What’s the value of a tooth? In the 1950s, when I was losing my first tooth, the going rate for the tooth fairy was 25 cents. My wife confirms she had the same experience, even though she grew up in Florida, while I grew up in Pennsylvania. Alas, inflation seems to have impacted everyone, including the tooth fairy. Serena Ng, writing for The Wall Street Journal, tells us what the tooth fairy is paying today.

“When her daughter was about to lose her first baby tooth, Kokoa Lawson went to work researching ideas. She wanted to make the tooth fairy experience magical and extra special for her only child. She gave her daughter a $100 bill decorated with glitter and tiny removable rhinestones. “She kind of lost her mind when she found it,” says Lawson, who lives in Temecula, Calif.”

But some cousins were jealous about the tooth-fairy haul and Lawson says she “did get a little pushback from friends.” “I simply said, ‘This is just what our tooth fairy does,’ and suggested they make it special in their own way for their kiddos,” says Lawson, 40, who works as a model and actress. Her outlay dropped to $20 for subsequent teeth.

The tooth fairy is getting more generous and creative worldwide—and parents are learning how tricky that can be. Parents already were going big for birthday parties and college acceptances, but now they are increasingly making a splash for smaller milestones, too. Pinterest, the online platform for sharing ideas, calls the phenomenon “inchstones” and has declared it a top predicted trend for 2024.

Global Pinterest searches were up for “potty-training rewards ideas” (100%), “end-of-year school party ideas” (90%), and “my first tooth party” (40%) between September 2021 and August 2023.

A poll last year by Delta Dental, a large U.S. provider of benefits, pegged the average payout per lost tooth at a record $6.23, from $5.36 in 2022. It isn’t just inflation delivering a bite. The same poll found 20% of children now receive both money and something else—often a gift—for each lost tooth.

 “Cash, a videogame, sometimes an iPhone,” says Mark Burhenne, a former practicing dentist who runs AsktheDentist.com. “It’s the parents competing” to improve the gifts, adds Burhenne, 64, who lives in Napa Valley, Calif. (His 35-year-old daughter Catharine Burhenne, who co-founded the website, says she is bucking the “generous gifting” tooth-fairy trend. She recently enlisted ChatGPT late one night to write a note from the tooth fairy.)

In the U.K. Chidera Nig, 32, says the tooth fairy gave her daughter 60 British pounds, equivalent to $76.50, a letter and a silver fairy necklace, along with a Louis Vuitton bracelet. Nig says her husband purchased the bracelet on the day their daughter was born, and it felt like the right time to give it to her. “That was her first baby tooth that she lost, and the process was uncomfortable for her, so we decided to give her the extra tooth fairy experience,” says Nig, a content creator. The money went into a piggy bank. “Childhood goes by so fast and we believe in cherishing every moment, celebrating milestones and creating long-lasting memories.”

Anuradha Singh, 51, a lawyer, asked her husband to take over her tooth fairy duties while she was traveling from their home, then in Hong Kong. Lacking change and not knowing the going rate for baby teeth, he left the equivalent of $64 under their child’s pillow, Singh says, adding: “It was an utter failure by the deputy tooth fairy.” She says she tried to claw the money back, but her daughter, then seven, resisted.

One problem—kids talk and compare.

In Cheshire, England, before five-year-old Rae lost her first tooth last autumn, she wrote to the tooth fairy, requesting a gift for herself, and something for her little sister. On the big night, she received three British pound coins, and two chocolate coins to share with her sister. On the way to school the next morning, Rae ecstatically told everyone she met what the tooth fairy had brought.

“I didn’t think about how that would unfold,” says Natasha Evans, Rae’s mother. “The others were like, hang on—the tooth fairy didn’t bring us chocolate coins!” Some children said they received only one pound, and one said they got a five-pound note. The other parents looked uncomfortable. Evans, who is 35 and manages a post-sales team at a software company, had to explain to each child and parent how the tooth fairy delivered chocolate because Rae had asked for something for her sister. “I said the tooth fairy normally doesn’t do that, and the next time she won’t do that,” says Evans, adding that she plans to stick to just money going forward.

To put this all in perspective, I did a little research. One dollar in 1950 is worth $13 today. That means the 25 cents I received from the toothy fairy in the 50s is worth $3.25 today. Inflation is affecting everyone, but it seems the tooth fairy has gone way beyond the real inflation rate. I’ve said it before and I’ll say it again – some people just have too much money and too much time on their hands!

In Part I of this series, we discussed options for healthcare insurance coverage for those who choose to retire before age 65 when people qualify for Medicare coverage. We discussed the first two of four options mentioned in an article by Gail Marks Jarvis published in The Wall Street Journal.

The first two options were Employer coverage and ACA (ObamaCare) coverage. Today we’ll discuss two more options; Private coverage and Last Resort options.

Private Coverage

Early retirees who don’t qualify for a subsidy can still buy private insurance through the ACA marketplace, and it is smart to do so even though it will cost full price and is likely more expensive than non-ACA private insurance, says St. Petersburg, Fla., insurance agent Peter Motzenbecker.

That is because there are few private plans available anymore outside the ACA system, and those that remain often don’t have the pre-existing condition coverage provisions that ACA plans do. In other words: ACA plans don’t screen people for their health before insuring them. And whenever people are insured through the ACA marketplace, they will be covered even if an illness stems from a past condition. Private plans frequently deny coverage if they determine a person’s malady stemmed from a condition that existed before they bought insurance.

The denial-of-care risk also applies to private plans that last for only a few months, says Christine Simone, chief executive of Caribou, a firm that helps financial planners compare health plans. Such plans are called “short-term” or “skinny” policies, and people sometimes buy them when they lose a job and need insurance for just a few months before taking a new job or going on Medicare.

Short-term plans are far less expensive than Cobra coverage as a stopgap for someone who leaves the workforce unexpectedly, Simone says, but she calls them “a gamble.” Although you have to pass a health screening to qualify for a short-term plan, a provider could refuse coverage for a condition by deeming it pre-existing.

Depending on the short-term plan, there can also be caps on coverage, such as $1,000 for a hospital stay. That can leave an individual short of what will be needed if, for example, he or she has a heart attack and has to be hospitalized at a cost that can easily be in the tens of thousands of dollars.

“It’s a misconception that private insurance outside the [ACA] exchange is better,” says Chumbley Hogue, the Dallas health-insurance agent.

Last Resorts

Another route to reduce coverage costs for those who have lost their job for health reasons could be through a Social Security disability designation. Such a designation would allow a person to get Medicare coverage before age 65, but Chumbley Hogue warns that the process can take months and Medicare often doesn’t start until 24 months after a person is deemed disabled.

One other alternative advisers suggest is to find work at a business that provides health insurance to part-time workers. Such companies include Starbucks and Trader Joe’s, according to career website Indeed.com. Given employers’ typical contributions to health insurance, an individual working part time for a large company might have to pay about $119 a month for health insurance, according to Kaiser Family Foundation Vice President Cynthia Cox.

All of this information should make you think twice before retiring before age 65. Your health is critical to the enjoyment of your retirement, so don’t take it for granted. Make sure you know in advance where you’re going to get your healthcare insurance and what it will cost. That’s a crucial part of your retirement plan.

All of this information should make you think twice before retiring before age 65. Your health is critical to the enjoyment of your retirement, so don’t take it for granted. Make sure you know in advance where you’re going to get your healthcare insurance and what it will cost. That’s a crucial part of your retirement plan.

More and more people are retiring before age 65, which creates certain problems for healthcare insurance coverage. Most retirees can count on Medicare to pick up most of the tab for their retirement healthcare, but what if you’re too young to qualify?

Gail Marks Jarvis, writing for The Wall Street Journal, offers us a reality check. “For a couple, premiums for coverage can run from $1,700 to $2,200 a month depending on where they live, their age and the source of the insurance. And besides premiums, there are deductibles, copays and prescriptions and coinsurance costs—potentially adding thousands of dollars more in extra costs. The upshot: Leaving work just four years before starting Medicare at age 65 can easily drain $100,000 or more from retirement savings.”

What’s more, some insurance options have a limited local network and might not include preferred doctors or allow participants to see a specialist without a referral. And many don’t cover expenses incurred out of state unless it is an emergency, a potential deal breaker for a retiree who wants to spend winters in a warmer climate.

 It’s easy to think you’ll have the same quality healthcare insurance coverage after you retire, but such is often not the case. Planning is needed to address this important issue before your last day of work. What are some options to consider?

Options

• Employer coverage
• ACA coverage
• Private coverage
• Last resorts

Employer Coverage

The cheapest option for a couple is to stagger retirements and have one keep working so both can rely on a workplace plan until Medicare becomes an option at 65. Workplace plans tend to be subsidized, with the employer paying about 83% of the cost of coverage for the employee on average, according to the Kaiser Family Foundation. For family coverage, the employee must pick up an additional share of the expense.

But that approach isn’t always feasible if you’re single or if neither partner wants to delay retirement. So another way to stay on a workplace plan and stay retired is through so-called Cobra coverage, which allows workers at many companies the right to continue health benefits for as many as 18 months if they leave their job under certain circumstances such as voluntary or involuntary job loss, reduction in hours worked or other life events.

Cobra coverage will cost more than if you are employed, with many employers requiring such plan participants to pay full fare, plus a 2% administration fee. However, the Cobra option will allow you to keep your preferred doctors as you consider what to do next. The average Cobra premium for a family recently ran about $25,000 a year, including the 2% fee, according to the Kaiser Family Foundation. That compares with an average of $6,775 a year the employee was accustomed to paying through paycheck deductions.

ACA Coverage

While using Cobra may be a good stopgap, moving to insurance through the Affordable Care Act marketplace is usually far less expensive because most people qualify for subsidies thanks to recent regulatory changes by the Biden administration to guide more people onto the program. Even people with more than $200,000 in income qualify in some parts of the country, and income typically plunges after leaving a job.

The ACA program includes four tiers of coverage: platinum, gold, silver and bronze. The bronze plans have the lowest premiums, silver next, then gold and platinum. Financial planners sometimes say silver is the best value, but that isn’t always the case once all potential out-of-pocket costs are compared, says Chumbley Hogue. Subsidies can be examined with the Kaiser Health Insurance Marketplace Calculator.

 Nationally, the average 63-year-old couple with a $150,000 income would get a $13,689 subsidy to significantly reduce the $26,439 premium on a silver plan. Subsidies vary by location and income. A family of four with an income up to $45,000 wouldn’t have to pay a premium for a silver plan. In New York City, a 63-year-old couple with an income of $250,000 could qualify for a small subsidy to reduce their premium.

Beyond cost considerations, ACA plans are more user-friendly than other private options because they won’t disallow coverage based on pre-existing conditions and can’t deny coverage or boot policyholders if they become sick after buying the insurance. Still, retirees who choose this route aren’t home-free after paying premiums. The plans have deductibles and other requirements like copays and coinsurance for doctors, hospitals and prescriptions. Furthermore, you may not have access to the best doctors and hospitals who don’t participate in the ACA program.

(Note: More on options to consider next post.)