Author Topic: Lean FIRE and health care costs when you get older  (Read 5768 times)

RainyDay

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Lean FIRE and health care costs when you get older
« on: July 10, 2020, 08:44:15 AM »
For those folks who are lean-FIRE (like, under $30k per year), how do you anticipate handling health care costs when you're in your older years?  I'm not talking about people who are former military and have health care for life, or anyone like that.  I'm talking about people who are paying for health insurance with no employer kicking in.  Health insurance doesn't always cover things like nursing homes and in-home assistance, and even when it does, co-pays and out-of-pocket costs can be astronomical when paying for things like cancer treatments.  Are you planning to buy long-term care insurance?  Is it budgeted in for when you hit (for example) age 65?  I confess I have no idea what Medicare/Medicaid cover in that realm.

I confess it's one of my biggest worries...my SO's father is 72 and is nearly bed-ridden.  He had back surgery and never recovered, and now has a whole host of problems requiring assistance.  They have long-term care insurance, though.

I'd appreciate any insights!

ontheway2

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Re: Lean FIRE and health care costs when you get older
« Reply #1 on: July 10, 2020, 08:55:00 AM »
I'm not quite under 30k anticipated, but I figure pretty much all of my income will go to pay for it. They cover your food and entertainment plus there is not much else one will be doing if they have to be in a nursing home. Medicaid will cover one in my state, but you have to have pretty much no assets; it is not only income based. You use up your savings paying for your care then move to Medicaid once your net worth is nearly zero.

RainyDay

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Re: Lean FIRE and health care costs when you get older
« Reply #2 on: July 10, 2020, 09:19:31 AM »
You use up your savings paying for your care then move to Medicaid once your net worth is nearly zero.

So this actually sounds like a plan NOT to pay health care costs at the end of life--to live off the government instead.  (sorry if this sounds judgmental...I don't mean it to be, just trying to understand what options there are for lean FIRE.)

MonkeyJenga

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Re: Lean FIRE and health care costs when you get older
« Reply #3 on: July 10, 2020, 09:52:01 AM »
I'm around a 20k spend, lower if I have no big medical expenses. I have some buffer on top of that for long-term care, and I will receive some SS in my 60's and likely some inheritance. When using ER calculators, I usually add an extra expense for medical that starts in my 50's.

Since I'm still in my 30's, my biggest backup option was going back to work at some point. I figured if my investment buffer was decreasing, or if the ACA was gutted, I could get a job.

I'll look into LTC when I'm older.

ontheway2

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Re: Lean FIRE and health care costs when you get older
« Reply #4 on: July 10, 2020, 10:57:01 AM »
You use up your savings paying for your care then move to Medicaid once your net worth is nearly zero.

So this actually sounds like a plan NOT to pay health care costs at the end of life--to live off the government instead.  (sorry if this sounds judgmental...I don't mean it to be, just trying to understand what options there are for lean FIRE.)

My budget is closer to 40k which would pay for a facility. My point is that if one is pulling a little more than planned to pay for the facility and they end up running out, there is another option. Of course if you do not want to have that as a back-up plan, you could always save a little extra and not include it in your 4%. Are you planning on any SS? That is also extra to add to your 30k if it is not already in your calculations. It is not in mine, but I do think at least something will be there to fluff my budget in old age for extra healthcare costs. I'll also add that you did bring up Medicaid in your post, so I figured it was not off the table.

Edit: there is also the impact of having a paid off house. If a nursing home is needed; the house would be sold and pay quite a bit of LTC
« Last Edit: July 10, 2020, 01:10:34 PM by ontheway2 »

Goldendog777

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Re: Lean FIRE and health care costs when you get older
« Reply #5 on: July 10, 2020, 07:16:30 PM »
Our paid off house is a $500k nest egg that I figure we will downsize or if one of us needs a nursing home, it will get sold and the other one will rent.  Not ideal but we donít have millions to support long term care.

Much Fishing to Do

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Re: Lean FIRE and health care costs when you get older
« Reply #6 on: July 11, 2020, 05:51:53 AM »
Our paid off house is a $500k nest egg that I figure we will downsize or if one of us needs a nursing home, it will get sold and the other one will rent.  Not ideal but we donít have millions to support long term care.

That sounds pretty drastic for what doesn't have to be such a huge expense.  My folks started carrying very comprehensive LTC insurance for $4/k year at 65 (I think the premium was about double by 75). It actually wasn't even an increase in monthly expenses for them when they got it b/c it was paid for by the reduced health costs when hitting medicare.  If its too large a nut to carry a reverse mortgage LOC could be used with all that equity so no one has to move anywhere if they don't want to.

jim555

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Re: Lean FIRE and health care costs when you get older
« Reply #7 on: July 11, 2020, 07:06:33 PM »
Health insurance never pays for long term care / nursing homes.  You spend down until Medicaid takes over.  No one has enough to self fund usually.  In my area it is $14,000 a month for a nursing home.

I'm on the ACA right now with a max OOP of $200 a year, thanks Medicaid!  Next year the plan will have a $2,000 max OOP when I pop out of Medicaid and cost $20 a month.  Post 64 you deal with Medicare and Medigap insurance, which is more expensive than the ACA for me.
« Last Edit: July 11, 2020, 07:22:27 PM by jim555 »

spartana

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Re: Lean FIRE and health care costs when you get older
« Reply #8 on: July 11, 2020, 07:31:21 PM »
My plan as a single childless person is to just use whatever assets I have, including my paid off home, as long as they last. If I outlive that (doubtful) then I would have to use medicaid and they would take whatever monthly income I would get to fund my care. BUT, to be honest, I am not against the Smith and Wesson end of life plan if needed (and able) so there is that option.

RainyDay

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Re: Lean FIRE and health care costs when you get older
« Reply #9 on: July 13, 2020, 05:34:05 AM »

Edit: there is also the impact of having a paid off house. If a nursing home is needed; the house would be sold and pay quite a bit of LTC

Good point, I had forgotten about the equity in the house.  Another poster also mentioned a HELOC, which I hadn't considered. 

The answers/insights are much appreciated!  I'm a gov employee, and if I stay til full retirement age, we get continuing health insurance for life.  If I leave early, I don't...so I'm wondering what people plan to do for old-age care when their yearly expenses (at time of FIRE) are very low.  Adding in health care costs could be devastating, but it sounds like there are good options. 

ontheway2

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Re: Lean FIRE and health care costs when you get older
« Reply #10 on: July 13, 2020, 07:21:41 AM »

Edit: there is also the impact of having a paid off house. If a nursing home is needed; the house would be sold and pay quite a bit of LTC

Good point, I had forgotten about the equity in the house.  Another poster also mentioned a HELOC, which I hadn't considered. 

The answers/insights are much appreciated!  I'm a gov employee, and if I stay til full retirement age, we get continuing health insurance for life.  If I leave early, I don't...so I'm wondering what people plan to do for old-age care when their yearly expenses (at time of FIRE) are very low.  Adding in health care costs could be devastating, but it sounds like there are good options.

There are options, but know that health insurance does not cover nursing homes or long term care

ontheway2

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Re: Lean FIRE and health care costs when you get older
« Reply #11 on: July 13, 2020, 07:25:22 AM »
Health insurance never pays for long term care / nursing homes.  You spend down until Medicaid takes over.  No one has enough to self fund usually.  In my area it is $14,000 a month for a nursing home.

I'm on the ACA right now with a max OOP of $200 a year, thanks Medicaid!  Next year the plan will have a $2,000 max OOP when I pop out of Medicaid and cost $20 a month.  Post 64 you deal with Medicare and Medigap insurance, which is more expensive than the ACA for me.

Damn! Assisted living where I am is 2.5-4k and nursing homes 4-6k. There are some where if you go in on the assisted side, then you can lock in rates and keep it around 4k long term.

spartana

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Re: Lean FIRE and health care costs when you get older
« Reply #12 on: July 13, 2020, 09:12:36 AM »

Edit: there is also the impact of having a paid off house. If a nursing home is needed; the house would be sold and pay quite a bit of LTC

Good point, I had forgotten about the equity in the house.  Another poster also mentioned a HELOC, which I hadn't considered. 

The answers/insights are much appreciated!  I'm a gov employee, and if I stay til full retirement age, we get continuing health insurance for life.  If I leave early, I don't...so I'm wondering what people plan to do for old-age care when their yearly expenses (at time of FIRE) are very low.  Adding in health care costs could be devastating, but it sounds like there are good options.
I was also a gov employee but retired too young to be eligible for employee health insurance (which was actually pretty expensive). I was very lean FIRE at first and this was before the ACA. What I did was first go on COBRA and then once that was gone a low cost catastrophic plan. If that increased too much as I aged or I developed a condition that was expensive to treat I probably would have had to look into moving to another country and establishing residency there. Or marry someone who had insurance I was single). There weren't too many other options pre-ACA.

Now with ACA I think the lower taxable income people will be able to get large enough premium subsidies or even free Medicaid until they are 65 and can go on Medicare. So most will likely have affordable health insurance but long term or nursing care will still be an issue. Probably most will eventually have to go on Medicaid for nursing home care if they outlive their assets.

As for myself, I can use the VA for my health care (and now do since shortly after the ACA was enacted and my private policy was cancelled). While that won't help with long term care or nursing care (which the VA won't cover for me or for most vets), I think my assets and income will cover most of that once liquidated.
« Last Edit: July 13, 2020, 09:17:15 AM by spartana »

RainyDay

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Re: Lean FIRE and health care costs when you get older
« Reply #13 on: July 13, 2020, 10:02:01 AM »
Health insurance never pays for long term care / nursing homes.  You spend down until Medicaid takes over.  No one has enough to self fund usually.  In my area it is $14,000 a month for a nursing home.


Similar in my area (near Washington DC)Ö I've heard of nursing homes for around $9000/month.  It sounds like LTC insurance might be the way to go, and just budget for it after a certain age.

spartana

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Re: Lean FIRE and health care costs when you get older
« Reply #14 on: July 14, 2020, 07:02:40 AM »
Health insurance never pays for long term care / nursing homes.  You spend down until Medicaid takes over.  No one has enough to self fund usually.  In my area it is $14,000 a month for a nursing home.


Similar in my area (near Washington DC)… I've heard of nursing homes for around $9000/month.  It sounds like LTC insurance might be the way to go, and just budget for it after a certain age.
The problem with LTC insurance is that the older you get before you start paying into it, the higher the cost. Apparently if you start it while younger (50s) you can lock in a fairly low price. But if you wait until older the monthly premiums are pretty high - especially if you may never need it or will need it for a very short time. Also there have been stories of LTC facilities that go bankrupt and shutdown.

Also LTC insurance isn't good just for elderly people. Young people have accidents too and can wind up needing LTC for life. And if FIRE and not paying into SS for many years, lose the SSDI benefit So no disability pay.
« Last Edit: July 14, 2020, 07:09:46 AM by spartana »

Laura Ingalls

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Re: Lean FIRE and health care costs when you get older
« Reply #15 on: July 14, 2020, 08:41:35 AM »
You use up your savings paying for your care then move to Medicaid once your net worth is nearly zero.

So this actually sounds like a plan NOT to pay health care costs at the end of life--to live off the government instead.  (sorry if this sounds judgmental...I don't mean it to be, just trying to understand what options there are for lean FIRE.)

Seems pretty judgemental.  The tail risk on long term care is extremely long.  I had a family friend that spent 20 plus years non-verbally but mentally alert in a long term care setting.  How does anyone plan to pay for something such as that.
« Last Edit: July 14, 2020, 11:34:05 AM by Laura Ingalls »

seattlecyclone

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Re: Lean FIRE and health care costs when you get older
« Reply #16 on: July 14, 2020, 10:30:13 AM »
You use up your savings paying for your care then move to Medicaid once your net worth is nearly zero.

So this actually sounds like a plan NOT to pay health care costs at the end of life--to live off the government instead.  (sorry if this sounds judgmental...I don't mean it to be, just trying to understand what options there are for lean FIRE.)

Seems pretty judgements.  The tail risk on long term care is extremely long.  I had a family friend that spent 20 plus years non-verbally but mentally alert in a long term care setting.  How does anyone plan to pay for something such as that.

Yes, this. I'm pretty confident we'd be able to pay for a few years of long-term care out of pocket, but it starts to get iffy when we're talking about a decade or more. For that reason I would consider buying insurance that doesn't kick in until you've already been in a facility for several years. Premiums should be pretty reasonable because most people only need to be in such a place for a year or three (if at all). However I don't think this is a product that exists.

Most long-term care insurance plans are the exact opposite of this: they'll cover the first few years and then cut you off! Seems like even if you do buy the insurance your only options for the tail risk are to either save a million bucks you probably won't need, or rely on Medicaid.

RainyDay

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Re: Lean FIRE and health care costs when you get older
« Reply #17 on: July 15, 2020, 08:21:30 AM »

Most long-term care insurance plans are the exact opposite of this: they'll cover the first few years and then cut you off! Seems like even if you do buy the insurance your only options for the tail risk are to either save a million bucks you probably won't need, or rely on Medicaid.

Exactly! 

Bateaux

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Re: Lean FIRE and health care costs when you get older
« Reply #18 on: August 09, 2020, 06:37:32 AM »
The reality of long-term care, is why I'm adding almost 3 more working years before FIRE.

2Birds1Stone

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Re: Lean FIRE and health care costs when you get older
« Reply #19 on: August 09, 2020, 09:38:57 AM »
FIRE'd on an $18k budget last year @32 y/o.

ACA (or similar subsidized care)
Geographical Arbitrage
Second Citizenship (EU)
Return to work
Etc etc...

I think you can convince yourself to work forever if you think of enough "what ifs". I would rather enjoy 40+ years of retirement and then get on medicaid/medicare if I go bankrupt in my twilight years than worry about it over the most physically fit/healthy years left.

Also, insurance is one thing.......taking care of yourself is another.

I laugh cry when I see people here with 7 figure net worth's doing OMY when they are drinking/eating/sedating themselves to death.

ol1970

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Re: Lean FIRE and health care costs when you get older
« Reply #20 on: August 11, 2020, 08:38:21 AM »
What a sad undignified way to close out your life.  I feel bad for the people who chose their line of work so poorly that it causes them to check out and go live a life of poverty at $30k year only to worry if it will work out, and never get to experience most of the good stuff.  Every generation has them, this generation they renamed it "leanfire" to make it sound cool.   I guess I get it if you don't really have anything you are talented at or passionate about, but that's pretty sad too.

jim555

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Re: Lean FIRE and health care costs when you get older
« Reply #21 on: August 11, 2020, 08:58:55 AM »
What a sad undignified way to close out your life.  I feel bad for the people who chose their line of work so poorly that it causes them to check out and go live a life of poverty at $30k year only to worry if it will work out, and never get to experience most of the good stuff.  Every generation has them, this generation they renamed it "leanfire" to make it sound cool.   I guess I get it if you don't really have anything you are talented at or passionate about, but that's pretty sad too.
$30K a year is poverty?   Paid off housing and $30K is more than enough.  You might have a spending problem.

MonkeyJenga

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Re: Lean FIRE and health care costs when you get older
« Reply #22 on: August 11, 2020, 09:25:52 AM »
@ol1970 is being super freaking condescending on more than one thread about anyone interested in less consumption than him.

30k is only poverty level in the US if you're a family of 5.

ol1970

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Re: Lean FIRE and health care costs when you get older
« Reply #23 on: August 11, 2020, 10:40:49 AM »
@ol1970 is being super freaking condescending on more than one thread about anyone interested in less consumption than him.

30k is only poverty level in the US if you're a family of 5.

You are correct, I apologize for not better understanding your position.  I'm not sure if you've noticed but there is a condescending view of people who don't choose to pull the rip cord as fast as financially possible.  It's cool, I'm just offering a slightly different perspective for those younger people out there who might be on the fence.  I'll stop chiming in and again I'm sorry for offending anyone with my admittedly harsh comments.


Malcat

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Re: Lean FIRE and health care costs when you get older
« Reply #24 on: August 11, 2020, 11:43:59 AM »
@ol1970 is being super freaking condescending on more than one thread about anyone interested in less consumption than him.

30k is only poverty level in the US if you're a family of 5.

You are correct, I apologize for not better understanding your position.  I'm not sure if you've noticed but there is a condescending view of people who don't choose to pull the rip cord as fast as financially possible.  It's cool, I'm just offering a slightly different perspective for those younger people out there who might be on the fence.  I'll stop chiming in and again I'm sorry for offending anyone with my admittedly harsh comments.

You are more than welcome to chime in, but your attitude suggests that you haven't spent a lot of time here.

There is only a condescending attitude towards working longer than you have to *IF* you hate your job. There's a very strong attitude that staying miserable for the sake of luxuries you don't need is tragic and avoidable.

However, MANY of us regular posters don't hate our jobs and happily discuss continuing to work with no judgement from others, and one of the most common subject matters here is OMY, where people tend to work one or multiple years beyond their FI savings target just to have more financial security and because they don't mind continuing for awhile.

*If* this were a mindless cult of ultra savers who dogmatically quit at 600k-1M savings regardless of life circumstances or career satisfaction, and who hounded anyone else who tried to live otherwise, then I would get why you've posted the way you have, but that's so far from the truth, it's absurd. It makes me wonder, if that's what you thought this place was, why did you join??? Just to educated us idiots on how wrong we're living??

Now, I know you have vast wealth and years of earning more per year than many people here save in a lifetime, but that doesn't give you the right to condescend others who choose to live their lives differently than you.

ETA:
I am also a high earner, not as high as you yet, but with very realistic potential to get there. I suspect, based on your posts, that even at the same wealth level, you and I would live life very differently.

That's cool, that's what this place is like. A lot of different people with very different lives and priorities sharing their perspectives. That's what makes this place interesting.
« Last Edit: August 11, 2020, 11:52:30 AM by Malcat »

Monkey Uncle

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Re: Lean FIRE and health care costs when you get older
« Reply #25 on: August 18, 2020, 07:51:22 AM »
Not sure if my experience is relevant to the OP's situation, but I'll go ahead and share anyway.  I FIREd at a relatively old age for this forum (49), and basic spending for my wife and me runs about $35-38k/yr, with additional money spent on travel and other "luxuries" in some years.

We're planning to handle old-age medical expenses the same way every other American does: traditional Medicare with a Part B supplement and a Part D drug plan.  DW goes on Medicare next year.  All-in with the Part B premium, supplement, and drug plan, it will cost more than we are paying for both of us right now on an ACA plan with the premium tax credit.  She will be selecting a Part B supplement that covers basically everything, so that her total spending on doctors, hospitals, and procedures will be the premiums that we pay for Part B and the Part B supplement.  Medicare incentivizes selection of the richest possible supplement, because you only get guaranteed issue when you first sign up (and in a few other extenuating situations that are largely beyond your control).  Plus my wife has a pre-existing condition that we know is going to result in at least a couple of expensive imaging procedures every year, and likely would price her out of switching plans once her guaranteed issue window closes.  So it doesn't seem wise to go with a skimpier plan.  But of course these are decisions that you make when you turn 65.  You don't really need to obsess over them when you are 35.  All in all, Medicare will be expensive, but still manageable within our budget.  For comparison, it will be a whole lot less expensive than a full-freight private plan.

Long term care is a completely separate issue because it is not covered by Medicare or any other regular health insurance.  There is no good solution for this, because LTC insurance is expensive, and will get more expensive (by an unknown amount) as you get older.  But once you've dumped 10s of thousands of dollars (or potentially more) into premiums over the years, you can't exactly cut your losses and run, because you've used your self-funding buffer to pay the premiums.  I'm choosing to treat long-term care as a tail risk, because although about half of people turning 65 will need long-term care, far fewer will need it for many years.  I'm hedging my bets on all potential tail risks by building a buffer into my budget (and if all this fails, there's the Medicaid option, which is how the vast majority of Americans handle long-term care).  Here's how I explained it in another thread about the potential for super longevity (which is another tail risk that gets brought up periodically):

https://forum.mrmoneymustache.com/welcome-to-the-forum/are-we-all-underestimating-life-expectancies-are-you-planning-for-100/msg2659431/#msg2659431

Quote
Living to 100 is one of those tail-of-the-distribution risks.  It might happen, but it probably won't.  Still, it might be good to guard against it, because even though it's a low probability event, if you are unlucky enough for it to happen to you after you run out of money, the consequences might be pretty bad.  But the problem is there are a number of other low probability/severe consequence events that might happen.   Can you really guard against them all?  Here are a few I can think of, along with possible mitigation measures:

Living to 100 or more.  Mitigation: run your simulations to age 110 (or 120, or 150, or whatever).

Future financial market performance is worse than anything in history.  Mitigation: assume the market will drop 80% or more in your first year of retirement, followed by 20 years of stagflation (or some other doomsday scenario - you can probably use a Monte Carlo simulator to generate something that is suitably scary).

You wind up spending years in a nursing home.  Mitigation: save a few hundred thousand extra.  Or buy expensive long term care insurance and make sure you have enough saved up to pay the ever-increasing premiums until you reach 100 (or 110, etc.).

Something unexpected happens in your personal life that causes your annual spending to increase significantly.  Mitigation: whatever your projected spending number is, increase it by 30% (or 50%, or whatever).  (Note that I am not talking about higher medical expenditures here.  That is not a tail risk for Americans - it is going to happen to most of us as we get older, so whatever baseline spend you are estimating should already account for increasing medical costs.)

Your expected Social Security benefit (or superannuation benefit, or pension, etc.) gets cut significantly, or eliminated entirely.  Mitigation: leave this source of income out of your simulations.

I'm sure there are others that we could come up with, but you get the picture.  If you plan for all of these risks, you're going to be right there with Suze Orman, working until you die, despite being a multi-millionaire.

What to do?  Don't plan for all of them.  The odds of all of them happening to you are vanishingly small (and you probably can't even think of them all anyway).  But the odds of one or two of them happening to you are pretty good, because there are so many possible low-probability events that might happen.  In my opinion, the way to deal with this is just to build in some generic safety buffers, rather than trying to plan for a bunch of specific low-probability events.  I believe MMM talked about this in one of his older blog posts (I'm too lazy to go dig it up).  For younger retirees, ignoring Social Security/pensions in your calculations is probably a reasonable safety buffer.  Monetizing a hobby or picking up the occasional side gig might be a good buffer.  You can reduce your withdrawal rate below what your simulations say is safe.  Ignore an expected inheritance in your calculations.  Maintain flexibility in your annual spending.  And on and on.  Pick a couple that work for you and call it good.  Yes, you will still have some unknown level of risk remaining, because some Armageddon that we've all never thought of still might happen.  If you can't stomach that, then early retirement (or retirement at any age) probably isn't for you.

Personally, my buffer approach is to run my simulations with a 100% historical success rate, and then cut the resulting maximum allowable spending amount by 15%.  Why 15%?  No good reason, other than that is a typical project budgeting contingency level.  I am also ignoring any inheritance that I might get from my parents, because I have no good way of estimating when it will occur or how much it will be.  And if necessary, I have the ability to cut another 10 grand or so off of my annual spending (beyond the 15% buffer).  That's enough safety buffer to allow me to sleep at night.

So to sum up, I guess I'm dealing with all of the poorly known increased spending scenarios, including medical/long-term care, by living as if I'm lean FIRE, even though historical simulations say I could live a bit richer.  Personally, I don't think it is wise for anyone to truly do lean FIRE with no buffer unless they are o.k. with going back to work.  Because something is always going to go wrong.

deborah

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Re: Lean FIRE and health care costs when you get older
« Reply #26 on: August 21, 2020, 11:13:48 PM »
Since I retired my stash has increased most years because Iíve lived within my expected budget. As a result, I will have enough for old age despite having a low expenditure most years. Yes, old age care can be very expensive, but people generally donít last very long needing the more expensive parts of it - generally, the last eight years of life are the expensive ones, and people tend to live more frugal lives for about the ten years prior to that. They no longer go on international trips (travel insurance after youíre 70 is much more expensive, you may have aches and pains preventing you from being as gung-ho as you were...), and potter around their neighbourhood. This offsets the later expenses to a certain extent.

Trudie

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Re: Lean FIRE and health care costs when you get older
« Reply #27 on: September 05, 2020, 10:19:52 PM »
Weíre fatFIREd, but I just wanted to comment on our LTC plans since weíre working on them right now.  We just applied for LTC insurance, choosing a life insurance policy with an LTC rider.  I am 50 and my spouse is 59.  I easily qualified, but they rejected his application because he has an autoimmune disorder and takes an expensive biological drug.  I was surprised to learn that a pretty high percentage of people are rejected for LTC coverage.  For the LTC companies itís an up or down decision, thereís not wiggle room with underwriting to offset that risk by paying higher premiums, for instance.  Learning these two facts kind of soured me on the industry.

Nonetheless, we are going to purchase the LTC coverage for me.  It ainít cheap.  Weíll pony up $50K and get about $17k in life insurance (burial expenses) when I die.  But, part of the reason is to create a fire wall if I should need care while heís still alive, and if heís not, thereís a care coordination piece thatís good to have.  We have no children.

In puzzling over how to take care of him should he need LTC before me... we shifted course and have decided to put off drawing Social Security until either FRA or 70 for him, since it isnít a cornerstone of our plans.  Based on current projections, SS for both of us should pull down about $48,000/year.  The balance would come out of our savings. I will still have a pretty comfortable life.  Not to mention the fact that neither of us will have expensive hobbies or travel plans at that point.  I also know that even Medicaid in our state would allow the non-institutionalized spouse to keep the house and car.

Weíre currently drawing 3% of our portfolio and have a paid off house.  The stache should continue to grow and create more of a buffer for this end-of-life stuff.  We are going to meet with our attorney to update wills and power of attorney documents, and get advice on protecting assets in our state if the total shit storm occurs.  Really, weíre just trying to make things minimally traumatic for the other.  Who cares if we both die with pennies to our name?  Thatís the ultimate efficient budgeting.  I just donít want the surviving spouse to be living in poverty.

Weíre also committed to the idea of moving to a continuing care community at some point to make it easy for us to manage those transitions.  Weíll try home care for as long as possible too.  We know which ones we like and are doing research.  I think itís so important to know where you would go in advance.

When I was accepted and he was rejected for LTC insurance, I kind of panicked.  But even if we could roll back the clock to 4 years ago, before his diagnosis, we werenít in the frame of mind to buy LTC insurance (we were sorting issues with our own elderly parents) and we were accumulating, not yet FIREd.  Shelling out the dough would have hindered us.  Moreover, I donít play the ďif we would have just worked longer to save even moreĒ card.  It seems kind of perverse to continue working jobs that are no fun and contributing to poor health.  I still think we made well-informed decisions based on having ďenoughĒ and are living a pretty awesome life right now.  If, in my old age I have to read books from the library, shop at thrift stores, ride the bus, soak my own beans, and grow a garden... wait, thatís how we live now.  Obviously we travel and do spendy things, but Iíve learned how little material stuff I need to be happy.



« Last Edit: September 05, 2020, 10:30:22 PM by Trudie »

Cassie

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Re: Lean FIRE and health care costs when you get older
« Reply #28 on: September 06, 2020, 10:09:07 PM »
I know plenty of people that travel well into their 80ís even internationally if physically able.  I know 2 couples that lean fired in their 40ís and arenít happy with their choice in their 60ís.  We are 61 and 66 and donít have LTC.  Too expensive and we probably wouldnít qualify. We are not fat fire but not lean either.  I think some people under estimate inflation, desires and other factors that influence lifestyle as you age.   

BeanCounter

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Re: Lean FIRE and health care costs when you get older
« Reply #29 on: September 07, 2020, 06:28:19 AM »
LTC insurance really is a terrible investment. When you look at the statistics, most people donít live in nursing facilities long enough for the premium expense to be worth it. The only exception being early onset Alzheimerís disease.

RainyDay

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Re: Lean FIRE and health care costs when you get older
« Reply #30 on: September 08, 2020, 06:17:30 AM »
LTC insurance really is a terrible investment. When you look at the statistics, most people donít live in nursing facilities long enough for the premium expense to be worth it. The only exception being early onset Alzheimerís disease.

Interesting, I hadn't realized that about nursing facilities.  But it makes sense... insurance companies are for-profit so if they weren't making money, they wouldn't be in business.

Lots of good info and ideas in the this thread!  I'm 48 and my SO is 42, and not yet FIRE'd.  But health care costs are in the back of my mind.

SwordGuy

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Re: Lean FIRE and health care costs when you get older
« Reply #31 on: September 08, 2020, 06:58:49 AM »
What a sad undignified way to close out your life.  I feel bad for the people who chose their line of work so poorly that it causes them to check out and go live a life of poverty at $30k year only to worry if it will work out, and never get to experience most of the good stuff.  Every generation has them, this generation they renamed it "leanfire" to make it sound cool.   I guess I get it if you don't really have anything you are talented at or passionate about, but that's pretty sad too.

@ol1970 ,

I feel bad for the people who chose a line of work that society pays so poorly for no good reason other than greed and never get to experience most of the good stuff.   Every generation has bloodsucking leeches that mistreat their employees by paying them piss-poor wages because they can get away with it and can buy enough politicians to block reasonable minimum wage reform.

Fixed that for you.