Goldman Sachs Asks in Biotech Research Report: 'Is Curing Patients a Sustainable Business Model?'

[Greg Sacramento]

CNBC - Fidelity Investments ----- Refers to those that live in the USA.
Fidelity Investments estimates that a HEALTHY 65 year-old couple retiring this year will need $280,000 to cover their health-care costs in retirement.

BUT the figures do NOT include other health expenses such as over-the-counter medications, most DENTAL expenses (which can be high for someone over 65.) AND LONGTERM CARE - Home services or nursing home -$60,000 to $100,000 a year for one person. Fidelity's calculations include premiums, cost sharing provisions and out-of-pocket costs associated with Medicare parts A,B and D.

 

[Bill Bauer]

Fidelity Investments estimates that a HEALTHY 65 year-old couple retiring this year will need $280,000 to cover their health-care costs in retirement.

The government pays for many of these costs in Canada. But you have lower taxes in the U.S. If, throughout one's career, one were to save the extra cash Americans get compared to Canadians, surely one would have no problems covering those expenses. People eat at restaurants every week (or even every day) and then they are surprised when they don't have any savings.

Assuming 0% interest rate, and a 40-year career, the couple needs to save $7000 per year (280000/40 = 7000). That's $3,500 per person or about $300 per month per person.

In the past 40 years, the stock market has been growing at the annual rate of 4%, adjusted for inflation (Dow Jones in 1988 was $2000, in 2018 it was $25000, so 25000 = 2000exp(40*r), r = 6.3%.
According to
https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm
the consumer price index was 100 in 1980s and 250 in 2018. 250 = 100exp(40*i), the rate of inflation i = 2.3%, which is similar to what one could get by investing into riskless assets.)

So assuming that one splits one's savings evenly between the stock market and the riskless asset (and ignoring the incredibly high rates one would get if one were to invest into real estate), one would earn (6.3 - 2.3)/2 = 2% after inflation. According to
https://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx
the couple would need to save $400 per month (or $200 per person per month) to save more than $280,000 in 40 years if they earn a return of 2% per year on their investments.

In any case, the lesson is: Don't be the grasshopper. Be the ant.

 

[Greg Sacramento]

The government pays for many of these costs in Canada. But you have lower taxes in the U.S.

https://www.investopedia.com/financ...ans-really-pay-more-taxes-than-americans.aspx

Local
Add on State Income Taxes - California $40,250 wage is 8.00 percent -- $50,000 is 9.30 percent
California sales tax 7.25 percent
Social Security tax 7.65 per cent
Real Estate tax $2,839.00 0n average home worth $384,200.
County taxes - 10 taxes for services and education in total $4,000 a year
The cost of living indexes to the rate of inflation for the middle class wage earner for the last 50 years - sad.
Healthcare costs and premiums.
Excise taxes, auto taxes, auto insurance, home insurance, fire and earthquake insurance.

http://theeconomiccollapseblog.com/...ss-families-have-been-targeted-for-extinction
http://www.pewsocialtrends.org/2016...se-look-at-changes-within-metropolitan-areas/

 

[Greg Sacramento]

continued... You have mentioned that you live with your mother, but I don't know how that plays on your finances.
You also have said that you are not married and intend not to do so. You have no children to support and you made that very clear. You told me by mail that you once lost a considerable amount in the stock market and you intend to stay clear of financial investments. What would happen if you became truly disabled? What would happen if you also had a wife and children where any family member unfortunately became disabled? You also told another person today that they should quit their job because of tinnitus. It's not that easy when one has children to support.

This will be my last post on this subject - I don't want to debate as you have debated others. My point to you by PM was that a million dollars in the bank at 65 years of age may not be enough to pay for medical or nursing home expense. This is often mentioned by analysts. I had mentioned to you by PM that 38% of older Americans can't afford to live in a nursery home for just the first couple of years, never mind longer term.

 

[Red]

The government pays for many of these costs in Canada. But you have lower taxes in the U.S. If, throughout one's career, one were to save the extra cash Americans get compared to Canadians, surely one would have no problems covering those expenses. People eat at restaurants every week (or even every day) and then they are surprised when they don't have any savings.

Assuming 0% interest rate, and a 40-year career, the couple needs to save $7000 per year (280000/40 = 7000). That's $3,500 per person or about $300 per month per person.

In the past 40 years, the stock market has been growing at the annual rate of 4%, adjusted for inflation (Dow Jones in 1988 was $2000, in 2018 it was $25000, so 25000 = 2000exp(40*r), r = 6.3%.
According to
https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm
the consumer price index was 100 in 1980s and 250 in 2018. 250 = 100exp(40*i), the rate of inflation i = 2.3%, which is similar to what one could get by investing into riskless assets.)

So assuming that one splits one's savings evenly between the stock market and the riskless asset (and ignoring the incredibly high rates one would get if one were to invest into real estate), one would earn (6.3 - 2.3)/2 = 2% after inflation. According to
https://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx
the couple would need to save $400 per month (or $200 per person per month) to save more than $280,000 in 40 years if they earn a return of 2% per year on their investments.

In any case, the lesson is: Don't be the grasshopper. Be the ant.

I feel like this proves Greg's point, if anything. It's no big deal to catch up to Canada and their taxes, you only have to free up 300$ of your budget a month.

 

[GregCA]

I feel like this proves Greg's point, if anything. It's no big deal to catch up to Canada and their taxes, you only have to free up 300$ of your budget a month.

Apparently, that's not a possibility for a large majority of workers: https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html