|
Posted by stevedhoward@gmail.com on February 28, 2008, 1:40 pm
Hi All,
Newbie to the group. I am 41 and my wife is 40, both US citizens. I
am an extremely anal planner, and have finally gotten to the point
where I have pulled my head out of the sand and realize that we
*might* have health problems in retirement :) I have read a good bit
on Medicare and the different plans and medigap, etc.
My question is this:
If I want to ensure we are OK health care wise in retirement, is $10K
per year (in todays dollars, inflated at 8% per year) out of pocket a
decent estimate to use when planning for costs? Is it even realistic
to guess at a number like this?
As an aside, I have already considered long term care insurance, which
we plan to purchase in our mid 50's.
Thanks!
Steve
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
|
|
Posted by rick++ on February 28, 2008, 2:59 pm
> If I want to ensure we are OK health care wise in retirement, is $10K
> per year (in todays dollars, inflated at 8% per year) out of pocket a
> decent estimate to use when planning for costs? Is it even realistic
> to guess at a number like this?
Thats the "million dollar" question. First the out-of-pocket cap has
been inflating more like 15% a year since the early 1990s when there
was brief respite due to managed-care. There is annual inflation
8%-10%
plus age-cohort inflation (40% more each 5-year-group older).
A five-year doubling rate is unsustainable, with no clear solution in
sight.
For instance, your costs will increase by 30 times by the time you
reach
medicare age then.
Second medicare coverage may be crumbling.
Medicare never covered as much as your employer program.
It has a "list price" for Part A, B & D (doctor, hospital & drug) of
$900 a month in 2008, but the government pays $778 of that
with the retiree paying the rest. As part of the drug law,
"well off(*)" retirees will pay 50% of premiums, phased in over the
next several years. Plus the medicare premiums and co-pays
are inflating a high annual rate too.
Theres another medicare option Part C- the HMO option
wich sounds the cheapest to consumers. But a NY Times
eidtorial yesterday recommended termination. Plus hearings
in Congress this week are heading in the same direction.
Part C is too expensive and not availble in low-income neighborhoods
is the claim.
(*) "Well-off" is currently just top 7% of retirees. But the
definition intentionally
has no COLA adjustment, so will be top 50% by 2020.
Relentless medical inflation make the projections extremely grim.
Premium and co-pay costs will easily consume half of an early retirees
expenses in a decade or two if this keeps up. None of the
presidential
candidates is talking drastic reform - just some bands to get more
people
to buy insurance. I suggesrt a rule of thumb is to compute
what you need for non-medical costs and double it to be on the safe
side.
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
|
|
Posted by stevedhoward@gmail.com on March 4, 2008, 5:20 pm
> to buy insurance. I suggesrt a rule of thumb is to compute
> what you need for non-medical costs and double it to be on the safe
> side.
>
Thanks, Rick. I love rules of thumb. It's a place to start, anyway.
Thanks!
Steve
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
|
|
Posted by Dave Dodson on February 28, 2008, 3:21 pm
wrote:
> If I want to ensure we are OK health care wise in retirement, is $10K
> per year (in todays dollars, inflated at 8% per year) out of pocket a
> decent estimate to use when planning for costs? Is it even realistic
> to guess at a number like this?
I googled "cost of health care in retirement" and quickly found the
following statement:
"According to a March 2006 study by Fidelity Investments, a retired
couple without employer-sponsored health insurance can expect to pay
$200,000 for out-of-pocket health care costs like premiums and co-
pays."
Further, at personal.fidelity.com/planning/retirement/
plan_overview.shtml.cvsr?refpr=rrc18, has a breakdown of estimated
healthcare expenses, and states, "Fidelity estimates that an average
65-year-old should plan for at least $551 monthly or $6,631 annually
in healthcare expenses."
Dave
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
|
|
Posted by rick++ on February 29, 2008, 11:43 am
> "According to a March 2006 study by Fidelity Investments, a retired
> couple without employer-sponsored health insurance can expect to pay
> $200,000 for out-of-pocket health care costs like premiums and co-
> pays."
Even employer programs may not be great. I friends in our state's
program
which is outside of medicare. Their premiums doubled from
$190 to $380 per month the past three years. If they move over to
medicare, they are requie to pay all the Part B premiums which is
$400,
unless they had jobs for ten years in the social security system.
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
|
| Similar Threads | Posted | | Retirement Health care premiums | April 23, 2008, 11:48 am |
| Nursing Home Care costs | June 8, 2007, 12:25 am |
| long term health care plans | December 20, 2007, 4:55 pm |
| Why Is The US Ranked 37th In Health Care by WHO? Would I Really Want To Retire Here? | February 29, 2008, 1:46 pm |
| FROM THE MODERATORS: Long term health care plans | December 22, 2007, 7:49 pm |
| Retirement planning options | February 14, 2008, 12:16 pm |
| Sanity Check: Do my assumptions about retirement planning make sense | June 22, 2007, 5:05 am |
| The costs of refinancing | January 24, 2008, 12:41 pm |
| Looking for People Who Actually Use Health Savings Accounts | December 2, 2006, 1:00 pm |
| Should I care when CDs pay interest? | October 7, 2008, 6:57 am |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap