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Old 04-08-2016, 07:21 PM   #21
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Originally Posted by simple girl View Post
Go to healthcare.gov and price out a silver plan (the only ones eligible for subsidies, since that is what you are counting on) for the two of you. I used the premium plus half the max OOP in my modeling - not sure this is the best way, but, it is my attempt at a best guess (that half the time you may have bad years where you hit the max OOP).
[...]
My understanding of the first point you raised is different: I believe all ACA-compatible plans are eligible for subsidies (Bronze through Platinum). In fact, you'll find that the subsidies have more "leverage" for lower plans (i.e., Bronze) since the amount of the subsidy doesn't change. Effectively the government pays a bigger share of the lower-coverage plans than of the higher-coverage plans.

I also think your modeling of medical expenses as half of OOP is not the most accurate approach - I think it is far over-estimating the cost for healthy people. It would be better to use an understanding of your past expenses and/or family history to come up with a more individual estimate. Remember, too, that you can switch plans at open enrollment - so you can change which plan you're on based on your health status.

For healthy people, your expenses will mostly be low. Your worst-case is probably an accident (for me it was an Achilles tendon rupture) that will quickly put you into the OOP.

For this scenario, the Bronze plan is likely to be by far the best.

For people with chronic issues it will likely get more complicated. If you're in subsidy territory, there is still likely to be a significant advantage to choosing the lower-level plans, but if your spending is high, some of the higher plans may turn out to be advantageous - this is also quite dependent on what your state's offerings are for coverage.

The general thing is that there is no free lunch: The better coverage of the higher-level plans comes from the higher premiums, so you're still paying for it. And since the subsidies are a much larger percentage of the premium for the lower-level plans, the equation is skewed in favor of those plans.
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Old 04-09-2016, 02:50 PM   #22
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Originally Posted by ulrichw View Post
My understanding of the first point you raised is different: I believe all ACA-compatible plans are eligible for subsidies (Bronze through Platinum). In fact, you'll find that the subsidies have more "leverage" for lower plans (i.e., Bronze) since the amount of the subsidy doesn't change. Effectively the government pays a bigger share of the lower-coverage plans than of the higher-coverage plans.
My understanding is different. Yes, you may receive subsidies for the premiums of all plans, but if you have a low enough income, you can also receive assistance ("cost sharing reductions") with the max OOP on Silver plans, only.

IMPORTANT
If you qualify for these extra savings on out-of-pocket costs, you get them only if you enroll in a plan in the Silver category. You can use a premium tax credit for a plan in any metal category, but youíll get cost-sharing reductions only if you pick a Silver plan.


*source: https://www.healthcare.gov/lower-cos...-pocket-costs/


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I also think your modeling of medical expenses as half of OOP is not the most accurate approach - I think it is far over-estimating the cost for healthy people.
Yes, it may be inaccurate for healthy people, but it helps me feel a bit more secure about our plans to plan for "worst case scenario". ie. you are only healthy until you are unhealthy. No one knows if they are going to be diagnosed with a chronic health condition at some point in their life, which can be quite costly.

I like to try to plan for worst case scenario and see how far off we are from being able to handle that budget. If we can't be successful with that plan, but we still decide to pull the plug, at least I know what degree of risk I am taking - eyes wide open.

Maybe the younger you are, you could feel more comfortable projecting say 25% of max OOP every year, as your chance of getting a chronic illness definitely goes up with age.

It's all a crapshoot IMO but you have to try to project/plan for out of pocket costs somehow. And IMO you can't go on past healthcare expenses because that can change in the blink of an eye with a devastating diagnosis you never expected.
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Old 04-09-2016, 03:20 PM   #23
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The risk is that your boyfriend can leave you in a heartbeat if he sees a younger 20+ girls. Cement the relationship with marriage, and then you have the right to the $1 million money. Your money of $300,000 at 38 years old won't be enough for you to retire to 70 .
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Old 04-09-2016, 03:58 PM   #24
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The risk is that your boyfriend can leave you in a heartbeat if he sees a younger 20+ girls. Cement the relationship with marriage, and then you have the right to the $1 million money. Your money of $300,000 at 38 years old won't be enough for you to retire to 70 .
If he had the money before they were married, maybe not. I think as Rodi mentioned, plan for the possibility of being widowed as well as split up (married or not). One of my friends just assumed she was the beneficiary of some retirement assets from her long time partner when in reality the partner's adult children were the named beneficiaries. That was half of what she had considered their retirement joint assets.

With the OP's relationship age differences and wealth disparity, it might not hurt to discuss a back up plan with a fee only financial planner. It can tough for women 50+ to be widowed or divorced, and the odds of one of those events happening are far from remote. It can sometimes be especially hard for middle aged women if they have been out of the job market for some time and lack current work skills.
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Old 04-09-2016, 06:03 PM   #25
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My understanding is different. Yes, you may receive subsidies for the premiums of all plans, but if you have a low enough income, you can also receive assistance ("cost sharing reductions") with the max OOP on Silver plans, only.
[...]
Thanks, I wasn't aware of the out-of-pocket reductions - California's website didn't have this information broken out (though it does appear to change the benefit descriptions based on this distinction). It appears the out of pocket maximum is also adjusted.

I played with the numbers a bit, and it's still not clear that this will always make the Silver option the preferred - Bronze still comes ahead for healthy individuals and individuals who hit the out of pocket maximum.

I put in a hypothetical 55 year old couple with incomes of 58K and 38K to see how things look.

For the 58K case, the premium difference is approximately $370 a month (or $4440 a year). Out of pocket maximums (individual/family) are: 6500/13000 vs. $6250/12500.

For the 38K case, the premium difference is smaller $223 a month (or $2676 a year) - this is due to the fact that the subsidy is getting maxed out, so the net premium is only $2/month. OOP maxes are: 6500/13000 for Bronze vs. $5450/10900.

You can see that the difference in OOP amounts doesn't make up for the higher premiums in either case (though the 38K case makes it close).

So the benefit for the Silver plan is in the mid-range - if you spend less than the OOP max, but more than the difference in the cost of the premiums, there's a range where the Silver plan is ahead.

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Originally Posted by simple girl View Post
Yes, it may be inaccurate for healthy people, but it helps me feel a bit more secure about our plans to plan for "worst case scenario". ie. you are only healthy until you are unhealthy. [...]
Maybe the younger you are, you could feel more comfortable projecting say 25% of max OOP every year, as your chance of getting a chronic illness definitely goes up with age.
Fair enough - and projecting 50% of OOP a year certainly would qualify as a pretty "bad case" in my book.

Note that how that happens makes a big difference to choice of plan. If it happens the way you stated originally (hitting the OOP max 50% of the years), the Bronze plan might come out ahead, where if the spending is flat (i.e., 50% of OOP max every year) the Silver plan is likely better.
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Old 04-13-2016, 03:34 PM   #26
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Originally Posted by ulrichw View Post
I played with the numbers a bit, and it's still not clear that this will always make the Silver option the preferred - Bronze still comes ahead for healthy individuals and individuals who hit the out of pocket maximum.

I put in a hypothetical 55 year old couple with incomes of 58K and 38K to see how things look.

For the 58K case, the premium difference is approximately $370 a month (or $4440 a year). Out of pocket maximums (individual/family) are: 6500/13000 vs. $6250/12500.

For the 38K case, the premium difference is smaller $223 a month (or $2676 a year) - this is due to the fact that the subsidy is getting maxed out, so the net premium is only $2/month. OOP maxes are: 6500/13000 for Bronze vs. $5450/10900.

You can see that the difference in OOP amounts doesn't make up for the higher premiums in either case (though the 38K case makes it close).

So the benefit for the Silver plan is in the mid-range - if you spend less than the OOP max, but more than the difference in the cost of the premiums, there's a range where the Silver plan is ahead.
Look at some lower numbers for income. It's been a while since I cranked it, but there is a "sweet spot" for MAGI where the Silver ends up being the best bet. When I last looked at it for my state, it was right around $30K for two adults ages late 40's/early 50's.

If you are living off of after-tax accounts it is possible to keep MAGI at that sweet spot level and not go over the "cliff".

Here is an excellent article written by one of our members here that you may find very interesting:

Donít Fall Off The Affordable Care Act Subsidy Cliffs | Root of Good


I'll be looking at it closer again when we are ready to pull the trigger (hopefully in 2018) to reassess and make sure that plan is still the best for us.
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Old 02-16-2017, 11:54 PM   #27
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February 2017 update:

Me:40, Him:58.
Total savings: $1.4 mil, Total NW: $1.56 mil.
My savings: $343K, My NW: $403K
We are still not married (an ERE prerequisite for me).
He is still not seriously thinking about retirement for himself (ugh).

I thought $1.4mil was going to be enough for us. We spend $30K/year or less, not including income taxes, health insurance, or future car payments. However, I am not sure we will be able to obtain decent health insurance & healthcare at any cost next year. Am I the only one extremely nervous about the individual health insurance market in the US next year? (If you have any recommendations, let me know, but please avoid the political junk so this thread doesn't get closed).

As a result, our retirement plans are now really up in the air unless we decide to retire and go with psuedo HI like Liberty Healthshare or become expats year round in another country with decent, affordable healthcare (maybe Mexico?). The COBRA for the high deductible plan where I work is $17,500/year for a couple. Ouch!

Another reason our estimated retirement date is in the air is my mother was diagnosed with Progressive Supra-nuclei Palsy (PSP) in May, which has severely impacted my life the last 6 months. I had to take off work/FMLA to be her full time caretaker when she became bed ridden in late August, but could not yet get her into a nursing home. The Medicaid system is really messed up in Kansas, and as a result, very few nursing homes will take Medicaid-pending patients anymore. We submitted an application to Medicaid 21 weeks ago, and are still waiting for them to approve her app. My mom and stepfather are in very bad financial shape with no assets, so the nursing home believes she will be approved someday... Anyway, I now have hands on experience with awful situations like this. I am an only child who lives 3 hours away, and my stepfather is in his late 60's and not fully competent, so I will probably stay put and not retire until after my mom passes from this terrible disease.

We finally moved to our main home for good last summer right before my mom went downhill, but because of her situation, I have not had much time to deal with my old, deteriorating house. I'm still not sure if I am going to rehab it and rent it, or try to sell it as is for a steep loss. At least I can still sell it for more than i owe. Sadly, the house needs major foundation work, which is the big, expensive hurdle in both scenarios.

On the bright side, both my boyfriend and I got really nice raises almost a year ago. I am happy with my job, but he is always complaining about his (yet does not think about retiring). I don't feel like I am in a hurry to retire due to my age, but I do worry about how many great years he has left.

I was hoping we'd be able to retire by April 2018, but things are not falling into place. There are too many negative loose ends: no good, affordable health insurance/healthcare in the US, my terminally ill mother with no resources of any kind, my old house dragging me down, getting my boyfriend to retire, and finally, getting him to marry me.

I hope this update doesn't sound too negative, but I am sure many of you have dealt with these same issues. Any advice or thoughts?
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Old 02-17-2017, 07:19 AM   #28
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Sorry to hear about your mom. We went through something similar with my Mother in law last year.

I've been semi-retired now for almost 5 years and on the ACA but if I were considering retiring this year I would wait to see what plays out with the repeal ObamaCare movement, myself.

Also, since 2/3rds of combined assets are his, you are smart to wait until you are married before quiting your job.

Good luck!
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Old 02-17-2017, 08:02 AM   #29
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February 2017 update:
Am I the only one extremely nervous about the individual health insurance market in the US next year? (If you have any recommendations, let me know, but please avoid the political junk so this thread doesn't get closed).
We are concerned as well and will be holding off until the healthcare future becomes a bit less murky. Our plan for FIRE is 2018, and so far it looks like we are on track financially - dependent upon healthcare expenses.

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Another reason our estimated retirement date is in the air is my mother was diagnosed with Progressive Supra-nuclei Palsy (PSP) in May, which has severely impacted my life the last 6 months.
Very sorry to hear this; that is a difficult diagnosis.

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I hope this update doesn't sound too negative, but I am sure many of you have dealt with these same issues. Any advice or thoughts?
The only advice I have is the advice I give myself - plan for the worst, and roll with whatever happens since of course we have no control of the future.

I have also become more politically active regarding the ACA, which helps me feel like I am least trying to impact our future retirement prospects.
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(49, married; DH 53. I am fully retired as of 2015 (well ok, I still work part-time but only because I love the job and have complete freedom to call off if I want to travel with hubby for work), DH hopes to fully retire 2018 when he turns 55 to access 401K penalty-free...although he may decide to do part-time consulting)
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Old 02-17-2017, 09:03 AM   #30
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Am I the only one extremely nervous about the individual health insurance market in the US next year? (If you have any recommendations, let me know, but please avoid the political junk so this thread doesn't get closed).
I am too.
After I left my fulltime permanent job in Sept 2013, I went on COBRA.
Then when ACA became available, I switched over to that even though I was eligible for another year of COBRA.
So I have been on ACA in 2014, 2015, 2016, and now 2017.

I cannot imagine being your age and being 20 years from Medicare-eligible.
I would definitely think very carefully about retiring without medical coverage.
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Old 02-17-2017, 11:16 AM   #31
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getting him to marry me.
You definitely have a lot going. I wish you to stay strong and don't forget to take care of yourself very well.

I honestly not sure I'd quit my job because you're still not married. You said your BF doesn't have a problem marrying you but a year later since your OP you've not tied the knot. This is a big question if he really really wants to do that as it take a half-day max to get married. Maybe he thinks you're after his $ now and afraid to commit because sometimes just that small piece of paper can rip the best friendships afterwards. In addition you need to be married to him for 10 years before you can claim for this 1/2 SS.
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Old 02-17-2017, 01:11 PM   #32
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Sorry to hear about your mom.

You can't do much about health care costs in the U.S. or your mom, but you can make decisions on the house and your BF, since you seem to not be on the same page on major issues like retirement and marriage.
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Old 02-18-2017, 05:46 PM   #33
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What is he waiting for about getting married? Sorry about your mom. I too have dealt with my mom and dementia until she passed in 2015,

Good luck with all your upcoming decisions.
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Old 02-19-2017, 06:29 PM   #34
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So sorry to hear all the bad news. At your age I would keep working and hope that your BF is healthy enough to retire when you can afford to. Health insurance cost is crazy. We have been semi-retired for 5 years and the cost for retiree health from our past employer is crazy. It just went up to 11.5/year for the 2 of us.
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Old 02-20-2017, 03:05 AM   #35
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Our health insurance under ACA (pre subsidy) is $1.7K a month with the 3 - 1 ACA pricing bands, with pretty high deductibles and out of pocket maxes (Bronze plan). At 5 to 1 age pricing, we will go to $2.8K a month in premiums alone and unknown future tax credits, if any.

On the bright side:
State Sen. Ricardo Lara (D-Bell Gardens) on Friday introduced a bill that would create a single-payer healthcare system in California.
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Old 02-20-2017, 08:13 AM   #36
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Go to healthcare.gov and price out a silver plan (the only ones eligible for subsidies, since that is what you are counting on) for the two of you.
I just wanted to make a clarification to the above regarding subsidies. ACA non-silver plans are eligible for the ACA Premium Tax Credit. The amount of the credit is based on the cost of the silver plan and your income. The credit helps offset the cost of your monthly premium. Some people refer to the premium tax credit as a subsidy.

Only silver plans are eligible for Cost Sharing Reduction (CSR) subsidies (also income based) which lower out-of-pocket costs for medical services.
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Old 02-20-2017, 09:11 AM   #37
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Very sorry about your Mom that is difficult.

Having read from the start... after two years (14 together?) you're still not married. As an outsider looking in, big red flag. Be married for at least two years before you quit working.

Married is different. No matter how long you've lived together, it's not the same. If he's 58 and was never married? Odds are if push comes to shove he will not get married. If he was divorced in early 40's prior to meeting you, then maybe, but I would not plan to ER if I could not do it on my own (in your situation).

Either way, yes, the ACA status does scare me too. We just ER'd last year and are on severance package medical thru August, I then planned to cobra for a few months before getting on ACA for 2018 - now that is all up in the air. Since you are both still working, definitely stay until the question marks are gone.

But, to me, your biggest risk is the marriage, lack thereof, and that so much time has gone by without it. Your worst case scenario? You RE right after you marry, the marriage dissolves quickly in a non-contest state (?) and 2 years later you're divorced, no recently employment, 42, and have assets for about 10 years. That's a rough place to land.

I hope I'm painting a picture that doesn't happen, but it's one that's objectively realistic.
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Old 02-20-2017, 09:36 AM   #38
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But, to me, your biggest risk is the marriage, lack thereof, and that so much time has gone by without it.
I don't know if the OP lives in a common-law marriage state.
And even if she did, I don't know what protection under the law she has money-wise with regards to their financial assets.

Is the OP a beneficiary on his retirement accounts?
Is the OP a beneficiary on his will?

To even be worrying about early retirement with this guy is a bit premature.
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