For the health coverage, that is.
Flexo posted on the rising costs of health care in retirement and the numbers are sobering. For people 30 years from retirement (about like myself) the average costs will be about a million dollars for a 20-year retirement!
At the Board of Directors meeting of our Credit Union (I'm the chair of the supervisory committee there) the Board voted to approve an increase of the portion of the health care coverage that the credit union pays for its employees. I was flabbergasted how much a group policy cost because I had no idea how much of it is typically covered by the employer! Well over $1000 per month for decent family coverage.
With that in mind, if you're contemplating a move to self-employment (like I do every once in a while), consider how well you would need to be doing to cover your current salary and the full cost of your health insurance. Health coverage can be a big deal — and a huge benefit — from your employer. Or, as part of your plans, you or your spouse may want to take, or keep, a job that provides those health benefits for the family.
Yeah it is pretty astonishing how expensive health care is. But that average is considering that the majority of Americans are overweight, lazy, eat like crap, and dont exercise. Some of us are none of those, therefore our costs will be far, far less. But it's a valid point nonetheless because you never know what might happen. Nice post!
Fred Brock wrote about this very problem in his book entitled, "Retire on Less." Mr. Brock provided two examples for health insurance during retirement, including self-insuring up to the large deductible of a catastrophic (or "major medical") health insurance, which is often cheaper than traditional health insurance, and further reducing typical medical expenses with health discount cards, such as by eHealthinsurance.com.
Can anyone comment on how realistic this is? If unrealistic, can anyone provide other ways of cost-effectively providing for one's own health insurance during retirement?
Thanks for the comments!
Looking at the above, you have more options available if (a) you've taken care of yourself, and (b) you have the green to pay for the very best care. This is a realistic path if you're relatively young, and still has some merit even if you're not. It's never too late to save more or to exercise more.
Beyond this it's a matter of what you can afford: high-deductible, discount plan, cash in advance, Medicare/Medicaid.