Author Topic: Healthcare Costs Revisited - How can you budget less than $13 or $14k a year?  (Read 15320 times)

Threshkin

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I am on the cusp of FIRE and have been looking at ACA healthcare pretty closely.  Here in CO the cheapest Bronze plan for my situation is $885/month.  (Two people 57 & 50, non-smokers, no health issues).  We generally visit the doctor 1-2 times a year.

I am budgeting a minimum of $1,000 per month or $12K per year just for health care! 

Keep in mind that this does not cover dental or vision at all!  Dental in particular can be very expensive.

ACA needs to allow a catastrophic only policy with a $10K or higher deductible.
And/or ACA policies that include coverage for Dental and Vision.

Roland of Gilead

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I am on the cusp of FIRE and have been looking at ACA healthcare pretty closely.  Here in CO the cheapest Bronze plan for my situation is $885/month.  (Two people 57 & 50, non-smokers, no health issues).  We generally visit the doctor 1-2 times a year.

I am budgeting a minimum of $1,000 per month or $12K per year just for health care! 

Keep in mind that this does not cover dental or vision at all!  Dental in particular can be very expensive.

ACA needs to allow a catastrophic only policy with a $10K or higher deductible.
And/or ACA policies that include coverage for Dental and Vision.

Is your income too high for a subsidy?  I get $9,930 per year for the both of you in Denver on a silver plan (bronze is cheaper) and $4,750 per year after a subsidy if your MAGI is $50,000.

$4,750 is only $400 a month which really is not too bad.

If you have a high income though, $9,930 is pretty steep.

AlmstRtrd

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Quote from Roland of Gilead

Quote
Well, you guys can do that.  I guess your portfolio is much much larger than ours.  We figure getting $4000 a month from our portfolio with a 3% to 3.5% SWR and the current SS website projection for our SS benefit if we quit working next year (age 46) and collect at age 62 is over $2500 combined.   $2500 is a significant amount of money compared to the $4000 we will be living on before SS.

I guess if I had $10,000 a month with a 3.5% SWR I wouldn't count on SS either.

ROG, why are you making the jump from "not expecting much from SS" to "your portfolio must be large." I would LOVE it if you are correct about SS. We would be looking at a monthly SWR number that is similar to yours but a considerably lower SS payout.

Roland of Gilead

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ROG, why are you making the jump from "not expecting much from SS" to "your portfolio must be large." I would LOVE it if you are correct about SS. We would be looking at a monthly SWR number that is similar to yours but a considerably lower SS payout.

I am making the jump because you guys do not seem to care about the money you have paid into SS, which is not a welfare program, thus I assumed you had so much cash it really didn't matter.

I feel the same way about my future SS payment that someone with a pension might feel if there was talk about cutting it drastically.   The most you ever hear about with pensions is maybe a limit on benefits for future hires and even that is usually fought tooth and nail.  I am not going to give up on getting my fair share so easily as to just say "I am not counting on SS".

Threshkin

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I am on the cusp of FIRE and have been looking at ACA healthcare pretty closely.  Here in CO the cheapest Bronze plan for my situation is $885/month.  (Two people 57 & 50, non-smokers, no health issues).  We generally visit the doctor 1-2 times a year.

I am budgeting a minimum of $1,000 per month or $12K per year just for health care! 

Keep in mind that this does not cover dental or vision at all!  Dental in particular can be very expensive.

ACA needs to allow a catastrophic only policy with a $10K or higher deductible.
And/or ACA policies that include coverage for Dental and Vision.

Is your income too high for a subsidy?  I get $9,930 per year for the both of you in Denver on a silver plan (bronze is cheaper) and $4,750 per year after a subsidy if your MAGI is $50,000.

$4,750 is only $400 a month which really is not too bad.

If you have a high income though, $9,930 is pretty steep.

Those numbers do not include a subsidy.  I do not qualify while I am working and, like others in this thread am concerned that the subsidy rules will be "adjusted" to exclude people who have large savings accounts.

We live in an era where the majority of "have not's" have learned that they can vote to take from the minority "haves".  Currently the taking mentality is focused on earnings.  I expect that savings are next, first IRA and 401k accounts, then taxable accounts. 

The taker's logic follows these lines: "Why should you have more than me?  I don't care how you got it, I don't have it so you should be forced to give it to me."  All wrapped in nice words like fairness, for the children, help the needy, etc etc.

AlmstRtrd

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Quote from Roland Of Gilead

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I am making the jump because you guys do not seem to care about the money you have paid into SS, which is not a welfare program, thus I assumed you had so much cash it really didn't matter.

I feel the same way about my future SS payment that someone with a pension might feel if there was talk about cutting it drastically.   The most you ever hear about with pensions is maybe a limit on benefits for future hires and even that is usually fought tooth and nail.  I am not going to give up on getting my fair share so easily as to just say "I am not counting on SS".

Got it. Thanks for responding. So you don't take it for granted that your SS monies will all be there but you are not going to be voting for politicians who are trying to take it away (my interpretation of what you are saying). Fair enough.

Tone is not always easy to guess at correctly online but, yeah, I guess my attitude is, shall we say, less feisty than yours.

Also I agree that it is not a handout but I do think that substantial changes (cuts) will be phased in over time just because SS is not sustainable as currently configured. Just basing that claim on all the charts I see on our debt levels.


Roland of Gilead

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Those numbers do not include a subsidy.  I do not qualify while I am working and, like others in this thread am concerned that the subsidy rules will be "adjusted" to exclude people who have large savings accounts.

We live in an era where the majority of "have not's" have learned that they can vote to take from the minority "haves".  Currently the taking mentality is focused on earnings.  I expect that savings are next, first IRA and 401k accounts, then taxable accounts. 

The taker's logic follows these lines: "Why should you have more than me?  I don't care how you got it, I don't have it so you should be forced to give it to me."  All wrapped in nice words like fairness, for the children, help the needy, etc etc.

I agree with you 100%.   We grossed over $250,000 this year and paid over $70,000 in various taxes and SS payments, plus even a little bonus $65 in extra ACA tax for high wage income!   I am definitely a have but I see the takers all around.

Instead of continuing to work until I am 60 and have so much money that I can afford to let them take half of it, I am going to bail early and become a taker myself.   It is the American way!

beltim

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Those of you worried about Social Security - are you also completely discounting ever receiving Medicare benefits?  Because Social Security, as funded, is completely solvent until 2037, at which point it will pay out 73-76% in promised benefits in perpetuity without any changes to the system (http://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p111.html).  But Medicare has a current and future funding shortfall of about 50% (http://kff.org/medicare/fact-sheet/medicare-spending-and-financing-fact-sheet/).

It doesn't make any sense to me to not count Social Security benefits in retirement planning but to count Medicare as a sure thing.

Gin1984

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Those of you worried about Social Security - are you also completely discounting ever receiving Medicare benefits?  Because Social Security, as funded, is completely solvent until 2037, at which point it will pay out 73-76% in promised benefits in perpetuity without any changes to the system (http://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p111.html).  But Medicare has a current and future funding shortfall of about 50% (http://kff.org/medicare/fact-sheet/medicare-spending-and-financing-fact-sheet/).

It doesn't make any sense to me to not count Social Security benefits in retirement planning but to count Medicare as a sure thing.
I assume my SS will pay for the cost of my health insurance from 65 and above so I can ignore both.  :)

Threshkin

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Those of you worried about Social Security - are you also completely discounting ever receiving Medicare benefits?  Because Social Security, as funded, is completely solvent until 2037, at which point it will pay out 73-76% in promised benefits in perpetuity without any changes to the system (http://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p111.html).  But Medicare has a current and future funding shortfall of about 50% (http://kff.org/medicare/fact-sheet/medicare-spending-and-financing-fact-sheet/).

It doesn't make any sense to me to not count Social Security benefits in retirement planning but to count Medicare as a sure thing.

I do not include any allowance for medicare in my expense planning.  This shocked my MIL (retired private banker) a few days ago.  She was commenting that her medical premium was $3K per year.  I told her my post-retirement premium would be around $12K per year and she was astounded.

ShortInSeattle

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Why so many people make the statement "I am not counting on SS" when they have paid hundreds of thousands of dollars into the program boggles my mind.

To me it is like saying "I own my home but am not counting on the USA to be able to defend the borders and prevent Russia from taking it from me"

If we could somehow bet, I would give you 10 to 1 odds on SS being there for you when you retire, and I would make a bundle off of you because I would bet big.

My FIRE plans are not dependent on SS. In practical terms, this means we have to save even more than we would otherwise. I do consider it likely that we'll get some SS back and I agree it is an accrued benefit that we are entitled to.

But basically I don't trust the government over the long term - a lot can happen in 30 years, and I have no intention of retiring on the assumption that all will be well and end up getting f-ed and needing to work as a Walmart greeter in my golden years.

I hope you are right and that I'm just pessimistic. Then I can spend my SS on blackjack and whiskey and feel foolish for those extra years I worked to double-cover my butt. :)



kkbmustang

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Why so many people make the statement "I am not counting on SS" when they have paid hundreds of thousands of dollars into the program boggles my mind.

To me it is like saying "I own my home but am not counting on the USA to be able to defend the borders and prevent Russia from taking it from me"

If we could somehow bet, I would give you 10 to 1 odds on SS being there for you when you retire, and I would make a bundle off of you because I would bet big.

My FIRE plans are not dependent on SS. In practical terms, this means we have to save even more than we would otherwise. I do consider it likely that we'll get some SS back and I agree it is an accrued benefit that we are entitled to.

But basically I don't trust the government over the long term - a lot can happen in 30 years, and I have no intention of retiring on the assumption that all will be well and end up getting f-ed and needing to work as a Walmart greeter in my golden years.

I hope you are right and that I'm just pessimistic. Then I can spend my SS on blackjack and whiskey and feel foolish for those extra years I worked to double-cover my butt. :)

+1 except replace the blackjack and whiskey with travel and massages.


rtrnow

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Those numbers do not include a subsidy.  I do not qualify while I am working and, like others in this thread am concerned that the subsidy rules will be "adjusted" to exclude people who have large savings accounts.

We live in an era where the majority of "have not's" have learned that they can vote to take from the minority "haves".  Currently the taking mentality is focused on earnings.  I expect that savings are next, first IRA and 401k accounts, then taxable accounts. 

The taker's logic follows these lines: "Why should you have more than me?  I don't care how you got it, I don't have it so you should be forced to give it to me."  All wrapped in nice words like fairness, for the children, help the needy, etc etc.

I agree with you 100%.   We grossed over $250,000 this year and paid over $70,000 in various taxes and SS payments, plus even a little bonus $65 in extra ACA tax for high wage income!   I am definitely a have but I see the takers all around.

Instead of continuing to work until I am 60 and have so much money that I can afford to let them take half of it, I am going to bail early and become a taker myself.   It is the American way!

I just don't see this really happening. Those with money are still in control and will be for the foreseeable future. Honestly it just sounds like complaining to me. You are upset about 70k in taxes but that is 28% based on the 250 you made. Why is that so awful to you? It sounds like the old argument that the rich pay most of the taxes. Well of course they do. That doesn't mean they pay a higher or the highest percentage. I mean I would rather have have 5% of 10mil than 100% of a 100 bucks.

Roland of Gilead

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I just don't see this really happening. Those with money are still in control and will be for the foreseeable future. Honestly it just sounds like complaining to me. You are upset about 70k in taxes but that is 28% based on the 250 you made. Why is that so awful to you? It sounds like the old argument that the rich pay most of the taxes. Well of course they do. That doesn't mean they pay a higher or the highest percentage. I mean I would rather have have 5% of 10mil than 100% of a 100 bucks.

If I put it to you that you could have 5% of 10mil in exchange for 5 years of your life, would you still make that choice?

In some other thread there is talk of a person who makes $90,000 and pays zero taxes.  Making $250,000 and paying $70,000 in taxes does leave you with $180,000 but at the cost of a year of your life.  I would rather have the $90,000 and zero tax than the $250,000 and 28% tax if I get that year of life too.


randymarsh

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I agree with you 100%.   We grossed over $250,000 this year and paid over $70,000 in various taxes and SS payments, plus even a little bonus $65 in extra ACA tax for high wage income!   I am definitely a have but I see the takers all around.

Instead of continuing to work until I am 60 and have so much money that I can afford to let them take half of it, I am going to bail early and become a taker myself.   It is the American way!

I just don't see this really happening. Those with money are still in control and will be for the foreseeable future. Honestly it just sounds like complaining to me. You are upset about 70k in taxes but that is 28% based on the 250 you made. Why is that so awful to you? It sounds like the old argument that the rich pay most of the taxes. Well of course they do. That doesn't mean they pay a higher or the highest percentage. I mean I would rather have have 5% of 10mil than 100% of a 100 bucks.

Oh no, you had to pay an extra $65. The horror! Life is so unfair and the gubmit is to blame.

rtrnow, I always laugh when people complain about how the poor don't pay very much in taxes. Duh, they don't have any money! You can't tax something that doesn't exist.

Roland of Gilead

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Oh no, you had to pay an extra $65. The horror! Life is so unfair and the gubmit is to blame.

rtrnow, I always laugh when people complain about how the poor don't pay very much in taxes. Duh, they don't have any money! You can't tax something that doesn't exist.

The extra $65 of course made very little difference, it was just a added little bonus when doing taxes that popped up at the end (hey! you get to pay $65 more this year on top of your other taxes).

I wasn't complaining about how the poor don't pay very much in taxes, I was saying I want to join the middle class early retirees who pay very little in taxes.  If you are working at walmart and pulling in $25,000 a year, you should not be paying any tax.  If you are pulling in $70,000 a year from your investments and paying zero tax, that is quite wrong, but it is legal and I want to join you there.

brewer12345

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I just don't see this really happening. Those with money are still in control and will be for the foreseeable future. Honestly it just sounds like complaining to me. You are upset about 70k in taxes but that is 28% based on the 250 you made. Why is that so awful to you? It sounds like the old argument that the rich pay most of the taxes. Well of course they do. That doesn't mean they pay a higher or the highest percentage. I mean I would rather have have 5% of 10mil than 100% of a 100 bucks.

If I put it to you that you could have 5% of 10mil in exchange for 5 years of your life, would you still make that choice?

In some other thread there is talk of a person who makes $90,000 and pays zero taxes.  Making $250,000 and paying $70,000 in taxes does leave you with $180,000 but at the cost of a year of your life.  I would rather have the $90,000 and zero tax than the $250,000 and 28% tax if I get that year of life too.

Its a free country: go right ahead and reduce your income and tax burden.  This is a choice every one of us must make, since we cannot change the tax code and I will presume adherence to the law.  I chose to do so.  I went from a 6 figure income and paying significant taxes in 2013 to a sub 50k income and a tax liability of approximately zero.  Its up to you.