The One Mandatory Cost in Retirement

In March 2017, the Northeast was hit with a snowstorm. There were blizzard conditions in some locations north and west of New York City. I called my parents to see how they were doing (they live in one of the New York City boroughs).

My dad told me their hot water heater died. It was one day shy of 15 years of service, which is great for a unit that was only under warranty for 10 years. My dad wasn’t complaining after the loss, so to speak, other than it occurred in a snowstorm.

He wasn’t fully up to speed with the new hot water regulations. Neither one of us realized The U.S. Department of Energy instituted new regulations, effective April 16, 2015. The new mandates require higher energy factor (EF) ratings on virtually all residential gas, electric, oil and tank-less water heaters. They also require new safety features. You can research this online; even Consumer Reports had a nice write up on it.

Calling around, my dad was receiving quotes in the range of $1,100 to $1,300. That included the tank, installation and removal of the old one. Wow. I remember helping my father years ago with a tank installation. They were much less expensive to buy and the installation cost was minor. Several tank replacements ago, my grandfather and my father installed one themselves. But it’s 2017 and the regulations are regulations.

What could possibly be so dangerous to make it necessary for our benevolent government to save us from the hot water heater monsters? I get the energy factor improvements. Who wants to pay more for energy? But why not just do it the way other efficient products are sold—put them on the shelf or in the showroom near the less efficient ones and let the consumer decide. For years, we've purchased air conditioners, washers, dryers and refrigerators that way. Auto manufacturers love to toot their horns about fuel economy.

Supposedly one of the reasons for the new regulations, besides the efficiency ratings, is your hot water heater may turn into a guided missile. Yes, it’s true. The same unit in your home that heats water for your laundry, dishwasher, shower, bath, etc., can kill you!  This occurs when pressure builds up inside the heater. No wonder some thought there ought to be a law.

Yes, it’s true. The internet is full of anecdotal evidence of the scary hot water heaters harming us—pictures and videos too. Google it if you don’t believe me. Yet, I could not find a tally of how many people die each year when hot water heaters go rogue. Remember we have 300-plus million people in America, so this must happen every day.

Healthcare Is a Bigger Concern Than Water Heaters

This whole situation got me thinking about regulations and our health. As my fingers type these words, we are debating what to do with Obamacare. We are still in denial about the mandatory health costs in retirement. Well, maybe not those who are retired and paying the costs, or those who saw their Social Security checks fall because their Medicare premiums went up. They are seeing their income lower than what they expected.

Why isn’t government concerned with the guided missile that will torpedo our planned way of life in retirement? Apparently, if the government is not interested, neither are most financial advisors. Don’t believe me? Ask your advisors if they can name the one mandatory cost in retirement. Ask them what have they done to keep your Medicare costs down. Do they know how maximize the tools the regulations allow for you to keep your health costs down (possibly taxes, too)?

If the answers to the above are no, then we have a serious problem. The small chance of the guided missile hot water heater is more important than our health costs. Those health cost are going to affect almost all of us who retire and want our Social Security checks. They are going to affect all of us who want to see a doctor when we are retired. Priorities.

(For more from this author, see: Your Wants vs. Needs in Retirement.)