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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 78299  
Subject: Re: Higher Medicare premiums for Top 25% Date: 4/14/2013 2:51 PM
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TMFMurph writes,

You do realize that even three times the "normal" Medicare premium of $99.90/month (about $3600/year) is only one-third of the $11,000 per beneficiary the Gov't spends on Medicare.

You're still getting a tremendous bargain.

Oh, before I leave...speaking of "bad math", this sentence totally ignores the $65,000 in Medicare payments made during my working career ( and all the money those contributions could have made during the last 40 years ) ;-)


Assuming you retired in 2012, paid maximum FICA in each of the preceding 35 years, and got a 10% return on your annual Medicare FICA contributions, your $65,000 would have grown to $173,000. Of course, while a savvy investor might have realized a 10% return, the average person only got 2.1% annualized over the past 20 years according to DALBAR. At that rate, $65,000 only grows to $87,000.


A lump sum of $173,000 will only buy a 65-year-old an inflation-adjusted annuity of about $600/month ($7,200/year) I wasn't able to find a policy on ehealthinsurance.com with Medicare's $100 annual deductible. The best I could do was $1200/month ($14,400/year) for a $1,000 deductible plan for a 64-year old. And of course, your for-profit private insurer will want to increase that with age. What would they charge for a 75-year-old, an 85-year-old? Double? Triple?

Hard to see how you could do better on your own.

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