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  #1  
Old 04-09-2021, 10:34 AM
Richard B Richard B is offline
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Default Retirement Health Insurance

I am looking to retire in the not to distant future and after reading Mojo-NC post about retirement I am more than ready! With that said, I do not have a defined benefit program at work so other than SS I will have to finance the entire bill myself. A couple of questions that I can not get any, or very little information about are:

1) I will not be old enough to get Medicare of course till 65 but how much should I expect to pay for it, my wife and I, when we retire below that age?
2) I keep reading 12 times my current salary but is that amount before or after all the deductions?
3) I am assuming that the first couple of years I will be spending as much or more than I currently am but should I expect that to continue into my 70's?

After working for over 45 years I think I am just nervous to retire and start a new chapter of my life.
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  #2  
Old 04-09-2021, 11:14 AM
mk cant log in
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I'll give you my input but health care costs vary wildly.

Wife/I were allowed to stay on her company policy after she retired but we paid 100% of the premium instead of the 20% while she worked. We paid about $1,300/month. Most guys I know in your situation pay anywhere from $900 - about $1,500/month for health insurance between retirement and Medicare age. We are both now on Medicare and the total premium is about $150/month each from each of our SS checks. Total about $300/month for coverage that is better than the policy we were paying $1,300 for. We have a good Medicare Advantage policy thru AARP United Health Care plan but you don't have to be a AARP member.

I'd suggest talking to your HR dept. and/or some insurance brokers before you pull the trigger on retirement.

A good broker can explain the Medicare Parts A, B, Advantage Plans, etc. much better than most of us. My broker explained it all to me in about 5 minutes.

BTW, whether you take SS at 65 or not, you have to sign up for Medicare at that age, actually a month or two earlier. If you are drawing SS prior to 65, they will automatically sign you up for Medicare and send you a card in the mail at 65.

Its confusing but a good broker can explain it in fairly short order.
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  #3  
Old 04-09-2021, 11:26 AM
Baseline Baseline is offline
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The only advice I would give you is to consult a professional. There are personal budget considerations, existing debt, taxes, personal desires, etc. As far as healthcare, depending on your income, you may qualify for a subsidy based on the ACA. You may be better off using your Cobra benefits from your workplace. Again, you need to have a retirement professional wade through this for you.

If you have a 401K or similar retirement plan the administrator must have an independent advisor that can provide you information and referrals about insurance. I would start there.
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Old 04-09-2021, 11:37 AM
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David Anderson David Anderson is offline
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Quote:
Originally Posted by Richard B View Post
I am looking to retire in the not to distant future and after reading Mojo-NC post about retirement I am more than ready! With that said, I do not have a defined benefit program at work so other than SS I will have to finance the entire bill myself. A couple of questions that I can not get any, or very little information about are:

1) I will not be old enough to get Medicare of course till 65 but how much should I expect to pay for it, my wife and I, when we retire below that age?
2) I keep reading 12 times my current salary but is that amount before or after all the deductions?
3) I am assuming that the first couple of years I will be spending as much or more than I currently am but should I expect that to continue into my 70's?

After working for over 45 years I think I am just nervous to retire and start a new chapter of my life.
I retired officially June of 2019. I was eligible for Medicare in 2020 and my wife is not until 2022. The first year we paid about $1500/month for standard $6000/each deductible health insurance for 2 of us (max out of pocket was $18,000 + $12,000 worse case). She has 15 months before she will get Medicare and I pay $810/month for her insurance today (max out of pocket $9720 + $6000worse case). Regarding 12X your salary, what does your financial advisor say as I would suspect this is based on your current debt, standard of living, assets, etc. As far as the future, Medicare part A or major medical is free. Part B is currently about $145/month and it pays 80% of your standard doctor visits and is usually deducted from you SS check. Because I waited till I was full retirement age to apply for SS, I currently pay this quarterly. Again depending on your pre-retirement income, Medicare looks back at your 2 year old tax returns, means tests your ability to pay so based on what income you made then assesses a surcharge based on that income for part B and Part D. For me this is substantial so today I pay this monthly, but come May I get my first SS check and the Government will deduct what I owe them from my SS check. To cover the 20% that part B and D doesn't cover one needs to have a Medicare supplement. Mine runs $240/month and their is a $400 deductible associated with it and Medicare. I suspect depending on your income, there are different plans, or at least that's what Joe Namath tells me! If you are 65 soon, then you need to check out the Medicare means testing, as it could have an effect on your total expenditures. As far as what you want to spend in your 70's, well your income will determine that. My financial guy says that you can take 4% out without affecting the base saved, He can also figure out how much you can take if you want to die broke! Good luck and talk to your financial guy and insurance broker to help with these issues.
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Old 04-09-2021, 11:47 AM
DW DW is offline
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You need to know how much money you spend. You should prepare an annual budget. Start by creating an annual expenditure analysis of recent spending by categories. Adjust the amounts in each category anticipating your spending during retirement. Some spending categories will increase and some will decrease. For example, travel will likely increase during retirement.

Once you do this step your analysis will fall into place with basic calculations.
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Old 04-09-2021, 11:58 AM
Misdirection Misdirection is online now
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The rule of thumb is 12 times your annual salary (before any deductions) or 25 times your annual spend (what you actually need to survive).

25 times your annual spend is also referred to as the 4% rule. That you can spend 4% of your assets the first year of retirement and adjust for inflation every year with a low risk of running out of money over a 30 year period. This also assumes that your invested appropriately (60% stock, 40% bonds most commonly). This is also based upon past returns and future returns are not guaranteed.

I agree with the comments above about seeing your financial advisor. If you do not have a financial advisor, you can see them for a one time fee. The best place to look might be whomever your 401k is thru (if you have one).

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Last edited by Misdirection; 04-09-2021 at 12:02 PM.
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Old 04-09-2021, 12:50 PM
Baseline Baseline is offline
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Quote:
Originally Posted by David Anderson View Post
To cover the 20% that part B and D doesn't cover one needs to have a Medicare supplement. Mine runs $240/month and their is a $400 deductible associated with it and Medicare.
Dave. Is that $240 a month for you or does it include your wife. I have a platinum Bluecross plan with minimal deductibles I pay $94 a month for. My part D is $17 per month with Humana. This is not a income based premium. I don't want to mess around in your personal business, but you might find a much cheaper premium if you check around for a better deal if the $240 is just for you.
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Old 04-09-2021, 02:54 PM
DW DW is offline
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Quote:
Originally Posted by Baseline View Post
Dave. Is that $240 a month for you or does it include your wife. I have a platinum Bluecross plan with minimal deductibles I pay $94 a month for. My part D is $17 per month with Humana. This is not a income based premium. I don't want to mess around in your personal business, but you might find a much cheaper premium if you check around for a better deal if the $240 is just for you.
Medicare insurance plans are established regionally so you need to shop for your area. Advantage plans are much cheaper than supplemental plans. My United Advantage plan costs $0. Advantage plans are a good value because the insurance companies assume the full SS role and gain efficiency due to privatization so consumers get more. It is easy to compare the benefits of all the plans.
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Old 04-09-2021, 03:18 PM
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David Anderson David Anderson is offline
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Quote:
Originally Posted by Baseline View Post
Dave. Is that $240 a month for you or does it include your wife. I have a platinum Bluecross plan with minimal deductibles I pay $94 a month for. My part D is $17 per month with Humana. This is not a income based premium. I don't want to mess around in your personal business, but you might find a much cheaper premium if you check around for a better deal if the $240 is just for you.
I just checked, I pay $694 a quarter for BCBS Plus for me only which includes part D. Because of my desire to use my existing doctors and I trust my agent, this was the best option. thanks and I will ask next time I see him. My friend who is on Medicare pays even more however he is on insulin and it is a nightmare on what they cover. Because the Canadian border is closed he had to get a better plan that covers his insulin pens. His increased coverage is still cheaper than his out of pocket expense with his old program. Once the border opens again he can buy it again in Canada over the counter for about $100, $500 cheaper than at home.
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Old 04-09-2021, 04:20 PM
Bugler Bugler is offline
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Quote:
Originally Posted by Richard B View Post
I am looking to retire in the not to distant future and after reading Mojo-NC post about retirement I am more than ready! With that said, I do not have a defined benefit program at work so other than SS I will have to finance the entire bill myself. A couple of questions that I can not get any, or very little information about are:

1) I will not be old enough to get Medicare of course till 65 but how much should I expect to pay for it, my wife and I, when we retire below that age?
2) I keep reading 12 times my current salary but is that amount before or after all the deductions?
3) I am assuming that the first couple of years I will be spending as much or more than I currently am but should I expect that to continue into my 70's?

After working for over 45 years I think I am just nervous to retire and start a new chapter of my life.
I am part of a Facebook group called New Retirement. I know that several folks have asked this question recently. You may want to check out the group and do a quick search.

https://www.facebook.com/groups/newretirement
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