Navigating Retirement After the Death of a Spouse

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.

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. Now he draws on his experience to write about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. You can reach him at chris@caniretireyet.com.]

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