This is not an accurate understanding of the Medicare Advantage plan's primary disadvantage: denial of coverage. I can tell you from the standpoint of seeing first hand the provider side of the equation, it is not uncommon for treatment recommendations to be denied even when very experienced specialist physicians advise that treatment to be the best plan for the patient. Much of the misunderstanding stems from the very typical "off-label" treatments and advanced treatment protocols, which cover most of medicine. In short, the choice of Medicare Advantage is trading the risk of an insurance company and its conflicted "peer review" panels' coverage decisions for the "benefit" of lower premiums. Most people do not encounter the risk because it is largely associated with serious illness and expensive treatments, so Advantage plans capture a growing market share due to the cost of insurance.
Jonathan, your review of the various safe withdrawal rate options are very informative and concise. There are so many variations it can confuse rather than educate. Your writing talent is so beneficial to your readers. Personally, I favor the fixed percentage withdrawal rate you referenced, rather than the more common starting rate escalated annually by inflation. Inflation is also not an ideal gauge for many retirees as many can adjust spending to some degree to offset aberrational inflationary years. One calculation often missing is the withdrawal rate optimized to allow for an inheritance. Most will find that a 4% withdrawal rate (not inflated) coupled with social security may do the trick. Many models use a "failure" rate (not running out of life before money), but those can be misleading for the many retirees who would value maintaining or even increasing account values to help children or charitable causes ...
CCRC's are an excellent option for older retirees, usually around 80+ is the average age of entry these days. The expense, while not insignificant, usually looks more reasonable when all costs of living are included in the rent or entrance fee figures. The monthly rents and/or fees cover many expenses otherwise incurred if living at home--lawn care, housekeeping, meals, social events, certain activities. And the socialization benefits are particularly beneficial and come with no cost.
I appreciate reading your insightful comments, it's always critical to review the fallacies or possible fallacies of financial generalizations. Many commenters have offered well-informed alternative considerations for some of your points. In a related sense, I would add two larger concepts to consider: 1) the Depression years would have been much better had the Fed acted appropriately to stem the negative tide at the time. I also doubt that the modern Federal Reserve would ever allow a recurrence of that magnitude of loss. Today's equity market still represents a historic high on a valuation basis and caution should be used for retirees. The positive situation today is that the fixed-income market offers a viable alternative return and asset allocation should now work much more effectively than the past decade. 2) the 4% "rule" is often misunderstood. There are a host of individual factors that can decrease (or increase) that withdrawal rate. The 4% is based on tax-deferred, not taxable accounts; it does not consider the offsetting income benefit of social security payments; it uses a 50/50 allocation between stocks and bonds; and it largely assumes "success" as not running out of money. On the latter point, many consider maintaining a meaningful portion of liquid net worth for heirs, in which case, a lower withdrawal rate between 3% and 3.5% is a much safer rate.
Very insightful. A balanced view of life includes seeing things more objectively. I think you're certainly right. Perhaps we can work toward that goal by attributing luck and skill to their proper place and trying to view our worries as transient as the hedonic treadmill would have us find our latest possession...
Good points I imagine the answer lies somewhere in between earning good income and a rewarding career. I suspect Dave found his career rewarding as well.
Comments
This is not an accurate understanding of the Medicare Advantage plan's primary disadvantage: denial of coverage. I can tell you from the standpoint of seeing first hand the provider side of the equation, it is not uncommon for treatment recommendations to be denied even when very experienced specialist physicians advise that treatment to be the best plan for the patient. Much of the misunderstanding stems from the very typical "off-label" treatments and advanced treatment protocols, which cover most of medicine. In short, the choice of Medicare Advantage is trading the risk of an insurance company and its conflicted "peer review" panels' coverage decisions for the "benefit" of lower premiums. Most people do not encounter the risk because it is largely associated with serious illness and expensive treatments, so Advantage plans capture a growing market share due to the cost of insurance.
Post: Don’t make the wrong Medicare decision
Link to comment from October 27, 2025
excellent post, thanks.
Post: Spending It
Link to comment from February 22, 2025
Jonathan, your review of the various safe withdrawal rate options are very informative and concise. There are so many variations it can confuse rather than educate. Your writing talent is so beneficial to your readers. Personally, I favor the fixed percentage withdrawal rate you referenced, rather than the more common starting rate escalated annually by inflation. Inflation is also not an ideal gauge for many retirees as many can adjust spending to some degree to offset aberrational inflationary years. One calculation often missing is the withdrawal rate optimized to allow for an inheritance. Most will find that a 4% withdrawal rate (not inflated) coupled with social security may do the trick. Many models use a "failure" rate (not running out of life before money), but those can be misleading for the many retirees who would value maintaining or even increasing account values to help children or charitable causes ...
Post: Spending It
Link to comment from February 22, 2025
CCRC's are an excellent option for older retirees, usually around 80+ is the average age of entry these days. The expense, while not insignificant, usually looks more reasonable when all costs of living are included in the rent or entrance fee figures. The monthly rents and/or fees cover many expenses otherwise incurred if living at home--lawn care, housekeeping, meals, social events, certain activities. And the socialization benefits are particularly beneficial and come with no cost.
Post: As Evening Approaches
Link to comment from February 22, 2025
I appreciate reading your insightful comments, it's always critical to review the fallacies or possible fallacies of financial generalizations. Many commenters have offered well-informed alternative considerations for some of your points. In a related sense, I would add two larger concepts to consider: 1) the Depression years would have been much better had the Fed acted appropriately to stem the negative tide at the time. I also doubt that the modern Federal Reserve would ever allow a recurrence of that magnitude of loss. Today's equity market still represents a historic high on a valuation basis and caution should be used for retirees. The positive situation today is that the fixed-income market offers a viable alternative return and asset allocation should now work much more effectively than the past decade. 2) the 4% "rule" is often misunderstood. There are a host of individual factors that can decrease (or increase) that withdrawal rate. The 4% is based on tax-deferred, not taxable accounts; it does not consider the offsetting income benefit of social security payments; it uses a 50/50 allocation between stocks and bonds; and it largely assumes "success" as not running out of money. On the latter point, many consider maintaining a meaningful portion of liquid net worth for heirs, in which case, a lower withdrawal rate between 3% and 3.5% is a much safer rate.
Post: Reality Check
Link to comment from January 25, 2025
Very insightful. A balanced view of life includes seeing things more objectively. I think you're certainly right. Perhaps we can work toward that goal by attributing luck and skill to their proper place and trying to view our worries as transient as the hedonic treadmill would have us find our latest possession...
Post: Why We Struggle
Link to comment from January 4, 2025
Your personal courage and the wisdom and inspiration your writings elicit in your readers is your real gift. And it is lasting…
Post: Staying Alive
Link to comment from December 21, 2024
Good points I imagine the answer lies somewhere in between earning good income and a rewarding career. I suspect Dave found his career rewarding as well.
Post: Time’s A-Wasting
Link to comment from November 23, 2024
Very well written and insightful article, Dave.
Post: Time’s A-Wasting
Link to comment from November 23, 2024
Well done post. The math often illuminates the logic as your home value example demonstrates...
Post: Math Rules
Link to comment from November 2, 2024