we are considering retiring to part-year Scotland and part-year Italy.>>>>>>>>>
I knew someone who retired from here a while back, like at least 10 or 15 years ago, and she was a native Scotsman who always knew she wanted to return home. In order to be able to partake of the NHS, she paid in for years while she lived here so she would have coverage when she moved back there. Is that still the case? Or can one move to, say, Germany and just voila! you have universal health coverage without ever having contributed?
@mcat2, you ask this over and over and over and over. What donāt you understand? Go to a financial planner. If your expenses and your desires demand an income of $xxxxx per month, then you have to plan to make that amount available to yourself at retirement. Itās not rocket science.
Federal employees who vested in the pension plan by I believe 1984 or 86 have defined benefit pension plans plus some cola. I believe that those hired afterwards or who opted out have a smaller pension that is more akin to a 401k with employer matching some of the contribution.
I know a Kaiser MD who had a defined benefit planānot sure if and how it has changed, as they have had a ton of changes.
āDo you think there are a lot of people in American with DB plans? Teachers, police/fire? Who beyond that? Do Federal employees have DB plans?ā
There are still people with private company pensions, though not as many as before, thatās for sure. Union employees in manufacturing, some airlines (thank God), and profitable companies that have not had an excuse to shed their pension plans yet.
I think the loss of typical pension plans will be the greatest game life-style game changer between my parentsā generation and mine. Itās going to be interesting to see it play out. To many, it would provide lots of mental comfort to know $3,000/month was coming in for life, vs. āwill I outlive my money?ā. I think seniors will be in a much worse position and the economy will take a hit from their reduced spending.
My parents receive teaching pensions and my sons are police. Maybe I should just be worrying about me
Worry is not productive, but thinking and planning for yourself sure is. Just like anything, we should secure our mask/life vest/financial security, etc. before assisting others. *-
Everyone worries about SS, but I take more comfort from our (DW and I) combined SS of ~60k/year inflation indexed SS than our slightly more in pensions.
@lxnayBob, with your combined SS and pension, will be exceeding $120k a year (if I am reading your post correctly), then you have no worries.
I receive state pension, but no COLA, so the annual amount will worth less each year, but still it is better than not having it, unless the state goes bankrupt and unable to meet pension obligations to retirees.
I keep bugging DH to check into the status of his pension, as the companies keep reorganizing and changing names. Not sure who handles his pension. It will be small (less than SS payments) butt itās better than nothing. That said, if we ever decide to relocate to be closer to the kids, their state taxes pensions. Blech.
@Hopeful820 , Iām not worried, but the point I wanted to make is that the $60k from SS will give us the equivalent purchasing power to today, but a few years of bad inflation and the $60k in pension (not indexed) will be decimated.
Weāve recently been advised that figure $10k per person annually for pre-65 medical expenses (then $5k per person for medicare years) Iām assuming that couples I see retiring in mid 50s have some kind of DB and retiree health benefitā¦ or enormous savings/inheritance.
@colorado_mom ā or they may be VERY healthy AND VERY lucky! H is over 70 years old and my folks are in their 80s/90s. Neither have spent much in medical expenses their whole lives. I one the other hand have spent much more than Iād like, as has at least one of my kids. Medical expenses are tough to calculate, and if you donāt have really great insurance, even tougher. Because of our great insurance, we havenāt had to pay all that much out of pocket for premiums or medical expenses; we are VERY grateful!
āIām assuming that couples I see retiring in mid 50s have some kind of DB and retiree health benefitā
Neither here. Savings, yes, and ACA has made it easier for the early retiree.
The thing with medical insurance is that there is a cap, right?? A maximum out of pocket. But yes, medical care is probably one of if not the number one cost in retirement.
Iād argue that being VERY healthy can be dangerous to your retirement planning as well. With all they can do to extend lives these days, what age of death DOES one plan for now? And there are things that medical advancements still havenāt been able to figure out yet, like dementia. They can keep your body going but if your mind goes, your costs of care skyrocket.
I believe I have whatās called a DB plan as a federal employee. I will get 1% of my āhigh 3 yearsā of salary, for each year I work, assuming some other criteria are also met. Itās not nearly as good a plan as āolderā federal employees, but I realize Iām lucky compared to many others. I also will get social security, plus what Iāve saved in the 401K type of plan, plus a matching contribution for some part of that. @HImom, health insurance is another great benefit of being a federal employee. Salaries in some areas are less than what one could earn in the private sector, but as I near retirement, Iām realizing the benefits more and more.
Some insurance plans come with a high deductible and some have a higher out-of-pocket than many are comfortably able to afford to keep the premiums within their budget. Itās a tough balancing act when there isnāt enough money to go around. I donāt believe Medicare has an out-of-pocket maximum, but am not sure on that. Does anyone know? That would be an important piece of information.
@1214mom, yes, the main benefit of federal employment/retirement is the eligibility to keep FEHB for life. DH left a Beltway Bandit (contractor) position to return to a lower pay federal position for just that reason.
@mominva, Iāve seen many mid and later career people do that. Sometimes I think of doing the opposite. Retiring a little early, and being a contractor for a couple of years. @HImom, I know medicare has a max for nursing home care. They ācut you offā at 20 or 21 days. They also have a max for hospital stays, but I donāt know what it is.
But my very good friend probably had over $300K of medical expenses in his last year of life, and between medicare and his supplement, very little came out of his pocket.
Yes, you have to be employed by the federal government for 5 years prior to retirement and have the insurance you covering you and your spouse for those 5 years (if you want both of you to be covered), if I recall correctly. It is an important benefit for H and our family, especially before ACA made it possible for folks with pre-existing health problems to get insurance through regular insurance companies without being assigned to a high risk pool.
The federal government continuing to pay its portion of retired employeeās health insurance premiums is an important benefit! As retired state workers, my parents and others I know have FREE no-premium medical coverage AND their retirement plan pays ALL their Medicare premium as well! This was part of their negotiated retirement benefit, for lower wages and/or other concessions that were made over the years.
āSome insurance plans come with a high deductible and some have a higher out-of-pocket than many are comfortably able to afford to keep the premiums within their budget. Itās a tough balancing act when there isnāt enough money to go around.ā
I agree with this but Iād argue one shouldnāt retire unless they can cover that scenario. You can play around on the ACA website and see what is out there at different price points for premiums/deductibles. One huge benefit of ACA is a stated out-of-pocket maximum. Per the healthcare.gov website:
āThe maximum out-of-pocket limit for any individual Marketplace plan for 2016 is $6,850 for an individual plan and $13,700 for a family plan.ā
I think folks donāt understand and appreciate a lot of the benefits ACA has brought to adding some uniformity and affordability to healthcare costs.
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