Budget summary for expats
Mar 21st 2016, 7:42 pm
#31
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Re: Budget summary for expats
Whats all this talk of retirement? 
Mar 22nd 2016, 2:28 am
#32
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Re: Budget summary for expats
So Pulaski - as you see from my previous post, I too am counting down the days till I'm Medicare eligible, and I don't think I'm poor, naive, or senile. I'm not expecting Medicare to be some magical silver bullet, but as I pointed out in detail in my post, I'm expecting to get something similar out of Medicare at 65 for $200/mo that I will be paying $700/mo for when I'm 64. For $700 at 64, that's a high-deductible bronze plan (I could pay $1,400/mo for a fancy platinum plan also, but let's not get carried away). So in what way is something that otherwise would cost at least $700 considered a bad deal when it only costs $200?
If you are comparing the cost and associated benefits of medicare to an employer-sponsored Group plan, where the employee pays very little for 'self', then the comparison is skewed.
Looking into this further (I'm actually getting closer to 65 so I'm genuinely interested in this) ...
This respectable-looking site says Fidelity have predicted that a couple should expect to need $240,000 to cover medical expenses in retirement. $240,000 for a couple is $120,000 per person. This is not just premiums, but deductibles and such (but not long term care, etc - those are out of scope for this discussion).
This site suggests life expectancy is roughly 85, so that suggests an AVERAGE of 20 years after 65.
$120,000 / 20 = $6,000/yr, or $500/mo (I know that's not mathematically correct/sophisticated, but should do for this discussion). I'm going to guess that this works out at roughly $200/mo in medicare premiums, and another $300/mo on out of pocket expenses not covered by Medicare.
If you are comparing the cost and associated benefits of medicare to an employer-sponsored Group plan, where the employee pays very little for 'self', then the comparison is skewed.
Looking into this further (I'm actually getting closer to 65 so I'm genuinely interested in this) ...
This respectable-looking site says Fidelity have predicted that a couple should expect to need $240,000 to cover medical expenses in retirement. $240,000 for a couple is $120,000 per person. This is not just premiums, but deductibles and such (but not long term care, etc - those are out of scope for this discussion).
This site suggests life expectancy is roughly 85, so that suggests an AVERAGE of 20 years after 65.
$120,000 / 20 = $6,000/yr, or $500/mo (I know that's not mathematically correct/sophisticated, but should do for this discussion). I'm going to guess that this works out at roughly $200/mo in medicare premiums, and another $300/mo on out of pocket expenses not covered by Medicare.
Mar 22nd 2016, 2:54 am
#33
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Re: Budget summary for expats
Good point about viewing these figures somewhat suspiciously if they come from financial providers.
Still, I think $500 a month per person is a good ballpark, assuming no known medical issues. That's what I'm budgeting - sounds about right for a pre-Medicare private policy allowing for tax credits, and for increased off-policy spending once in the Medicare age range.
Still, I think $500 a month per person is a good ballpark, assuming no known medical issues. That's what I'm budgeting - sounds about right for a pre-Medicare private policy allowing for tax credits, and for increased off-policy spending once in the Medicare age range.
Mar 22nd 2016, 6:26 am
#34
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Re: Budget summary for expats
Mar 22nd 2016, 6:40 am
#35
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Re: Budget summary for expats
Something to bear in mind: Fidelity has been criticised recently for making pronouncements that people need to save a significantly higher multiple of their current salary before they can retire, and their estimates of healthcare costs form part of that. The criticism essentially implies that they are doing this to increase the money they have under management, and so increase their profits. The sort of people likely to be influenced by this guidance are exactly the sort of people most likely to be persuaded to have someone at Fidelity manage their retirement accounts for high fees.
But the original purpose of this discussion was to try to understand the assertion by Pulaski (and Boiler) that 'Medicare is Expensive'. I believe it would be far more logical to say, "Healthcare is Expensive", and then talk about what Medicare does / does not do to minimize your exposure.
