Various crossovers

[tetrimbath]

I'm familiar with crossover from many arenas, one of the most prominent being from the Nine-Step program. Once upon a time I reached it, but every crossover point is based on assumptions and best guesses. I blogged about the financial side and some other aspects. Rather than dump over a thousand words here, I'll just provide a link.

http://trimbathcreative.wordpress.com/2012/12/22/crossover-into-a-new-world/


Crossover points sound like they are obvious events; but,
"At the moment of the crossover point, there is little confidence. Eagerness and anxiety are in balance as well. Optimism and pessimism can see both futures."

[Tammy]

I like his ideas ... How he applies it to many scenarios.

[Lainey]

Interesting, will have to ponder this. It seems like most people are juggling so many balls in their air - work, or family, or finances, or hobbies, etc. - that we don't stop to think that we may have actually reached a goal or two.

I think Americans are culturally trained to keep striving and not rest on our accomplishments, so a crossover point is just a signal to get another goal and keep going.

[Yossarian]

Part of it is the unknowns too. You might have enough for foreseeable expenses but I guess I still worry about the unknowns. And then there is giving; even if I have enough for me I'd like to be able to help my kids with college expenses and weddings and whatnot. So even when I think I have enough for living expenses for me it's not the end of the road, just going past a milestone.

[rosarugosa]

How does one factor medical insurance costs into the crossover concept? Essential, enormous, unpredictable. You can't really self-insure unless you're Gates or Buffett, because a serious illness could wipe out even a multi-millionaire, which most of us are not. My employer provides medical insurance to retirees, with the retiree paying a percentage of the premium, but a percentage of how large of a number? It just keeps growing. And although the company philosophy/values are consistent with continuing to provide this benefit, it may change at some point because if nobody else is doing it, it becomes harder to provide Cadillac benefits and remain competitive.

[tetrimbath]

I wish there were easy numbers to pass along. This is one of the greater unknowns. I've watched my premiums double in five years, and only keep the coverage in case of catastrophic events. Even without a major illness, health care costs are hard to estimate.
I think you answered your own question somewhat by acknowledging that there is no way to really self-insure, and no way to really know how your health or accidents will play out in the future.
On the numbers side: For monthly costs, I know my insurance company provides charts of premiums by age. That's probably your best resource for data. Make your own guess about adjusting for health care inflation. For lifetime costs, I recognized that it might be necessary to use savings in an emergency; and then have to rebuild. That's the unfortunate circumstance I am in now, though not from health care. How big does that reserve have to be? There are no perfect numbers. $250,000?
Crossover is not a guarantee and isn't necessarily permanent. I've worked through some scenarios to see what an absolute guarantee would look like. It involves so many diversifications in financial instruments and accounting for various tax structures that it quickly became ridiculous, and obviously involved massive wealth. Absolutes are abstract, not real. A real crossover is a reasonable approximation, nothing else; yet, that is powerful. (Hi. Thanks for letting me remind myself of this. And now I don't know if I answered your question.)
Oh yeah, I've become a fan of a simple way to avoid dipping into those reserves. Live healthy. My health care costs went down as I ran more and ate better, even at the cost of fancy shoes and organic food.

[Gardenarian]

Great blog post. I am at that crossover point, but several health crises in the last year keep me working. I do everything I'm supposed to for health (I'm fit, exercise lots, try to eat right, etc.) but it's a throw of the dice. Theoretically FI but it seems that could change.
There is a lot more than numbers at work here - especially when you have children...