Adventures in the Second Half

We have an applet on our computer that displays our photographs in a bar on the side of the monitor.  So as I write, snapshots of Bill, myself, family, and our friends rotate through. 

Today the first picture is of our friend, Tom standing by his bicycle in Montana with a big grin on his face, followed by Aunt Helen at her 90^th birthday surrounded by nephews and grandsons,  and then a picture of a grandson petting a llama, followed by Bill and his sons on one of their ball park weekends.  Now a picture of more friends on bicycles, in front of tents, in kayaks, at ball games…  It is a glorious life most of the time, isn’t it!

This weekend I went out to dinner with an old friend and a new one, the three of us past the age when brown hair comes naturally.  Over lasagna and wine we spoke about our adventures, one friend backpacking in Canada, the new friend enjoying white water rafting, and my more moderate bicycling and kayak trips.  Our new friend told us that people often asked her, “What if you get hurt?” when she tells then how she likes to spend her time.  And we all agreed that the pleasures of truly being in these places made up for any risks. 

To tell you the truth, the risks that I take are pretty mild.  I educate myself about places I’m going and prepare for the unlikely possibilities.  Before kayaking in the Apostle Islands in Lake Superior we took a safety class and changed our course when facing waves that made us uncomfortable.  In Alaska, we chose to go on a guided trip with people who understood tides and the local wildlife.  Still each of us has had a fall or an unexpected illness that has sent us back to shore or to the nearest emergency room.  Even so, I would rather take these slight risks to go kayaking in Alaskan waters teeming with whales, otters, and seals than live to 100 watching reality shows.

We know that there will come a time when we can’t do these things.  Tom had to take a break from bicycling to have back surgery.  Another friend, in his early 80’s has quit sleeping on the ground though he comes along for the hikes.  We ride shorter distances, hike slower, but see as much or more.  Part of the reason for aiming for an early retirement is to have the chance to enjoy these things before the day comes when we cannot.      

What about you?  Have you been able to remain active?  What activities do you enjoy?  What have you had to give up?  Which risks are worth it and which are not?

• Alaska Discovery
• Trek & Trail:  Apostle Islands
• Adventure Cycling
• Elderhostel:  active outdoor programs

Early Retiree Health Insurance Part 3: what others are saying about it

Syd, at Retirement:  a Full- Time Job asks, “Are you afraid to retire?  Why?”   To me, health insurance is the scariest part of early retirement.  The landscape of health insurance for individuals seems full of craters that could easily swallow a person’s savings.  While we wait to see if the contentious political system is going to provide answers to this problem, we all have to consider how to deal with it in the here and now.  If you’d like to read my previous posts on this topic see Early Retiree Health Insurance Part 2 and Retiring Before Medicare. 

Since I wrote those earlier posts,  I’ve found a couple of very good blogs with information on buying individual health insurance.  I won’t attempt to restate all of the great research and information provided by these posters.  I would like to hear what has worked for you. 

First, my favorite personal finance blog, Get Rich Slowly, included a guest post by Jason Gingerich in May of 2008.  Gingerich covers issues such as the differences in the protections provided by group vs. individual coverage, how to shop for insurance and what to do if you can’t find an insurance plan that will take you.  It’s a comprehensive post with a lot of information. 

Another good post is Health Insurance in Early Retirement: A Real Eye Opener at the blog, Retired at 47.  This post is more from the personal perspective and discusses some of the pitfalls and surprises – such as that even minor health problems can result in exclusions.  He has another post that discusses Health Savings Accounts. 

AARP has a list of questions to ask of potential health insurance plans and information about different types of plans and how they work.  AARP also includes links to other resources including some information that is specific to your home state. 

For now, I’m hanging onto my part-time job because it allows me to buy into my employer’s group plan.  I figure I’m going to need a fair amount of money saved just for this expense when I do retire full-time.

Pawpaws, the recession, and our retirement

It’s almost pawpaw season.  Two Septembers ago, on a cloudy Saturday, my husband asked if I’d like to go pick pawpaws.  He had noted the location of some fruit bearing trees in a park a few miles from our home.  So we took some cloth bags and trooped into the woods.  The ground was wet and my walking stick sunk clear to bedrock as we balanced on a slope just above a stream.  To really get this picture, you have to remember that we are not youngsters.  We are well into middle age and have quite a few grey hairs between us.  We laughed and had a lovely time.  Bill shook the trees and I scurried around chasing the oblong  fruits that fell and rolled down the hill. 

pawpaw seedlings

On the way home we turned philosophical and told ourselves that if our retirement plans did not work out as expected we could still have a great time doing things like picking pawpaws.  I think that this autumn day in 2007 was the first time that we articulated a growing unease about the economy.   The newspapers were still reporting rising housing prices and the stock market had been soaring.  I don’t know what news story or intuition told us that things couldn’t continue in this way.

Most people don’t really know what a pawpaw is.  Perhaps they remember the song, “Picking up pawpaws, put them in the basket” from their childhood. This is not a fruit that you will find in most supermarkets.  The pawpaw is the only temperate climate member of a group of tropical plants.   The flower is deep burgundy and smells a bit like rotting meat.  In Missouri pawpaws often grow as an understory shrub or small tree.  The yellow fleshed fruit has a sweet tropical flavor.  I used my pawpaws to make sweet bread and cookies.  And I saved the seeds to grow trees for our backyard.   

Of course the stock market dropped later that October in 2007, and again in 2008 on into 2009.  The housing bubble burst and a lot of people found that they weren’t as rich as they thought they were.  Bill and I have always been the slow and steady kind of money managers so while we aren’t quite as well off as we thought we were, we’re fine.  We didn’t refinanced our house to pocket its equity or put all of our retirement money in the stock market. Our retirements will probably proceed as planned, though perhaps postponed a bit. 

But that lingering uneasiness remains.  Are we stepping back from the brink or is a financial depression still a possibility?  How might that affect any of us?  And so we react, sometimes in anger, sometimes believing every rumor that we hear.  The world isn’t how we thought it was and that makes it easy to doubt our old assumptions.  Perhaps we should all take a deep breath, take a walk in the park, pick pawpaws and bake some cookies.

I’m not dead!

“I’m still alive,” Mom tells me on one of our morning phone calls. 

“I’m not worried about you dying Mom,” I respond.  “If you are dead there is nothing I can do about it.  I’m more worried about you lying on the floor needing help.” 

Mom laughs.  Good, I don’t want her to feel that we are somehow suggesting that she can’t take care of herself.  She’s obviously quite capable. 

My sister and I take turns calling our 83 year old mother each morning.  Because it is easy to forget whose turn it is, we decided to trade off by months rather than daily.  We discussed this idea with Mom for a couple of years before we implemented it.  She is obviously ambivalent about the plan.

Mom lives alone in her own home.  Her yard is immaculate and she mows her own yard.  When a neighbor suggested that she should have her children or grandchildren mow the lawn, she snapped back that she wanted to do it!  If she gets bored she strips wallpaper in a room that is starting to look a little worn, hires wall repairs, and then paints the room.  She tells me that she is thinking that she should stop painting ceilings. 

Mom volunteers one day a week at the Ronald McDonald house and another day at her church’s food pantry.  She travels with friends though she has quit driving cross country alone to visit her son 10 hours away.  If she can’t find someone to drive with her, she flies these days.

But Mom does have a range of health problems.  She would tell you that they are all minor and I suppose they are … unless they get worse.  So we call each morning to make sure everything is ok. 

Mom seems to think that my calls are a burden but I enjoy them.  Some days it is just a quick good morning as I rush out the door.  Other mornings we chat for a bit about the weather or what we are up to.  It’s nice to have that regular short contact with her. 

This is the part of retirement that we don’t so much want to think about.  In our fifties, sixties, and for many of us our seventies, we can expect to be quite active.  Things start to get more difficult in our eighties and for most people in their nineties the ailments begin to add up – Arthritis, macular degeneration, diabetes, heart disease, not to mention the really scary stuff like Alzheimer’s.  Mom has given up political rallies and other events that require her to stand for long periods of time.  As her doctor tells her, “The parts, they do wear out.”   

When do you decide to give up the house for an apartment that will be easier to care for?  Some friends have already done this, choosing to move into living quarters that will work for most, if not all of the rest of their life.  I’m not sure I’ll be ready to give up my garden and deck so soon.  I like the sound of children playing outside.  I even enjoy the less soothing sound of teen agers hanging out in the creek bed behind our yard.  Do I want to live with just mature people around?  How do we support our parents and older friends?  How will we support each other when we get there? 

I don’t have any real answers to these questions but they are things I think about when I contemplate retirement. 

I’m hoping that some of you will join in a conversation about what is working for you in retirement, what you hope to do in retirement, how you plan to afford it, or even why you don’t ever plan to quit work.  I’ll write some about the financial aspects, but I’m particularly interested in the other facets of the non-paycheck life.  Where do you plan to live?  How do spouses handle retiring at different times?  How do you plan to handle health insurance in an early retirement? 

Early Retiree Health Insurance – Part 2: a discussion with the Kansas State Insurance Commissioner’s office

Like most introverts, I have an aversion to talking with total strangers on the telephone – even when those strangers are at the end of an 800 help line.    However, if I am going to get answers to my questions about retirement, that is what I have to do.  

Yesterday I spoke with a representative of my state insurance commissioner’s office and someone at the company that handles my 403B.  Both were incredibly patient and took the time to answer my sometimes awkwardly worded questions.  I’ll get to the 403B questions another day but today I want to write a little more about health insurance. 

If you read my previous post on this question, you know that I’m trying to understand the health insurance options open to early retirees.  Because my husband is older than me, I may want to retire early so that we can enjoy travel and other activities together.  I can calculate living expenses pretty easily but I’ve been having a difficult time figuring what health insurance might cost and how difficult it will be to obtain.   I wanted to know what health insurance options are available to someone between the ages of 55 and 65 and how much I’ll need to save to cover premiums.  I will not be covered by employer health insurance in my retirement.

Since health insurance rates continue to rise faster than inflation and legislative solutions are in flux, I can’t be sure what will happen in the next few years but I can at least understand what the options would be today. 

In the past week, I’ve spent some time on AARP’s web site and on the web site of the Kansas Insurance Commissioner.  Both have good information about insurance options.  I also reviewed a great post on buying health insurance by J.D. at Get Rich Slowly.  Today I want to focus on what I learned at the Kansas Insurance Commissioner’s web site and after talking with Steve at the Commissioner’s office.

Caveat 1:  The states have very different laws and options in relation to insurance.  Check with your own state’s insurance office to learn what is available in your state.

Caveat 2:  I am not an expert.  Check out what I’m telling you with reliable sources and respectfully let me know if I’ve misstated something or made an error.  I’ll do my best to post corrections.

Here’s what I learned:

• The state of Kansas provides a list of insurance companies that offer individual major medical health insurance plans in the state.  Steve in the commissioner’s office told me that they recommend that an individual check with several companies.  You are likely to get a range of responses with some companies charging substantially higher than others and some offering policies that exempt pre-existing conditions such as hypertension.  But just because one company won’t cover a pre-existing condition doesn’t mean that another one won’t. He told me that in most cases, you can find a less expensive policy this way without turning to the state’s high risk pool.
• If you are turned down by at least two companies or are only offered policies more expensive than the state’s high risk pool policies, you can qualify for health insurance via the Kansas Health Insurance Association (KHIA).  There is a fairly clear explanation of what is involved in qualifying for this last resort insurance on the web site.  It is expensive and many people cannot afford it.  Steve recommends that you continue to look for a less expensive policy even while you are on this insurance. 
• I asked Steve what happens if you are offered only policies that exempt pre-existing conditions.  In that case, you would also qualify for the Kansas Health Insurance Association policies. 
• I also wondered if there was enough money for everyone who qualified for the high risk policies.  Was there a waiting list or other postponement that kept people from getting these policies even when they qualified?  He told me that there was no waiting list in Kansas.  If you qualify and you can pay the premiums, you can get a policy.  I’m curious to hear from readers if this is the case in their states.
•  The price of the KHIA policies are based on age, sex, and smoking status.  You can get a lower premium if you choose a higher deductible. 
• For a non-smoking 64 year old female with a $2500 deductible,  the premium would be $757.27  This gives me an idea of worse case scenarios for buying health insurance in my state.  For a five year early retirement, I would expect to need to have saved at least $50,000 for health insurance.  That’s a worse case scenario and hardly ideal but at least I know what the situation is. 
• I am still unsure what happens if you buy an individual policy and later develop a medical condition.  Your employer provided health insurance can’t throw you out, but they do often raise premiums for employers that have a lot of claims.  What happens with individual policies?  I’ll look a little more into this for next time. 

I have not researched the insurance situation in other states and am interested to hear from readers about health insurance options in other states.  Has anyone bought health insurance as an individual between the ages of 50 and 64?  How did it go?  What were the problems?   I recommend contacting your state insurance commissioner’s office.  Read what is on the web site first and write down your questions.  Mine was not only willing, but eager to answer my questions.