Retirement planning

[300UGUY]

Picked up another 5 years by saying 'never' to drinking.

Changed it to 2x per week got 5 years.

All my grandparents exceeded the number I got by 10 years. My father's side by nearly 20. I don't take it too seriously!!

 

[MossRoad]

...... Starts with Working my @$$ off from time I was rather young, living within my means and putting my saved $ to work.


Mark

Funny how that works! :laughing:

 

[300UGUY]

Doing so really helps out SS though as that gets rid of at least ONE retired person prior to getting to that age lol.



I have only once or twice earned near 50K never solidly broke it (gross) yet by making wise choices & taking my finances seriously. I have 4 or 5 times that amount in the market/IRAs Savings etc, with (next year) will be paid off my 2nd home (farm,) & my other half still has 4 years to pay off her's. Biggest costs have been her medical bills. I am back in school for more education to make even more for next 20 years prior to my "full retirement age" so I can figure that I can easily bank 6 figures into the accounts...

The farm was bought in 2000 Dec 30th, 15 yr mortgage I have not paid additional onto it as variable rate has been stuck at 4%, not worth it however the first home I paid off & sold I made a LOT of double payments to keep the extended costs down from having higher interest of the 80's and yes I was still in my Teens when I signed paperwork for the 1st place. Starts with Working my @$$ off from time I was rather young, living within my means and putting my saved $ to work.


Mark

I hate to say this, but one bit of illness can send you backward financially. I had a friend of mine from school, he had a stroke at 36. He never worked again. Life can deal some cruel blows, I looked at my friend and thought " there but the grace of god "

 

[300UGUY]

I'm just passing on the wisdom of professionals....

If you need a pro to tell you that.....

 

[MossRoad]

I plugged in my dad's numbers. He passed away in 1995.... it resurrected him and gave him 8 more years to boot!

 

[MossRoad]

If you need a pro to tell you that.....

Goes along with needing to be told to live within your means....

 

[riptides]

....The big wild card today is the cost of Health Care... many I know with modest pensions pay their entire pension check in health care premiums or part B supplemental... just a sobering thought.

...

Oh yeah. I tried full retirement two years ago. Healthcare costs for me and the family were over 50k for the individual policy time period. I had no pension or cobra coverage. On top of the money for insurance, we met our out-of-pocket deductibles for family.

Mind you, I make a crap load of money when I choose to work, but I mean really. 50k in insurance? For a great amount of people in the USA they might not make that money in two years.

 

[riptides]

The interesting thing for me on the Dealth Calculators (there are many on the internet BTW) they all seem to predict my demise within one or a few years of each other. They nailed my mom, uncle and grandfather.

Anyway, it was not meant to be a serious addition to the conversation, just some insight into how people plan. And I bet the insurance industry has stuff like this with a lot more data they can use.

 

[300UGUY]

I put my dad's numbers in, and he drinks a lot. He is 80, and it gave him another 8 years, but his parents lived to be 90 & 96. He is in better health than most his age. The liver should go to the Smithstonian !!

 

[Parkanzky]

Oh yeah. I tried full retirement two years ago. Healthcare costs for me and the family were over 50k for the individual policy time period. I had no pension or cobra coverage. On top of the money for insurance, we met our out-of-pocket deductibles for family.

Mind you, I make a crap load of money when I choose to work, but I mean really. 50k in insurance? For a great amount of people in the USA they might not make that money in two years.

Last year was the first year the Affordable Care Act was really in full effect. Ideology aside, I saw the healthcare marketplace as a great way to get an idea of healthcare costs when we want to retire. Your number above doesn't jive with what I was estimating, so I went ahead and ran some numbers here:

https://www.healthcare.gov/see-plans/

I made a hypothetical family of five where the parents want to retire early. The parents are 55 and 58, and the "children" are 22, 23, and 24. I figured this is about the worst-case scenario for a family, since you'd expect some of your children to qualify for their own insurance. I chose a very high household income, so that there is no subsidy at all for any of the plans. Again, worst-case. Nobody in this family smokes. If you choose to spend $8/pack to wreck your health, you don't get to complain when you have to pay more for medical coverage.

I ignored "bronze" and "silver" level coverages, since the out-of-pocket maximum tends to be higher and they will be expensive if anybody has any major medical issues. I found that there is a lot of "gold" and "platinum" coverage available for around $2k/mo with reasonable out-of-pocket maximums (There was a Humana plan for ~$1800/mo with a $3k out of pocket maximum for the family, for instance). Even if you hit the out-of-pocket maximum every year, your total spend will be under half of what you were spending on premiums alone.

You may want to look around again for coverage and see if you can't find something more reasonable.

 

[riptides]

Last year was the first year the Affordable Care Act was really in full effect. Ideology aside, I saw the healthcare marketplace as a great way to get an idea of healthcare costs when we want to retire. Your number above doesn't jive with what I was estimating, so I went ahead and ran some numbers here:

https://www.healthcare.gov/see-plans/

I made a hypothetical family of five where the parents want to retire early. The parents are 55 and 58, and the "children" are 22, 23, and 24. I figured this is about the worst-case scenario for a family, since you'd expect some of your children to qualify for their own insurance. I chose a very high household income, so that there is no subsidy at all for any of the plans. Again, worst-case. Nobody in this family smokes. If you choose to spend $8/pack to wreck your health, you don't get to complain when you have to pay more for medical coverage.

I ignored "bronze" and "silver" level coverages, since the out-of-pocket maximum tends to be higher and they will be expensive if anybody has any major medical issues. I found that there is a lot of "gold" and "platinum" coverage available for around $2k/mo with reasonable out-of-pocket maximums (There was a Humana plan for ~$1800/mo with a $3k out of pocket maximum for the family, for instance). Even if you hit the out-of-pocket maximum every year, your total spend will be under half of what you were spending on premiums alone.

You may want to look around again for coverage and see if you can't find something more reasonable.

Yeah, I looked around for coverage, that is what the exchanges and marketplace allow one to do.

2k a month is still 24k a year. Times 2 and your right at 50k. Close to my figure for the last two years.

Bottom line is unless you have a pension, or are close to medicare age inclusion coverage (COBRA) , don't even think about retiring early without something or someone bridging the gap for you.

 

[Parkanzky]

Yeah, I looked around for coverage, that is what the exchanges and marketplace allow one to do.

2k a month is still 24k a year. Times 2 and your right at 50k. Close to my figure for the last two years.

Bottom line is unless you have a pension, or are close to medicare age inclusion coverage (COBRA) , don't even think about retiring early without something or someone bridging the gap for you.

The numbers I am quoting are coverage for all five people. So $24k/yr total for the family of five.

 

[riptides]

The numbers I am quoting are coverage for all five people. So $24k/yr total for the family of five.

Yeah, you don't think that is a little on the extreme side?

I went from something like this, while employed (400 a month), coverage through COBRA (200 a month), coverage as an independant (meaning no company or group available) (2400 a month).

 

[Travelover]

................Bottom line is unless you have a pension, or are close to medicare age inclusion coverage (COBRA) , don't even think about retiring early without something or someone bridging the gap for you.

Actually, if you are living off investments, you can proportion what you take out from pre and post tax accounts and qualify for a generous health care insurance subsidy. Some people have to take out extra from IRAs and convert to Roth IRAs to get MAGI over the Medicaid threshold.
ObamaCare Calculator: Subsidies, Tax Credits, Cost Assistance

 

[Parkanzky]

Yeah, you don't think that is a little on the extreme side?

I went from something like this, while employed (400 a month), coverage through COBRA (200 a month), coverage as an independant (meaning no company or group available) (2400 a month).

Your coverage while you were employed and through COBRA were heavily subsidized. Healthcare is expensive and people in the 2nd halves of their lives need a lot of it. $2400/mo, total, including everything out-of-pocket, does seem reasonable to me for all of the healthcare costs for five people. That's under $500/mo. per person. That doesn't seem extreme to me at all.

 

[Travelover]

Your coverage while you were employed and through COBRA were heavily subsidized. Healthcare is expensive and people in the 2nd halves of their lives need a lot of it. $2400/mo, total, including everything out-of-pocket, does seem reasonable to me for all of the healthcare costs for five people. That's under $500/mo. per person. That doesn't seem extreme to me at all.

Healthcare spending in the US is about $8300 per person per year. So 5 x 8300= 41,500. If you aren't paying it, someone else is.

 

[Parkanzky]

Healthcare spending in the US is about $8300 per person per year. So 5 x 8300= 41,500. If you aren't paying it, someone else is.

Which is why I think the $2k/mo for a family of five looks like a good deal. I plan for $2k/mo in today's dollars for the two of us when I factor healthcare into our early retirement plans. That's high, based on what I see on the exchange right now, but I would rather over-plan.

 

[KiotiKowboy]

I have a simple 80/20 plan that includes dental and vision. I pay about $500 month. There is a $500 yearly deductible, $30 - $50 copays and max out-of-pocket is either $2500 or $3000 per year. I am retired, 60 years old. My wife will have the same plan when she retires and I'm not sure if we can combine to save any money at that time.

 

[MossRoad]

I have a simple 80/20 plan that includes dental and vision. I pay about $500 month. There is a $500 yearly deductible, $30 - $50 copays and max out-of-pocket is either $2500 or $3000 per year. I am retired, 60 years old. My wife will have the same plan when she retires and I'm not sure if we can combine to save any money at that time.

How much is it if you take a $2500 deductible? Just curious. Trying to see how long it would take to save up $2500 in an emergency fund.

 

[RedNeckGeek]

Last year was the first year the Affordable Care Act was really in full effect. Ideology aside, I saw the healthcare marketplace as a great way to get an idea of healthcare costs when we want to retire. Your number above doesn't jive with what I was estimating, so I went ahead and ran some numbers here:

https://www.healthcare.gov/see-plans/

I did the same last year, more out of curiosity than need. I plugged in my real numbers, and even for the lower quality bronze and silver plans, got prices five times higher than I'm paying through my employer sponsored health care. When I looked at plans that offered benefits comparable to what I have now, premiums were more like 10-12 times more expensive. I understand that some of the premium cost is paid for by my employer, but 80%? I don't think so. My take on the ACA is that it just legitimized victimizing individuals that are not eligible for group plans. Is it any wonder, since the legislation was largely crafted by the insurance industry?