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Author: workwayless Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1490  
Subject: Re: Inflation in large budget items Date: 10/10/2003 3:44 PM
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I am seriously concerned that my largest budget items, especially health insurance, will rise so much faster than my retirement income that I will fall behind the 8-ball.


I too share your concern about the rising cost of health insurance. Here's what I've done to mitigate the effects:

1) While I was working, I secured my own health insurance policy--as opposed to employer-supplied. This has given me number of years of history to find out the actual cost of post-FIRE health insurance so that I could factor it into my "worse case" scenario planning. So even if I continued to sustain increases in the future, I wouldn't be likely to run out of money.

2) My policy has a high deductible. The higher the deductible, the lower the premium. While it's true that I've been incurring increases averaging 15% per year, it helps that my premium cost started at a low dollar figure to begin with.

3) Since health insurance is such a runaway expense, therefore I keep my other expenses as low as possible. You mentioned CPI. Since I keep my non health insurance expenses lower than the CPI, then I have found that my overall personal CPI pretty much tracks with inflation.


Another approach some have tried is to invest in health care related stocks.

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