Is there a safe amount of money for retirement?

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saver7007
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Is there a safe amount of money for retirement?

Post by saver7007 »

Saw an interesting MarketWatch article this morning. I was wondering how many people here agree with the headline statement that "There’s no such thing as a safe amount of money" for retirement, or if you disagree how do you figure the safe amount of money taking big risks into account? Do you self-insure against the big risks and if so how much money is needed for that?

https://www.marketwatch.com/story/i-ret ... 1642133454
mrmass
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Re: Is there a safe amount of money for retirement?

Post by mrmass »

That post from Marketwatch doesn't give me much info other than he got sick.
1. Why did sick man retire at 50?
2. How much did he have?
3. At 53 he took a PT job I'm guessing no health ins? If he did have health ins. He'd go on cobra. Why didn't he go on ACA?

So many more questions will come up.

What I got out of it. Make sure you have health insurance at all times.
260chrisb
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Re: Is there a safe amount of money for retirement?

Post by 260chrisb »

saver7007 wrote: Fri Jan 14, 2022 11:36 am Saw an interesting MarketWatch article this morning. I was wondering how many people here agree with the headline statement that "There’s no such thing as a safe amount of money" for retirement, or if you disagree how do you figure the safe amount of money taking big risks into account? Do you self-insure against the big risks and if so how much money is needed for that?

https://www.marketwatch.com/story/i-ret ... 1642133454
This is of course is an unfortunate situation and frankly one that anyone could experience. None of us know what a safe amount is nor does any of us ever know that. Retiring at 50 is very risky for the majority of folks without even considering what could happen. I'm comfortable in that I have enough money to retire at 60 later this year. Will I have enough? I'll let ya know in 25-30 years! I could get sick next month. I could win the lottery next year......what I've saved is what I have and I'm good with it and don't plan to look back.
mrmass
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Re: Is there a safe amount of money for retirement?

Post by mrmass »

There's a thread here from a 39yo that wants to "retire" thats a long life with many opportunities to have an accident/get ill. Gotta plan on health insurance.
stocknoob4111
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Re: Is there a safe amount of money for retirement?

Post by stocknoob4111 »

In my view retiring in the United States before Medicare eligibility is a major risk and I would be really careful about doing it... I plan to retire at 50 but I plan to be outside the US where medical costs are much more manageable. Medical costs in the US can bankrupt you in a New York minute even if you have a good deal of money.

Health Insurance in the US is extremely convoluted and can't be relied on since there are so many exclusions and fine print - it's almost designed to make it so ambiguous so it's easy for the insurance company to deny a claim.

Besides healthcare, other costs such as housing are also rising exponentially in the US so it's just getting impractical to retire early in the US.
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Garco
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Re: Is there a safe amount of money for retirement?

Post by Garco »

Money is only one thing that matters in deciding when to retire.

For me, in addition to money (investments, savings, property, income) the key thing was my career stage. The next was my ability, as the sole provider for my family, to cover the major expenses for education, healthcare, and housing of my wife and children.

Only after my children had graduated from college (without any debt), and I had accumulated enough to sustain my standard of living indefinitely based on my 401k investments and Social Security, did I consider retiring.

But just as important as money was my career, which related not only to my income but also to my own goals for achieving some things through my work. My work was more than just a job. It was my outlet for creativity and for creating my professional reputation.
Last edited by Garco on Fri Jan 14, 2022 12:06 pm, edited 1 time in total.
JDave
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Re: Is there a safe amount of money for retirement?

Post by JDave »

Nobody should retire unless they have a trillion dollars.
Seriously I read the same article, and gave up when it didn't mention his health insurance (or lack of health insurance) at all. It's pretty moronic writing when an article about going broke over health issues doesn't mention the person's health insurance, and typical for "Marketwatch".
peskypesky
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Re: Is there a safe amount of money for retirement?

Post by peskypesky »

trash article.
Mr.BB
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Re: Is there a safe amount of money for retirement?

Post by Mr.BB »

Marketwatch has become nothing but clickbait.
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vanbogle59
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Re: Is there a safe amount of money for retirement?

Post by vanbogle59 »

saver7007 wrote: Fri Jan 14, 2022 11:36 am Saw an interesting MarketWatch article this morning. I was wondering how many people here agree with the headline statement that "There’s no such thing as a safe amount of money" for retirement, or if you disagree how do you figure the safe amount of money taking big risks into account? Do you self-insure against the big risks and if so how much money is needed for that?

https://www.marketwatch.com/story/i-ret ... 1642133454
By this logic, there is no safe salary before retirement.
Risk doesn't start with retirement. Although, it does change.
And it might feel completely new, because the source of funds is different from the previous 40 years of earning.
But we are all always at risk (financially, emotionally, societally....).
All you can do is have a solid plan and try to adapt as circumstances demand.
MathWizard
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Re: Is there a safe amount of money for retirement?

Post by MathWizard »

I assume that this person did not have good health insurance plus a prescription drug plan.

Retiring without these is foolish in the US.

Yes there is a safe amount of money, but it is not the amount that this person had, or it would have been had it been deployed well.

The story of the grasshopper and the ant made a big impression on me in my youth. I have little sympathy for someone who retired having worked decades less than I , who are up short because they didn't plan.

Getting sick was not their fault, it was retiring very early without a good plan. They took a big risk and it did not pan out. We should learn from their mistake, but don't despair,just plan.
Last edited by MathWizard on Fri Jan 14, 2022 12:11 pm, edited 1 time in total.
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beernutz
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Re: Is there a safe amount of money for retirement?

Post by beernutz »

Saying Marketwatch articles are clickbait is an insult to clickbait. They don't even rise to that level.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. --Will Rogers
LittleMaggieMae
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Re: Is there a safe amount of money for retirement?

Post by LittleMaggieMae »

IDK, I feel bad for the person in the article - life happened.

I wonder how different their financial future would be if they had not "retired" and had their medical issues while still employed? It sounds like they have a long term (not going to go away) health issue. How much (and for how long) coverage and how expensive would it be they have had if they were employed (and covered by an employers health insurance) when their medical issues started? I'm thinking a few years into their medical issues - that they would be in the same boat - even if they hadn't retired. Or perhaps it would have been easier to access their SS disability income if they were employed when their issues started?

I will admit - I stopped thinking about the "perfect" amount of money to have saved up for retirement. There is no way I can get to the amount of money I calculated that covered all worse case situations I could think of (at costs 30 years from now!) and where I was still living my "routine frugal lifestyle" based on my "middle of the road" single person's income that would result in feeling 100% secure in retirement. So, I am settling for Good Enough - and if something really bad happens to me (or the world) I will just have to be creative/flexible/resilient and try to get thru it the best I can.
Last edited by LittleMaggieMae on Fri Jan 14, 2022 12:19 pm, edited 1 time in total.
stocknoob4111
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Re: Is there a safe amount of money for retirement?

Post by stocknoob4111 »

MathWizard wrote: Fri Jan 14, 2022 12:10 pm I assume that this person did not have good health insurance plus a prescription drug plan.
Health insurance is a slippery slope and isn't a guarantee that you will not be saddled with major medical bills. Health insurance frequently deny legitimate claims based on absurdities buried in their fine print.

This poor guy had $650,000 in medical bills which the Insurance Company denied due to his procedure being flagged as "unnecessary" even though the doctors themselves told him he needed surgery ASAP. Luckily for this guy the outcome was good because the mayor of New York got involved in his case but he was about to go bankrupt.

https://www.cbsnews.com/news/back-surge ... er-650000/

The gist of it is that be EXTREMELY wary of relying on health insurance in the United States as it's very poorly regulated and Insurance companies get away with practically anything which is why I will NOT retire in the US before 65 as the possible healthcare related financial risk is just too high. And now with skyrocketing housing costs there are other factors as well.
Last edited by stocknoob4111 on Fri Jan 14, 2022 12:22 pm, edited 1 time in total.
Whakamole
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Re: Is there a safe amount of money for retirement?

Post by Whakamole »

mrmass wrote: Fri Jan 14, 2022 11:45 am That post from Marketwatch doesn't give me much info other than he got sick.
1. Why did sick man retire at 50?
2. How much did he have?
3. At 53 he took a PT job I'm guessing no health ins? If he did have health ins. He'd go on cobra. Why didn't he go on ACA?

So many more questions will come up.

What I got out of it. Make sure you have health insurance at all times.
It's a garbage article. Can confirm, there is literally no information in the article other than: retired at 50, went back to work a few years later, got sick. MW said "this is a lesson, there's no safe amount of money for retirement."

I wonder if he "retired" on a few hundred thousand dollars, thinking that and a low budget would get him to social security/medicare, and didn't budget for health insurance under ACA.
LittleMaggieMae
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Re: Is there a safe amount of money for retirement?

Post by LittleMaggieMae »

I assume that this person did not have good health insurance plus a prescription drug plan.
to this point - health insurance - even "good" health insurance may not be so good if you develop a long term expensive condition/ailment. Insurance coverage changes from year to year - so what may have started out covering what you need for little out of pocket may change over the years into a policy you can no longer avoid to take (as your out of pocket goes up) or coverage drops.

Purchasing "good health insurance" isn't inexpensive if you have an ongoing condition that requires expensive medications or procedures.


Also lets not forget that the ACA health insurance needs to be re-purchased every year... I'm pretty sure the ACA plans aren't optimal for covering a long term expensive health condition with very little out of pocket from the person insured. I'm guessing one's insurance cost would go up dramatically once one acquires an expensive health condition.
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firebirdparts
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Re: Is there a safe amount of money for retirement?

Post by firebirdparts »

I presume we all know that an illness would quickly take all your money if you're a "normal" millionaire. It's not like we need to read an article.
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shess
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Re: Is there a safe amount of money for retirement?

Post by shess »

saver7007 wrote: Fri Jan 14, 2022 11:36 am Saw an interesting MarketWatch article this morning. I was wondering how many people here agree with the headline statement that "There’s no such thing as a safe amount of money" for retirement, or if you disagree how do you figure the safe amount of money taking big risks into account? Do you self-insure against the big risks and if so how much money is needed for that?

https://www.marketwatch.com/story/i-ret ... 1642133454
How would the article's story differ if the person had NOT retired? Or was his medical condition somehow caused by his early retirement?

The reality is, you could retire at 50 on a $15M portfolio, and the next day your neighborhood cosmetic dentist could take a fall on your sidewalk, injure his hands, and sue you into bankruptcy. All you can do is make prudent plans and hope for the best, with no guarantees.

That's true even if you decide to keep working. Say you worry about that klutzy dentist, so you decide to keep working until $20M? You might die, or YOU might have an accident which removes your ability to work, etc, etc. Again, no guarantees.
maj
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Re: Is there a safe amount of money for retirement?

Post by maj »

Depends on whether or not you have a safe budget for retirement.

peace
MathWizard
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Re: Is there a safe amount of money for retirement?

Post by MathWizard »

stocknoob4111 wrote: Fri Jan 14, 2022 12:18 pm
MathWizard wrote: Fri Jan 14, 2022 12:10 pm I assume that this person did not have good health insurance plus a prescription drug plan.
Health insurance is a slippery slope and isn't a guarantee that you will not be saddled with major medical bills. Health insurance frequently deny legitimate claims based on absurdities buried in their fine print.

This poor guy had $650,000 in medical bills which the Insurance Company denied due to his procedure being flagged as "unnecessary" even though the doctors themselves told him he needed surgery ASAP. Luckily for this guy the outcome was good because the mayor of New York got involved in his case but he was about to go bankrupt.

https://www.cbsnews.com/news/back-surge ... er-650000/

The gist of it is that be EXTREMELY wary of relying on health insurance in the United States as it's very poorly regulated and Insurance companies get away with practically anything which is why I will NOT retire in the US before 65 as the possible healthcare related financial risk is just too high. And now with skyrocketing housing costs there are other factors as well.
There will always be these stories to fuel outrage,but often there is a reason for these things. I was restricted by my insurance from going just anywhere for a major surgery, and went to the local teaching hospital and it was all covered. Had I went to my first choice,I would have had to pay the entire bill.

I did say good insurance.

I expect to pay $15K for health insurance staying on my employers group plan in retirement and on Medicare, with 2% premium increases per year for my wife and I.

Of course, that also means taxes on that amount if I pull from tax deferred for those premiums

Good health insurance and cheap insurance are not the same thing.

You do have a solution of going to another country which has national health care,but make sure that the country allows people to emigrate and participate in the NHS if they have not been there when they are young. You can imaging the problem that e.g. Canada would have with people who get sick late in like and then move to Canada.
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Re: Is there a safe amount of money for retirement?

Post by iamblessed »

Once you get so old are you really going to worry about it?
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Candor
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Re: Is there a safe amount of money for retirement?

Post by Candor »

Safe from all outliers is not a reasonable goal and is not even attainable. Being reasonably safe is attainable but that is in the eye of the beholder and will be different for each individual. There is no one size fits all for much of life to include retirement.
The fool, with all his other faults, has this also - he is always getting ready to live. - Epicurus (341–270 BC)
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Garco
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Re: Is there a safe amount of money for retirement?

Post by Garco »

There ARE good health plans. Even if your employer changes providers, if your employer remains committed to current and former (retired) or long-term employees, you are likely to be in a decent situation. (But think about your family, not just yourself.) If your employer is an established enterprise or institution, you are likely to be able to count on significant help. In addition, there are likely to be some optional insurances partly subsidized by your workplace, and these should be subscribed to (e.g., optical and dental care). Your institution may also support a special "major medical" supplemental plan.

For me, with a career in academia, I never doubted that my employer (a major university) would continue to support current employees and retirees. Even when my employer switched providers of the health insurance (from BC/BS to Humana) after I retired, the coverage remained excellent. After 7 years in retirement, my out-of-pocket costs have been minimal -- mainly co-pays on some prescription drugs; but no co-pays on the main medical services (e.g., colonoscopies); small copays on dental and optical care and prescriptions.
Last edited by Garco on Fri Jan 14, 2022 1:23 pm, edited 3 times in total.
Whakamole
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Re: Is there a safe amount of money for retirement?

Post by Whakamole »

MathWizard wrote: Fri Jan 14, 2022 12:36 pm You do have a solution of going to another country which has national health care,but make sure that the country allows people to emigrate and participate in the NHS if they have not been there when they are young. You can imaging the problem that e.g. Canada would have with people who get sick late in like and then move to Canada.
Canada has firm requirements on immigration; they explicitly say that unhealthy people cannot move there:

https://www.canada.ca/en/immigration-re ... ive-demand
We may refuse your application if we believe that your health condition might cause an excessive demand on health or social services. This decision is based on the results of your immigration medical exam.

Your condition is considered to cause an excessive demand if:
* the health or social services needed to treat your health condition would negatively affect wait times for services in Canada, or
* the services needed to treat and manage your health condition would likely cost more than the excessive demand cost threshold
In addition, many countries prefer that their immigrants are skilled workers or large investors, rather than humble retirees.
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Re: Is there a safe amount of money for retirement?

Post by shess »

I'll be honest, I'm not sure how people manage to be this confident extrapolating how good their health-insurance is for black-swan events based on things like how well the company has covered colonoscopies. When you have a $500 or $5,000 procedure done, they're going to eyeball it and probably go with the stats, perhaps with some computer-aided evaluation. When you have a $750k procedure done, they are going to call in multiple specialists to review everything by hand to make sure things were watertight from top to bottom. I don't think the two experiences necessarily correlate.
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Re: Is there a safe amount of money for retirement?

Post by livesoft »

Life is not fair safe.
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loukycpa
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Re: Is there a safe amount of money for retirement?

Post by loukycpa »

LittleMaggieMae wrote: Fri Jan 14, 2022 12:25 pm
I assume that this person did not have good health insurance plus a prescription drug plan.
Also lets not forget that the ACA health insurance needs to be re-purchased every year... I'm pretty sure the ACA plans aren't optimal for covering a long term expensive health condition with very little out of pocket from the person insured. I'm guessing one's insurance cost would go up dramatically once one acquires an expensive health condition.
Is this true? I have understood that ACA plans can’t consider pre existing conditions in coverage decisions or rates.
LittleMaggieMae
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Re: Is there a safe amount of money for retirement?

Post by LittleMaggieMae »

loukycpa wrote: Fri Jan 14, 2022 1:19 pm
LittleMaggieMae wrote: Fri Jan 14, 2022 12:25 pm
I assume that this person did not have good health insurance plus a prescription drug plan.
Also lets not forget that the ACA health insurance needs to be re-purchased every year... I'm pretty sure the ACA plans aren't optimal for covering a long term expensive health condition with very little out of pocket from the person insured. I'm guessing one's insurance cost would go up dramatically once one acquires an expensive health condition.
Is this true? I have understood that ACA plans can’t consider pre existing conditions in coverage decisions or rates.

What you understand is true. I'm not saying that someone with an ongoing health issue COULDN"T get an ACA plan. They can, but the price of the plan that covers more of their health care needs will most likely be more expensive than some one who needs a plan to cover basic routine health care.
The person with an on going health issue will also most likely pay more for medications and some parts of their health care even with the best for them ACA plan. ACA plans are NOT like some of the awesome employer sponsered Health care benefits.

(I'm extrapolating from incomplete data here) - I know a diabetic friend with LOTS of diabetic health issues that need treatment is using an ACA plan. a couple of years ago - the plan she had got her insulin prescription filled with a $60 a month out of pocket expense... several years later that same level of plan had her insulin prescription cost jump to 1K out of pocket. She looked at other plans but none of the plans offered much relief.

Along with the other health issues she has she can get an ACA plan - but she may not be able to afford both the cost of the ACA plan and the out of pocket expenses that best fit her situation. Another bit of 'awfulness' in all of this is that it's very hard to guesstimate what one's yearly expenses will be... there is a lot of "mystery" involved with healthcare. There is NO standard price for a medication - and it's sometimes like pulling teeth to find out how much an insurance policy will cover (based on the price they assign to the medication) - so yeah, it's great if the insurance will cover (I'm making this up) 50% of Medication A that they price at $100 for the particular policy. Sucks if the insurance will cover (I'm making this up) 50% of Medication A that they price at $1000 for a different policy. It's the same Medication A two different prices and two different out of pocket amounts.
Last edited by LittleMaggieMae on Fri Jan 14, 2022 2:17 pm, edited 1 time in total.
MathWizard
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Re: Is there a safe amount of money for retirement?

Post by MathWizard »

shess wrote: Fri Jan 14, 2022 1:00 pm I'll be honest, I'm not sure how people manage to be this confident extrapolating how good their health-insurance is for black-swan events based on things like how well the company has covered colonoscopies. When you have a $500 or $5,000 procedure done, they're going to eyeball it and probably go with the stats, perhaps with some computer-aided evaluation. When you have a $750k procedure done, they are going to call in multiple specialists to review everything by hand to make sure things were watertight from top to bottom. I don't think the two experiences necessarily correlate.
Surely good insurance is better than poor or no insurance

What is the alternative ?

Even if you are working and have health care insurance through your employer, you still have the same issue if they decline payment.

Would the problem go away when a person is on Medicare?

As was said earlier, there will always be the risk of a black swan event.
shess
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Re: Is there a safe amount of money for retirement?

Post by shess »

MathWizard wrote: Fri Jan 14, 2022 2:10 pm
shess wrote: Fri Jan 14, 2022 1:00 pm I'll be honest, I'm not sure how people manage to be this confident extrapolating how good their health-insurance is for black-swan events based on things like how well the company has covered colonoscopies. When you have a $500 or $5,000 procedure done, they're going to eyeball it and probably go with the stats, perhaps with some computer-aided evaluation. When you have a $750k procedure done, they are going to call in multiple specialists to review everything by hand to make sure things were watertight from top to bottom. I don't think the two experiences necessarily correlate.
Surely good insurance is better than poor or no insurance

What is the alternative ?

Even if you are working and have health care insurance through your employer, you still have the same issue if they decline payment.

Would the problem go away when a person is on Medicare?

As was said earlier, there will always be the risk of a black swan event.
I guess my point is that you could demolish your retirement with bad insurance, but good insurance is no guarantee that uncovered healthcare problems won't demolish your retirement. You're right, you basically have no choice.

Health-insurance issues were my single biggest concern about retiring early, way ahead of housing and the like. I felt that I could model the costs of housing and food and clothing and travel reasonably well, but health insurance and healthcare were daunting. Tying it back to the OP, health insurance costs have been a lot, but the real thing I miss from being on a major company's healthcare plan is having someone in-house I can call to (sometimes) iron things out.
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Re: Is there a safe amount of money for retirement?

Post by SuzBanyan »

MathWizard wrote: Fri Jan 14, 2022 2:10 pm
shess wrote: Fri Jan 14, 2022 1:00 pm I'll be honest, I'm not sure how people manage to be this confident extrapolating how good their health-insurance is for black-swan events based on things like how well the company has covered colonoscopies. When you have a $500 or $5,000 procedure done, they're going to eyeball it and probably go with the stats, perhaps with some computer-aided evaluation. When you have a $750k procedure done, they are going to call in multiple specialists to review everything by hand to make sure things were watertight from top to bottom. I don't think the two experiences necessarily correlate.
Surely good insurance is better than poor or no insurance

What is the alternative ?

Even if you are working and have health care insurance through your employer, you still have the same issue if they decline payment.

Would the problem go away when a person is on Medicare?

As was said earlier, there will always be the risk of a black swan event.
For both ACA plans and employer provided, one should always be aware of the maximum out of pocket that might be payable, both in-network and out-of-network. Then understand the network, so it more likely most of your costs fall within this buckets. But there is always a possibility that despite your plans, you will have a significant out-of-network bill. Until recently, SF General Hospital had no -in-network insurance plans. So if you arrived there by ambulance after a car accident, you could run up a bill up to to your MOOP out-of-network pretty quickly.

For Medicare, my understanding that there is still no maximum out of pocket cost for prescription drugs. Part D helps but has no cap, although I think when you exit the donut hole after paying more than $7000 in the year, the remaining costs should be significant lower.
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Garco
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Re: Is there a safe amount of money for retirement?

Post by Garco »

I share the skepticism about the "whataboutblackswans" comment. What alternatives do you have? All I can bring to bear is that in working 39 years as a faculty member with that employer -- a time during which I also held some administrative positions -- I never heard of any case where the university's health insurance didn't cover the bulk of the costs for health events. This was a large university with the thousands of faculty and administrative staff all using the university's health plan.

It's true that most health-care events and costs are not medical emergencies; and few require major surgery. But I never heard of ANY faculty or staff member or retiree who was left bankrupted because of an unreimbursed medical or health-care expense.
MathWizard
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Re: Is there a safe amount of money for retirement?

Post by MathWizard »

shess wrote: Fri Jan 14, 2022 2:33 pm
MathWizard wrote: Fri Jan 14, 2022 2:10 pm
shess wrote: Fri Jan 14, 2022 1:00 pm I'll be honest, I'm not sure how people manage to be this confident extrapolating how good their health-insurance is for black-swan events based on things like how well the company has covered colonoscopies. When you have a $500 or $5,000 procedure done, they're going to eyeball it and probably go with the stats, perhaps with some computer-aided evaluation. When you have a $750k procedure done, they are going to call in multiple specialists to review everything by hand to make sure things were watertight from top to bottom. I don't think the two experiences necessarily correlate.
Surely good insurance is better than poor or no insurance

What is the alternative ?

Even if you are working and have health care insurance through your employer, you still have the same issue if they decline payment.

Would the problem go away when a person is on Medicare?

As was said earlier, there will always be the risk of a black swan event.
I guess my point is that you could demolish your retirement with bad insurance, but good insurance is no guarantee that uncovered healthcare problems won't demolish your retirement. You're right, you basically have no choice.

Health-insurance issues were my single biggest concern about retiring early, way ahead of housing and the like. I felt that I could model the costs of housing and food and clothing and travel reasonably well, but health insurance and healthcare were daunting. Tying it back to the OP, health insurance costs have been a lot, but the real thing I miss from being on a major company's healthcare plan is having someone in-house I can call to (sometimes) iron things out.
My situation may be a bit better than yours in that I can stay in the group plan, though I need to pay all the cost. Kind to like COBRA,but
for the rest of my life and my wife's life.
I never had anyone iron out any issues, we did that, but being part of a 6000+ group means that the account is big enough that the ins. company is not going to be careful to keep good relations.
I'd estimate that they get over $10 million in premiums in a year from the group plan.
marcopolo
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Re: Is there a safe amount of money for retirement?

Post by marcopolo »

There is no such thing as "safe".
It is all about considering probabilities.

The idea of putting off a desired retirement plan for fear of some black swan event seems comparable to sitting on cash waiting for the crash to happen.

Peter Lynch said something to the effect"

"More money has been lost waiting for a crash, than in actual crashes".

I think it can similarly said that

"More time has been lost worrying about such black swan event, than in actual black swan events"
Once in a while you get shown the light, in the strangest of places if you look at it right.
shess
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Re: Is there a safe amount of money for retirement?

Post by shess »

MathWizard wrote: Fri Jan 14, 2022 3:14 pm
shess wrote: Fri Jan 14, 2022 2:33 pm Health-insurance issues were my single biggest concern about retiring early, way ahead of housing and the like. I felt that I could model the costs of housing and food and clothing and travel reasonably well, but health insurance and healthcare were daunting. Tying it back to the OP, health insurance costs have been a lot, but the real thing I miss from being on a major company's healthcare plan is having someone in-house I can call to (sometimes) iron things out.
My situation may be a bit better than yours in that I can stay in the group plan, though I need to pay all the cost. Kind to like COBRA,but
for the rest of my life and my wife's life.
I never had anyone iron out any issues, we did that, but being part of a 6000+ group means that the account is big enough that the ins. company is not going to be careful to keep good relations.
I'd estimate that they get over $10 million in premiums in a year from the group plan.
If I could have stayed on my health plan as basically some mega-COBRA-type thing, I would 100% have done it. Probably would have stuck with it even at a modest premium. But I can also see the flip side, the company was big enough (many tens of thousands in the plan) that they self-insured, with the insurance providers roped in mostly as administrators. Taking on liability for a bunch of retired people probably isn't super interesting to bean counters, even if they mostly pay their fair share.

[One of my dreams was to just have a retirement subscription plan, where I could pay a substantial yearly fee to get access to health insurance and the cafes and on-site gyms. I will be the first to admit, we were spoiled rotten :-).]
hudson
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Re: Is there a safe amount of money for retirement?

Post by hudson »

saver7007 wrote: Fri Jan 14, 2022 11:36 am "There’s no such thing as a safe amount of money" for retirement, or if you disagree how do you figure the safe amount of money taking big risks into account? Do you self-insure against the big risks and if so how much money is needed for that?
Safe amount of money? Most likely. Once the back of the envelope showed that I could generate enough income without working plus a cushion, I retired....at 66...my full retirement age. It's worked for 8 years.

Self Insure big risks?
Health Insurance? no
Home and Car Insurance? no
Long Term Care? yes

How much money is needed to self-insure for long term care? I'm probably OK. That is a concern. So called long term care insurance is more like dental insurance. I'll pass. Nothing that I've read in this forum has changed my mind.

But how much? $10K per month for 60 months
Dusn
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Re: Is there a safe amount of money for retirement?

Post by Dusn »

Those of you who are saying that you will not retire in the US due to health insurance issues — where do you plan to go?

I can’t imagine how any country would remain solvent if they offered free healthcare to anyone who retires there. But I guess some do. What countries do this?
59Gibson
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Re: Is there a safe amount of money for retirement?

Post by 59Gibson »

Complete garbage fear porn. Things happen and sometimes they're bad, there are no guarantees in life.. how is this new? By the tone of the article and a few comments on the bottom, the only solution is to make everything "Free". Yay free for everyone
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Re: Is there a safe amount of money for retirement?

Post by KlangFool »

Dusn wrote: Sat Jan 15, 2022 8:00 am Those of you who are saying that you will not retire in the US due to health insurance issues — where do you plan to go?

I can’t imagine how any country would remain solvent if they offered free healthcare to anyone who retires there. But I guess some do. What countries do this?
Why does it has to be free? It just has to be reasonable.

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fortunefavored
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Re: Is there a safe amount of money for retirement?

Post by fortunefavored »

Life has a 100% chance of death, too.

Stop visiting Marketwatch.

For those without access to a cadillac government/corporate plan, managed providers like Kaiser seem the best option for avoiding these scenarios. It is what I have chosen to go with. It is not THE BEST care.. but it is pretty good care and reasonably predictable.

Or just work until you drop dead or hope you're still alive at 65 for Medicare.
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tennisplyr
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Re: Is there a safe amount of money for retirement?

Post by tennisplyr »

“Safe” implies a guarantee…we all know about guarantees in life.
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Dave55
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Re: Is there a safe amount of money for retirement?

Post by Dave55 »

I have been paying out of my pocket Blue Cross Blue Shield for over 35 years (Small business owner). Had one major surgery, several minor ones, never had an issue with BCBS. Medicare is not far off for me.

Dave
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JoeRetire
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Re: Is there a safe amount of money for retirement?

Post by JoeRetire »

saver7007 wrote: Fri Jan 14, 2022 11:36 amI was wondering how many people here agree with the headline statement that "There’s no such thing as a safe amount of money" for retirement, or if you disagree how do you figure the safe amount of money taking big risks into account? Do you self-insure against the big risks and if so how much money is needed for that?
There's no such thing as a safe amount of money - not for retirement and not for non-retirement.

However, there is "safe enough". That's all anyone can strive for.

If you have enough money to cover your expenses for the rest of your life, that's "safe enough".

"I had always said I was going to retire when I was 50. I had worked and saved since I was 16. Retiring without Medicare and Social Security is a scary thing. I wound up retiring then going back to work. At 53, I took a part-time job with a decent salary for the hours but I was sooooo bored. "

So the reader retire for 3 years and went back to a part time job (because they were scared?) but was bored. Is there supposed to be some sort of moral to the story here? Should have stayed at the original job? Should have taken a full-time non-boring job instead?

The reader apparently made several choices that they regretted. It's impossible to tell if any of them have anything to do with "safe amount of money for retirement" or if anything would have been different had the reader made different choices.

An important topic, but a poor article.
Last edited by JoeRetire on Sat Jan 15, 2022 9:39 am, edited 2 times in total.
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KlangFool
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Re: Is there a safe amount of money for retirement?

Post by KlangFool »

OP,

Yes, the number is 50X and above. The reason being is if someone with that number still cannot retire, it is no longer a money problem. It is something else.

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Stoic9
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Re: Is there a safe amount of money for retirement?

Post by Stoic9 »

Excellent article, look at the intellectual debate this article has produced. Just enough information to ensure you have to look deep and consider not only the what if's but more importantly your own assumptions of your future.
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tvubpwcisla
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Re: Is there a safe amount of money for retirement?

Post by tvubpwcisla »

That situation could happen to any of us. Not sure any amount of money would help with a medical condition.
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JoMoney
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Re: Is there a safe amount of money for retirement?

Post by JoMoney »

"Safe" from what? Safe from it being impossible to spend yourself broke?
Some people are forced into retirement or unemployment and manage to get by with very little. There's a wide range of how much money people need to live the lifestyle they want in "retirement".
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Twinsfan10
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Re: Is there a safe amount of money for retirement?

Post by Twinsfan10 »

Nothing in life is 100% safe. That goes for retirement. There are a lot of black swan events that could derail our retirement. None of these are likely so we have to go with the 90% chance and call that good. For retiring I would use the following. Lets say you need 100,000 a year in todays dollars and you plan on retiring this year at age 65 when you qualify for medicare. This should give you a comfortable retirement with room to spare if things don't work out. Lets say you will get 20,000 in social security starting at age 66 1/2. You will need 80,000 after social security so you will need to take out 100,000 per year out of your 401K. Using a 4% withdraw rate you need 2.5 million dollars plus another 30,000 in taxable to cover your 1 and 1/2 year without social security. This assumes a safe 60/40 asset allocation. If you want to be safer add a cushion. 50% cushion would equal 3.75 million. 100% cushion equals 5 million. You also need to add money for every year you want to retire before age 65. $100,000 in taxable per year should cover that. In summary to retire at age 65 with these criteria you need 2.5 million, age 64 2.6 million, age 60 3 million. This is to meet the 90% safe. You can retire with a lot less if you have a pension or you can live off of less than $100,000. By the way I would rather retire a few years to early (and have to make a few cuts) then to retire a few years too late and be not be able to enjoy it.
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Re: Is there a safe amount of money for retirement?

Post by AnnetteLouisan »

Your own assumptions…. I’ve been meaning to bring this up as a topic since I find many of my financial and retirement assumptions are just that, unstated, based on perhaps little, not clearly articulated. Our stated assumptions can be tested but the unstated ones probably should be vetted a bit better.

At 55, I project the next 20 years as being full of continued financial progress for myself, as the last 20 were. I imagine retiring at 60 or 62 and still being healthy. I imagine traveling. I assume my family will retain its current level of RE assets. But none of that really can be relied upon and I need to plan for other scenarios, so I have long term disability insurance, long term care insurance, some (smaller) amount of life insurance, good medical and a large emergency fund. I found making a list of if-thens a good exercise.
Last edited by AnnetteLouisan on Sat Jan 15, 2022 10:03 am, edited 2 times in total.
Boatguy
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Re: Is there a safe amount of money for retirement?

Post by Boatguy »

Garco wrote: Fri Jan 14, 2022 12:02 pm Money is only one thing that matters in deciding when to retire.

For me, in addition to money (investments, savings, property, income) the key thing was my career stage. The next was my ability, as the sole provider for my family, to cover the major expenses for education, healthcare, and housing of my wife and children.

Only after my children had graduated from college (without any debt), and I had accumulated enough to sustain my standard of living indefinitely based on my 401k investments and Social Security, did I consider retiring.

But just as important as money was my career, which related not only to my income but also to my own goals for achieving some things through my work. My work was more than just a job. It was my outlet for creativity and for creating my professional reputation.
Couldn’t have said it better myself!
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