Retirement planning

[riptides]

Last year was the first year the Affordable Care Act was really in full effect. Ideology aside, I saw the healthcare marketplace as a great way to get an idea of healthcare costs when we want to retire. Your number above doesn't jive with what I was estimating, so I went ahead and ran some numbers here:

https://www.healthcare.gov/see-plans/

I made a hypothetical family of five where the parents want to retire early. The parents are 55 and 58, and the "children" are 22, 23, and 24. I figured this is about the worst-case scenario for a family, since you'd expect some of your children to qualify for their own insurance. I chose a very high household income, so that there is no subsidy at all for any of the plans. Again, worst-case. Nobody in this family smokes. If you choose to spend $8/pack to wreck your health, you don't get to complain when you have to pay more for medical coverage.

I ignored "bronze" and "silver" level coverages, since the out-of-pocket maximum tends to be higher and they will be expensive if anybody has any major medical issues. I found that there is a lot of "gold" and "platinum" coverage available for around $2k/mo with reasonable out-of-pocket maximums (There was a Humana plan for ~$1800/mo with a $3k out of pocket maximum for the family, for instance). Even if you hit the out-of-pocket maximum every year, your total spend will be under half of what you were spending on premiums alone.

You may want to look around again for coverage and see if you can't find something more reasonable.

Yeah, I looked around for coverage, that is what the exchanges and marketplace allow one to do.

2k a month is still 24k a year. Times 2 and your right at 50k. Close to my figure for the last two years.

Bottom line is unless you have a pension, or are close to medicare age inclusion coverage (COBRA) , don't even think about retiring early without something or someone bridging the gap for you.

 

[Parkanzky]

Yeah, I looked around for coverage, that is what the exchanges and marketplace allow one to do.

2k a month is still 24k a year. Times 2 and your right at 50k. Close to my figure for the last two years.

Bottom line is unless you have a pension, or are close to medicare age inclusion coverage (COBRA) , don't even think about retiring early without something or someone bridging the gap for you.

The numbers I am quoting are coverage for all five people. So $24k/yr total for the family of five.

 

[riptides]

The numbers I am quoting are coverage for all five people. So $24k/yr total for the family of five.

Yeah, you don't think that is a little on the extreme side?

I went from something like this, while employed (400 a month), coverage through COBRA (200 a month), coverage as an independant (meaning no company or group available) (2400 a month).

 

[Travelover]

................Bottom line is unless you have a pension, or are close to medicare age inclusion coverage (COBRA) , don't even think about retiring early without something or someone bridging the gap for you.

Actually, if you are living off investments, you can proportion what you take out from pre and post tax accounts and qualify for a generous health care insurance subsidy. Some people have to take out extra from IRAs and convert to Roth IRAs to get MAGI over the Medicaid threshold.
ObamaCare Calculator: Subsidies, Tax Credits, Cost Assistance

 

[Parkanzky]

Yeah, you don't think that is a little on the extreme side?

I went from something like this, while employed (400 a month), coverage through COBRA (200 a month), coverage as an independant (meaning no company or group available) (2400 a month).

Your coverage while you were employed and through COBRA were heavily subsidized. Healthcare is expensive and people in the 2nd halves of their lives need a lot of it. $2400/mo, total, including everything out-of-pocket, does seem reasonable to me for all of the healthcare costs for five people. That's under $500/mo. per person. That doesn't seem extreme to me at all.

 

[Travelover]

Your coverage while you were employed and through COBRA were heavily subsidized. Healthcare is expensive and people in the 2nd halves of their lives need a lot of it. $2400/mo, total, including everything out-of-pocket, does seem reasonable to me for all of the healthcare costs for five people. That's under $500/mo. per person. That doesn't seem extreme to me at all.

Healthcare spending in the US is about $8300 per person per year. So 5 x 8300= 41,500. If you aren't paying it, someone else is.

 

[Parkanzky]

Healthcare spending in the US is about $8300 per person per year. So 5 x 8300= 41,500. If you aren't paying it, someone else is.

Which is why I think the $2k/mo for a family of five looks like a good deal. I plan for $2k/mo in today's dollars for the two of us when I factor healthcare into our early retirement plans. That's high, based on what I see on the exchange right now, but I would rather over-plan.

 

[KiotiKowboy]

I have a simple 80/20 plan that includes dental and vision. I pay about $500 month. There is a $500 yearly deductible, $30 - $50 copays and max out-of-pocket is either $2500 or $3000 per year. I am retired, 60 years old. My wife will have the same plan when she retires and I'm not sure if we can combine to save any money at that time.

 

[MossRoad]

I have a simple 80/20 plan that includes dental and vision. I pay about $500 month. There is a $500 yearly deductible, $30 - $50 copays and max out-of-pocket is either $2500 or $3000 per year. I am retired, 60 years old. My wife will have the same plan when she retires and I'm not sure if we can combine to save any money at that time.

How much is it if you take a $2500 deductible? Just curious. Trying to see how long it would take to save up $2500 in an emergency fund.

 

[RedNeckGeek]

Last year was the first year the Affordable Care Act was really in full effect. Ideology aside, I saw the healthcare marketplace as a great way to get an idea of healthcare costs when we want to retire. Your number above doesn't jive with what I was estimating, so I went ahead and ran some numbers here:

https://www.healthcare.gov/see-plans/

I did the same last year, more out of curiosity than need. I plugged in my real numbers, and even for the lower quality bronze and silver plans, got prices five times higher than I'm paying through my employer sponsored health care. When I looked at plans that offered benefits comparable to what I have now, premiums were more like 10-12 times more expensive. I understand that some of the premium cost is paid for by my employer, but 80%? I don't think so. My take on the ACA is that it just legitimized victimizing individuals that are not eligible for group plans. Is it any wonder, since the legislation was largely crafted by the insurance industry?