Author Topic: how much do you budget for health insurance in retirement?  (Read 2930 times)

rosaz

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how much do you budget for health insurance in retirement?
« on: September 17, 2014, 10:22:02 AM »
Hi everyone, sorry if this has already been covered, I did a quick search but couldn't find anything.

I most likely won't be retiring for 20 years or so for reasons which I'm very ok with (still in my 20's, middle class salary, single parent having to live near my daughter's dad in high COL area, etc.). I do still like to start thinking ahead though as to what my retirement budget will be, and how much I need to put aside each month to get there at say, 50.

But I always get stumped trying to project health insurance costs in retirement. I figure most of my other expenses can be calculated with a reasonable degree of accuracy, but for health insurance, I have no idea.

So I'm curious as to what you all think the health insurance market will be like in 20 - 40 years, and your approach to planning around the uncertainties?

catccc

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Re: how much do you budget for health insurance in retirement?
« Reply #1 on: September 17, 2014, 10:32:11 AM »
Well, my time line is considerably shorter than yours, so I feel like current health care system will still be in place when I retire.  But I think for any time frame, right up until you are looking at FI in the next year or so, the exact future needs don't matter so much- instead you should just focus on saving as much as you can while maintaining a standard of living you deem reasonable.  A lot can happen in 20 years, there are so many uncertainties in life.

But if you really want to have a number, I would visit one of the sites that give you an idea of what insurance will cost you given your age and income at retirement, and number of family members.  Adjust for inflation as necessary.  Not an exact science, but not completely baseless, either.

Good luck!

Eric

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Re: how much do you budget for health insurance in retirement?
« Reply #2 on: September 17, 2014, 10:43:14 AM »
Health insurance should be easy to budget for.  Choose your state, your projected retirement age, projected retirement income, and see how much plans cost on healthcare.gov.  Re-run the numbers periodically and adjust your projections with premium changes. 

Health care is harder to budget for, and probably much more variable based on your personal situation.  You won't really know until you get there, but how healthy are you now and how healthy will you be at that age?  Are you on prescription meds?  Do you have chronic conditions?  Family history of _______ ? 

ShortInSeattle

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Re: how much do you budget for health insurance in retirement?
« Reply #3 on: September 17, 2014, 11:16:10 AM »
The difficult part is estimating your out of pocket expenses. Many "Bronze" plans have a 10k out of pocket max per family. As you age, your out of pocket costs will probably rise.

Our ER budget will be about 5k per year for premiums (via the exchange website) 2-3k in out of pocket expenses per year (doctor, eye doctor, dentist) and an additional 7-8k that can be switched from "travel" to"healthcare" if we have higher than expected out of pocket costs.

SIS


Fishingmn

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Re: how much do you budget for health insurance in retirement?
« Reply #4 on: September 17, 2014, 12:11:37 PM »
Age 52 - planning to retire in 3 years. Currently budgeting $14k/year based on MNSure (ACA) plans and no subsidy. Like a previous poster, we have an extra travel budget that could be tapped.

Jessa

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Re: how much do you budget for health insurance in retirement?
« Reply #5 on: September 17, 2014, 12:24:36 PM »
But I think for any time frame, right up until you are looking at FI in the next year or so, the exact future needs don't matter so much- instead you should just focus on saving as much as you can while maintaining a standard of living you deem reasonable.  A lot can happen in 20 years, there are so many uncertainties in life.

This is basically what I'm focusing on. My earliest possible retirement date isn't for 16 years....a lot can happen in 16 years. I'm saving as much as I can and working on spending as little as I can. Once I'm within a few years of retirement, I'll have a better idea of what the costs will probably be like. At this point, even setting a target for a nest egg is hard, because I don't know what my regular expenses will be like in 15 years. So save what I can, and adjust accordingly as I get more information.