I’m afraid of getting sick. Not in the sense that I’m actually afraid of germs. Goodness knows how many germs pass through my fingers (literally) on any given school day. Normally, the concept of illness lurks in the back of my mind and then lurches to the forefront when a student gets sick (literally). I’m afraid of getting sick in the sense that I don’t know how well we can afford it, especially in the future. Let me explain.
This weekend, I watched my dad spend $12 for a bottle of concentrated cherry juice. Amidst a bad flare up with his arthritis, he couldn’t get into his doctor right away and found himself resorting to home remedies, old wives’ tales, and whatever my Google searches yielded. When we called the store to see if they carried that particular juice, they confirmed that they did and cautioned us that it was not your typical juice in terms of price. At that point, no one cared. But then, I really, really did.
For the past few months, I’ve watched my parents prepare to retire. There are far too many variables to pin down an actual date, but it’s safe to say that they both want to retire sooner rather than later. As they sort through their finances and plan their future together, I can’t help but smile. I am so happy for them. And I’m kind of jealous. It made me think that maybe I needed to give the concept of FIRE another long look.
But then the cherry juice incident happened. I’ve tried to get my parents in on the FIRE movement — especially since my mom lived it in her 40s — but they’re just not budging. I gave them the cold, hard facts about the 4% rule, but they’re not sold. And now I don’t know if I am either. I understand* the concepts of insurance, Obamacare subsidies, HSAs, FSAs, medical and dental tourism as means of covering medical necessities and emergencies now and in retirement. But how in the world do you afford $12 bottles of cherry juice on a regular basis without batting an eye?
To give you some perspective, $12 is 6% of our grocery budget or 4% of our general spending budget for the month. That’s a lot of money for one item! My thyroid medicine costs less and that’s for a three-month supply. Now, I know I could and probably should push the cherry juice out of my mind when it comes to considering my own retirement — whether that retirement happens in my 40s or much later. It’s unlikely that I’d find myself in that exact situation. There are prescriptions, alternative treatments, preventative care, and other miscellany that could all take the place of cherry juice.
But who is to say there won’t be other expenses? And what do you do when these added expenses aren’t covered by insurance? When you’re living off your investments in retirement, how do you swing that? If I travel too far down this line of questioning, I can transition from trepidation to full-blown panic fairly quickly. If something as simple as a homeopathic treatment has me all off kilter, imagine how I’d react to a major illness.
I don’t have answers, only lots of questions. I wonder how often people consider the nuances of illness. As a generally healthy person who has a chronic condition that is well managed, I can peer into both worlds. Most days, I feel totally healthy and feeling unwell is entirely unexpected. But on some occasions, it’s not. What’s more is that the expense of illness isn’t new to me. I’ve watched people get tragically sidelined by medical bills. I’ve dealt with a fair share of them. But for some reason, it’s this $12 cherry juice that I can’t shake. On one hand, it’s just a bottle of juice. But it’s also so much more.
*I am using this loosely. So very, very loosely. I read your blog posts, Frugal Vagabond and Mr. Groovy, and I try really hard to understand.
So Tell Me…Am I being overly cautious? Has anything ever unsettled you like this? How does illness influence your perspective on money or FIRE?
Yes this sort of thing can concern me if I dwell on it… however, I know that we are smart with money and have health insurance and a decent size emergency fund that should see us through an illness.
You never know what the future may hold for us so we need to remain flexible and be able to roll with the punches.
Thanks for the article 😀
That’s where I get stuck, though. When people tell me they’ve landed squarely on a retirement number, I always wonder about major (or minor!) illnesses. Great reminder about flexibility. I’m continually working on that!
Emily @ JohnJaneDoe
I am so very nervous right now about health care expenses. ACA has allowed a lot of people to escape 9-5 insurance-providing work (including us), but it doesn’t look secure. Our out of pocket premium went way up (65%) last year for inferior insurance, and our provider is dropping out of our exchange. Health care costs and health insurance probably our top stressor right now, so I don’t think you are overreacting or being too cautious.
I’m glad I’m not alone in my worries, but I really wish I were! My insurance coverage is great through my work though there’s a big price increase again this year. My husband’s is good. It’s one of the reasons why I don’t think I could stay at home with a family – the family plan from his district is so expensive and the coverage isn’t great! And that’s right now. If I start contemplating retirement (or early retirement), my eyes cross.
Des @ Half Banked
I read a horrifying story about the amount it cost a young woman to deal with her cancer treatments on TFD the other day and it gave me the same feeling – like, everything can be as planned and perfect as it could possibly be, and then BAM, everything is different. And that’s as a Canadian living in socialist healthcare utopia! I’m a total baby about being sick, and it’s not uncommon for me to try to spend away the sick by dropping $40 on things like cough drops and ColdFX and other over the counter remedies. Oh, and canned soup, because I feel like sodium is the answer to most of my problems.
All that is to say I get where you’re coming from, and it can definitely be an unsettling thought. I’m grateful for the resources – including my salary – that make it possible to handle those bumps in the road now!
I’m pretty sure sodium is science, right? I mean, that’s how Campbell’s is still in business, no? I hear you on the ability to manage the bumps now. And hopefully foresight and planning will make the future manageable as well.
Matt @ Optimize Your Life
Health care costs are definitely a concern. My approach right now is to keep chugging along with saving and then plan to reassess healthcare when I get closer to FI. Health care costs have increased at a rate that seems unsustainable. The ACA is having issues. The idea of a public option is back on the table. There are so many different things that could happen with health care costs at this point that I don’t even know how to plan.
Healthcare costs are very difficult to plan for because the whole business model can change at any time. If you plan for today’s system and it changes tomorrow, will it be better or worse for the patients financially? Who knows?
The best we can do is maintain healthy habits, put a buffer in the budget, and stay educated about the most cost-effective place to access care (primary doctor vs specialist vs urgent care vs emergency department- the UK has a great guide http://www.choosebetter.org.uk/wp-content/uploads/2013/12/1025_Choosebetter-popster_Web.pdf).
Best of luck and best wishes for everyone to stay happy and healthy!
Thank you for sharing this, Julie! The education piece is key, isn’t it? 🙂
Vicki@Make Smarter Decisions
OK – so the really crazy thing is that my husband bought a bottle of cherry juice last week (when we couldn’t find good cherries at the store). He says he feels very different in terms of pain in his joints when he has a small amount of cherries/juice each day. He is pretty in tune with his body so I believe him, but I totally thought the same thing about the cost. And yes, the whole illness thing freaks me out a bit in terms of retiring too. And so does looking at my mom and dad – as my mom cares for my dad with moderate Alzheimer’s to avoid a $7000/month nursing home placement. And they can afford it. My $1500 dental work freaked me out too. It shouldn’t but it does.
Medical expenses can be crazy. 25% of my in-laws income is used for medical conditions. That really freaks me out. We spend a lot of time and a fair amount of money on veggies, fruit and a gym membership. I’ve been re-reading Younger Next Year, and am seriously tempted to send it to my parents. We can’t prevent everything, but a lot of things are in our control.
So check this out. One county in AZ outside of Phoenix is down to ZERO health insurance providers agreeing to be part of ACA. We’re down to ONE in our county – and even that is debatable. I’ll believe it when I see they’ve signed the contract. Worried? Who me? Yes, but – as long as Mr. Groovy agrees with me that we might at some point need to be flexible – i.e. move to CA to be close to the border if we need medical treatment that is no longer available (or sustainable) here – I’ll try not to worry.
That’s terrifying. I suppose in addition to this being a lesson in flexibility for me, it’s also a lesson in patience. I’m trying really hard to wrap my mind around things that very well might not apply or exist (hello, pension) when we get ready to retire — early or otherwise.
Truthfully, I devote almost no time to worrying about medical coverage in retirement, early or otherwise, because of our willingness to be extremely flexible. There are so many countries with guaranteed access to high-quality medical care that in an absolutely dire, worst-case scenario, we’d be open to moving to one of them to cover an unexpected chronic major medical condition.
I think I sit somewhere on the MMM side of the spectrum in that I see the amount of income we plan to retire on as a ridiculous fire hose of money, provided we can adapt to changing conditions. Even if we started to spend $12 on fancy cherry juice on a regular basis, with a time horizon of decades, if gives you so much time to correct course elsewhere to adapt, whether it’s relocating, shaving the money elsewhere, taking one shift a week at the Wal-mart as a greeter, or whatever.
In short, don’t worry! Stress kills!
HA! I excel at worrying. It’s all I do basically. I’m trying to chill, and I am significantly calmer. But yeah. I guess I get nervous when I look at our own budget. I don’t know where we could really shave from in the event of serious illness. But medical tourism might be the answer. That’s why I linked to your site. You teach me so much!
The Green Swan
I totally agree with you. I keep coming back to the need of having plenty of cushion to my FIRE number. Not only does the random illness (major or minor) come up but if you’re retiring early, that means an extra long time for randomness to have an impact. Cushion and flexibility are my keys!
Yes! I get so nervous that I’ll never feel like the cushion is big enough. Maybe if I were actually approaching FIRE I would feel differently. But even when health should be predictable, it absolutely isn’t!
Also remember that if you retire with extra and the crucial first ten years of retirement see a healthy economy, you’ll have a good chance at lots of growth in your portfolio. (Or make your cushion after you retire by continuing to tutor, writing a book, etc.) That growth can give you the ability to buy $12 juice every week if you feel you need to.
Early retirees tend to over-analyze and plan for allllll the things. It’s what makes us forward-thinking and good savers! When you get overwhelmed by the million problems that could possibly befall you, just take a deep breath. Good things happen too, and we have the ability to influence outcomes with thoughtful choices.
Good things do happen, that’s for sure.
Gary @ Super Saving Tips
I hear you on the $12 cherry juice. Our budget currently includes $75/month just for various supplements, which of course are not covered by health insurance. That’s in addition to the 30% of our budget we spend on medical coverage and care (with the bulk of that spent on prescription medication). If you had told me in my forties that I’d be spending my money this way 20 years later, I’d have thought you were crazy. So no, I don’t think you’re being overly cautious, I just think most people are “underly” cautious when it comes to this subject. As for what you can do about it, obviously you want to put yourself in the best financial shape you can so you have flexibility and options. But I can’t overestimate the value of preventative care and good healthy habits, something I waited too long to do something about. You can’t stop every illness that comes along, but you can put yourself in the best health possible.
I just had this conversation at a check up with my doctor. He was saying that when people enter their 30s and 40s, you can see all the good decisions and all the bad decisions people have made and are continuing to make. It definitely gives me pause when I contemplate soda versus tea (I know the real answer is water!) or consider not going for a jog. Glad I’m not crazy, Gary!
An average retiree (age 65) will spend 250K on medical expenses in the last 30 years of their life. Interestingly, on average 25-30% of this spending happens in the last year of their life.
End of life care is enormously expensive.
All that being said, I think that most early retirees need to plan to be medical tourists because economic reports that I’ve read suggest that healthcare can easily work it’s way up to 25% or more of US GDP (compared with about 18% currently).
So well said, Hannah. The numbers are overwhelming and so important to understand early on.
This is why I want to own my business and build wealth. It seems an average income and saving 10% is no longer what it used to be. :-/
Even at 21 years old, I am ever so conscious of my health because I don’t want to regret it in my 30s and 40s. Being healthy can save a lot of money over the long-term and I even started an HSA account just in case I ever need it. I’m saving my health related receipts so that I can withdraw it all tax free!
It’s really amazing that you are able to keep your general spending budget to be $300, I think I exceed that by a lot and looking to lower that in the coming months.
So many of my friends have disabilities and that has radically altered how I think life will be later. I see what they have to spend money on to accommodate themselves. It is most clearly impacting what I’ll want when I purchase a condo. I am in my early thirties, but am already thinking about aging in place and trying to make good choices now that will make my life in a few decades easier.
Revanche @ A Gai Shan Life
Funny, I’m gestating a post on a similar theme.
I understand people feeling like worrying too much is unproductive but I also suspect they’ve never been sidelined by a serious illness. Considering medical tourism is fine for some things but if we’re talking late in life or severe health conditions, the ability to actually go to those other countries and set up shop is not necessarily likely.
In the worst of my pain and fatigue days, keeping myself fed and minimally clean are the maximum possible activities, and often the pain is so bad that I wonder why breathing isn’t optional. So then I have to pick the one of the two that sustains life and damn the hygiene. Moving to another country for care? I’d laugh but my ribs hurt right now.
I don’t even want to imagine how much more difficult it is to pack a bag and travel if you have any sort of cancer or issue requiring surgical intervention.
So yeah, you could say this has preyed on my mind. My disease has forced me to change my major, my career plans, and my life goals. Of course I’m worried about where the money will come from when things get worse and I can’t earn income. This is why I both want to retire early and want to have at least $5M (preferably $10M) in assets before I do. I don’t know how many more “good”, mobile years I’ll have. I don’t want to squander what time I have but also don’t want to end up retiring destitute. I’ve already seen that flick, thanks.
Diana E Sung
I think it was around the time I was diagnosed with a second chronic disease that I gave up the notion of A) ever living abroad again–especially in a country without pretty high quality health care, most of which come with high C.O.L and B) the idea of retiring before I hit my 30 years in this system and can retain the Board of Ed contribution to my very generous health care plan–even if I technically save enough money to do so. I’m seeing what Medicare is doing to my mom (a federal government retiree, no less). It’s not pretty. P.S. I know you wrote this a long time ago, but blame the snow day for my stalker fest of your blog.