Meet Mr Money Mustache who retired at the age 30

[oddballstocks]

Replying to myself: http://www.mrmoneymustache.com/2012/11/01/our-new-237-per-month-health-insurance-plan/

 

Looks like he was paying $237/mo in 2012 for a $20k family deductible plan with a max of $32k out of pocket.  Given health insurance increases in the past four years it's probably closer to $500/mo for this same plan.

 

On his forum people keep asking how they can get a plan like his, comparable plans run $700/mo back in 2014.  Seems like he hasn't revisited the issue since 2012.  In the post he says they skated by with his wife working part time.

 

This is the missing link, affordable health insurance isn't really available if you're trying to retire early.  I know most on this site are in Canada and Europe where it's different.  But in the US it's not practical unless you have a substantial bankroll for health care alone.

[oddballstocks]

For completeness on this.

 

Went to healthcare.gov and entered in my family stats.  I make too much to get any subsidies, although interestingly enough they recommend that I enroll my kids in the state's medicare program.  Interesting way of shifting costs.

 

Cheapest plan is $400/mo with a $14k out of pocket max.  So we're talking about $1500/mo for health care.  Maybe you get a few years where it's cheaper, but I'd expect to budget the full amount.

 

It's crazy what things cost.  One of my sons had a camera put down his throat to examine some vocal nodules, cost was $14k, insurance picked up everything but about $1500.  The "original" cost was $60k that was knocked down to $14k due to insurance company discounts.  So one procedure like that which took about an hour and you've blown your deductible.

 

I could rant on this for a while, but this is it for now.  Bottom line, it's extremely expensive to not be under employer health insurance in the US.  Some can do it, they're usually young, and hit the genetic lottery and perfectly healthy.  You can roll the dice and see where they land, but I've had a few encounters where if healthcare wasn't available a family member wouldn't be living right now.

 

The costs are terrible.  I'm trying to psych myself up to pay $5k for a birth in early 2017.  I will probably not even look at the bill and blindly pay.  Looking at these bills is infuriating.  They stick an IV in you and suddenly there's a $200 drug in there you didn't know about.  Or the $37 Advil pills, or how the doctor and hospital double charge you for everything.  The hospital charges $200 for an xray because it took place in their building, then the doctor charges $200 for the xray because they actually did the xray.  Such a scam.  But there's nothing that can be done unfortunately.

[CorpRaider]

Can you think of nothing?  Truly?

[Jurgis]

Thanks oddball.

 

Yeah, I think his "$237/mo in 2012 for a $20k family deductible plan with a max of $32k out of pocket" is presented overoptimistically. Like you said, it probably costs way more now. And someone commented on his site that it might not cover drugs and some other things.

 

Also his post doesn't cover health deterioration and premium increases as you age (offset by Medicare from 65, but not for things that Medicare doesn't cover).

 

In short, I agree with you:

 

affordable health insurance isn't really available if you're trying to retire early.  I know most on this site are in Canada and Europe where it's different.  But in the US it's not practical unless you have a substantial bankroll for health care alone.

[valcont]

For completeness on this.

 

Went to healthcare.gov and entered in my family stats.  I make too much to get any subsidies, although interestingly enough they recommend that I enroll my kids in the state's medicare program.  Interesting way of shifting costs.

 

Cheapest plan is $400/mo with a $14k out of pocket max.  So we're talking about $1500/mo for health care.  Maybe you get a few years where it's cheaper, but I'd expect to budget the full amount.

 

It's crazy what things cost.  One of my sons had a camera put down his throat to examine some vocal nodules, cost was $14k, insurance picked up everything but about $1500.  The "original" cost was $60k that was knocked down to $14k due to insurance company discounts.  So one procedure like that which took about an hour and you've blown your deductible.

 

I could rant on this for a while, but this is it for now.  Bottom line, it's extremely expensive to not be under employer health insurance in the US.  Some can do it, they're usually young, and hit the genetic lottery and perfectly healthy.  You can roll the dice and see where they land, but I've had a few encounters where if healthcare wasn't available a family member wouldn't be living right now.

 

The costs are terrible.  I'm trying to psych myself up to pay $5k for a birth in early 2017.  I will probably not even look at the bill and blindly pay.  Looking at these bills is infuriating.  They stick an IV in you and suddenly there's a $200 drug in there you didn't know about.  Or the $37 Advil pills, or how the doctor and hospital double charge you for everything.  The hospital charges $200 for an xray because it took place in their building, then the doctor charges $200 for the xray because they actually did the xray.  Such a scam.  But there's nothing that can be done unfortunately.

 

Our daughter was born this summer and we are still getting all the medical bills. I have stopped counting but the last estimate was $20K. And this was a natural birth. My wife's insurance paid the bulk of it but the charges makes me mad. $1000/per night for a hospital stay. I am sorry , I have stayed in $1000/night hotels and this ain't one. And separate charges for the same service from multiple LLCs. As a business owner I can see the scam they are pulling but this is a cartel now and its hard to get rid of it.

 

That's why I thought single payer was a much better solution than the crap we had now. Everyone gets reasonable health care access. A specialized care may get worse but I think we will save on the unnecessary surgeries also. Also limit the patent duration and all these dirty tricks like mashup,alternate delivery and purification.

 

Another scam is the drug industry/doctor cartel. Years ago I dated this girl who was a medical rep. She had zero idea about what she was selling but damn she looked really good. Her job was mainly to take these doctors out on dinner. All these married geeks would fawn over her and then the account rep would "drop by" and talk business. 

 

[Liberty]

Healthcare certainly seems to be a bigger challenge in the US, and your system is clearly not on a sustainable path. But MMM does live in the US, and there's a large contingent of people who did what he did in the US, so it's not insurmountable (maybe you have to work a year or two longer or whatever, but it's probably not a reason to abandon the whole project). A good place to start to find out how they deal with this challenge might be to go on the MMM forums and see if there are threads about it or sign up and ask the question.

 

http://forum.mrmoneymustache.com

 

MMM has a 2015 post where he itemizes his expenses for 2014, his coverage didn't seem that high then, but it could've changed since:

 

http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-familys-2014-spending/

 

Makes no sense to me to tie health insurance with employment. It's like tying access to electricity with piano lessons.

[Jurgis]

But MMM does live in the US, and there's a large contingent of people who did what he did in the US, so it's not insurmountable (maybe you have to work a year or two longer or whatever, but it's probably not a reason to abandon the whole project). A good place to start to find out how they deal with this challenge might be to go on the MMM forums and see if there are threads about it or sign up and ask the question.

 

http://forum.mrmoneymustache.com

 

MMM has a 2015 post where he itemizes his expenses for 2014, his coverage didn't seem that high then, but it could've changed since:

 

http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-familys-2014-spending/

 

Liberty, oddball already looked at MMM forum. MMM has a plan that is no longer available at that price point. Even if it was available, it doesn't address other problems I raised. I think it's not sustainable long term for his family either. We will see how his medical expenses go for the next 20-30 years... but then it will be too late for us who have to make decisions now. ( Of course he's now getting huge payoff from the blog, so even if medical goes through the roof, he can cover it. ).

 

No, "work a year or two longer" won't cover medical. Try 10 years longer, then perhaps.

 

I'm going for being very safe, and we can quibble, but I'm gonna stay with $1M number for just medical costs for the rest of one's life. I include everything in this number: insurance, copays, doctors, drugs, dental, long term care, etc. I think I'm being somewhat generous assuming $1M will cover a family.

 

Sure, it's not a reason to abandon the retirement project. Just delays it.

 

Caveats: yeah, people can risk and retire, go to cheapo country for medical if they get cancer/Alzheimers/etc maybe. I have relatives who've done that (although they had free coverage in target country, which is not given). Or perhaps USA institutes universal Medicare in next couple years and anyone who risked and retired wins. BTW, even with universal Medicare, I'd probably allocate ~$500K for any long term care needs until the end of life. This might be on the "very safe" side too, but people do need nursing homes and these cost a lot... even without butlers and Cadillacs.

[james22]

As a business owner I can see the scam they are pulling but this is a cartel now and its hard to get rid of it.

 

That's why I thought single payer was a much better solution than the crap we had now.

 

Setting prices is better than a controlling prices?

[Liberty]

So are you saying that all the people who retired young are now going back to work because of health insurance changes in the past couple of years?

 

You can move to Canada, we're pretty welcoming  ;)

[Packer16]

I think $1 million may be steep.  If we use Nate's number of $18k per year until 65 (it may be lower once kids are off the plan) then Fidelity has a study that shows medical costs from Medicare eligibility to death is about $240k for a couple.  To get to a $1 million you need to in retirement for 42 years, age 23.

 

Packer

[Jurgis]

So are you saying that all the people who retired young are now going back to work because of health insurance changes in the past couple of years?

 

If this is addressed to me, then, no, that's not what I am saying.

 

What I am saying is that people who retire young, do not allocate enough money for increasing medical costs for the future.

And the medical costs hit you late in life when going back to work is possibly not an option.

 

In optimistic scenario, you retire early with a bigger nest egg than needed for other things, you continue to be frugal and your investments+frugality cover the shortage of medical funds == no problems.

 

In pessimistic scenario, the shortage surfaces when you're 70+, with no chance of employment, hit by long term care costs == big problems. Well, maybe your earnings/savings go to near zero and Medicaid saves you.

 

It's still your choice to retire or not. I'd rather be safe. Others can decide for themselves.

 

You can move to Canada, we're pretty welcoming  ;)

 

I'm thinking about it, but weather sucks (in general) and RE prices suck (right now). And I'm not sure it's easy to get GC equivalent/citizenship for full benefit coverage. I'm considering other countries too. I'm also considering just having extra $1M for medical.  8)

[Jurgis]

I think $1 million may be steep.  If we use Nate's number of $18k per year until 65 (it may be lower once kids are off the plan) then Fidelity has a study that shows medical costs from Medicare eligibility to death is about $240k for a couple.  To get to a $1 million you need to in retirement for 42 years, age 23.

 

To be safe I'd double Fidelity's estimate of $240k per couple. So we are back to $500k for 65+ and whatever else you need until then.

 

To reiterate this ( https://www.genworth.com/about-us/industry-expertise/cost-of-care.html ) estimates long term care at $5k per month, nursing home at $11k per month. They might be jacking up price display though, since they sell insurance. Even if you half the costs, $240K would be gone really fast. Of course, the flip side is that when you're in nursing home, you might not have other expenses??? But if your spouse isn't, that doesn't apply.

 

Anyway, like I said to Liberty, people can decide themselves. Of course, majority of Americans may not save even 240K just for medical costs. Definitely throws a wrench into lower income MMMs.

[oddballstocks]

You can move to Canada, we're pretty welcoming  ;)

 

It's REALLY hard to move to Canada.  You have to be sponsored by a Canadian company and there's a high hurdle for the company to show that no Canadians can do the job.

 

My sense is Canada is afraid of Americans coming in and taking jobs.  I've been drilled about doing business in Canada anytime I've come to visit.  I guess one thing you could do is come in on the 6mo tourist visa then overstay and hope you can work things out.  It's a really easy place to visit for a few days/weeks/months, but much harder to move there for good.

 

I think the easiest way to move is to marry someone from Canada.

[oddballstocks]

You can buy your way into Canada as well: http://www.cic.gc.ca/englisH/immigrate/business/investors/index.asp

 

You need to have $1.6m in net worth and invest $800k in Canada.  It's a fascinating program, the government takes the $800k and invests it into government projects that create jobs.  So in essence you are paying $800k to get in, there is zero return on that money.  You get your money back without interest after five years and three months.

 

Based on the health care discussion it seems the $500k in US costs is cheaper than dumping $800k into a Canadian investment to earn health care.  Although the $800k isn't lost, there is opportunity cost associated with that money.

[Liberty]

You can move to Canada, we're pretty welcoming  ;)

 

It's REALLY hard to move to Canada.  You have to be sponsored by a Canadian company and there's a high hurdle for the company to show that no Canadians can do the job.

 

My sense is Canada is afraid of Americans coming in and taking jobs.  I've been drilled about doing business in Canada anytime I've come to visit.  I guess one thing you could do is come in on the 6mo tourist visa then overstay and hope you can work things out.  It's a really easy place to visit for a few days/weeks/months, but much harder to move there for good.

 

I think the easiest way to move is to marry someone from Canada.

 

Interesting. I've never had to move to Canada, as I was randomly born here, but I know that the country has a fair amount of net immigration coming in, so I assumed it wasn't that difficult.

[oddballstocks]

You can move to Canada, we're pretty welcoming  ;)

 

It's REALLY hard to move to Canada.  You have to be sponsored by a Canadian company and there's a high hurdle for the company to show that no Canadians can do the job.

 

My sense is Canada is afraid of Americans coming in and taking jobs.  I've been drilled about doing business in Canada anytime I've come to visit.  I guess one thing you could do is come in on the 6mo tourist visa then overstay and hope you can work things out.  It's a really easy place to visit for a few days/weeks/months, but much harder to move there for good.

 

I think the easiest way to move is to marry someone from Canada.

 

Interesting. I've never had to move to Canada, as I was randomly born here, but I know that the country has a fair amount of net immigration coming in, so I assumed it wasn't that difficult.

 

I've had the same perspective/experience in the US.  There are a ton of immigrants here and I've always figured it was easy.  Then I started to work with them professionally and asked about the process.  Turns out it's extremely hard and they were very lucky to get through. 

[Jurgis]

In addition moving to country X is often different from moving to country X and getting (medical) benefits from country X. The fact that you are allowed to live legally in country X doesn't necessarily mean that you are going to get free healthcare or other benefits from country X.

 

The converse is that some countries don't have "pay for healthcare" concept at all, so you get free healthcare even if you are foreigner living there, since they have no way to price and charge you.

 

I don't know how this is in case of Canada.

[Uccmal]

You can buy your way into Canada as well: http://www.cic.gc.ca/englisH/immigrate/business/investors/index.asp

 

You need to have $1.6m in net worth and invest $800k in Canada.  It's a fascinating program, the government takes the $800k and invests it into government projects that create jobs.  So in essence you are paying $800k to get in, there is zero return on that money.  You get your money back without interest after five years and three months.

 

Based on the health care discussion it seems the $500k in US costs is cheaper than dumping $800k into a Canadian investment to earn health care.  Although the $800k isn't lost, there is opportunity cost associated with that money.

 

I was going to say.  People with money can move anywhere.  Buy a franchise, install yourself as the manager, pay yourself a salary, and get enrolled in the provincial insurance program. 

 

If you are looking to move to Canada I will marry you oddball - thats legal here as well.  My Wife and I live commonlaw so it shouldn't be a problem.  Could be a marriage made in hell, and it will never get consummated but who is to know.  Now, I am not sure about the 4 kids, and you would have to divorce your current wife.  Details, details....  On a side note I had a girlfriend way back who had been married while she went to University in Quebec to get some sort of freebies offerred there.  Dont ask me, she was pretty weird. 

[Uccmal]

In addition moving to country X is often different from moving to country X and getting (medical) benefits from country X. The fact that you are allowed to live legally in country X doesn't necessarily mean that you are going to get free healthcare or other benefits from country X.

 

The converse is that some countries don't have "pay for healthcare" concept at all, so you get free healthcare even if you are foreigner living there, since they have no way to price and charge you.

 

I don't know how this is in case of Canada.

 

We dont have free healthcare.  Our health care is administered under provincial plans.  If you are employed your employer pays your share.  If you are not employed or are self employed, and are under 65 you have to pay a provincial health care premium.  As it is my wife and I both get surcharged the full amount each year on our taxes for earning too much.  My premiums are covered by my Wife's benefits at the moment.  If she quits or we separate then I would have to pay direct premiums to the government, somewhat based on my income which I am trying to keep close to zero these days.  I am not sure what the premiums are for people who are not employed but 5000 upside per person is the number I use if my Wife were to quit. 

[Jurgis]

Right. I probably should not have said free healthcare. The systems vary a lot depending on country. In some, you have to pay premiums to be covered. In some you have to pay for certain time to be covered (in the future too), similar to US social security. In some, there's no payment at all; it comes from general taxes. And so on. Thanks for clarifying Canada's model. :)

[Uccmal]

For completeness on this.

 

Went to healthcare.gov and entered in my family stats.  I make too much to get any subsidies, although interestingly enough they recommend that I enroll my kids in the state's medicare program.  Interesting way of shifting costs.

 

Cheapest plan is $400/mo with a $14k out of pocket max.  So we're talking about $1500/mo for health care.  Maybe you get a few years where it's cheaper, but I'd expect to budget the full amount.

 

It's crazy what things cost.  One of my sons had a camera put down his throat to examine some vocal nodules, cost was $14k, insurance picked up everything but about $1500.  The "original" cost was $60k that was knocked down to $14k due to insurance company discounts.  So one procedure like that which took about an hour and you've blown your deductible.

 

I could rant on this for a while, but this is it for now.  Bottom line, it's extremely expensive to not be under employer health insurance in the US.  Some can do it, they're usually young, and hit the genetic lottery and perfectly healthy.  You can roll the dice and see where they land, but I've had a few encounters where if healthcare wasn't available a family member wouldn't be living right now.

 

The costs are terrible.  I'm trying to psych myself up to pay $5k for a birth in early 2017.  I will probably not even look at the bill and blindly pay.  Looking at these bills is infuriating.  They stick an IV in you and suddenly there's a $200 drug in there you didn't know about.  Or the $37 Advil pills, or how the doctor and hospital double charge you for everything.  The hospital charges $200 for an xray because it took place in their building, then the doctor charges $200 for the xray because they actually did the xray.  Such a scam.  But there's nothing that can be done unfortunately.

 

It is a difficult problem, not unsolvable.  Part of the problem lies with the perception that a single payer system, such as our provinces have is socialism.  As we know this is not a well liked concept in the US where folks appear to value their civil liberties more than a social safety net.

 

From my perspective this is not a correct assumption.  Our health system is similar to any western countries public education system, including the US.  Health care eats a greater peice of the pie than education but it is similar in nature.  The US uses the military both as a social safety net, and as a means to move government money into the private sector.  Other countries do this to a lesser degree. 

 

If government mandated single payer health care is socialism, than certainly government mandated military expenditures into the private sector are also socialism.  Its just better hidden. 

[Uccmal]

Right. I probably should not have said free healthcare. The systems vary a lot depending on country. In some, you have to pay premiums to be covered. In some you have to pay for certain time to be covered (in the future too), similar to US social security. In some, there's no payment at all; it comes from general taxes. And so on. Thanks for clarifying Canada's model. :)

 

I was going to add that we dont have copays for basic medical services, but we do pay for prescription drugs, at market rates - a good employer plan will cover this.  I was looking into getting a calcium channel test (the one where you look at the blockages in your arteries).  To get it I either have to have symptoms worthy of the test - i.e. a discernible heart problem, or go to Buffalo. 

 

Now the problem with crossing borders to get procedures done is that you have no recourse.  Try suing the Doctor in the US, Mexico, or India, when you live elsewhere.  If its a serious procedure then you also have no aftercare. 

[Uccmal]

Finally, and I will shut up for awhile. 

 

As much as I like Mr. MM some of his stuff is out there in terms of sustainability.  Let me tell you, there  is a big difference between DIYing everything between the age of 40 (mmm),  and 52 (me).  If I dont do heavy lifting and awkward work daily, I pay the price for much longer than he will.  I can only assume that this aging effect is going to get worse.  MMM doesn't know this yet.  Some of his assumptions are based on his age, as are mine. 

 

My dad gets frustrated because he is losing muscle strength.  He used to DIY everything.  Now he is sore for days if he needs to into a crawl space or under a building to get at plumbing or electrical.  And he works out every single day, and has for over 50 years. 

 

MMM also assumes that he will always be married to his current wife.  Dividing assets in an acrimonious divorce can be costly.  I shouldn't admit this but I run separate reality checks periodically where I look at a division of assets and its effects on me, my partner, and the kids.  Would I be able to thrive financially after a separation?  (yes).

[John Hjorth]

For completeness on this.

 

Went to healthcare.gov and entered in my family stats.  I make too much to get any subsidies, although interestingly enough they recommend that I enroll my kids in the state's medicare program.  Interesting way of shifting costs.

 

Cheapest plan is $400/mo with a $14k out of pocket max.  So we're talking about $1500/mo for health care.  Maybe you get a few years where it's cheaper, but I'd expect to budget the full amount.

 

It's crazy what things cost.  One of my sons had a camera put down his throat to examine some vocal nodules, cost was $14k, insurance picked up everything but about $1500.  The "original" cost was $60k that was knocked down to $14k due to insurance company discounts.  So one procedure like that which took about an hour and you've blown your deductible.

 

I could rant on this for a while, but this is it for now.  Bottom line, it's extremely expensive to not be under employer health insurance in the US.  Some can do it, they're usually young, and hit the genetic lottery and perfectly healthy.  You can roll the dice and see where they land, but I've had a few encounters where if healthcare wasn't available a family member wouldn't be living right now.

 

The costs are terrible.  I'm trying to psych myself up to pay $5k for a birth in early 2017.  I will probably not even look at the bill and blindly pay.  Looking at these bills is infuriating.  They stick an IV in you and suddenly there's a $200 drug in there you didn't know about.  Or the $37 Advil pills, or how the doctor and hospital double charge you for everything.  The hospital charges $200 for an xray because it took place in their building, then the doctor charges $200 for the xray because they actually did the xray.  Such a scam.  But there's nothing that can be done unfortunately.

 

It is a difficult problem, not unsolvable.  Part of the problem lies with the perception that a single payer system, such as our provinces have is socialism.  As we know this is not a well liked concept in the US where folks appear to value their civil liberties more than a social safety net.

 

From my perspective this is not a correct assumption.  Our health system is similar to any western countries public education system, including the US.  Health care eats a greater peice of the pie than education but it is similar in nature.  The US uses the military both as a social safety net, and as a means to move government money into the private sector.  Other countries do this to a lesser degree. 

 

If government mandated single payer health care is socialism, than certainly government mandated military expenditures into the private sector are also socialism.  Its just better hidden. 

 

Please do not shut up. It's an interesting discussion [, but hardly investment related, though].

 

Personally, I pay a - basically - flat rate "health contribution" of 3.68% of my gross income by working, to the Danish state. It's not tax deductible, so it's a tax. A minor part of my municipality tax [basically a flat rate of 24.5% of my gross income by working, at total level] goes to the running of nursery homes for the elders situated there in the municipality.

 

It's a social contract established between generations and citizen in the society over time, established by the society - by law. I pay it gladly [,said the capitalist, & educated and professionally trained capitalist henchman [CPA]].

[CorpRaider]

 

"That's why I thought single payer was a much better solution than the crap we had now. Everyone gets reasonable health care access. A specialized care may get worse but I think we will save on the unnecessary surgeries also. Also limit the patent duration and all these dirty tricks like mashup,alternate delivery and purification.

 

Another scam is the drug industry/doctor cartel. Years ago I dated this girl who was a medical rep. She had zero idea about what she was selling but damn she looked really good. Her job was mainly to take these doctors out on dinner. All these married geeks would fawn over her and then the account rep would "drop by" and talk business."

 

Every time I go to the doctor like three different pharma reps come in and go back to kiss ass/bribe waste time and resources.