(This estimate applies to those who wish to retire before the age of 55, the earliest point at which one is eligible to receive an employer-paid pension. It also assumes one is not receiving Social Security, which can kick in at age 62. Retirement financial planning has often been likened to a three-legged stool: savings, pension, and Social Security. If you have all three, you don't need as much savings.)
When we were young and thought we would live forever, we worked and saved so that we could lead the good life later (the Protestant Ethic). Today we work out of fear.
Fidelity Investments says that a 65-year-old couple without an employer-paid plan needs $200,000 to cover their share of medical expenses for the rest of their lives. $200,000 may seem like a bump on the road to those with a shot at amassing $1,000,000, but it’s an awful lot to someone making $50,000 per year. Furthermore, $200,000 is just an average; we all know someone who has had to go to the hospital for an unplanned emergency, and if he was uninsured, then it was doubly calamitous. In the Bay Area the bills for major surgery easily run into six figures, and, if you’re uninsured and have modest assets, the odds are that you’ll be wiped out.
Even if one can afford it, buying insurance on one’s own is extremely frustrating, especially if one’s family has a pre-existing medical condition, such as heart disease, cancer, or diabetes. The insurance company will try to exclude coverage for these illnesses, but these conditions are what motivates the purchase of insurance in the first place.
Because of the fear of the major medical event, and because of the fear of navigating the system without the protection of an employer, people work. They may have means, advanced degrees, and decades of experience, but they hold low-level jobs that they could do in their sleep, not to pay the mortgage, but to receive health benefits.
The fear of the disruptive event---natural disaster, terrorism, medical emergency---controls more of our lives than we’re aware of, and, in this season of Lent, we should ponder these words and ask how much of them we truly believe:
Be not anxious about your life, what you shall eat, or what you shall drink, nor about your body, what you shall put on. Is not life more than food, and the body more than clothing?© 2006 Stephen Yuen
For the Gentiles seek all these things; and your heavenly Father knows that you need them all. But seek first his kingdom and his righteousness, and all these things shall be yours as well.
[Matt 6: 25, 32, 33]