problems in FL for existing homes due to modifications to flood insurance and hurricane proofing. In many cases, it is cheaper to knock an existing home down and rebuild. Flood insurance can be as high as $3,000 per month. Yes, PER MONTH. Be advised.
FL also has the highest mortgage forfeiture rate in the country - or at least it did for a good long while. It has the highest number of repossessed homes in backlog in the country. Many of these homes have storm damage, the owners walked away, and/or they have been empty for extended periods of time, have had damage and/or have been vandalized.
Normally speaking Part A is free to you. Part A covers most hospitalization.
Part B is for doctors and your cost for Part B will be $104.90/month. Once you start drawing ss benefits they will deduct the Part B premium from your ss benefit amount. If you don't start drawing ss at age 65 you will get an invoice for $314.70 from medicare every three months.
Now it is time for supplements.
When i first started I went with Plan F and if you want a plan where EVERYTHING is covered Plan F is what you want. For one year I had some health issues (back pain, severe) where I had x-rays, an MRI, three epidurals in the hospital, two visits to a surgeon and on top of this several visits to my family doctor. During this time I paid nothing, not even one penny, for anything.
On top of my Plan F I had a plan D which covered medication. For most people a Plan D affords them pharmacy for near next to nothing. I paid $30/month for my Plan D coverage and if it wasn't for one pill I take, Jentadueto, I doubt my total pharmacy would have run more than $100 for the year but Jentadueto is not cheap. Out of pocket it I would have paid somewhere around $500/month but the way the Part D (Cigna) for me works is in January the first three month prescription costs me just short of $500 for everything, The second and third quarter runs around $150 and then the last quarter jumps back up to $500 again.
I pay $360 for Part D premiums plus $1,300 per year for all my medications and it is the Jentadueto that is 90% of it. Not bad, if I had to pay for everything it would be better than $7,000 per year pharmacy so it's a must have for me.
For my Plan F I was paying $141/month and I was happy with it until they upped my rates I went shopping and settled on a Part G plan which is absolutely identical to the Plan F except under the Plan F I have to pay the Medicare $147 annual deductible. That is the only difference.
I am in South Georgia and you need to be aware rates vary around the county and even within a state. The difference between a Plan F in California and Georgia can be shocking so shop around.
Below are some premium costs that will give you an idea:
I had to choose between a Plan F or G. My monthly premiums for Plan F would be $157.94 but if I went with a Plan G my monthly premium would be $136.48 saving me $21.46/month for a total of $257.52 over the course of the year.
Of course with the Plan G I would have to pay the $147 Medicare deductible but even if I do, and I know I will, I will still enjoy a net savings of $110.52 with the Plan G so I took it.
Understand that Medigap policies are standardized... that is a Plan F is exactly identical to the Plan F offered by any other company and so on. Makes shopping easy.
If you go to the How to compare Medigap policies page you will see the only difference between Plan F and G is Plan F covers the Medicare Part B deductible which is $147.
Two things I especially like about either Plan F or G is the foreign travel insurance. It isn't a lot, the lifetime benefit is only $50,000 and they pay only 80% leaving you with 20% but what happens if you have a real medical problem in the Bahamas while on a cruise? Hopefully it is enough to get you home.
Plan F and G also cover Part B excess charges.
With a Plan F you will never have excess charges so i don't know where you are getting the six figure sum for health care.
As far as long term care I am looking into that myself.
Hope this helped some.
prices for medigap plans are highly location sensitive. the way your state is catagorized has a lot to do with prices as far as age based or community based . ny is one of few community rated states where there is no age adjusted increases unlike most states so we start out more but usually level out cheaper down the road. we also can switch plans freely with no health restrictions after initial enrollment like most states have.
right now an f plan in our area from arp is 3150 each a year for us (261 per month ea.). as a couple at today rates that is 6300 a year . add in medicare , part d coverage , dental , vision and hearing aids and a couple can easily need over 200k for health care , not even counting any long term care or in home care not covered by medicare. . .
in our area in ny there is no plan g so we are going with a plan f high deductable with a 2146.00 deductable a year each.
you can see for a couple in ny we are 2500.00 a year more for an f-plan than georgia but we don't increase with age like your chart shows.
you can shift things around and get policies that cover less but leave you exposed for more. you may capture a few years of being ahead before ole murphy takes hold and slams you with the unexpected.
we will likely hit 15-18k first year in retirement for my cobra since i am 62 , marilyns medicare and medigap plan and our long term care insurance. we already spent that on dental last year for the two of us.
our healthcare costs are just about on par with housing costs and we live in a stabilized building in queens ,nyc.
i always thought medicare was a very cheap system once you went on it but once all the pieces are added together it is not much less than our insurance now. in fact i think it will cost a bit more .
Last edited by mathjak107; 04-05-2015 at 03:12 AM..
I wonder if there is such a thing. Here is what I am thinking...
I retire at 65 reasonably healthy. I will start SS and go on Medicare. I want a policy that will cover anything Medicare doesn't up to and including LTC if necessary and hiding the body when I kick the bucket (cremation and disposal of ashes, though if kids insist they can have them). Single premium - pay up front and if I die the next day they make good money but I am betting I don't. So is there such a thing? It seems like there should be. The price tag might be crazy scary if there is, but I would like to know.
Here is the full thought process behind this. Buy a home outright, probably in a 55+ community in FL using home equity after selling current home. Buy the above mentioned policy with some (hopefully not all) of retirement savings. With no rent (yes, there are HOA fees) and no fear of crazy medical bills, a "poverty level" income from SS should be enough to live on comfortably.
Anyway, is there such a thing?
LTC is handled seperatley and depending on your state , age , health , amounts and perks prices will be all over the map.
they are strict as can be as far as who they accept. we got our ny state partnership plan through gensworth last sept. i am 62 and my wife 64 .
they came to our house and did extensive blood work , drug testing , hiv testing , body mass etc and memory tests .
we too 400 a day inflation adjusted for our area. i became slighly diabetic the past year although my numbers through diet and exercise are normal and i was still surcharged.
because we took it so late in life the premiums are 7800 a year for both and nys gives us back 1600 as a tax credit .
most states now sponser plans that are partnerships.
you buy your plam from an approved insurer and the state agrees that in exchange for buying this plan they agree to certain things.
in our case ,ny, they agree:
not to touch assets at all if you buy 6 years of coverage for in home or assisted living and 3 years nursing home care. .
no 5 year look back
no cap on the income the stay at home spouse gets
when the insurance runs out you go on a special version of medicaid and they pick up the bill.
but since they can only control the agreement in state you only get those perks in state.
if you move out of state you will only get the 3 years insurance coverage but no agreement.
as far as why we wanted it ? it wasn't for the 3 years coverage that is for sure.
we wanted it for what happens after the insurance runs out.
with private insurance we get to pick any place we like near family , not a hundred miles away where medicaid has an opening.
once insurance runs out the state pays all the bills forever.
not only that but no assets have to be moved effectively cutting the stay at home spouse off from 1/2 the assets.
even if you move assets the stay at home spouse has restricted income they can have if they have someone on medicaid in a nursing home.
our agreement has none of that required.
that is worth every penny of premium since just a tiny part of the gains on those assets cover the premium and protect all those assets.
trying to self insure can be an awful idea for many reasons .
the base of every investment pyramid should be the various types of insurance that apply to your situation and asset level that protect those asset from devastation by mitigating damages that stand a pretty good chance of happening.
having our house burn down from fire is less than a 1% chance and yet most have fire insurance.
needing long term care ,either in home ,assisted living or nursing home runs 77% . . yet many with assets worth protecting wing it or claim they are self insuring which can be a big blunder in the end for so many reasons.
it wasn't until money magazine did a feature story on us years ago that their team of pro's and i disagreed on the self insuring aspect.
i saw no reason to not do it.
but they were right and i was wrong and there were so many reasons i didn't evn realize why that would have been a poor idea.
Last edited by mathjak107; 04-05-2015 at 05:23 AM..
I'm 52 and would like to retire from my current job at 55. I do not plan to stop working however, healthcare is a major concern. My employer offers a good healthcare plan which according to the crazy numbers would amount to 75% of my gross pension if I would like to continue it after I retire. I don't see how this is sustainable as the cost projections of the plan will eclipse median household income in 10 to 12 years. That just doesn't make any sense. I am not a fan of the Affordable Care Act as I have gone on the exchange and the costs of plans are nearly as crazy as my current plan. However, I do not support repealing it without offering another realistic option. IMHO Healthcare costs are one of the biggest impediments to many people retiring and opening up job opportunities for young people. It also has put a stranglehold on economic expansion by employers since many fear adding to the payroll not knowing where the ACA is going and what effect it will have on their business cost structure. Having no insurance is not a viable default plan either. I have come to the conclusion that a Medicare for all as a basic plan with private supplemental options is a realistic option. I hope that this important issue will make some headway in the next 3 years and provide more clarity.
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