Getting Close Now

[Born2Fish]

Ready to Quit/back way off the work thing and spend more time fishing, hiking, camping, woodworking...NOT working.

I am 60, DW is 55 and stay at home. I would like to quit now but am also considering a new job for 1 or 2 years. Burned out on long days/weeks/travel.

Savings: 500k pre-tax, $17k HSA, $20k ckg. Small ($7400/yr) fixed pension. SS annual - me $24300 Aug, 2020. DW $8500 Sep,2026.

Expenses: $58k/yr total includes $5k taxes and $18k annual mortgage (20 years left).

Ideal plan: I want to sell my home (~100k equity) and relocate near the coast in a smaller house (drop from $18k annual mortgage to $14k annual mortgage for 20 yrs).

Still have a few questions:
* ACA Healthcare

Cost estimator. I ran online ACA estimate with 60k income and it returned ~$380/Mo premiums for me and DW combined. I have heard from others that the actual amount after registering could be significantly higher than this estimate. Is that true?

Timing? If I were to quit midyear could I still get HCI for the remainder of the year or do I need to wait until end of year?

FIRECalc:
I entered values for Jan, 2019 retirement using $420k savings (in case I convert some funds to stay below the ACA subsidy threshold in the next few years): 40k expense, $7400/yr pension, $18k 20 yr mortgage. 1 failed but curves look pretty low.

I want to adjust SocSec WD to 2021 or 2022 with PT work. How can I adjust FIRECalc to account for 2-3 years of part time work at, say, $30k/yr?

 

[Dtail]

The estimates for the ACA should be accurate. The official ACA site is Healthcare.gov
Are you using that site?

Firecalc: In the "Other/Income" tab, in the Pension/Off Chart spending area use the first line to input 30k income starting in year 2020 or whatever year you are starting the work, uncheck the inflation box. On the second line input as an expense 30k with the year you expect to stop earning the 30k and uncheck the inflation box.

 

[VanWinkle]

Ready to Quit/back way off the work thing and spend more time fishing, hiking, camping, woodworking...NOT working.

I am 60, DW is 55 and stay at home. I would like to quit now but am also considering a new job for 1 or 2 years. Burned out on long days/weeks/travel.

Savings: 500k pre-tax, $17k HSA, $20k ckg. Small ($7400/yr) fixed pension. SS annual - me $24300 Aug, 2020. DW $8500 Sep,2026.

Expenses: $58k/yr total includes $5k taxes and $18k annual mortgage (20 years left).

Ideal plan: I want to sell my home (~100k equity) and relocate near the coast in a smaller house (drop from $18k annual mortgage to $14k annual mortgage for 20 yrs).

Still have a few questions:
* ACA Healthcare

Cost estimator. I ran online ACA estimate with 60k income and it returned ~$380/Mo premiums for me and DW combined. I have heard from others that the actual amount after registering could be significantly higher than this estimate. Is that true?

Timing? If I were to quit midyear could I still get HCI for the remainder of the year or do I need to wait until end of year?

FIRECalc:
I entered values for Jan, 2019 retirement using $420k savings (in case I convert some funds to stay below the ACA subsidy threshold in the next few years): 40k expense, $7400/yr pension, $18k 20 yr mortgage. 1 failed but curves look pretty low.

I want to adjust SocSec WD to 2021 or 2022 with PT work. How can I adjust FIRECalc to account for 2-3 years of part time work at, say, $30k/yr?

My wife and I are currently on the ACA. The premium changes if your income changes from your estimated income when applying for coverage. If you low ball your estimate, you will pay back the difference at tax time. I would suggest trying to increase your after tax savings to help control the income for ACA. You also might look at delaying SS by using some of your pre-tax savings to make up the difference. This will give you more flexibility with taxes when RMDs start at 70 1/2. Part time work will help, but remember that is taxable income and will count against your ACA limit. It is not as complicated as it seems, once you grasp the concept of controlling taxable income.

Best to you and the DW,

VW

 

[Born2Fish]

The estimates for the ACA should be accurate. The official ACA site is Healthcare.gov
Are you using that site?

Firecalc: In the "Other/Income" tab, in the Pension/Off Chart spending area use the first line to input 30k income starting in year 2020 or whatever year you are starting the work, uncheck the inflation box. On the second line input as an expense 30k with the year you expect to stop earning the 30k and uncheck the inflation box.

Yes - I used the ACA site. So that sounds good.

I played around with the "Other/Income" and ran scenarios using part time income. I hope I can do PT for a while to push out SS start date.

If I could work 1000-1300 hrs/year and have health care I could easily go another 3-5 years.

 

[fosterscik]

Maybe I'm missing something (WEP, GPO...) but wouldn't your wife get 1/2 your age 62 SS benefit when she claims at 62? An extra $3600 per year would help.

 

[Rianne]

I feel your angst. I figured out it's like a jigsaw puzzle. Especially when you're cashing out the portfolio. Your savings in pretax, what is it invested in? Do you have other post tax savings. Our post tax savings mixed with cash, some income from DH consulting keeps us in line with ACA MAGI. That's the big hurdle in our situation.

The 100K equity in home is not taxed, you could use part of that to offset using portfolio. The 30K part time gig is a must.

I hope you can get that low interest rate on your new home.

 

[Born2Fish]

Maybe I'm missing something (WEP, GPO...) but wouldn't your wife get 1/2 your age 62 SS benefit when she claims at 62? An extra $3600 per year would help.

It's my understanding that the spousal benefit percentage varies depending on when she starts taking SS. If she takes it at 62 she gets around 1/3 of "my benefit amount" and she would get a maximum of 1/2 of "my benefit amount" if she waits until her SS full retirement age.

I am going to delay as long as possible (so she will get a fixed percentage of a Larger amount) but she will begin taking hers at 62.

 

[VanWinkle]

It's my understanding that the spousal benefit percentage varies depending on when she starts taking SS. If she takes it at 62 she gets around 1/3 of "my benefit amount" and she would get a maximum of 1/2 of "my benefit amount" if she waits until her SS full retirement age.

I am going to delay as long as possible (so she will get a fixed percentage of a Larger amount) but she will begin taking hers at 62.

You are correct about the reduced % for your wife if she claims at 62. My wife would receive 35% of mine if I claimed early and she claimed at 62. She can claim her benefit early and get the spousal benefit later when you file for your benefit. The 50% of your benefit will always be reduced by the amount she gave up by filing at 62.

Example:

If her age full retirement benefit is 800, she will get about 600 at age 62, a reduction of 200.00.

If you waited until she was at full retirement age to file for your benefit, she will get 50% of your PIA less the 200.00 from filing early. (1200-200=1000)

 

[Born2Fish]

I feel your angst. I figured out it's like a jigsaw puzzle. Especially when you're cashing out the portfolio. Your savings in pretax, what is it invested in? Do you have other post tax savings. Our post tax savings mixed with cash, some income from DH consulting keeps us in line with ACA MAGI. That's the big hurdle in our situation.

The 100K equity in home is not taxed, you could use part of that to offset using portfolio. The 30K part time gig is a must.

I hope you can get that low interest rate on your new home.

The home equity is a great idea.

Rates are around 4.5 now. Higher than my current mortgage but not terrible.

Mix of stocks/CDs/Stable Value.

The 30k gig would be great. If it doesn't work out then I'll find another full time gig for a couple of years.

 

[Born2Fish]

The home equity is a great idea.

Rates are around 4.5 now. Higher than my current mortgage but not terrible.

Mix of stocks/CDs/Stable Value.

The 30k gig would be great. If it doesn't work out then I'll find another full time gig for a couple of years.

Got a job offer in my targeted coastal area. Full time position but owner said I can take off extra weeks vacation as long as I schedule in advance. Just won't get paid for those weeks. Good to me.

Expect to earn around $75k. Med ins not great but I have ~18k HSA balance to cover qual med expenses for a few years.

The income loss bugs me a little but I will be able to drive 5 mins to work, and have time to go fishing (or surfing) after work depending on the season. How cool is that?

Heck, there's a good chance I may actually LIKE my job. That'd be great!

Got prequalified for a "near-the-beach house" mortgage. Made an offer on my "forever" house. Waiting to see if I got it.

VA mortgage, 3.875% fixed, 30 years, $0 down pmt. The rate was lower than I had expected several months ago when I started this move.

This move will allow me to start taking SS around 65 instead of 62. If things work out I will try to keep reducing hours as my position gets stronger.

Firecalc shows 0 failures and the curves look much stronger than if I just quit working and retired.

I have been on an emotional roller-coaster lately. Second-guessing my move. Have decided to just go for happiness above 2 more years of stressful life with higher savings.