plonkee money an english-er's thoughts on personal finance

July 25, 2008

planning for the worst

Filed under: philosophical — Tags: , — plonkee @ 12:00 pm

Good news is in.

With access to the right drugs, HIV has become a manageable chronic illness rather than a fatal disease. It’s kind of like Type I Diabetes now, although if you stop taking insulin you’ll die much more quickly – if you stop taking HIV medication then there’s a variable amount of time before you develop Aids, after which you’ve probably got 9 to 12 months.

As with diabetes there can be serious complications, in the case of HIV these can be from the effects of the virus itself, and the side-effects of the anti-retrovirals required to keep it at bay. But treatment has added 13 years to average life expectancies of HIV+ people already, without treatment 10 years after the point of infection was your expected lifespan.

cost of treatment

In addition to increasing life expectancy, the cost of treating HIV+ patients has also been revised upwards. It’s been estimated at $618k over a lifetime, which sounds like a lot of money to me, but apparently it’s about the same as the lifetime cost of treating heart disease. In the UK, treatment for HIV is free on the NHS to legal residents (no prescription charges), which is good because even with standard costs, all those drugs would work out expensive.

planning for a brighter future

I’m sure you’re all pleased about this, but what does it have to do with personal finance?

Well, I’m sure you remember that diagnosis of HIV+ status used to be a death sentence. If you know you’ve only got a few years to live, you plan things differently. And just like every cloud has a silver lining, I’m convinced that every piece of great news has it’s own downsides. The downside of realising that your life expectancy has seriously increased is that it means that you’ve got a future – one which will require money. You’ll have to plan for retirement after all.

I’m a firm believer in expecting the best, but planning for the worst, the implications of this are often counter-intuitive. If you have a reduced life expectancy then you should plan for the worst – which is that you’ll die early, but on the other hand as far as your finances are concerned the worst case is actually that you live longer than expected and run out of money.

For people struggling with infertility who decide to go for IVF treatment, the worst outcome personally is probably that they spend thousands on cycles and still end up without a successful pregnancy. But, as far as budgeting goes, the worst (most expensive) outcome is that you spend thousands on cycles and end up with a successful pregnancy with twins or more. Because they are expensive. Really expensive.

You may as well set some money aside to prepare for the expense of things going better than expected. If they don’t, the money can be used for other purposes – if you can’t think of anything, I can give you a list of suitable charities. Naturally, you should balance this against the pulls on your money. But sometimes planning for the worst, actually means planning for the best as well.

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