Three Reasons I’m Not Worried About Healthcare Costs In Early Retirement

medicineEver heard of “golden handcuffs”?

Usually, this is a system of compensation and/or benefits that is designed to keep an employee from leaving a company. Benefits like matching retirement account contributions, insurance, and stock options are popular handcuffs that can keep an otherwise disgruntled or burned out worker from leaving for potentially greener pastures. And by greener pastures, I’m talking about early retirement.

I’ve received my fair share of feedback via email that basically insinuates that I’m off my rocker for wanting to retire so early in life due to high healthcare costs. It’s assumed that retiring by 40 years old almost ensures that I’ll be tackling expensive healthcare bills by myself, because there is a false perception out there that health insurance can only be attained by way of an employer, or that retiring early in life somehow invites expensive medical bills.

This is a bit confusing to me.

First, health insurance is extremely easy to attain without an employer’s permission or help. I discussed my foray into buying health insurance on my own around this time last year. I pay just north of $130/month for a high-deductible healthcare plan (HDHP). Not an expense I like having, but it doesn’t exactly break the bank either. Moreover, this whole process has been made even easier through the Affordable Care Act since there’s now a national exchange.

And whereas some people crave the security blanket of golden handcuffs, I think they can actually be more harmful than they are helpful.

I actually have the opinion that by retiring early in life I’ll be minimizing my healthcare costs over the long haul, and I’ll give you readers three good reasons why.

Low Stress

I work more than 50 hours per week in the service department of a busy luxury car dealership. The job is fast-paced and, at times, incredibly stressful. I think there are few jobs out there that don’t involve a healthy dose of stress. Maybe my job is more stressful than others, or maybe I’m just more sensitive to it, but I can feel this stress in a physical way that I can only describe as present. I know when it’s there, and I know when it’s gone. The former times are usually at work, and the latter times are usually everywhere but work.

There is a ton of research out there that shows certain lifestyles that include a lot of stress can lead to preventable diseases, and eventually death. The leading 10 causes of death according to the Centers for Disease Control and Prevention lists heart disease as the #1 killer in 2010 (most recent data). Of course, looking down the list you have chronic lower respiratory diseases, stroke, and diabetes. Even unintentional injury is the #5 leading cause of death, and nearly 1/3 of the deaths are due to car accidents.

What do I see here? A lot of preventable death, to some degree. While genetics plays a large part in many of these examples, certainly stress and lifestyle cannot be ignored. If you’re not engaging in a ridiculous commute to work you’re less likely to die of a car accident. If you’re not eating a ton of horrible food out of convenience because you’re so busy working you’ll be less likely to have the internal health issues that can lead to diabetes, heart issues, or stroke. If you’re not stressed out all of the time you’re body isn’t constantly releasing hormones and wasting energy to fight it, thereby lessening your chances to catch anything from the common cold to cancer.

And what can be a better way to avoid stress than to spend most or all of your time doing the things you love to do? I’m aggressively chasing financial independence so that I can pursue the passions that bring me joy. I want to write, spend time with loved ones, travel, manage my investments, and eventually make the world a better place. How stressful can living your dream possibly be?


I have a secret weapon here in exercise. While I’ve admitted that my diet right now could be improved in terms of overall health, it’s been maximized for efficiency, taste, cost, and convenience. But a major factor in convenience will no longer be as necessary once I’m financially independent. I won’t be slaving over a stove to cook big meals, but at the same time I won’t have to microwave frozen lunches because I won’t have to worry about packing a lunch anymore. But where I lack a little in my food choices, I more than make up for it in my regular fitness routine.

Furthermore, I’ve always been a fan of physical activity. I started exercising heavily when I was 11 years old to protect myself and deflect the constant teasing I faced as a stranger in a small town. A love was born, and I’ve been a big fan of working out regularly ever since.  And I know that if I can make time for the gym three times per week even while managing a full-time job, this blog, my portfolio, and life in general, I think I have an even better chance at exercising regularly once I’m no longer working at a full-time day job.

Regular exercise can make a huge difference in one’s life. It can help fight obesity, while simultaneously keeping the heart healthy. I spend $30/month on my gym membership, and I look at this cost as the cheapest form of health insurance there is. Once I’m financially independent, I plan on staying fit through regular exercise and making it a lifelong commitment.

Cheaper Healthcare Abroad

Lastly, this is something that maybe isn’t often mentioned or thought about, but is an idea I’ve factored in to any contingency plans.

One fantastic aspect about being financially independent is that you’re also geographically independent. Once I no longer need to commute to work, clock in, and physically exert myself while exchanging my limited, dwindling time here on Earth for a paycheck, I can theoretically live and play wherever I want. My plan to live off of dividend income means I can collect dividends from high-quality companies like The Coca-Cola Company (KO) and Chevron Corporation (CVX) from anywhere in the world. It matters not if I’m living in the US or Ecuador; the dividends will still roll in and I can still spend them as I see fit.

As such, if I were faced with a life-threatening and highly expensive health problem like cancer, I would have the option to seek treatment abroad where access to high-quality healthcare is available and plenty cheaper than what we have here in the US. While I wouldn’t want to do this unless absolutely necessary, knowing the option is there is a huge weight lifted off of my shoulders. Furthermore, this option would only be explored if I faced severe costs that were somehow not covered by my aforementioned health insurance.

I’ve also thought about living abroad much later in life anyhow, and if I were living in a country with much cheaper costs of living, like Thailand, for instance, I’d already be in a location where cheaper healthcare is readily available.


I look around me and I see a population that is overworked, overstressed, and, at times, overweight. But I have vowed to not be a part of the problem, and I’ve instead formulated my own solution. By avoiding the stress of commuting long distances, working long hours, and putting up with unreasonable demands, I know that I can limit a silent killer and keep my body psychologically and emotionally healthy. And by exercising, I’ll keep my body physically healthy, thereby lowering my risk factors for major diseases. Finally, if my genetics get the best of me and I get massively and expensively sick, I know that financial independence gives me the flexibility to get healthcare quotes from anywhere in the world and pursue options that best befit me.

In addition, I know that I’ll be able to comfortably cover my high deductible, because in order to become financially independent I’ll need to accumulate hundreds of thousands of dollars in income-producing assets. I won’t need to worry about being one of the many that have to claim bankruptcy due to mounting medical bills and deductibles because my $10k deductible isn’t going to sink my boat when I’m cruising around the ocean of life in a $500,000 battleship.

And one final point: Being financially independent means I won’t have to worry about missing work if I were to get sick. Missing work can be a problem for many Americans that get sick, especially those that are living paycheck to paycheck. If it only takes a few skipped paychecks to miss the mortgage payment which cascades into a domino effect of missed bills , then even the best health insurance in the world doesn’t mean much.

Full Disclosure: Long KO, CVX

How about you? Worried about healthcare costs in early retirement?

Thanks for reading.

Photo Credit: lobster20/


  1. Joe Carnation says

    If you’ve worked for a large U.S. corporation over the past few years you’ve probably witnessed the shift away from generous benefits anyway. I’ve worked for two companies in the past 4 years that ditched their traditional health coverage plans for high deductible plans like the one you’ve bought for yourself. The golden handcuffs are a thing of the past anyway so you might as well pursue your freedom.

    • says


      I’ve noticed the same thing and employer health coverage seems to get worse and worse over the years… And I would also agree with Jason that work stress is probably my biggest enemy right now. When I reach early FI, I imagine myself working out and exercising everyday. I’m not worried about health benefits at all since I plan on devoting a huge chunk of my free time towards health and fitness. If anything, my health will drastically improve once I reach FI.

      • says

        Improved health and lower stress is definitely a significant benefit to achieving financial independence. I know for myself, I get frustrated at the many hours stuck sitting in one place without the ability to be active and move. I look forward to waking up, having a few hours of exercise and productive time in the morning, and relaxing afterwards with whatever other hobbies or interests I’m pursuing at the time.

        • says


          Your description of financial independence sounds like a dream to me. I’d love to wake up at a decent time (NOT 6:30 a.m.) and work on things I’m passionate about, as well as have extra time to stay physically active and make sure I’m physically healthy as well as emotionally and psychologically healthy. :)

          Best wishes.

      • says

        FI Fighter,

        I agree. Stress is enemy #1. Reducing it is imperative to overall well-being. I’m really looking forward to letting all those feelings just melt away!

        Best regards.

    • says


      I agree. Pensions are a great example of this trend.

      But a regular paycheck and the income that comes with it is just another form of handcuffs. There’s a lot of fear behind leaving the steady paycheck for early retirement and living off of dividend income. Personally, I’ll make the leap the instant it’s possible…but I can understand how many others are a bit more tepid toward the idea.


  2. Emsee says

    Excellent post! Stress is something that is always in my thoughts, especially how to avoid it. This aspect of life is often neglected when it comes to healthy living and the preservation of our well being. Funny this should come up as I just today started toying with the idea of starting a blog about the many aspects of frugal living, especially health.

    Great blog and thank you, I’ve been reading here and there for a week or so. I originally found this site from your post on MMM.

    Keep up the good work!

    • says


      Hey, glad you found the blog! I always enjoy Pete’s writing, and I’m so grateful he gave me the opportunity to post there a while back.

      And I agree with you that stress is something that’s often neglected. I think it’s easy to neglect because it’s largely invisible, and doesn’t often physically manifest itself until you’re in the hospital. I personally don’t want to wait until then to reduce my stress levels! :)

      I hope you stay in touch.

      Best wishes.

  3. Monty says

    I’m currently sporting the golden handcuffs. I have a job that sucks the life out of me! The problem I have is that I have to be there 10 years to be vested to receive a pension. The pension won’t kick in until I’m 60, but its safe and substantial. I have to stay another 1.7 to become vested. I’m honestly about ready to throw logic out the window and quit! Oh well such is life.

    • Monty says

      Also wanted to mention with those 2 years I will be 43 and should have enough invested to early retire to Florida. I was fortunate to buy a nice condo at the bottom of the real estate crash for pennies on the dollar. If I can endure the two more years, everything falls into place. Problem is I still just want to say screw it and quit.. lol

      • says


        I totally hear you. I’m in the same exact position. I feel like I’m losing a piece of myself every day that goes by at work. It’s unfortunate and frustrating.

        It’s a tough situation for you. If you can stick it out for another couple of years it sounds like it’ll be worth it. If you can retire early to Florida at 43, you’ll be in a better position than 99% of the population. Hang tough, my friend! I feel your pain.

        Best regards!

  4. Steve says

    Another excellent post. I am curious, and I am sorry if you have addressed it, how does your significant other feel about the idea of retiring abroad? I definitely see the advantages, and might do it, seasonally, myself as I will be working only 5 months a year soon. But it can be hard on family, and there are children to consider.

    • says


      Well, the idea of retiring abroad is still far off in the future. My girlfriend has actually lived abroad, and is rather receptive of the idea. She’s lived in France and Norway, and she’s actually from El Salvador. However, she has a young son to think about right now. I will say she’s a bigger fan of Europe than some of the places I’m interested in (SE Asia, Ecuador). Her idea of travel is just to travel and see the sights, rather than worry about costs of living.

      Congrats on your situation there! Working only five months a year is fantastic. I’ve often thought about shifting down to part-time work and then working on the blog and my writing a bit more. We’ll see.

      Only working part of the year like that definitely opens up the possibilities for you. Take advantage of it, if possible. :)

      Take care.

    • says

      Investing Pursuits,

      Thanks! Glad you enjoyed it.

      And I agree: Health is something that’s easily taken for granted. I personally think about it quite often, because in life it’s all we really have. You can have all the money in the world, but with no health it’s meaningless. I think that by retiring early I’ll improve my health markedly, and I’m really looking forward to the reduced stress and improved well-being.


  5. says

    While my job is generally low stress I can definitely tell when it starts creeping up on me. Plus the random nights of getting up in the middle of the night for 2-3 hours of work really messes with my sleep schedule. Having a normal sleep schedule can help out so much with your stress level as a way to decompress and allow the body to relax. My stress level has been going down though now that I’ve started exercising fairly regularly again. It feels great to get back in the gym. There’s plenty of options for healthcare and with so many companies switching to high deductible plans anyways, it’s not like there’s a huge difference between health care coverage on the open market vs through an employer.

    • says

      Also, I know I’ve said this several times before but in my adult life my some of my lowest stress and happiest times were when I didn’t have a job. I was laid off and while it was stressful in the beginning once I began to focus on everything but finding that next job my stress level went way down. I didn’t have to get up early in the morning and drive in traffic for 45 min just to sit at a desk all day and even worse make the hour long drive back home. That time out of work was a taste of what FI could be like before I had even learned about FI. But I want more! That’s the whole reason I started my own journey.

      • says


        I’m totally with you. The times when I wasn’t working – I recently took two weeks off and it was the time of my life – were always much less stressful than when I was toiling away at a job and creating value for an employer. The only stressful aspect of not working was worrying about money, and as such preparing for interviews and wondering about where the next paycheck was going to come from. Once that concern is eliminated via financial independence, the rest is gravy! :)

        Thanks for sharing. I share your motivation 100%.

        Best wishes!

  6. says

    I’ve seen you take a lot of criticism around rising health care costs. I think I even saw someone on the today show try to rationalize your strategy away due to that issue. I’ve always thought the same thing each time – The person critiquing you never understands that your dividend income is going to grow. When you are 50 or 60 you will be crushing it with even more dividend income that will help pay medical bills and other expenses.

    Healthcare costs may rise for you but so will your income. Cheers.

    • says


      Absolutely. Great points there.

      Health insurance, and with it healthcare costs in general, will surely increase over time. And I’m not getting any younger, so I understand the eventual need for more care. However, my dividend income growth will likely outpace the increase in health insurance expenses over the long haul, at least until I’m much, much older. I hope by then my dividend income will far exceed my expenses to the point to where dramatic healthcare costs will still be comfortably covered. Of course, I hope to maintain this blog as long as I’m able, so we’ll see how it goes!


  7. says

    Nice to see a different point of view on health care in retirement. I never thought of going overseas for health care but its definitely sounds like a viable option. Unfortunately, I have to admit that can relate to those with the so-called “golden handcuffs.” You see…In 8 1/2 years, as part of my retirement package, I can potentially retire with medical benefits for life (currently approx. $1,300/month). As you can imagine, this type of benefits rarely exist anymore. I’ve actually calculated this benefit to be worth approx. $436,000 ($15,600 x 28), assuming I retire at 50 and live to be 78 (the current average male lifespan). If I live longer, the benefit is even greater than my estimate. The downside is that if I life a shorter lifespan, the total benefit obviously would shrink. I like to think that I live a healthy lifestyle and therefore fully expect to live at least 78 (fingers crossed).

    • says

      A Frugal Family’s Journey,

      Thanks for stopping by!

      Wow. Sounds like you’re in a great spot there, although your handcuffs are extra golden. That’s a gift and a curse, but if you can stick it out you’ve got some serious benefits coming your way. Although I don’t doubt your benefit is worth a lot of money, I’m not quite sure why your health insurance is so much money? I remember quoting HDHPs over at ehealthinsurance and playing around with quotes, and even at two children my total bill was somewhere around $400/month (if I remember right). And I know Pete from MMM pays less than $300/month for his whole family. At any rate, that’s a fantastic benefit, and the costs are really a moot point if it’s fully paid for. I would just be careful to have everything riding on it, as we’ve seen how quickly pensions can disappear when the balance sheet starts getting stressed.

      I hope you stay in touch. And I wish you and your family the best of luck with your FI journey!

      Take care.

  8. says

    Very nice article! It’s a very relevant topic.

    Lowering stress is probably the single biggest benefit of achieving FI. I hope having close to zero stress will add years to our lives.

    Even before the advent of the ACA getting affordable coverage was not impossible, as you have clearly demonstrated with your $130/mo HDHP. I expect to have decent affordable health insurance in FI that will hopefully cover most expenses, but I won’t be afraid of hopping over to Mexico or Costa Rica if the numbers look better. I think a lot of providers grossly over charge for their services and because of that I think the medical tourism industry is here to stay.

    Keep pumping it! =).

    • says


      I’m with you all the way. I’m confident that reducing stress in our lives to a significant degree should lengthen our lifespans. And life is everything. Without time and health we have nothing. We’re not immortal, so every year I can extend my life in a healthy manner I’m all for it. I don’t want to take even one moment for granted.

      And the flexibility of being able to crunch numbers and hop over a border if necessary is something that financial independence offers. Pretty cool stuff, right? :)

      Best wishes!

  9. Dividend Investing Rookie says

    A great post, DM. One of the things that stands out most for me is that you can live abroad while living off of your dividend income. I think that is a great option to have. I have never thought of it till now, except that I am a Canadian, so I can go back to either Vancouver or Toronto at any time I want, and it’s a lie if I say that it didn’t cross my mind. But the reason why I left in the first place is the rain and the snow. That is why I love living in LA. However, now that I know that living abroad could be an option, I will definitely consider it real hard. Thanks for sharing your thoughts!!! Always something to learn.

    • says


      Thanks so much for the kind words. Glad this post expanded your horizons a bit.

      And I hear you on weather. I often think about moving back to Michigan because I really miss my family, but the weather up there leaves a lot to be desired. I believe I suffer from SAD (Seasonal Affective Disorder), and so in the winter I can get a little down and out. But family is family!

      I’ve never been to Vancouver. That’s a city I’d love to see sometime. I hear it’s amazing!

      Thanks for stopping by.


  10. innerscorecard says

    You know, this is another reason that you should consider investing money in a Roth IRA. Even assuming that you are paying 0% taxes on long-term capital gains and qualified dividends in your taxable account, the same amount of money in a Roth IRA is still “better” for you in many ways – relevant in the case of health insurance, this income won’t be counted in calculating how much of a subsidy you get. There are other cases too, such as how much need-based financial aid your kid(s) will get for school.

    Really enjoy your blog and really want to see you succeed, which is why I think it is not the right choice to go taxable-only for you.

    • Kipp says

      Actually the problem regarding ACA for an early retire, in my opinion, is having enough income to get a subsidy and avoid medicaid. If you make under 133% of the poverty level you are on medicaid not a subsidy.

    • says


      That’s an interesting perspective there. To be honest, I hadn’t contemplated it. While I’m not relying on subsidies as a cornerstone of my early retirement strategy, I wouldn’t necessarily turn them down either. It’s like taxes: I’ll pay what’s asked and I can appreciate the need for them, but if the IRS told me tomorrow I never had to pay again I’d gladly oblige.

      However, the money I’d be able to sock away in a Roth between now and 40 is a relatively small sum in terms of what it would reduce my annual income by. We’d be talking less than $2k/year, and if that’s the difference between a subsidy and no subsidy I’m not particularly concerned. Furthermore, I don’t anticipate my health insurance costs going up dramatically from here. But I guess we’ll see.

      And Kipp brings up a great point there. I honestly wasn’t aware of the cut-off here, because it’s not something I researched. But I guess if I’m borderline on subsidies which would reduce costs dramatically I could get pretty creative. :)

      And thanks for the support. I genuinely appreciate it!

      Best regards.

      • Kipp says

        Hello Dividend Mantra,

        I just recently started reading your blog and love it so far!

        It is also important to note that some states did not expand medicaid so that is another reason why the cutoff is important and although the coverage would be cheapest on medicaid, in my opinion you want to avoid medicaid.

        States have the ability, although currently seem to resist using this, to seize the assets of your estate when you decease to pay for medicaid. Will their resistance change in the future? Who knows? I think if deficits continue to grow it may, but to be on the safe side I plan on getting an insurance policy for my family when I retire.

        • says


          That’s interesting stuff there. I wasn’t aware of the tightrope one must walk between Medicaid and subsidies under the ACA. Interesting stuff.

          I don’t think I’ll have to worry much. If I qualify for subsidies then I suppose I won’t turn them down, but I’ll also plan for a fully self-funded health insurance plan. I find it’s always better to leave the government out of one’s affairs when and where possible.


  11. Mikko says

    A great post again DM! I believe that keeping fit and eating healthy has a major affect on ones health but there’s always things that can happen even though you live healthy. On those occasions the health insurance is good to have. I can use myself as an example though I live in an European country where medical care is quite cheap.

    I’m 28 and I’ve been into dividend growth investing for few years now and things were looking pretty good until I was diagnosed with cancer few months back. Due to the treatments I have been on sick leave so this has reduced my income a lot while medical bills keep piling up. Fortunately I have been paying a health insurance on my own so that has covered the medical bills. The frugal lifestyle and dividend income have helped with the reduced income. I’m pretty happy that I started DGI because I don’t have to stress about the income so I can focus on fighting the cancer. The treatments are working and the doctors should be able to cure me so I’m confident that this is just a minor setback for major comeback.

    This has opened my eyes for the fact that we only live once so I’ll be taking a head start towards the freedom once I’m healthy again and will travel the world with my girlfriend for a year or so. Once we get back I’ll find a job that I don’t hate and will continue with DGI and pursue early retirement without forgetting to enjoy the journey in the meantime.

    Thank you for the inspiration and keep up the good work!


    • says


      Thanks for stopping by and sharing that.

      I’m terribly sorry to hear of your situation there. You’re in my thoughts. I certainly hope you’re able to kick cancer’s ass and use this experience as a major turning point in your life. I know that past tragedies in my life were huge lessons for me in terms of what I wanted out of life and how to get it. I can imagine this whole experience will show you how fragile life really is, and we never want to waste a moment of it.

      I wish you the best as you move past this and eventually jump on the fast treadmill to freedom. :)

      Best wishes!

  12. says

    I definitely think about health insurance as a big cost in early retirement. But as mentioned above, employer health care is getting worse, and my company still has me pay for my family. They only cover about $3800 of my health care per year, and its a basic plan. Just another cost to factor in.

    I should add that travel insurance is VERY cheap and that covers lots of medical issues, plus ‘extraction’ from a country if needed. But when I was overseas and not feeling well, I’d just go into a pharmacy and ask the person there and walk out with whatever I needed. Less restrictions on prescriptions too.

    • Dave says

      The neighbors kid fall off his skateboard; broke his hand, ankle and disclocated his shoulder – 4 hour emergency room visit – $15,959.

    • says


      Man, sorry to hear about the horrible coverage you have at work there. Perhaps it might be worth it to see what you can get on the market?

      I never thought about travel insurance. Definitely something to consider. And your experience there in regards to cheap medicine that’s readily available is definitely a big benefit to living in different countries. That’s awesome, as long as you can self-diagnose properly and accurately. :)

      Best regards.

  13. says

    I didn’t see you mention Obamacare but the irony is that once you have no paycheck you might qualify for substantial subsidies. It’s actually a nice safety net for early retirees especially since you no longer have to worry about preexisting conditions.

    • says


      I wasn’t even thinking about subsidies, but another reader mentioned that. My thought on subsidies is that I’m not going to go out of my way to receive them, but if they’re there I won’t turn them down either. I’m trying my best to do this journey “au naturel”, if you will. But if help is given, I won’t turn it down.

      Thanks for adding that. Subsidies weren’t on my mind when I was thinking about healthcare costs in early retirement, but they could certainly make things easier.


  14. Ravi says

    KO jumped today on strong intl sales. Must feel good, huh?

    Then again, it’s not really a gain until they increase the dividend, but hopefully good earnings foreshadow continued dividend increases…

    • says


      I seen this pop coming eventually, especially since the yield was quite a bit over 3%. That doesn’t happen very often, and now the yield looks to be falling below 3% yet again.

      But like you said, it’s not really more money in my pocket until I’m collecting the increased dividend. And I was more than happy to receive the recently boosted dividend a couple weeks ago. :)

      Best wishes!

  15. says

    I think that paying $30 monthly for gym membership is too much. But if this encourage’s you to work out more often then its ok. I also had a gym membership back in days, but i realized that it’s cheaper to buy used “gym bike” from ebay or other similar, and pair of hand weights. Almost new gym bike cost me like €40 so around $50+ it was like only few years old i checked the model and it was retailed around €160 so big save there. And pair of hand weights witch changeable weight sizes costs also around €40 and these were new. Just running is also cheap way to exercise. You can do all the same moves in home that you can do in gym, some things of course varies.

    I think biggest plus for home exercise is that you can do it every time you just have that 30+ minutes of free time. And you don’t need to travel to gym and back, that can take time if you gym is not close by.

    30$ x 12 = 360$ year = 9 shares of Coca-Cola company 10 year’s saving for gym membership gives you 90 shares with a value of $3600 (calculated with $40 per share no compounding added :) )

    Just an opinion. but its true.

    • says


      I’ll be honest and admit I don’t like paying $30/month for a gym membership. I’ve tried before to work out at home and I’ve failed miserably. I’m just much better at getting a great workout in at a gym. I’ve always been that way. But I’m open to giving it another shot in the future to save the money.

      Although, I also look at the $30/month as really cheap health insurance, because the workouts, if at increased intensity and efficiency at a gym vs. home, should increase my overall health dramatically and reduce my healthcare expenditures pretty significantly over the long haul. I could also look at it as a small entertainment cost, because I get a lot of enjoyment out of working out.

      All depends on your perspective. The way I look at it is the gym membership requires me to invest about $10,000 to cover the membership costs on a run rate, based on a 3.5% yield across the portfolio. I’d certainly rather not have to save up $10k and just work out at home, so I may give this another try in the future.

      Thanks for adding that!


  16. Jon says

    Guess we’re fortunate here in the UK to have a socialised medical system. Not perfect my any means, but then which system is. I,m fortunate that I work from home, I spend 1 hour walking in the morning, 1 hour walk at lunch time, weights in the evening because I have no commute. Once I’m FI, I will probably spend half the day excercising. Having the time to keep fit is one of the big advantages of early retirement and it makes you feel great inside and out. Jon, from UK.

    • says


      Sounds like you’ve got a very nice situation going on there! No commute is a dream of mine; however, I’ve only got a 10 minute commute by car now. A tad far for a bike, but very short by car. I used to just take the bus and a scooter, but, unfortunately, I had to get a car a little while back.

      Congrats to you for taking your fitness and health so seriously. That’s fantastic. Keep up the great work!

      Best regards.

  17. Chuck says

    I love the premise of this website and in theory would love to do what you are doing. Unfortunately having a family with multiple kids makes retirement a lot harder. Even though I am tight with my $$$ and we live a frugal life, you can only shelter your kids from so much…thus it costs money. Would love to see this website with answers for families.

    • says


      I hear you. I don’t plan on having children; although, this was a decision I made a long time ago before I ever started this journey.

      I’ll try to address this topic at some point in the future. In the meanwhile, take comfort in knowing that it is indeed very possible. Although he only has one child, Pete from MMM and his wife retired at 30 with a kid. Something to think about!

      Thanks for stopping by.

      Best wishes.

  18. says

    Come to Canada! Healthcare is free so it won’t be a concern. But taxes might be… We can’t have the best of both world I guess. But if your income would be less than 20000$ you wouldn’t pay a lot of tax. And canadian dividends have a special tax treatment ( but not foreign dividends).

    • says


      There’s a lot to like about Canada. Personally, I’ve always wanted to visit Vancouver. Seems like a really beautiful city, but extremely expensive. Maybe one day I’ll make it up there!

      Take care.

  19. Ron says


    Great post once again. MMM had an excellent post where he laid out how the ACA has made it dirt cheap to acquire health insurance. Even when you retire on 18k of income, you will be getting subsidies to offset your premiums. On top of that, your co-pays and deductibles will be eligible due to your income. is a great website to get an idea about how much health care will cost you but not 100% accurate.

    Also, anyone who has an HSA option available through their insurance should read this article posted by ERE:

    Hope this is of use to any readers!

    Again, keep up the good work.

    • says


      Great points there. ACA has made all of this even easier for us that are seeking freedom from wage slavery.

      And I actually purchased my health insurance from ehealthinsurance, and described that process in the linked article that talks about my HDHP. It was super easy.

      And that’s a great article there from ERE. Love Jacob’s stuff.

      Best wishes!

  20. Ravi says

    Maybe this is my youth talking, but I don’t really plan to fight any serious illnesses. If exercise, sleep, and good nutrition can’t keep me healthy, then I suppose it’s my time to go.

    No sense in spending tens/hundreds of thousands on chemo or some other medical procedures that aren’t even proven to do anything but stress you out and pile you over your head in medical bills (even if you have decent insurance).

    My guess is that we will keep moving at this rate and insurance will cover less and less to the point where something has to give. Chicken and egg sort of problem with US healthcare where costs go up to cover for a large number of people that don’t pay, who then can’t afford to pay inflated bills, which increase further to account for more delinquencies, etc…

    Hopefully they will start limiting state funded healthcare to basic needs (blood work, vaccinations, pre/post-natal care, regular check ups, etc) and charge people like hell for expensive procedures. For some reason, our society is obsessed with treatment over prevention.

    We are okay with spending $100K to keep an elderly retiree on Medicare in the ICU, but unwilling to spend $100K to feed 100 impoverished kids for a year! Seems a little odd to me… (nothing against retirees, just trying to make a point)

    • says


      “For some reason, our society is obsessed with treatment over prevention.”

      Couldn’t agree more. I’ve said it before and I’ll say it again: I can’t remember the last time I had to wait in line to work out at the gym. Obesity is a national epidemic, yet our local gym never has a capacity issue. And for some reason, I just don’t think all of these people are working out at home. And while my diet could be more balanced, I’d be willing to bet that I’m in the top 10% of the population in terms of body fat %, cholesterol levels, blood pressure, stamina, overall health, etc. That’s because I work out religiously and stay physically active.

      An ounce of prevention is worth a pound of cure.

      Best regards.

  21. thaiguy says

    “I’ve also thought about living abroad much later in life anyhow, and if I were living in a country with much cheaper costs of living, like Thailand, for instance, I’d already be in a location where cheaper healthcare is readily available.”

    I did just that, retired early at 47 from a high-paying, high-stress government job after 25 years of full-time working. Sold my house at the peak of the real estate boom in the early 2000s with a sizable profit, and moved to Thailand with that, my government pension and future IRA and Roth earnings once I reach eligible age.

    Now in my mid 50s, I pay about $1500 a year for a local Liberty Mutual medical insurance policy that covers inpatient and outpatient with a $1,000 U.S. annual deductible, and total coverage capped at $156,000 per episode and $625,000 lifetime. The typical private hospital doctor visit here costs about $30 for the doctor’s fee and hospital facility and nursing charges. Treatment and medicines are extra, of course.

    The quality of medical facilities is OK, especially in the bigger cities, but the quality of doctors is, as everywhere, quite variable. Private hospital inpatient rates range from $125 to $400 per night inclusive of room, nursing and meals. My LMG policy has a hospital inpatient room benefit of up to $250 per night.

    It’s a decent life, especially in the capital city of Bangkok. But there are downsides. The country’s political situation is unstable, the courts and the police function in a pretty sorry way, and the best you can achieve is a one-year annual visa that the government could change the rules for at any future point. Environmental protections and food safety also are poor, and lots of products you take for granted in the U.S. simply aren’t available here or, if they are, they’re at much inflated import prices.

    All in all, though, a single person can get along quite decently on $2000 per month, and easily on $3000. My biggest single expense is the $500 a month I pay for a two-bedroom, two bathroom apartment in BKK.

    • says


      Hey, thanks for stopping by and sharing. I really appreciate that.

      Your story sounds really amazing. Retiring early at 47 and moving to Thailand. That’s a pretty crazy life! Good for you. :)

      I have a desire to at least visit Thailand one day, if not actually live there eventually. I’m not sure how cheap it will still be when I’m ready to live off of my passive income, but I’m hopeful I’ll have a chance at it.

      Enjoy Los! :)

      Take care.

  22. donebyforty says

    Good point about mobility, Jason. I’ve found that healthcare costs vary wildly even in different parts of the US. It’s dirt cheap here in AZ, with comparable plans being crazy expensive in the NY area. It’s going to be a major factor in determining where we move to next (along with property taxes). Costs like that often don’t figure into the analysis when deciding where to live…

    • says


      That’s a great point there in regards to healthcare costs in different states. I remember when I first started shopping for my HDHP I quoted out what it would be in Michigan, and it looked about the same. However, the quote and the finished product are often different, so I’m curious now if my health insurance will go up dramatically if/when I move. I’ll definitely have to take this into consideration, because I’m already a bit depressed at the thought of paying state income taxes again!

      And glad to hear things are cheap there in AZ. Plenty of sunshine, reasonable cost of living, and cheap health insurance. :)

      Take care!

  23. says

    I’d love to see a bit more rigurous analysis on the healthcare issue. You’ve mentioned the low monthly payment but have you calculated out what the costs would be if you actually used that insurance?

    When I scoped out the health insurance offerings my employer offered, I used a common risk management practice. I thought of possible medical scenarios in the next two-three years, ranging from catastrophic to best case, assigned probabilities to them as best I could, and estimated their total cost based on both the deductible, the copay (as well as plan maximums), AND the reimbursement rates for particular procedures. Then you multiply cost by probability and you have a sort of composite risk.

    Point is, in my situation, even the middle of the road forecasts had me saving ALOT of money through the employer healthcare plan with a higher premium vs anything out there with a low deductible tag, provided by my employer or otherwise. My risk assessment determined that even minor unexpected medical needs (fell and broke ankle, bronchitis, ANYTHING THAT REQUIRES MULTIPLE SPECIALIST VISITS) would max out my deductible, and that these scenarios where very likely. So I picked the higher premium plan with the lower deductible and the higher reimbursement rates.

    While this isn’t so much the case now with newer obamacare standards, many analyses on sites such as this don’t take into account the risk that healthcare will be used at a greater rate than in the past and simply look at monthly premiums. A fuller asessment would include not just your annual limit, but the reimbursement rates for stuff you are likely to need in the coming years, since you may have to make up the difference between the rate charged by providers and the reimbursement rates of the plan.

    • says


      I think, in the end, one has to be hopeful about their health. I take pretty good care of myself, and I’m in overall excellent condition. Is there a chance I break my leg tomorrow? Sure. But how low are those odds? I’d like to think quite low, and as such I’d rather keep my premiums as low as possible. I’ve probably visited the doctor four or five times in the last decade. Of course, there is some bias there based on what has already happened, but as a relatively young, healthy guy I’m confident this should continue for at least another decade. And as pointed out above, if that’s not the case I have some options.

      All of my victories and setbacks are published live on this blog, so we’ll see if my hopefulness is based in reality or not.


      • says

        You don’t buy insurance because you’re hopefull….

        All I’m saying is that your analysis is incomplete, since a plan’s premiun and annual out of pocket cost are not the only data points to consider. You may be less risk averse and thus are willing to self ensure, which is not in-and-of-itself a bad thing. Just don’t fool yourself into thinking that your maximun exposure is 12k.

        Anyways, you’re young so at least for now your strategy might pay off. Hopefully your family doesn’t have a history of heart disease, diabetus, or any of the other expensive diseases that drain your pocket book.

  24. says

    Actually $30/month for a gym is not bad at all. It’s actually on the frugal end of gym memberships. Many gyms charge between $40-100 depending on your package. I go to Blue Moon Fitness and they charge me $21.39/month with tax and that’s for their VIP membership. I live in Omaha, Ne so cost of living isn’t as high as in more populated cities.

    I signed up when they were having a special promotion and they were waiving most of their enrollment fee. I believe if I remember correctly I only paid $1.07 for my enrollment fee.

    • says


      Great point there. I think $30 is pretty attractive; however, if I could lower it even more I’d love to. I’ve seen some gyms like Planet Fitness moving to a $10/month per membership business model, which is really refreshing. Unfortunately, there aren’t any around me. I think at $10/month you can’t lose, assuming you’re not spending a lot of money on gas to get there.

      And great job spending less than $30/mo yourself. That’s a pretty attractive price point, in my view.


  25. says

    You may not have to wait until retirement to find out if the ACA makes things ‘even easier’. The employer mandate kicks in soon enough. My suspicion is many top 500 companies in the USA will soon–within the next few years–start kicking their employees onto the exchanges as a cost saving measure…the result will be a huge boon to their bottom lines when you consider how much they will save on employee benefit costs…at any rate, I believe we are headed for national health care very soon so that will be a boon to everyone who wants to retire early…and this is coming from someone who hates the idea of nationalized medicine, I just think its inevitable and would actually be an improvement over the ACA.

    • says


      Hard to say what’s going to happen. Nationalized medicine would indeed be great for someone like me, as the taxation would likely not be commensurate with the benefits once I’m no longer exposed to high tax rates through the 9-5 income.

      I’m paying an attractive rate right now, but I’m definitely going to look into exactly how cheap I can get it once I’m FI.

      We’ll see how things play out. The great thing about becoming financially independent is that one can be more flexible in response to all possible outcomes.


  26. Chad says

    “One fantastic aspect about being financially independent is that you’re also geographically independent. Once I no longer need to commute to work, clock in, and physically exert myself while exchanging my limited, dwindling time here on Earth for a paycheck, I can theoretically live and play wherever I want. My plan to live off of dividend income means I can collect dividends from high-quality companies like The Coca-Cola Company (KO) and Chevron Corporation (CVX) from anywhere in the world. It matters not if I’m living in the US or Ecuador; the dividends will still roll in and I can still spend them as I see fit.”

    You see the light my friend. As Dan Miller says, Time is the only resource you can never recapture….

    • says


      Thanks for adding that.

      Time is indeed the most valuable commodity of all, because once it’s gone it’s gone for good. Money can always be earned in some fashion; time cannot. They always say time is money, but they are far from a 1:1 ratio.


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