Navigating Retirement After the Death of a Spouse

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On September 11, 2019 I shared a string of Tweets written by my friend Emily. In those tweets, Emily shared that her husband, David, had been diagnosed with glioblastoma just a few months after they retired early. Glioblastoma is an extremely aggressive and lethal brain cancer.

D&E

Sadly, but predictably, David lost his battle with the disease only a few months later. In April 2020, he passed.

Emily and David documented their journey to financial independence and early retirement on the blog Plan, Invest, Escape (P.I.E.). Given that history, Emily started thinking about how to share her experiences in an effort to help others better plan and prepare for early retirement.

Getting started writing on her own was proving challenging, and the idea of starting her blog back up was overwhelming. She was approached about being interviewed for a podcast, but she didn’t feel ready to talk about things yet either.

We agreed that I’d send her a list of questions as prompts for writing. What follows is what grew out of it. I asked a lot of questions with instructions to answer only what she wanted. We had no deadline. I didn’t know what, when, or even if I’d get anything back.

She answered every question… with tremendous honesty, vulnerability, and transparency. So I’m going to get out of the way and share her story in her words….

Welcome Emily. Thank you for taking the time to share your story in an effort to help others.

Let’s start by discussing the dynamics of your relationship with David as you planned for early retirement and how that shifted when you were thrust into the role of having to do everything.

Would you say you each played equal roles, or was one person dominant? If both were active, was it more divide and conquer, or were you both involved in all aspects? 

While David was the initial mastermind and driver behind our early retirement plans, we were both fully involved as our plans took shape. 

David was the details guy. He approached his knowledge acquisition in a very academic way and – as always – his capacity to learn, understand, and retain complex ideas blew my mind. He’d be the one finding the articles, blog posts, and podcasts and passing them onto me. I could say that I knew ‘enough’ and he just knew more!

Having said that, we did each play to our personal strengths and divide and conquer to some extent. As our retirement date got closer, we actually wrote a list of concepts and calculations we needed to nail down. I got taxes and healthcare – so I’m good there. He got social security, RMD’s, and retirement calculators, so I’m a little weaker on those. We both documented our learnings though, and I have that to guide me.

In my opinion, accurately estimating health care costs is the biggest challenge when planning for early retirement. Even when we plan carefully and buy “good insurance” we don’t really know how good it actually is until we have to use it. 

Can you first describe the approach to buying health insurance you and David took as you entered early retirement?

As extreme planners we really thought we had this nailed down as we left our jobs. Our plan was to use COBRA from my company for the second half of 2018, mostly to ensure continued coverage and take advantage of some already paid deductibles. It was expensive (around $1,800 a month) but we had budgeted for it. 

I remember joking in September 2018 that our family received the most expensive ‘free’ flu shots ever. However, as David was diagnosed in October 2018, we were very happy to have that coverage and took full advantage of it.

The second part of our original plan was to use ACA coverage from 2019 onwards. We would keep our income low enough to obtain reasonably priced family insurance.

So that was the plan for health insurance. What was the reality of navigating medical insurance and the health care system as early retirees while dealing with David’s diagnosis of glioblastoma?

Our approach to buying health insurance was truly one of our first lessons in flexibility in early retirement. Beware, this story is a lengthy roller coaster ride! TLDR: We had some major surprises but it worked out ok.

Plans first changed when we received a surprise letter in the mail from David’s company offering retirement health insurance for 2019. It was a surprise because as was David’s nature, he had asked his employer many times what his retirement benefits would be, and he was previously told that he was not eligible for company insurance in retirement. We went ahead and signed up for 2019 and were happy to have excellent coverage from his company.

This all changed in the summer of 2019 when a hand delivered FedEx letter arrived from David’s company stating that they had made a mistake and that they were revoking the insurance. They were to give us a 3-month grace period to find new coverage.

It’s safe to say that I felt physically ill at this point. It became obvious that most ACA insurance does not cover out of state care. Much of David’s cancer treatment was in Boston, MA at this point. (Editor’s note: David and Emily sold their home in Boston and moved to their early retirement home in New Hampshire just months prior to his diagnosis.) On top of this we had already reached our out-of-pocket max and would likely have to start again if we got new insurance.

I sat down and worked out all of our options. I planned on getting some pricey private insurance for David – which did allow out of state care – and ACA coverage for me and the kids. My back-up Hail Mary was a letter to his company describing who David was, his exemplary history with the company, and a description of our situation. I was delighted that my letter landed on the right person’s desk – someone who was determined to help. 

David was still eligible to receive his last few months of COBRA coverage, and as he was now receiving social security disability benefits, COBRA rules allowed for an extension beyond the standard 18 months after separation from his company.

It wasn’t the cheapest (about $1,100 a month), but we were able to keep family coverage with a somewhat acceptable out of pocket max (about $8,000 per year). It’s worth noting that the out-of-pocket max figure was the main driver of my insurance coverage decisions at this point. 

David passed away in April 2020. By this point I was already aware that COBRA rules allowed for an additional time extension for the surviving family. The kids and I have coverage from David’s company until November 2022. While COBRA is still a pricey option for us (about $700 a month), it makes more sense than ACA insurance due to my income and tax planning through 2022.

One final kick in the teeth was related to the transfer of coverage from David as the primary insured, to me as the surviving spouse being the primary insured. Apparently a perfectly legal policy is for the insurance to ‘reset’ at this point. 

This meant that even though our family had paid the full out-of-pocket max in early 2020, it was now reset to zero and the kids and I would have to begin paying towards deductibles again. A worst-case scenario if anything happened to me or the kids in the second half of 2020 would be that we could end up paying the out-of-pocket max twice in one year. I fought this decision with many different people on the phone, and received a hard no from all parties.

At this point I was nearly ready to take my story to the podcast world or the media. It was utter exhaustion with the situation and desire to simply move on that stopped me. Luckily the kids and I ended 2020 with no further out-of-pocket costs.

When David received his diagnosis and became a regular consumer of medical services, were there any major negative surprises, or did your health insurance and the medical system function as you expected? 

Our health insurance functioned pretty much as expected. That’s possibly because I had low expectations for it! 

Our local physical therapy provider who was recommended due to their experience with neurology patients was out of network. We also had to pay for a hospital recommended post-brain surgery ambulance ride to a rehab facility. The routes to get this reconsidered through health insurance were painful and complex. My request was denied, and the energy I would use to fight the charge further was required elsewhere. 

We saw the typical complex statements detailing outrageous costs. I kept an eye on it all – but again – only had so much bandwidth to make sure there were no major mistakes. I made a point of calling each provider before paying a bill, to request a prompt pay discount. This worked to some extent and I managed to shave off 5% here and there. 

What was most frustrating was that as I was willing and able to pay the bills as they came in, the providers were usually unwilling to give any further discounts after insurance had paid their part. If I’d had the stomach to delay payments, I could probably have managed to negotiate a greater discount, but that’s not a tactic I was willing to risk my sanity over.

Were there any pleasant surprises, things that worked out better, cost less, etc. than you anticipated?

Sadly, there were no pleasant surprises. I guess one of the only benefits to David being on a clinical trial was that some of the medications and procedures were covered by the trial.

Do you have any advice for someone who receives a serious medical diagnosis about navigating the system effectively based on your experience of helping David?

On the health insurance side, I can only say keep on top of it. Have a file for bills and sit down regularly to go through them and pay them. Keep an eye on your Explanation of Benefits so nothing crazy slips through. Keep records of all calls you make to your providers and insurance company. 

There are different ways of using the term “worst case” scenario. After working and planning so hard, having only a few months to enjoy your early retirements before David’s diagnosis of glioblastoma was clearly horrible in many respects. But from a strictly financial perspective, a different diagnosis that is not so lethal, but would require similar amounts of ongoing care for years or even decades could be even worse. 

Based on your experience and seeing how much it can cost to deal with a serious medical condition, what advice would you give a relatively healthy person entering early retirement and struggling with what to do about health insurance in early retirement?

That’s very true. From a strictly financial perspective, David’s diagnosis was never going to be a long-term financial drain. I often wondered how we would have managed had it been longer term. 

One of the differences with a chronic illness would hopefully be the ability to operate outside of panic mode. I felt that I spent a lot of time in panic mode, simply fighting fires as they arose. There was very little ability to plan, or shop around for alternate care. 

In terms of healthcare planning in early retirement, I can honestly say that our conservative approach was something of a saving grace. We were all healthy and didn’t have any concerns going into early retirement. Even so we were cautious not to cut corners.

We never believed that we could ‘healthy lifestyle’ ourselves out of a healthcare crisis or accident. I remember researching Healthshare Ministries and not having the nerve to accept the caps on insurance and the fact that David would have to wait several months for coverage to kick in as he had asthma as a pre-existing condition. 

Realistic healthcare costs were something we included in our early retirement plan. We allowed for the fact that we should be prepared to pay the out-of-pocket max in any one year, and potentially in several years. 

To do this we wrote 3 budgets. One was the ‘belt tightening’ budget for tough economic times. This budget cut things like vacation travel, eating out, and funding hobbies. Our mid-range budget was the one we planned to stick to, and our ‘fat’ budget was an understanding of how frivolous we could afford to be if all was well.

Funding an out-of-pocket max in early retirement could potentially sound impossible to budget for, and could derail many peoples’ early retirement plans. Sadly, these are the constraints we have to work within in this country. Until healthcare changes in the U.S. these are the rules we have to play by and the plans we have to make.

It’s also worth mentioning that some of the early retirement community tout overseas healthcare as a less expensive back up plan. I understand how this could work in an ideal situation involving elective or planned surgeries.

I urge caution relying on this approach. There is no way that David could have travelled any significant distance once he became ill. Even our monthly trips to Boston were stressful and exhausting.

Related: Retirement Healthcare — What Are Your Options?

Taking Time to Reflect

Let’s stop there. That’s a lot to chew on!

Think about your own relationship dynamics. If you’re the more interested partner, how would things change for your loved one(s) if something happened to you tomorrow? If you’re the less engaged partner, what do you need to learn from the planner in the relationship to be prepared if they were no longer around?

What can you take from Emily generously sharing her experience as it relates to your planning for health insurance in early retirement? Are you taking short cuts that may leave you vulnerable? Many of us are creative, adaptive, and full of ingenuity. That’s great, but do you want to rely on those traits to navigate our healthcare system when you’re operating in “panic mode” during stressful times?

Have you fully considered what a “worst case scenario” could look like? Are you truly prepared financially for a situation like Emily and David faced? Or something worse?

These are challenging topics and can create unpleasant conversations, but they need to be addressed. Please share your thoughts and questions in the comments below in a respectful manner.

Thank you to Emily for generously sharing her experiences to help us all be better prepared. Next week, I’ll publish the 2nd half of our Q&A in which Emily shares blind spots she discovered in her and David’s planning, how she is adapting Social Security and tax planning under circumstances dramatically different than those she planned for, and her powerful take home message.

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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. After achieving financial independence, Chris began writing about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. Chris also does financial planning with individuals and couples at Abundo Wealth, a low-cost, advice-only financial planning firm with the mission of making quality financial advice available to populations for whom it was previously inaccessible. Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He has spoken at events including the Bogleheads and the American Institute of Certified Public Accountants annual conferences. Blog inquiries can be sent to chris@caniretireyet.com. Financial planning inquiries can be sent to chris@abundowealth.com]

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29 Comments

  1. Many thanks to Emily for candidly sharing her family’s story. She has provided a really important service to the FIRE community today. I hope this post goes viral, people need to read it. What a gift she gave!

  2. I’m happy that it worked out for Emily and David that they had COBRA coverage through their employer sponsored plan. I’d be curious how something like this would have played out post-COBRA either under an ACA plan or a health sharing ministry.

    Although obviously not as impactful as David’s issues, our son had a major accident merely 2 days before our COBRA expired. He’s totally fine now. A few days later and we would have been dealing with medical bills just north of $30,000. Even better we’d already met the out of pocket max by that point so it cost us nothing.

    We have a health sharing ministry (Samaritan Given) in place now but fortunately haven’t had to test it’s effectiveness for large scale care yet (hopefully never do, fingers crossed).

    1. MikeFI,

      Thanks for sharing your story. Your final point is one I wanted to make with this post. It builds upon a point that Darrow made just last week… insurance tends to do a great job of selling a feeling of security. But with details buried in legalese, it’s hard to know what you really have until you have an adverse event that requires you to use the insurance. That’s where Emily’s willingness to share her experience, while uniquely her own, is invaluable to make us at least think a bit more deeply about blind spots we may have.

      Best,
      Chris

      1. Yes, many thanks to Emily for generously sharing her practical experiences with insurance. This is so incredibly valuable for those of us making decisions on coverage. My heart aches for her & her children; my family’s best wishes are sent out to her.

      2. Thanks Chris. Totally on point that you don’t know what you have until it’s tested. I’m not an early retiree, getting closer to backing off work. Emily’s info is really invaluable – thank you so much Emily. Bless you.

  3. Thank you all for your willingness to share this information, especially given the personal tragedy that this story covers. Chris – you have delivered yet another very useful, insightful and informative article and using the testimonials from Emily really make this so very helpful.

    Thank you to you and Emily for putting this together.

    Emily – my sincerest condolences to you and your family for your untimely and what seems to me to be a cruel loss.

    DJ

  4. Thank you Emily. I’m so sorry for your loss. Unfortunately, I went through a similar scenario in July of 2018 as my husband passed from lung cancer (never smoker). Because my husband’s company had less than 20 people, I was not eligible for COBRA after he passed and ended up with an ACA plan from marketplace. My deductible is $6900 but I can also contribute to an HSA. Honestly, the coverage has been very good. When my spouse was diagnosed, I took over all the finances, medical bills etc. I was always aware of our finances but not physically issuing payments. We were planning on early retirement and had almost reached our goal number when he passed away. This past March, I early retired as my perspective has changed signficantly. Life truly is too short to do something that is no longer enjoyable and limiting. I find I am busy every minute of the day maintaining my home, pets, hobbies, exercise and travel.

    1. Elizabeth,

      My condolences. I’ve received several private emails this morning sharing similar stories.

      Reading them reinforces how important it is to think about these things from all angles. You certainly want to be prepared for anything, but at the same time you don’t want to be so focused on financial security that you forget why you started saving and investing in the first place. These aren’t easy decisions.

      Thanks for contributing to the conversation in a thoughtful way.

      Best,
      Chris

  5. Thanks for Emily sharing her story! I kind of stumbled into FIRE after my wife passed a couple of years ago. Much like a David, it was an aggressive cancer and she was still on short term disability at work. I was shocked that going to long term disability would mean she would no longer be classed as an employee and would need to find insurance! I mean you don’t go on disability because you are healthy, but now you have a pre existing condition! Unreal!

    I discovered FIRE after this and figured life is short for this working crap!!! On cobra at the moment and hopefully have lower income and can find ACA plan. Thankfully, I am also a dual UK citizen- so if it all goes to pot here I can high tail it back home (to rainy weather????).

    Hoping living in MA provides a better level of ACA plan. Part of my decision not to go to low tax states – sometimes you get what you pay for!

  6. Thank you, Emily, for sharing your story. Know it will help many people as they plan their retirements. I know it has helped me remove blinders I was wearing.

  7. This story made me super sad at first, and then determined to get our ducks in a row similar to yours. If either of us were to be stricken ill, I would not want finances to be a worry on the list. We’re debt free and almost early-retired (goal is 40), but we do not have a set plan for health insurance yet. I have taken a six month leave in the past and utilized a health share ministry, and did not use it at all. That option was in the back of my mind… Luckily we’re healthy, but this was a good reminder that can change in an instant through no fault of your own and you need to be ready for the worst case scenario. I need to start researching our other options…

  8. I was the leader of a medium sized business that was self insured, that meant that the company paid the health expenses of employees although we carried catastrophic insurance for very high cost illnesses and treatments. Employees paid no premiums for the coverage and it was very good coverage that we all shared. There was a copay up to a very reasonable out of pocket expense, but we felt people should have some incentive to participate in the management of their health care costs. This proved to be almost universally true.
    Insurance laws and rules are constantly changing but we were committed to providing the best health care we could for our loyal employees and used all of the experts and their advice to maximize their care and minimize our cost.
    The one statement that really hit me in Emily’s story was, “I was delighted that my letter landed on the right person’s desk – someone who was determined to help.” I was that person for many of our distressed employees and myself and my team worked tirelessly and creatively to lift the burden from them, knowing no one else likely could.
    I am retired now and sometimes look back on all those times and celebrate our achievements for these people in their most troubling times. I rarely heard from any of them or ever knew how it all worked out but I want to believe we sometimes receive a small mention when people like Emily tell their stories.
    Management are not just greedy uncaring impersonal ogres. We do good in many unnoticed and unappreciated ways, but we can’t do everything always for everyone.

    1. Luda Kirk,

      Thanks for this thoughtful comment and for doing your honest best. It’s easy to vilify “evil insurance companies” or “greedy companies”, but the reality is that our world is filled with good people, who get caught up in imperfect systems. Few systems are both as large and impactful and simultaneously so “imperfect” as the American medical/insurance complex, driven by perverse incentives and guided by a patchwork of often seemingly irrational rules and laws.

      Best,
      Chris

    2. Hi Luda. I love that you treated people like people. That’s a potential benefit from working for a small company. My company used to be smaller, and I remember asking for and having granted multiple exceptions by the VP of HR. We had some humane leaders then. But once the company expanded, rules became more rigid and exceptions don’t exist. Thank you for treating your staff like humans. I’m sure their loyalty repaid your kindness in spades.

  9. Emily, I am very sorry for your and your family’s loss and that David had to endure such a devastating illness. Thank you for your generosity of time and spirit in sharing your experience. I don’t know that I would be able to do that in your situation, no matter how thoughtfully and gently Chris posed his questions.

    This family’s experience, as evidenced by Emily’s comments about choosing your battles, highlights another disturbing facet of our healthcare system besides it’s cost – the constant need to do battle over billing issues, pre-authorizations and out-of-network care at a time when your loved one needs you by his or her side the most. Many times, privacy issues prevent other family members or friends from stepping in to help even if they’re willing to. While it’s critical to spend healthcare premium dollars carefully to preserve financial resources, it’s just as critical to choose a health insurance policy with constraints and limits you can live with during a medical crisis. Unfortunately, that’s sometimes difficult to predict, and we end up leaving money on the table because our hearts are elsewhere and we simply don’t have the time or the energy for the fight.

    1. Mary,

      You make great points. Inevitably, most of us are going to have to utilize this system at some point. In the past I’ve shared a couple of books to help people learn more about how the system works, so when that often stressful time comes we can be better informed consumers. This is a good reminder to people to give them a read.

      The Price We Pay by Marty Makary
      An American Sickness by Elizabeth Rosenthal

      Best,
      Chris

  10. Several years ago I was on a practice retirement sabbatical. I had a major medical event. ACA paid the bulk of my 6 figure medical expenses. I paid the aprox 6k out of pocket max. The ACA monthly premium was around $150. Cobra would’ve been around $1800 a month. In my experience, those with sufficiently lower income will find an ACA plan infinitely more affordable.

    1. Fred,

      You’re correct for most people who are fully retired and have a low enough income to benefit from subsidies, but if you read closely they never reached that point. The plan was to use COBRA only for a couple of months as a bridge to the ACA, for the second half of their first year of retirement when they had already earned a substantial income in the first half of the year. Then when the diagnosis occurred, they realized they couldn’t continue treatment with any of the ACA plans available. Our healthcare system, using that term generously, is a mess. It is important to realize that things often aren’t simple and straight forward, so it’s important to learn from the experience of others as all we have to figure out how to navigate the system we have.

      Best,
      Chris

  11. My FI number includes unsubsidized ACA premiums and having to pay the out of pocket max every other year, entirely because I read Emily’s Twitter thread. I’m grateful to her and her family for sharing their experience as I would likely have discounted the likelihood of high medical costs without a real story to anchor me. Am I cushioning too much? Probably, but as Chris has written, I’m a risk pool of one.

    1. Karen,

      This, IMO, is a strong argument to consider alternatives to traditional full-time employment or full early retirement. It is definitely possible that you’re over saving and being too conservative. However, as Emily’s story demonstrates these things can and do happen. So it is possible that you’re being prudent.

      As much as we would like, we can never know what the future holds. So it is good to maintain flexibility and not handcuff yourself financially, nor give up too many years preparing for every worst case scenario that may never happen.

      Best wishes in finding the right solution for you.

      Chris

  12. Wow! Emily and David had so much more organization in their planning than most. I really liked their take on Cobra plans abs planning for the out of pocket max in their retirement. And 3 budgets? Amazing. Thank you for sharing!

  13. We FIREed in spring 2018, and my husband got some major unexpected medical issues a year later. COBRA was useful while we were traveling and unsure where we’d settle down. Once we found a place, we switched to ACA. That’s so helpful since the medical costs in 2019 ramp up over a quarter million. I am so grateful for ACA. It also illustrates that unexpected medical issues can show up any time, and we need to be prepared.

    Thank you Emily for sharing your wisdom. I am the person who is in charge of our family finance. I have been slowly dragging my non-engaging husband to the financial discussions. It’s so important for our family gain financial literacy.

    Thank you Chris for consistently producing high quality content that matters!

    1. Thanks for reading. I agree that Emily has a powerful and important story that needs to be heard. I’m glad you found it useful.

      Best,
      Chris

  14. Chris, I didn’t mean to imply that Emily made a wrong choice. Surely they had little choice and did the best they could in their circumstances. In my situation ACA was dramatically better than COBRA.

    1. Yep. Agree for most ACA will be much less expensive way to buy health insurance. I just wanted to add a little color. Unfortunately, things are rarely simple with our system.

      Cheers!
      Chris

  15. I am so thankful to live in Canada where the insurance and cost of care weren’t things I had to worry about when I got terribly ill. It drives me nuts to see people say that they don’t have to worry about healthcare costs because they exercise and eat right. Welcome to the club buddy, it sure didn’t save me from needing a dozen CT scans and a couple of operations. The public health campaigns do people a real disservice in understanding how common and random health events are.

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