What’s Up Next Podcast?: Episode 4
What’s Up Next?
Paul Thompson and I are proud to release our fourth episode of the The What’s Up Next Podcast. This podcast is an exploration of financial independence and taking the conversation to the next level. The show features panel discussions with top influencers in the financial independence space. Guests weigh in on questions that don’t have clear answers to refine your path to FI.
Episode 4
How does physical health affect financial independence? Today we discuss whether early retirement is attainable for those with chronic disease and what adjustments are necessary. Our panelists on this episode include Tanja Hester, Dragon Guy, and Dragon Gal.
Also, listen to the very end for a short but satisfying blooper reel!
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Your Hosts:
Enjoyed being on the podcast! You guys made it a fun experience for us. Thanks for bringing attention to the very complicated and personal issues surrounding health care. It was a great conversation and a good opportunity for us to reflect on health and FI. Cheers, Dragon Guy and Gal
You guys were great guests. It was alot of fun.
REALLY great episode guys! Digging deep into a huge issue that affects us all
Thanks Dave. Glad you liked it.
This podcast demonstrates the true nitty gritty of the matter and the illusion of simple mathematical projections vs future reality. Excellent!
Paul has the opinion some magic is going to change the reality, or by getting his bypass in Caracas he will have an equivalent medical outcome at a cheaper cost. Wait a minute: Caracas is now socialist and reverting to Jungle and people are roasting rats to survive, maybe it’s not a good choice. Hang your hat on the ACA? The ACA is outcome based one size fits all medicine. As such you don’t get best care, like DG is getting, you get one size fits all care. You heard in the podcast only one plan covered DG’s CML at his present level of care. He could pay a $15K deductible plus premium for that ACA plan which would allow him to stay at his present level, that means his all of his care is basically out of pocket. He has to pay the $15K before the first dollar of insurance kicks in, and he is still paying the premium and he pays probably 20% or 30% of the bill AFTER he pays the 15K, plus he’s still paying the premium. “But it’s got pre-existing conditions!!!” Whoopdedoo. How is this “insurance”? ACA is smoke and mirrors. Our political consultant’s talking points won’t save you from going broke.
Here is couple statistical trains of thought: 2/5 people will get cancer of some type from a malignant zit to a melon in your squash and everything in between. If you are one who pulls golden ticket, there is a 1/5 chance will to die. Of the one who pulls the golden ticket, 42% depleted their entire fortune fighting their disease. At 65 you have a 1/10 chance of Alzheimer’s. At 85 you have a 1/3 chance. If you’re a woman you have a 1/3 chance of living to 90 and a 2/100 chance of living to 100. Who’s going to pay for your 24/7 “memory care”? Medicare does not cover that. You say we don’t have a clean understanding? The understanding is very clean. Insurance companies owe their existence to the cleanliness of the understanding. Now consider the prevalence of Diabetes, Stroke, HTN, Cardiac disease, morbid obesity. Eating tomatoes and running a mile and living an underfunded life is not a solution. 7 come 11 anyone?
My solution is to self insure. I retired with enough money I can convert 1M to a Roth and then never touch the Roth. In 10 years (age 75) the Roth will be worth 1.8M in 20 years (age 85) 3.2M. At my 85 my wife will be 78. At her 90 the Roth will be worth 6.4M if left untapped. Somewhere in there the likelihood is it will be tapped and there will be money available and the risk covered. Each year my risk of disease goes up, but so does my compounding. I will get my daily hamburgers from other investments. If my wife and I just wake up dead someday without tapping the Roth, my kids will be ecstatic. Either way it will serve it’s purpose. That’s my version of clarity.
I think self insurance is the only way to really go. But that is quite expensive.
It’s not as expensive as it appears if you start early enough. Let’s say you’re 45 and you set aside 300K @ 6% in a 50/50 mix account and you do not count it as part of your SWR money, but as a separate insurance acct. At 65 with no additional money added it would be worth $962K, nearly 1M. When you get sick you don’t pay all of that at once. The statistic I read was 92K/yr is what wiped people out. $962K left @ 6% would payout 92K per year for 16 years aside from the rest of your SWR portfolio. So if you got sick at 65 you would have money enough to last to 81 or almost 82 to cover your illness. Likely 16 years of that level of chronic disease would be terminal. Each succeeding year you don’t use it, it continues to grow so if/when needed it’s plenty robust and the rest of your retirement is secure. If you’re a 4% x25 type and your “number” is 100K/yr you need to be a 4 x 28 type by age 45 to make this happen. It’s not much different than saving for college and it may make you rethink that monster 529 to send Jr off to Harvard for a 4 year drunk and send him to U of I instead, and use the rest to build a retirement insurance nest egg.
Hi Gasem, I really appreciate your total honesty in your first comment. And I like your thought process in this second comment. Most of all, I’m grateful you listened to the podcast and gave your detailed opinions. All the best, Dragon Gal
This episode is an excellent wake-up call for all of us really. It’s a unique discussion, having guests who have faced cancer and serious illness and weighed retiring early retirement. I enjoyed the view of both wanting to leave work early because of the chance to live life freely while still healthy vs the dilemma of dealing with losing employer sponsored health insurance and the reality of those costs. The big takeaway for me is that most of us really just look at these issues with a bit of what Gasem calls “7 come 11” anyone? It definitely gets you thinking.
This episode made me think a lot about risk and planning.
Totally enjoyed the conversation of reflecting on health and FI. It’s a great episode at all. It’s not an amazing episode only it’s a fun experience overall.