One off medical costs and the number

baggins11

This week I have spoken to a couple of people who have booked private operations as the waiting times were too long on nhs and it would put their life on hold.

I can imagine this will be an ongoing issue so I was just interested if those on this forum who are retired or nearly retired if you budget for medical operations eg a knee op or big dental work in the way you would for a new car etc.

It is something I hadn't considered until now but it could be a significant expense. Time is precious so I can see why people go private.

Do any of you budget for health one offs in the way you would a new car or roof repair when calculating your number? Because up until now I have been thinking about day to day expenses and not really got my head around the impact of big one offs on my number.

Linton

Budgetting for unknowns at that level of detail is in my view pointless. If you add every possibility you can think of you may never be able to afford to retire.  Better just to ensure that your plan contains a large allocation to extras. 

In any case if you have planned prudently after perhaps 10 years you are likely to be far richer than planned when many of the risks you accounted for did not actually arise.

baggins11

Thanks Linton. I am still at the stage were my number is vague and I am just working towards saving as much as I can.

I suspect I will be susceptible to "one more year" as my tendency is to always think work will dry up/glass is half empty so I always take on too much work.

It is great to hear when people end up getting richer in retirement. It must be a satisfying feeling of security.

lisyloo

insurance (on a moratorium basis) is affordable up to 73 (according to my advisor who seems quite good).

I am recording what I spend this year (not that hard, I just categorise my spending into categories- travel, holidays, household etc.)
I'm then doing a budget as this years spending will probably not reflect average.

I currently have car capital £3K, health (tests, dental, glasses) £1, normal house repairs £2K
but I don't think you can account for significant one-offs.

I'm still working on it.

squirrelpie

baggins11 said:

I can imagine this will be an ongoing issue so I was just interested if those on this forum who are retired or nearly retired if you budget for medical operations eg a knee op or big dental work in the way you would for a new car etc.

You can't really budget for this in any sensible way, IMHO.

Parts you can - we have used private dentists for years since they offer a wider range of treatment than is available through the NHS. So you can easily see lists of treatment costs and make some estimate of what you might need.

But how do you know what medical treatments you will need? You don't know whether you will get cancer or some other condition, and you don't know what NHS operations or drugs will be available and whether private treatment will offer any significant improvement. You can take out private medical insurance but that doesn't cover everything. Maybe work out the cost of full medical insurance and put that amount of money aside to be spent if and when necessary?

bostonerimus

I live in the USA so medical expenses are very much part of my budget. I pay $125 per month for medical and dental insurance and have a $5000 deductible before insurance starts paying. I’m very lucky as I have government retiree insurance and most people will pay a lot more and probably not have access to such good medical facilities. The NHS is a far better way to deliver healthcare that the fragmented and unequal system in the US, but the NHS needs to be funded, staffed and supported at the required levels to deliver the care people deserve.

Albermarle

squirrelpie said:

baggins11 said:

I can imagine this will be an ongoing issue so I was just interested if those on this forum who are retired or nearly retired if you budget for medical operations eg a knee op or big dental work in the way you would for a new car etc.

You can't really budget for this in any sensible way, IMHO.

Parts you can - we have used private dentists for years since they offer a wider range of treatment than is available through the NHS. So you can easily see lists of treatment costs and make some estimate of what you might need.

But how do you know what medical treatments you will need? You don't know whether you will get cancer or some other condition, and you don't know what NHS operations or drugs will be available and whether private treatment will offer any significant improvement. You can take out private medical insurance but that doesn't cover everything. Maybe work out the cost of full medical insurance and put that amount of money aside to be spent if and when necessary?

Normally anything serious and/or expensive would have to be dealt with by the NHS. Most private work is consultations ( £200?) diagnostic ( £1000 for a scan ?) and relatively minor operations costing a few Grand. No doubt there are some things that will cost more but probably£5K to £10K would cover most routine procedures, and something bigger like a hip replacement could be £15K .
According to this website anyway.
A to Z index of private treatment, operation and test prices | Private Healthcare UK

baggins11

So in practice if you have a big enough 'extras' pot you can just reduce other discretionary spends that year in most cases eg. scale down the holiday plans that year or other luxuries. I guess its no different to budgeting when working, you prioritise.

lisyloo

baggins11 said:

So in practice if you have a big enough 'extras' pot you can just reduce other discretionary spends that year in most cases eg. scale down the holiday plans that year or other luxuries. I guess its no different to budgeting when working, you prioritise.

You can do it that way
Or you can have a miscellaneous pot in addition

Stubod

..I cover it by having a £50k "spare money" pot which is not included in any budgets or used in any long term planning....

p00hsticks

We've recognised that there's a good chance that at some point we'll probably want / need to have such expenditure, but haven't included anything specifically in for it - on top of our budgetted monthly / yearly expenditure we have quite a large pot of money for large one-off items and any costs would come from there in the same way that a new car, new boiler, fitted kitchen etc would.