How to deal with potentially huge medical expenses for parents?

[Mei]

Hi, I'm very new to this website. My hubby stumbled upon this website and is very excited about the prospect of early retirement. Even before this blog, he has been talking and thinking about this, just no concrete plans. The only big picture 'plan' is to accumulate as much money as possible in the next few years to allow that. We are 30 and live a comfortable life, possibly earning more than most of our our peers . But we are naturally frugal people, we did upgrade our lifestyle (better food mainly, we still travel cheap, though not super budget like we did when we were students) with our higher incomes, but I would say the upgrade is very minimal (compared to a few of my peers who are earning in the same category). So, I don't think scaling down on our lifestyle after retirement will be a big problem for us.

But I do have a major worry, that I can't seem to convince myself - medical costs, not for ourselves, but for our parents. My parents do not have medical insurance as we realised the benefits of it too late and they already have illnesses which makes them unqualified for insurance coverage now. Thankfully, their conditions are under control now. But anything can happen when u grow old and I'm aware that treatment costs are going to drain our savings if something bad happens and we have retired by then. Assuming we continue in our jobs (with the same kind of salary), I'm confident we can handle all their medical costs. I can't help but worry that we will regret our early retirement choice when the need arises and we are helpless to provide them with the necessary medical treatment.

Any advice on how we can handle that, apart from not putting them as priority? Because they are our priority whether we like it or not.

[NumberJohnny5]

More info would help. What kind of condition? I understand that you may not want to be specific. Perhaps you could tell us what country you're in? If I can assume US, then insurance shouldn't be a huge deal come January 1 (well, I guess we'll see how the budget crisis is handled in the next few months). Either they can get insurance on an exchange, or Medicaid; past a certain age, Medicare. It may not be the most desired outcome...but it is better than nothing, and I'd assume it'd help keep the portion you have to pay low(er).

[Mei]

Hi, thanks for your reply!

We are from singapore. My mum has a liver condition, and I've tried to get her insurance coverage few years ago but they all got rejected fr the various insurance companies. I even tried asking if they could insure her for other illnesses, except conditions related to her liver but they all came back with negative replies. (as I'm writing this post, I realised maybe I'm worrying too much since the other 3 parents are fine and insured, though I'm going make a point of checking out their insurance details to put my mind at ease). My mum is covered by basic government health insurance, which works on a deductible and co-insurance basis on qualified claims (which I need to check out more how they determine tge amount but the claimable amount looks pathetic. for eg, the claimable amount for a liver transplant (which already rates as tge most serious condition in the health plan) is merely $1100. I'm not sure how much would such a major operation cost but it looks more like a 5 figure sum that we need to consider. this is assuming that all is well after tge operation I suppose. What if the transplant doesn't work? What if she needs more surgeries? What if an operation will not solve her problem, meaning it'll be life long medication required?). I know I'm pessimistic, but u get my point? There's so many possibilities of sicknesses that our parents could meet.

I guess what I'm really trying to ask is, how do we decide how much is enough to set aside as emergency fund? I have an idea how much I want to set aside (looking at 2x our combined annual pay) but my husband thinks it's too much and it'll possibly delay our retirement by a few years (minimum of 3 years assuming we save 75% of our pay). I know I'm being too conservative but I think I'll feel more at ease retiring knowing I have a relatively comfortable pool of emergency fund. Would like to hear some perspectives on how to arrive at a reasonable amount for such use? or does it make sense to work another 3 more years?

[bogart]

I'm sorry you're dealing with your Mum having a long-term liver condition.

Mustachians seem pretty scattered, and it's possible you'll tap into someone with knowledge of Singapore's systems, but I don't think I'd count on it; moreover, you don't want a general overview, you want to know about your Mum's prospects and the associated costs.  I'd guess your best bet would be to ask (her) if you can consult with her doctor (I'm assuming she has one) about her condition and its likely progression and treatments, including costs within the system where you find yourself.  I know pricing in the US is generally quite opaque, but my sense is this is less true in other parts of the world.

In the US, you'd be looking at 6 figures, not 5, for a liver transplant (or perhaps more, i.e., 7) and associated costs.  Also, I have no medical training but my impression is that people who have transplants typically require lifelong drug treatment to prevent the body from rejecting the transplanted organ (which, even though "similar" to the patient's, the body recognizes as foreign).  All of which is just to say you're probably best off getting good information from someone who really knows what they're talking about, given the situation, rather than general advice from someone on the internet.

My best wishes for your Mum's well-being.

[Debbie M]

Another idea is to start with a smaller emergency fund, but don't retire until your retirement income can be high enough so that you can keep adding to that emergency fund.  You can probably still retire in less than three years, but also be able to grow the emergency fund to eventually get as big as you'd like (or bigger).