So, how much do YOU need to retire?
Since you’re already retired, have you figured it out? What is/was your number?
Why? What purpose does this serve? Etc.
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“How much do we need to retire?” - Sometimes I think the answer to this is like my observation on houses. A place half again as much would be nice. For example, when we could afford a $200k house (back when houses were cheaper) those $300k beauties looked lovely. Likewise many folks with X in retirement savings probably feel like …. gee, 1.5X would be really nice!
In retirement, the uncertainty of future healthcare needs is a stressor. However I do like the fact that we no longer have to fret over the saving for retirement (we did plenty of that) and saving for college.
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Yes, this can be the biggest uncertainty in how much money is needed, even if estimates for other expenses in retirement are predicted well.
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It looks like Medicare advantage plans are required to have out of pocket maximums so perhaps at least a worse case scenario could be estimated if one goes that route or has other similar coverages.
Either way it can certainly add up and should be considered. Of course not everyone will get to a point where they are fully prepared for their retirement needs.
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I thought that the traditional Medicare Supp plans also offered OOP limits? I am thinking of Plan G, but have not researched.
I view LTC costs as the far greater unknown.
Having been enrolled in a HDHP for several years now (Deduc is almost $7K), I think I will spend less OOP when covered by Medicare.
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Right. I feel fortunate to not be too worried about some years with max OOP. (For many retirees, that is not the case.) It’s the potential LTC (long term care) TBD costs that were on my mind when I said “future healthcare needs”.
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Medicare does have OOP limits. The devil is in the details.
Make sure the drug you need is in the formulary. Make sure you go to a provider that accepts your plan.
And once you need rehab or nursing home care, Medicare covers 3 months I think and you need to be making progress or they kick you out. Advantage plans require you to be pre approved. And rules can change every year with advantage plans or they can decide not to cover that area.
So plans work until they don’t and once you need skilled nursing, you’ll need to have money to pay for that. Or no money and you need to find a place that accepts Medicaid, which many don’t.
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It is eye opening. I was looking at a plan we did with a Schwab advisor in 2018, where we were estimating expenses after retirement. My estimate was less than half of what our actual costs will be in 2025. Boy, did I miscalculate that.
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Or…that potentially multi-year phase of life where a person cannot live completely independently but also would not qualify for any sort of HHC covered by Medicare.
What always amazed me was the immediate first dollar coverage AFTER one falls and ends up in hospital, and then discharged to rehab facility, and then to home with hospital bed, walker, wheelchair, etc. But no coverage for any supports, physical or human, that could help to prevent a fall in the first place.
I realize that our medical care system can not cover all things for all people, but the money spent in the last week of life can be mind-boggling, while at the same time, almost nothing is spent until one does fall.
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I agree! Health insurance costs have risen dramatically. I would need to pull files to see how much I paid in 2018, but I would guess premiums have doubled, or close to that.
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I know somebody in rehab now. Single room is $11,700/month (covered by Medicare as long as there is PT progress, 100 days max). I assume skilled nursing wing has similar costs. OUCH.
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Our deductible is $13k (family) and we pay both sides of our actual insurance premiums as well (self employment ftw). We are probably some of the only people who will be pleasantly surprised by costs when we hit Medicare age, lol.
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Some things to make sure of pre-Medicare is having a PCP; once you are an established patient, you are ‘in’. Specialists pretty much accept Medicare as primary insurance. If going to rehab and there is a chance of extending into long-term-care, be very detailed with selection - and also see if they have Medicaid beds or how that transitions once the individual meets the criteria financially. Again, once in with LTC there, not needing to move.
Medicare will only cover some time after hospitalization – and is can be much less than the max days allowed if no progress is made (and it becomes LTC instead of rehab).
Skilled care (nursing home) generally run into hundreds a day. There are average numbers on length of life once one goes from Independent Living to Assisted Living to Skilled Care, but most LTC insurance policies don’t cover beyond a few years. Our initial policies did, but as soon as our 10 year no premium increase went beyond that, we were offered to cut our benefits for no rate increase. We figure we will self insure beyond our policy limit. We SWAN (sleep well at night) with our current situation – figure on the risk and how to handle. Some absolutely plan to have as little as possible reliance on family based on caring for their own parents or elderly relatives. We plan to live near our nurse daughter, who can help navigate medical providers if we need this - and if their children are near them that would be a help too, just for some family contact.
One consideration is family history on medical conditions, and how any medical conditions for you affect one’s longevity and QOL (quality of life) in retirement, medical needs in retirement.
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This applies if you begin taking Medicare after you turn 65. For those taking Medicare at 65, the rule doesn’t apply. In that case, you can contribute your annual max + catch up amount prorated for the number of months in the year that you had a HDHP.
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Thanks for the accurate information. That is an important distinction to keep in mind.
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Most people should sign up for Medicare A at 65. DH was advised to wait 6 mos after his last HSA contribution before signing up for Medicare A. Similar issue with being careful to have a creditable drug plan (and there were mixed messages about whether a high deductable plan qualifies ) before signing up for Medicare D. What is your experience with the look back and what is needed to avoid a Medicare part D penalty after having a high deductible plan ?
Both H and I contributed to our HSA up to the month prior to the month we began Medicare. We were both retired at the time. No issues with Part D, which was part of our HDHP. Our Medicare broker was very knowledgeable about the rules - they have a series of videos on YouTube that explain important rules related to Medicare, which is what drew me to using them.
However … if you are enrolled in an employer plan at 65 & sign up for A, the 6 month look back applies. If you’re thinking of continuing to work & will have employer insurance after 65, you definitely should discontinue contributing to an HSA six months prior to the point at which you will sign up for A. You can find good information by googling HSAs and Medicare.
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What you all describe in this most recent few chats is so complex - I just prefer to not turn 65!!
My head is spinning.
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I spent a lot of time researching before my H, who is older than I, turned 65. I read, watched videos, checked out the information on the Bogleheads forums, and talked to four Medicare brokers. I am a control freak, so I had to do that! As a result, I did feel comfortable helping H make a choice, and I had no problem choosing when my time to sign up came. But the catch is that everything changes. The new Part D changes are pretty important. They didn’t affect us, because we don’t have meds other than generic maintenance drugs. For others, it was a huge change. Fortunately, the Medicare website allows direct comparisons between plans to make choices easier.
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But then there’s the private plans. I still have 9 years but my wife less. But she doesn’t work. Not sure if it matters.
First hurdle is when she turns 62 - to take or not to take SS - but that’s 4.5 years away. We have time.
Thank goodness.
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