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Old 08-03-2017, 11:23 AM
 
12,825 posts, read 20,151,461 times
Reputation: 10910

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Quote:
Originally Posted by larsm View Post
I think you are being more than a little over dramatic on the healthcare issue. If you have in the $1-2 million range, and you are 59, to suggest you are panicked over bridging healthcare costs to 65 seems over the top to put it mildly. Unless you are uninsurable (which is not possible based upon current, and foreseeable, laws), with depilitating health issues, you have more than enough to bridge the gap years. Even if you spend $50,000 a year between insurance costs and out of pocket, you are talking about depleting stash by $300,000. Hardly the death knell for a portfolio of $1-2 million. Painful? Yes. Devastating? Nope.
A couple of months of an aggressive cancer can upend that apple cart quickly. Or any of the seriously expensive issues that can hit quick.

Let's do some math.

Take for example, a simple sinus surgery. What is your best guess about the street price, if one had no insurance?

From that basis, we can then start our math exercise.
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Old 08-03-2017, 11:25 AM
 
12,825 posts, read 20,151,461 times
Reputation: 10910
Quote:
Originally Posted by eliza61nyc View Post
I also did not factor in Long term health insurance. Not sure how I feel about that? I've been scrounging around sites and it's so expensive for little return.
Lots of things seem like they are not a problem. Until they are.
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Old 08-03-2017, 11:29 AM
 
Location: Texas
1,971 posts, read 1,376,326 times
Reputation: 6745
Annual large expenses for us in retirement are $12K income tax, $5K property tax, $2K car insurance (3 cars), about $2K home insurance. $1.5K yard maintenance, $1K pool maintenance. My insurance is paid by company for life. We have no mortgage or car payments and only file standard deduction. Large expenses in near future are $20K+ for new roof, and $20K+ for 2 new HVAC systems.
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Old 08-03-2017, 11:34 AM
 
Location: Ohio
5,019 posts, read 1,807,325 times
Reputation: 4103
Quote:
Originally Posted by PartIrish View Post
eliza61nyc,

You have two important variables nailed down--your monthly expenses and a $2K/month pension. Now you just need to know how much your Social Security will be and when you will elect to start receiving it. At that point, you can think of your retirement "number" as based on two phases. Phase I is the bridge that gets you from pension + investments to Social Security age. Phase II is pension + social security + investments. Once you calculate social security into your formula, the amount you need each month minus pension and social security is what William Bernstein calls "residual living expense." Take that number and multiple by 12 to get an annual amount, then multiple it by 25 to see how much you will need over the period of your retirement.

For example, you indicate that you need $6K/month. Subtracting your pension income, you now need $4K/month. If you eventually receive $1500/month in social security, you are now down to needing $2500/month. Multiple that $2500 x 12 and you get $30K/year. Multiple that number time 25 and you get $750K needed to fund your retirement. Add to that the years you are self-funding social security and that is pretty close to your number.
There ya go, that's about right. Also, you are assuming that $750K is static and does not earn a dime which won't be true. I saw some estimates on here for $3M!! Put all this in a spreadsheet and check it, some of these estimates are way out in left field.
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Old 08-03-2017, 11:43 AM
 
Location: Philadelphia/South Jersey area
2,879 posts, read 1,407,237 times
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Quote:
Originally Posted by BayAreaHillbilly View Post
Lots of things seem like they are not a problem. Until they are.
And there in lies the problem. Do we keep slogging along trying to cover every contingency. One of the reasons I want to get out of the rat race early is purely emotional. over the last 4 years I lost my wonderful amazing husband, my little brother (both to cancer) and my best friend (heart attack from morbid obesity)
ALL were under 56.
some times I think of our 25th anniversary where we decided not to go to Europe but instead save the money.

How do you reach a balance? Do I leave at 58 while pretty healthy and knock a few things off the ole bucket list, do I stay to pad the nest egg, purchase LTI, self insure??
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Old 08-03-2017, 11:55 AM
 
Location: Albuquerque NM
1,661 posts, read 1,527,824 times
Reputation: 3650
I'm single and have no need to leave an inheritance. The value of my home is my LTC policy for a nursing home. My retirement income is sufficient to pay for assisted living or home healthcare here in flyover country. The conditions for collecting on an LTC policy, rapidly rising premium costs, and uncertainty that the insurance company would continue to provide LTC insurance in the future did not appeal to me. If I had a family history of dementia or some similar condition, my choice may have been different.
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Old 08-03-2017, 12:01 PM
 
519 posts, read 431,110 times
Reputation: 981
Quote:
Originally Posted by BayAreaHillbilly View Post
A couple of months of an aggressive cancer can upend that apple cart quickly. Or any of the seriously expensive issues that can hit quick.

Let's do some math.

Take for example, a simple sinus surgery. What is your best guess about the street price, if one had no insurance?

From that basis, we can then start our math exercise.
There is zero reason why someone with $1-2 million does not have the resources to pay for health insurance. As I said, even with crappy insurance (expensive with high deductible) what's the bill? $50,000 a year will certainly cover it unless there are some very unusual circumstances...
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Old 08-03-2017, 12:17 PM
 
11,938 posts, read 20,400,010 times
Reputation: 19334
Quote:
Originally Posted by NewbieHere View Post
People like to exaggerate online.
I'm not sure...and we could be talking two types of exaggeration...but I think all the articles and information overload...almost all of which is dire, has really scared people.

But then I just read an article published today on Bloomberg from Ben Steverman that surveys abut this are confusing for people, and assets appear to be understated. It was on a feed I can't link from...so that's why no link.

Sort of like " How much cash do you have?" "I have a hundred thousand dollars."

The guy collecting info writes down 100K, the stats people use 100K...and reporters report 100K, and everyone gnashes their teeth over the poverty of today's retired.

Meanwhile, the guy that answered the question is sitting on a nest egg of 1.5 million, because the question was cash, not total, and the guy who asked the question, didn't write the question so no one involved understood the parameters... and we have garbage data that is meaningless.

There's a lot of that...and I hear them all the time...50% of marriages fail...false. Most people using credit cards are in debt....false...
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Old 08-03-2017, 12:37 PM
 
71,700 posts, read 71,801,099 times
Reputation: 49268
Quote:
Originally Posted by larsm View Post
There is zero reason why someone with $1-2 million does not have the resources to pay for health insurance. As I said, even with crappy insurance (expensive with high deductible) what's the bill? $50,000 a year will certainly cover it unless there are some very unusual circumstances...
in the tristate area
well if you are a retired couple 1 million can safely generate 40k before taxes pretax . after taxes 40-50k barely covers the basic cost of living here for anything but a low end life style . our health insurance right now would take 12k in after tax dollars of that 40-50k and we have a 4000 deductible too .

1 million is really no better than a 40 or 45k pension pretax when it comes to cash flow ..
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Old 08-03-2017, 01:00 PM
 
Location: SoCal
13,252 posts, read 6,345,210 times
Reputation: 9873
Quote:
Originally Posted by BayAreaHillbilly View Post
A couple of months of an aggressive cancer can upend that apple cart quickly. Or any of the seriously expensive issues that can hit quick.

Let's do some math.

Take for example, a simple sinus surgery. What is your best guess about the street price, if one had no insurance?

From that basis, we can then start our math exercise.
Strawman arguments. Why no insurance? The most expensive health insurance is less than $50k a year.
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