Author Topic: FI -- except for healthcare expenses?  (Read 5135 times)

RedmondStash

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FI -- except for healthcare expenses?
« on: October 03, 2017, 08:37:47 PM »
So there's FI by the 4% rule, but given that healthcare expenses keep rising in double digits, and given the current political unrest in America, is there anyone who would otherwise be FI but isn't moving on to RE because of concerns about future healthcare expenses? If so, what strategies have you come up with to deal with that future unknown? Have worries about healthcare expenses changed your FI number?

As I contemplate the timing of leaving my job, this is by far my biggest concern. I'm wondering how those whose FIRE dates are coming in the next year or two are thinking about it, especially those who don't relish the idea of fleeing the country.

Miss Piggy

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Re: FI -- except for healthcare expenses?
« Reply #1 on: October 03, 2017, 08:51:00 PM »
I'd be FIREd already if not for the healthcare uncertainty.

I anticipate health insurance premiums + care + prescription expenses being upwards of $25,000/year for the two of us, so basically doubling the cost of a standard mustachian lifestyle. Our plan is to keep my consulting business just to earn that healthcare money, and use our stash for the rest.

pdxmonkey

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Re: FI -- except for healthcare expenses?
« Reply #2 on: October 03, 2017, 09:07:29 PM »
I expect this to be me a few years down the road although I expect one or possibly two reforms to the current system between now and then. Most likely to reach my FIRE number in the 2020-2024 time frame so it's several congressional and at least one presidential election down the road. Lots of time for either or both parties to change things or come to a mutual agreement.

EnjoyIt

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Re: FI -- except for healthcare expenses?
« Reply #3 on: October 03, 2017, 10:41:17 PM »
The cost of healthcare concerns me as well. This also includes care when we are elderly. The only solution I can think of is to work a little bit longer and have a higher nest egg. I figure that it is worth it to us to work an extra 1-2 years to allow for compounding and further contributions to increase our wealth.  In the long run we will sleep better knowing we should have enough to cover our healthcare needs.  This is especially true if we ever need rehab, assisted living or nursing home care.

The other option is to FIRE away hoping that your wealth will grow faster than the cost of healthcare or that the US will come to its senses and do something to actually make it more affordable.

Gin1984

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Re: FI -- except for healthcare expenses?
« Reply #4 on: October 03, 2017, 11:07:59 PM »
I could not get insurance prior to the ACA.  I won't retire early until this gets a bit more settled.  But regardless, my FI number is much, much higher than many here because I expect to pay about $25,000/year in health care. 

Maenad

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Re: FI -- except for healthcare expenses?
« Reply #5 on: October 04, 2017, 03:58:41 AM »
Our FI date was bumped out a year. We're supposed to RE in early 2020, but might wait until after that year's election to decide.

Monkey Uncle

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Re: FI -- except for healthcare expenses?
« Reply #6 on: October 04, 2017, 04:46:25 AM »
I probably would have FIREd already if not for the health care uncertainty.  Right now I'm planning to go in January 2018.  After the latest failed attempt to repeal the ACA, I'm thinking I'm going to go ahead and do it.  Even if a repeal does pass next year, it likely will take a couple of years to phase in, which should give me time to get a "plan B" in place.  I already have a 5 - 10k annual spending buffer that I could tap to cover some of the extra cost; I'll probably do some consulting or a part-time gig of some sort to make up the rest.

EarthSurfer

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Re: FI -- except for healthcare expenses?
« Reply #7 on: October 04, 2017, 05:31:00 AM »
Like another poster, I have kept a side consulting business which I hope can yield enough to cover actual costs.

Honestly, I'd rather work 20 hours a week at REI (access to the group plan after a year with most of the cost covered) than return to a tech environment even 1-2 days per week.

RedmondStash

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Re: FI -- except for healthcare expenses?
« Reply #8 on: October 04, 2017, 08:42:58 AM »
I already have a 5 - 10k annual spending buffer that I could tap to cover some of the extra cost....

This is smart. I kinda hate delaying FIRE to build this up, but it sounds like it might be worthwhile. I certainly would, as another poster said, sleep easier at night.

Thanks, everyone.

FireHiker

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Re: FI -- except for healthcare expenses?
« Reply #9 on: October 04, 2017, 09:59:32 AM »
Honestly, I'd rather work 20 hours a week at REI (access to the group plan after a year with most of the cost covered) than return to a tech environment even 1-2 days per week.

I am not FIRE'd yet, but this is entirely how I feel.

Altons Bobs

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Re: FI -- except for healthcare expenses?
« Reply #10 on: October 04, 2017, 11:00:46 AM »
Is it a concern, that's why I'm still working. I will keep my business so I can keep my group plan as long as I can until there is a definitive answer on where health care is going.

MrMoogle

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Re: FI -- except for healthcare expenses?
« Reply #11 on: October 04, 2017, 11:48:45 AM »
I'm FI except for healthcare, marriage, and kids.  Not sure if the later two will happen or how much additional spending (if any) would be required out of my nest egg to cover them. 

I'm shooting for FIRE in 2020 when I'll have ~1.5x what the 4% rule says I personally need.  That works out to 2.667% of current expenses.  The longer it takes for these unknowns to hit me, the better shape I should be in.

I really don't know a good way to do it, but I'm currently liking my job, so I'm willing to do it.

ducky19

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Re: FI -- except for healthcare expenses?
« Reply #12 on: October 04, 2017, 01:07:12 PM »
I have right at 10 years until I hit my "comfort" number for FI, and by that point I should have around $100k stashed in my HSA to help cover expenses for 12 years before Medicare kicks in. My wife is 4 years younger than I am and I expect will work for a few years after I RE, so should have healthcare coverage through her employer for 4-5 of those 12 years.

snapperdude

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Re: FI -- except for healthcare expenses?
« Reply #13 on: October 04, 2017, 03:03:36 PM »
Honestly, I'd rather work 20 hours a week at REI (access to the group plan after a year with most of the cost covered) than return to a tech environment even 1-2 days per week.

I am not FIRE'd yet, but this is entirely how I feel.


Wow, REI must have a lot of openings.

FireLane

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Re: FI -- except for healthcare expenses?
« Reply #14 on: October 04, 2017, 07:24:16 PM »
If I could be sure of future health care expenses, I could retire next year. As it is, I'm waiting until 2020, both to boost my stash so I have a bigger safety margin and also because a few elections will have taken place since then and I'm hoping we'll have a better idea of the future of health care in America.

Right now, there's way too much uncertainty for me to be comfortable leaving the sheltered little oasis of employer-sponsored health insurance. It gives me some comfort that the GOP failed to repeal Obamacare, even with majorities in both houses of Congress. But who knows what's going to happen tomorrow?

MayDay

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Re: FI -- except for healthcare expenses?
« Reply #15 on: October 04, 2017, 07:37:05 PM »
"luckily" we have maybe a decade of saving to go.

We expect at least 25k of medical expenses a year.

We'll work extra if need be to have a big padding be for medical stuff.

EarthSurfer

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Re: FI -- except for healthcare expenses?
« Reply #16 on: October 04, 2017, 09:50:34 PM »
Honestly, I'd rather work 20 hours a week at REI (access to the group plan after a year with most of the cost covered) than return to a tech environment even 1-2 days per week.

I am not FIRE'd yet, but this is entirely how I feel.


Wow, REI must have a lot of openings.

REI is more about the environment and the customers. As a friend says, "We sell paddle boards. How fun is that!"

Like all retail, there is a high turnover. REI attracts a bit more gray hair than other retailers with access to a decent benefits package for part time work after a year of service.

As a 12,000 mile backpacker, I should probably have just moved into a gear store 20 years ago...