10yrs to retirement, how to think about healthcare

**disneysteve** · 12-31-2020, 02:23 PM

Originally posted by docstudent View Post

Currently, I’m employed and earning $117,500 per year will make $120, 800 next year and max out at 127, 900, if I do not promote again, which is highly unlikely. Or I could return to my former employer and make $90,000 a year, but little to no chances to promote. But, I would receive full healthcare benefits at retirement.

My income potential could go as high as I’m willing to climb the ladder at work. But, would you make more money or settle for the health benefits?

There's no way I'd make my employment decision on what healthcare coverage might look like 10 years from now. Take the money.

You're talking about a difference of at least $30,000/year, so $300,000 over 10 years and probably even more. Let's say you take the higher paying job and invest even $2,000/month for the next 10 years and earn a 6% average return. You'll end up with about $330,000. That should be more than enough to pay for your own health insurance for quite a number of years. Plus, as you said, your income potential at the better job isn't capped. Keep getting raises and saving more and the gap between the two jobs just gets wider and wider.

**docstudent** · 12-31-2020, 02:40 PM

I was thinking the same thing, but a few people were like, don’t turn down healthcare benefits. Once my student loan is paid off, I will have additional funds to put into savings. On a very conservative estimate, I plan on having about $230,000 in cash reserve on hand. I will be able to access about $1,000 per month from my 403b accounts at the age of 59 1/2. I’ve learned to live on $3900 a month, so I’m hopeful that I will be ok. I know I’m leaving tons of money on the table by retiring early, but I yearn for total freedom.

**kork13** · 12-31-2020, 05:30 PM

For far too many people, the allure of a strong benefits package serves as golden handcuffs in a dead-end job. Trust in yourself, your earning potential, and your clearly evident ability to make smart decisions. Stay in the current job, bank your strong income, and you'll do great for yourself.

BTW, just because you "retire" 10 years from now doesn't mean you're prohibited from earning an income in other ways that you're passionate about. Whether it's a little side business monetizing a hobby, or a few part-time/per-diem hours a week, or some random online/virtual consulting or other work. I expect that you'll find that you prefer to be doing SOMETHING, even if you don't financially NEED to earn any income.

**srblanco7** · 01-01-2021, 04:51 AM

Originally posted by kork13 View Post

Trust in yourself, your earning potential, and your clearly evident ability to make smart decisions. Stay in the current job, bank your strong income, and you'll do great for yourself.

This is well said. Bet on yourself. This pandemic certainly highlighted the need for reasonable and affordable health-care, and I'm hopeful (though not necessarily optimistic) that we, as a nation, will continue to make strides toward universal health care, which I believe is a human right.

**disneysteve** · 01-01-2021, 05:07 AM

Originally posted by srblanco7 View Post

I'm hopeful (though not necessarily optimistic) that we, as a nation, will continue to make strides toward universal health care

So much could change in healthcare over 10 years, especially if the Democrats keep the WH for at least 8 years and hopefully gain control of the Senate along the way. It would suck to pass up hundreds of thousands of dollars in income to possibly secure healthcare coverage that 10 years from now it turns out you don't even need.

**MonkeyMama** · 01-01-2021, 06:18 AM

I agree with the others.

Personally, I have always taken the cash. I have never taken employer healthcare. So the whole "I have to work full-time until 65 because of healthcare" thing is just odd to me. & I totally understand that people end up in that situation due to health issues (and is precisely why I do not participate in the employer system). But today at 45, I'd just have to work 8 hours per week to pay for our health insurance. & that's with supporting 4 people. Yes, our health insurance is our biggest expense and it's about 20% of our income. But... I don't need to make a full-time salary for the next 20 years to cover it.

As an aside, if you do plan to retire early it's important to decouple your health insurance from employment. You could end up in a situation where you develop a pre-existing condition and it's just too insanely cost prohibitive to give up employer health insurance. Those are some serious golden handcuffs. That is why I am trying to avoid by just sticking to the private health insurance system. Though the primary motivation has just been better insurance (better than employer offerings). But over time, it's been the better choice for our plan to retire early. I expect to be done with full-time work at age 50. My husband hasn't worked full-time since age 25. My husband did also develop a serious health condition in his early 30s. That could have easily been "I have to work full-time to 65 to afford his healthcare" situation, if we hadn't of already been on the private insurance system. I feel like we dodged a major bullet.

**docstudent** · 01-01-2021, 08:17 AM

Over the past 21 years, I’ve not dealt with anything connected to insurance and healthcare associated cost. I’ve been lucky enough to have my workplace provide 100% of my premiums. Beyond the scope of paying a $30 co-pay, that’s my relationship with healthcare. However, I’ve heard nightmare stories about how healthcare cost have crippled families. I will continue to be diligent and save over the decade so that I’ll be more than ready to address any issues in the future.

**disneysteve** · 01-01-2021, 10:29 AM

Originally posted by docstudent View Post

Over the past 21 years, I’ve not dealt with anything connected to insurance and healthcare associated cost. I’ve been lucky enough to have my workplace provide 100% of my premiums.

That's amazing, and rare. I'm curious what sort of job you had that did that.

I've always had good insurance through my employer but I've always had to pay a significant chunk of the premiums.

**Smilinggirl** · 01-03-2021, 02:12 AM

Originally posted by MonkeyMama View Post

I agree with the others.

Personally, I have always taken the cash. I have never taken employer healthcare. So the whole "I have to work full-time until 65 because of healthcare" thing is just odd to me. & I totally understand that people end up in that situation due to health issues (and is precisely why I do not participate in the employer system). But today at 45, I'd just have to work 8 hours per week to pay for our health insurance. & that's with supporting 4 people. Yes, our health insurance is our biggest expense and it's about 20% of our income. But... I don't need to make a full-time salary for the next 20 years to cover it.

As an aside, if you do plan to retire early it's important to decouple your health insurance from employment. You could end up in a situation where you develop a pre-existing condition and it's just too insanely cost prohibitive to give up employer health insurance. Those are some serious golden handcuffs. That is why I am trying to avoid by just sticking to the private health insurance system. Though the primary motivation has just been better insurance (better than employer offerings). But over time, it's been the better choice for our plan to retire early. I expect to be done with full-time work at age 50. My husband hasn't worked full-time since age 25. My husband did also develop a serious health condition in his early 30s. That could have easily been "I have to work full-time to 65 to afford his healthcare" situation, if we hadn't of already been on the private insurance system. I feel like we dodged a major bullet.

Can you talk more about this? It's an interesting concept that for some reason has not crossed my mind. Are you saying you pay for insurance privately (say, through BCBS for instance), and find it a better choice because it frees you from being tied to an employer, despite the cost? Couldn't the cost go up exorbitantly if you did develop a serious health condition or is that capped?

**MonkeyMama** · 01-09-2021, 07:15 AM

Originally posted by Smilinggirl View Post

Can you talk more about this? It's an interesting concept that for some reason has not crossed my mind. Are you saying you pay for insurance privately (say, through BCBS for instance), and find it a better choice because it frees you from being tied to an employer, despite the cost? Couldn't the cost go up exorbitantly if you did develop a serious health condition or is that capped?

I don't think that "pre existing" is really a thing any more with ACA.

But in the past when it was a thing, no, our costs could not go up (at all) for any medical reason. Which is why I said it's important to decouple insurance from employment, if early retirement is a goal. The second you were on an employer plan and got sick for any reason (pre-ACA), it would severely limit your insurance options in the future.

I discussed more in depth in that other post, but just saw I was tagged in this thread.

I do think some of this discussion is N/A and somewhat changed with the ACA. But... I never had any high hopes that ACA would stick, so I have not personally made the switch.

**LivingAlmostLarge** · 01-10-2021, 01:53 PM

Originally posted by MonkeyMama View Post

I don't think that "pre existing" is really a thing any more with ACA.

But in the past when it was a thing, no, our costs could not go up (at all) for any medical reason. Which is why I said it's important to decouple insurance from employment, if early retirement is a goal. The second you were on an employer plan and got sick for any reason (pre-ACA), it would severely limit your insurance options in the future.

I discussed more in depth in that other post, but just saw I was tagged in this thread.

I do think some of this discussion is N/A and somewhat changed with the ACA. But... I never had any high hopes that ACA would stick, so I have not personally made the switch.

I fully agree about decoupling insurance from employment. But do you think that will actually happen?

Docstudent I think I'd take the free medical but I'm chicken. I am unsure if we are going to go to a socialized system and if costs get more out of control then maybe people would be willing to push their legislators to decouple employment and medical. I have no crystal ball. I think Fishingdude's number of $18k for medical for a couple in their 50s is probably good. So $10k for you. By the time you retire in 10 years it could be $15k/year. If that's the case is it worth it?

I think i like the idea of free medical but then again maybe it locks you into where you live and a bad plan so maybe making more money to save to have choices is the better answer.

**MonkeyMama** · 01-10-2021, 05:01 PM

Originally posted by LivingAlmostLarge View Post

I fully agree about decoupling insurance from employment. But do you think that will actually happen?

I meant on a personal level, making the personal choice to not participate in employer insurance.

**MonkeyMama** · 01-10-2021, 05:36 PM

Originally posted by LivingAlmostLarge View Post

In the other thread you say you never have been dependent on employer provided coverage. What are your expectations for cost of for medical at 50?

Other thread was getting hi-jacked, so I felt it was more appropriate to answer here. (Am I breaking some unwritten rule? Sorry if it's weird).

I expect medical cost at 50 (x2) to be a heck of a lot less than what we currently pay for 4 people. 50 is not that far away for me.

**LivingAlmostLarge** · 01-11-2021, 08:41 AM

Originally posted by MonkeyMama View Post

Other thread was getting hi-jacked, so I felt it was more appropriate to answer here. (Am I breaking some unwritten rule? Sorry if it's weird).

I expect medical cost at 50 (x2) to be a heck of a lot less than what we currently pay for 4 people. 50 is not that far away for me.

What do you pay now for medical for 4? What do you think you will spend for 2? I don't think 50-55 is the expensive age. i think it's 60-65 age that is prohibitively expensive. I also wonder since you do have pre-exisiting conditions that will impact the costs? What do you plan on budgeting for medical after age 50?

10yrs to retirement, how to think about healthcare