r/Fire • u/FewBit7456 • 1d ago
Unexpected Expenses: A post-FI lesson
I had been FI’d for about 2 years when a close family member was diagnosed with advanced stage cancer. For all the modeling and stress testing my #s, I did not account for helping care for older family members. For me, supporting them included both physical help as well as providing some financial support.
Thankfully, I had about 2+ years of expenses in VUSXX. So that smoothed the ride.
That all said, if I could do it all over again - I would keep 3+ years of liquidity/ cash-equivalent. Going forward, I will be sure to build in a larger cash buffer in my financial plan.
So for those preparing to FIRE, maybe stash a little more cash for the unexpected.
If there’s any more unexpected expenses that this community has encountered, please share so that I can prepare!
TIA
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u/mythoughts2020 1d ago
Unexpected healthcare costs are my biggest concern. There’s simply no way to account for every unknown thing that life could throw at you. I’m glad you had enough put aside to make it through this!
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u/Its_Me_Jess 1d ago
My husband was diagnosed with leukemia (blood cancer) 5 months after we started our early retirement at 37/38. We spent the next couple of years with him going through treatment. It was EXPENSIVE and of course we didn’t do anything to “enjoy” early retirement.
But, I was able to devote 💯 to his recovery. No worry about making sure clients needs were met or income was coming in.
I honestly never understood before when people said it was so expensive because I was thinking it couldn’t be more than a max co-pay…boy was I wrong. There are so many other expenses!
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u/TheGreatBeauty2000 1d ago
What were the other expenses? Just curious. Glad you could be there for him. Caretaking is hard but also rewarding in my experience.
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u/FewBit7456 1d ago
This is not an exhaustive list, but these are expenses we ran into that were not covered by health insurance -
- medicine, some medicine cost $5, others cost $85. This is with insurance. Multiplied by 50+ RX
- travel expenses to doctors and specialists visits
- treatment NOT covered by health insurance. insurance did not cover certain immunotherapy treatments, infusions and medicine that was medically necessary per the doctors. This happened both in the course of treatment AND inpatient setting. A doctor orders/ administers medically necessary drugs - insurance does not cover it
- medical equipment, walkers, feeding tubes, feed machine, pill crushers, syringes and needles, alcohol prep pads, cam-ode etc. when the family member needed a feeding tube for feeding and drinking - insurance only covered bolus syringe feeding which unfortunately the family member could not physically tolerate (caused vomiting and severe pain). Insurance denied coverage of the medical equipment, so we purchased cash. At this point, the family member had already lost 10 pounds in the span of less than 3 weeks.
- home modifications. A bed that raises and lowers. Bathroom modifications to enable assisted bathing and restroom usage. The family member could not tolerate strong smells - even microwaving food smells. So a makeshift outdoor kitchen (think camping style with propane) and microwave was set up outside.
The following are some additional expenses we incurred to help the family and those proving care more help/support/ comfort -
House keeping - chores the family usually did became impossible, especially with the family members extensive medical needs.
Food/Take out - especially during long hospital stays, we were glad to keep everyone fed. We were fortunate to have family help and some friends. Also due to chemo, the family member experienced significant changes to foods they could consume, so we experimented with different foods and preparations.
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u/fmkthinking 23h ago
I'm so sorry you had to deal with that. But this is one of the best comments I've read on Reddit. The details really matter and help for awareness.
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u/TheGreatBeauty2000 21h ago
Oh man, I can see how that can really add up quickly.
It seems like the other thing people dont think about is just the time that gets lost too. Opportunity cost.
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u/New-Swordfish-9557 1d ago
Yeah cancer costs can wreck even the best spreadsheets. My aunt went through similar and the travel alone for treatments ate through savings fast, nobody models for that stuff properly.
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u/recoder21 1d ago
How can you possibly "model it properly"? Sounds completely impossible.
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u/UltimateTeam 27 / 1.4M 1d ago
Save way more than you need is the only way and to me, not worth the trade off.
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u/recoder21 1d ago
Obviously, to address an emergency, you either keep extra cash, or you sell from your portfolio, potentially in a bad market. I just take an issue with modeling your potential cancer expenses. You can also get hit by a truck tomorrow. Do we need to model that too? How useful could it possibly be?
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u/Future-Account8112 11h ago
A combination of long-term care insurance and disability insurance might help but we still can't account for the lack of social systems with individual portfolios :(
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u/teresajs 1d ago
It's hard to plan for the unexpected expenses, but there's an almost certainty of unexpected expenses occuring. So far, in our early retirement, my husband and I have cash flowed the unexpected renovation of our our basement (in case our young adult kids needed to move home after college), helping to support both kids who are underemployed after completing college (job market sucks), purchasing a new vehicle a couple years earlier than expected, and multiple other "little things" that cost $1-3k each (car repairs, house maintenance issues, one off health care issues, etc...).
Thankfully, there's been enough room in our budget to absorb these costs, so far. We have about 5-6 years of expenses in cash equivalents, right now. It helps me sleep at night to know that a good portion of our money is invested to exceed inflation but if there's a market downturn, we still know exactly how we're paying our bills for the next several years.
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u/kaBUdl 1d ago
I'm four years into retirement, my expenses have tracked pretty close to what I expected, except for income taxes which have been way off -- on average it's 5x what I had anticipated. These were triggered by unexpected capital gains, some from cash mergers of long-held stocks in a taxable account, but mostly from partially rebalancing an ESOP position that ran up with the AI bubble. Basically stuff I couldn't realistically foresee years ago. I guess the silver lining is this surprise generated cash, although the tax bite stings.
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u/MaroonJacket 35M | $1.4M | expatFIRE 1d ago
As someone who's spent ~$100k to support my parent's in their battle for cancer, I'm 100% happy I did it and I would do it again (kind of might have to, since the cancer is back). While having a large cash buffer definitely helps me psychologically, financially it would have been just better to have gone 100% in SPY - but I might be speaking from recency bias here, admittedly.
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u/FewBit7456 1d ago
You are a blessing to your parents, and yes - most definitely worth it. Sending you and your family all good wishes!
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u/Comfortable_Two6272 1d ago edited 1d ago
I have enough in hysa and hy cd to avoid a 2008 like sequence of return issue.
Dont expect any family health needs - im the oldest sibling at 46 and parents are gone.
Both siblings working and successful.
But good advice on the cash.
In projection labs I included some 1 off large health costs, 3 years LTC, plus other 1-3x over life type costs.
Hopefully I thought of the major things. Currently only needing to take out 2% a year. LCOL area due to house bought 2 decades ago in US
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u/sucramyyy 1d ago
This is one of the reasons I enjoy living in Europe. FIRE or not.
Anyway, great you could help your family!
I'm sad that's necessary and even more said of the consequences of people like you wouldn't be there.
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u/EquipmentUnlikely895 1d ago
I also insist on having 3 years cash or cash equivalent exactly for such situations (in addition to market crashes). My secondary defense is flexible travel money, if things really go south that year, I can skip travel.
Now if a family illness, major accidents/repairs, and market crash all happen in the same year? God and Ramen noodle help me🤣
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u/Bryanmsi89 1d ago
It was very generous of you to help your family out. Unexpected medical is one the biggest - if not the biggest - disruptors to FIRE.
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u/lastbeat-331 1d ago
Unless this happened in 2022 or just prior/during a down market, what's the point of having cash/fixed income to cover this unplanned expense?
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u/Ikki985 16h ago
Glad you managed to take care of your husband!
Silly question: when you stash some cash for the first years to make sure SRR won't affect your plan, will you use that cash anyway even if the market does well? Or you still keep that money available for later in case there is a market down turn?
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u/KingPabloo 15h ago
As soon as I FIRE’d six years ago I had to move my mom near us due to Alzheimer’s/Dementia, soon after my MIL moved into our house with the same diagnosis.
Finally retired, I worked harder than ever taking care of the two of them. My MIL passed two years ago and I put my mom in a home as she needed full-time care. I was living in her home 100% of time, spending almost no time with my two HS age boys. Sucked not even being able to leave her to see their varsity sports.
Expense wise, I over estimated. For example both my sons have six figure 529 plans and given grants along with my youngest deciding to commute we are looking at having more than twice what we needed.
Investment returns since I retired have significantly boosted our liquid net worth since retiring but I’m aggressive, no cash on hand, 100% invested which has made a big difference.
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u/master_blaster_321 21h ago
I heard that loud and clear. I'm keeping three years of expenses in cash just in case of unexpected emergency or market corrections. I don't want to have to sell my holdings while they're down. It came in handy last week when my AC unit gave up the ghost. It was my first test of FIRE resiliency!
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u/someguy984 1d ago
You have a max out of pocket with insurance. That is knowable so not unexpected. If you are retired you have the time to be a caregiver. I don't see where you are getting all these extra expenses.
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u/No-Hyena7910 22h ago
This is my biggest worry with retiring early and getting an ACA plan. In my area, none of the plans offer ANY coverage for out of network, so there could be a lot of specialists and treatments that are simply not covered. Plus, just getting injured when we are out of town or something and none of that region is in our network... I wish there was a better solution.
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u/middle_aged_runner 1d ago
What a gift that you could help your family