Scott Adams' BlogHealth Math
Here’s a little math problem. Let’s see who can solve it first. The question is this: How much money would you need to give to a 21-year old today, in a lump sum, so he can invest it and pay for his lifetime of healthcare?
Your assumptions are as follows:
- Life expectancy: 85
- Health insurance currently costs $6,000 per year
- Healthcare costs rise 10% per year
- Investment income averages 4% per year after taxes
- You can spend your principle too, so you have zero left at death
Feel free to add any assumptions I left out, except for assuming a higher investment return. You would invest your healthcare money in something safe, such as municipal bonds.
