Foolishness of the 4% rule

itwasntme001

bostonerimus said:

Deleted_User said:

itwasntme001 said:

itwasntme001 said:

27 pages of time and effort spent on trying to come to some sort of conclusion on a "safe" withdrawal rate and how best to accomplish it.  Surely time better spent actually enjoying life by spending some of the money?  If there is a 1 in 2 or 1 in 3 chance of getting cancer in a lifetime, surely time better spent keeping fit and healthy and not stressing or worrying over safe withdrawal rates?  And so what if you run out of money into old age.  You will be cared for by the state anyway.

Better to just have a very rough sense of how much you can spend and set appropriate allocations.  No need to get so accurate about these things and certainly no need for 27 pages.

Perfection is the enemy of good/action/progress etc.

And now 51 pages of nonsense.  People trying to bring order and precision in a world that is inherently disordered and chaotic.  Utterly pointless.

Comments like this, helpful and smart as they are, always make me wonder what the author is doing a) reading and commenting on this topic and b) on this financial forum. You do realize that even if you are here you could ignore?  

Doing it once raises eyebrows. And then copying and reposting the same smartness again and again… Blocked. 

The self referencing nihilism is sad.

It is funny how people react when they are faced with the truth.

[Deleted User]

Terron said:

Deleted_User said:

UK/Canada have GPs which serve as guardians to limit usage of the system. 

No. In the UK GP's provide 90% of the healthcare for 10% of the budget. They don't ration usage (though a shortage of GPs in an area might do so). They are either salaried or partners and their pay does not depend on how much they do (baring some incentive schemes and extra work they might do). So they are more motivated to provide preventative care than doctors in system where they are paid by activity, and are not motivated to bump up costs/profits by performing unnecessary work.

My father was a GP. 

I had opportunity to experience systems in different countries. In Britain GPs act as gatekeepers to specialized care. Its designed to lower healthcare use and costs.  You can’t access specialized healthcare and diagnostics unless referred to by a GP.  It makes it a real hassle to access specialists. This gatekeeping delays diagnosis, lowers use and costs and patient satisfaction. Countries with more gatekeeping consistently show lower rates of cancer survival.  For example: https://bjgp.org/content/61/589/e508

In the US they have ads promoting new expensive drugs, treatment and diagnostic and, because of insurance coverage, access is too easy for most.  They use healthcare way too much which makes the overall expenditure very high. People I deal with show far more satisfaction with healthcare they get, get a lot more and much easier/faster diagnostics and use it every time they feel dizzy. 

Thrugelmir

MK62 said:

bostonerimus said:

 Personally I would have got the money from higher taxes on corporations, dividends, CG and income tax.

All in good time......

Personally though, I thought the freeze on the Personal Allowance was a regressive step - I'd have preferred to see a rise in income tax instead, but at the time the govt didn't want to break a manifesto promise.....though you could argue that this is a play on words, as freezing the PA is effectively a tax rise, for most, in all but name.

The NI increase is more debatable.......they have to get more money from somewhere, while at the same time not shafting the economy....it's tough to square that circle.......but again I think it would have been fairer on income tax....if they wanted to get more from employers, they could have raised just the employers NI rate (though, again, not sure this would be a good idea quite yet....with furlough finishing etc)......

Employers have an increased rate of corporation tax coming their way.  How much more are you expecting them to bear?  Given the toll that Covid has taken on the broader economy. 

bostonerimus

Deleted_User said:

Terron said:

Deleted_User said:

UK/Canada have GPs which serve as guardians to limit usage of the system. 

No. In the UK GP's provide 90% of the healthcare for 10% of the budget. They don't ration usage (though a shortage of GPs in an area might do so). They are either salaried or partners and their pay does not depend on how much they do (baring some incentive schemes and extra work they might do). So they are more motivated to provide preventative care than doctors in system where they are paid by activity, and are not motivated to bump up costs/profits by performing unnecessary work.

My father was a GP. 

I had opportunity to experience systems in different countries. In Britain GPs act as gatekeepers to specialized care. Its designed to lower healthcare use and costs.  You can’t access specialized healthcare and diagnostics unless referred to by a GP.  It makes it a real hassle to access specialists. This gatekeeping delays diagnosis, lowers use and costs and patient satisfaction. Countries with more gatekeeping consistently show lower rates of cancer survival.  For example: https://bjgp.org/content/61/589/e508

In the US they have ads promoting new expensive drugs, treatment and diagnostic and, because of insurance coverage, access is too easy for most.  They use healthcare way too much which makes the overall expenditure very high. People I deal with show far more satisfaction with healthcare they get, get a lot more and much easier/faster diagnostics and use it every time they feel dizzy. 

Insurance plans often don't cover things in the US or at least charge high out of pocket costs and there are millions who either can't afford the deductibles and so go without treatment or simply don't have insurance. For the people who can afford the US system it is excellent, but many simply can't and so they get poor or even no healthcare. I'm sensitive to this because my ex does not have health insurance and recently broke a leg and had to pay thousands out of pocket to get it set. During that treatment the doctor discovered a benign growth (they think it's a large cyst) in the stomach that needs an operation, but without insurance they can't afford to have it treated. So the choice is a low premium plan at $100/month and a bill of around $10k (which they don't have) or a higher premium of $200 per month and a bill around $5k and the extra monthly bill.

MK62

Thrugelmir said:

MK62 said:

bostonerimus said:

 Personally I would have got the money from higher taxes on corporations, dividends, CG and income tax.

All in good time......

Personally though, I thought the freeze on the Personal Allowance was a regressive step - I'd have preferred to see a rise in income tax instead, but at the time the govt didn't want to break a manifesto promise.....though you could argue that this is a play on words, as freezing the PA is effectively a tax rise, for most, in all but name.

The NI increase is more debatable.......they have to get more money from somewhere, while at the same time not shafting the economy....it's tough to square that circle.......but again I think it would have been fairer on income tax....if they wanted to get more from employers, they could have raised just the employers NI rate (though, again, not sure this would be a good idea quite yet....with furlough finishing etc)......

Employers have an increased rate of corporation tax coming their way.  How much more are you expecting them to bear?  

No more than they are already being asked to bear ......and like I said, not sure it's a good idea quite yet anyway.......

Terron

Deleted_User said:

Terron said:

Deleted_User said:

UK/Canada have GPs which serve as guardians to limit usage of the system. 

No. In the UK GP's provide 90% of the healthcare for 10% of the budget. They don't ration usage (though a shortage of GPs in an area might do so). They are either salaried or partners and their pay does not depend on how much they do (baring some incentive schemes and extra work they might do). So they are more motivated to provide preventative care than doctors in system where they are paid by activity, and are not motivated to bump up costs/profits by performing unnecessary work.

My father was a GP. 

I had opportunity to experience systems in different countries. In Britain GPs act as gatekeepers to specialized care. Its designed to lower healthcare use and costs.  You can’t access specialized healthcare and diagnostics unless referred to by a GP.  It makes it a real hassle to access specialists. This gatekeeping delays diagnosis, lowers use and costs and patient satisfaction. Countries with more gatekeeping consistently show lower rates of cancer survival.  For example: https://bjgp.org/content/61/589/e508

In the US they have ads promoting new expensive drugs, treatment and diagnostic and, because of insurance coverage, access is too easy for most.  They use healthcare way too much which makes the overall expenditure very high. People I deal with show far more satisfaction with healthcare they get, get a lot more and much easier/faster diagnostics and use it every time they feel dizzy. 

"In Britain GPs act as gatekeepers to specialized care."

True.

"Its designed to lower healthcare use and costs. "

True. It is designed to do so by only sending cases that really specialist care to specialists, and avoid waste. The people who designed the system did not think rationing would be needed. They believed that after the major infectious diseases were dealt with the cost would drop. They were wrong about that.

"You can’t access specialized healthcare and diagnostics unless referred to by a GP. "

False. It is true you can't directly access a specialist on the NHS, but there are alternative routes.
You can turn up at A&E and they can pass you on to a specialist. This is the quickest method and GPs will advise you to use it in urgent cases. That has happened to me twice. In each case the tests showed it wasn't as serious as it might have been. 
Also you can go private. I used to have private health insurance through work. I used it once though it wasn't needed. The surgeon had been a student of my father's and would have treated me for free, but since I had the insurance I claimed. I could have got the operation on the NHS but this way I could get it done near my parents and stay with them whilst recovering.

From the paper you reference 
The value of a strong primary care sector to a healthcare system is recognised worldwide.1,2 In many European countries, the gatekeeper system and the frequent practice of having patients on a GP list to ensure continuity of care3 have been seen as critical to cost-effective,4 patient-centred primary care as part of a comprehensive healthcare system, and as tools to ensure equal access for those in need of care.

Life expectancy in Canada - 82 years, in the UK - 81 years, and in the USA - 79 years. Health expenditure per person (2019, US dollars) in Canada $5,418, in the UK $4,653, and in the USA $11,072. The USA spends a lot more for a worse overall result.

[Deleted User]

Life expectancy in Canada - 82 years, in the UK - 81 years, and in the USA - 79 years. Health expenditure per person (2019, US dollars) in Canada $5,418, in the UK $4,653, and in the USA $11,072. The USA spends a lot more for a worse overall result.

There are lots of different factors playing into this. US has much higher rates of obesity. Still. Although other countries are catching up.  Can’t blame healthcare for this.  The culture of eating fast food and buying prepared food with lots of salt and sugar. US has much higher rates of homicides. Killing young people and lowering life expectancy. Can’t blame the healthcare.  Suicides.  More guns = more suicides.    Hard drugs. Race issues and history.  Single parent families give worse outcomes.  Latinos have the highest life expectancy. Blacks have the lowest.  Canadians do more jogging. 

Citing life expectancy as a proof of better healthcare is a stretch.  Correlation does not mean causation.

None of it helped my Canadian neighbour who had to go to the US to have her breast cancer first tested and then operated without having to wait many months.  Not only did she have to pay for health services twice (once through taxes) but she was also forced to go far away and not have family near through fairly stressful time in her life.  Increased Canadian life expectancy. Increased US healthcare expenditure.  

Incidentally, high expenditure in the US pays for a huge chunk of healthcare innovation which raises life expectancy worldwide.  

bostonerimus

High US costs don't necessarily go to research and innovation, they also go to profits, ridiculous cost of supplies and high salaries and just to cover the enormous inefficiencies in the system. I have a friend who is a health insurance consultant and negotiates for mid sized companies who want to buy plans from insurance companies. He bought a weekend house on the beach for $1.4M and then spend another $1M on renovations, that is part of healthcare costs in the US.

Anyway in the UK people don't need to worry about paying for healthcare once they retire, but they might need to worry about access to that care. Still when calculating your retirement budget healthcare is not a big item for the UK retiree, whereas it's a big item for all US retirees particularly if they retire before 65. For those people it will be many thousands of dollars a year. If they are on Medicare they will still pay a couple of thousand in premiums that is taken out of their social security check, and will probably also pay extra in deductibles, drugs and test fees. If you are poor, retired and live in certain states you could get Medicaid and have the costs covered by your state, but many states have very restrictive rules and so poor retirees often have limited healthcare until something catastrophic happens and then they could still get a nice big bill. At least the UK retiree does not have to worry about going bankrupt because of medical costs, that's a worry for many in the US.

[Deleted User]

High US costs don't necessarily go to research and innovation, they also go to profits, 

Didn’t say otherwise. Glad they also go to profits and help to fund retirements.

Nobody is forced to retire before 65.  A couple of thousand in retirees costs is a tiny fraction of the delta in state pensions and taxes.  

Fundamentally, we agree. Healthcare inflation is indeed reflected mainly in deteriorating access and understaffing as populations age which is now true in the UK, US and Canada. Its not an issue for trying to plan for financially for cost escalation. 

Thrugelmir

bostonerimus said:

High US costs don't necessarily go to research and innovation, they also go to profits, ridiculous cost of supplies and high salaries and just to cover the enormous inefficiencies in the system.

A friend of mine spent some time working for the Red Cross in a childrens hospital in Kabul. There was a plastic surgeon that fly in from New York and did 4 week stints. Rebuilding chidrens faces damaged by land mine explosions. He used to joke that rich vain Americans were prepared to pay anything to stay looking young. Had no hestitation in charging them top $ to fund his charitable work.