Hello, I’m on the bubble....

C

ClayMore

Dryer sheet wannabe
Joined
Feb 10, 2018
Messages
21
Location
Atlanta
Looking at a package offer now. 581/2, NW of $1.3, 700k retirement accts, 400k deferred comp( pays out equally over 5 yrs, 300k cash, and annual pension of 60k. No debt and pedestrian tastes.
I’m concerned that medical for 60-65 could make things tight. Is 30k yr a reasonable budget for ACA policy?
I have 30 days to decide, job is ok but life would be better.
Firecalc says I’m ok if I LBYM. Considering Mexico or Panama for a while.
Any advice about expat or medical cost management appreciated.
 
Hello ClayMore and welcome to the ER forum. Without knowing your annual expenses I can't give you much advice on what to do, but I do think that $30K for ACA (assuming your single) is more than adequate.

I'm sure others will chime in on that as well as your living abroad questions.
 
30k for ACA might well be within reason now, and post-cobra now (which is why i think you say starting at 60), but a lot can change between now and the next couple years. While no ACA changes are going to happen in congress in 2018 (no budget resolutions being opened per the senate, and would need to swing R in the fall for them to try again), it's not something we can bet on for the next 7 years.

That said, I'm ER'd with a bigger window and just gonna deal with what happens! I tend to not worry about things that I cannot control. And if the ACA starts costing north of 30k after subsidies then I'd be very surprised.

How good is the package offer?
 
Pension and savings would give you an income in retirement of at least $100K not counting SS. No doubt you can retire on that considering the majority of retired people live on less than half of that. It's up to you if you want to work longer to have a more lavish lifestyle. Only you can make that choice.
 
ClayMore said:
Is 30k yr a reasonable budget for ACA policy?
Click to expand...

I just looked at the ACA plans available in my area for a 60 year old. The most you could pay is about $18,000 in premiums and $7000 out of pocket max for a total of $25K. Could be $20K or less if you are healthy so $30K is plenty. Your area may be a little more expensive(or less).
 
ClayMore,
I would look into the the ACA policies on the Healthcare Exchange for Atlanta.
It might not be in the 30k range.
I am 57 and pay a monthly premium of 156 and max yearly OOP of $1,250. This is for a Silver Plan in Tampa Florida from Florida Blue.
Edit - the above is based on managing MAGI down to 20k yearly.
 
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Dtail said:
ClayMore,
I would look into the the ACA policies on the Healthcare Exchange for Atlanta.
It might not be in the 30k range.
I am 57 and pay a monthly premium of 156 and max yearly OOP of $1,250. This is for a Silver Plan in Tampa Florida from Florida Blue.
Click to expand...

You must have a big subsidy. The OP has a large income and will get no subsidy.
 
Good point. Just reread the post for the 60k pension. From that perspective, plus other potential income as a single, would Claymore have too high an MAGI to even qualify for ACA coverage?
 
Thanks all for your feedback. The package is a lump sum cash payment of 200k and 12 months subsidy on Cobra. Had it been a rule of 75 this would be a no brainer since that would include retiree medical to 65. As it stands, I would need to work another 3-1/2 yrs to make the 20 that qualify for medical.
I need to check but believe I can defer pension payout but can’t postpone the deferred comp. if that were my only income is it feasible to manage it (80k) down to a susbsidy qualifying level using IRA contributions?
 
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In SF Bay Area a platinum insurance monthly premium range $1,250 to $2,400 per person, depend on insurance. ACA could be lower.
 
The maximum income (MAGI) for a single living in Georgia to qualify for an ACA subsidy for 2018 is $48,240.
 
ClayMore said:
..........I need to check but believe I can defer pension payout but can’t postpone the deferred comp. if that were my only income is it feasible to manage it (80k) down to a susbsidy qualifying level using IRA contributions?
Click to expand...

We are retired and on ACA. We have delayed taking pensions and manage income to keep MAGI below the subsidy thresholds. There are several threads on the forum you can search that cover ACA and MAGI. Also the Kasier Family Foundation calculator will help determine subsidy amounts and threshold levels.
 
aaronc879 said:
You must have a big subsidy. The OP has a large income and will get no subsidy.
Click to expand...



No kidding! To quote a price with an ACA subsidy is misleading. I'm in a state with multiple insurance companies and at 62 pay $844/month with $3,500 deductible
 
Check out healthsherpa.com

It looks like an unsubsidized bronze plan in Atlanta would be ~$800/month.... the cost of freedom!
 
MAGI call for ACA

I found some info on MAGI calculation for ACA that is helpful. Apparently, the calculation for ACA allows you to deduct IRA contributions, HSA contributions and a portion of medical expenses. While its a bit circular, premiums are also deductible. That should work for me because I can defer pension payout to age 65 and am only required to be paid out for the SRP portion of the pension and full amount of deferred comp. That amounts to ~ $75k. I have to do the math but with these deductions , I stand a decent chance of managing MAGI to below the subsidy cliff. If not, there’s always south of the Border for care and north of the Border for meds. Since we are no longer faced with a tax penalty for ACA non-compliance, I’m more optimistic about my ability to meet my health care needs. Step 1 is to swap 150 minutes per day of stressful commute for 30 minutes of walking and 120 minutes of peacefulness with DW and the fur babies!:dance:
 
Claymore,
I didn't know that the ACA medical premiums were an MAGI calculated deduction.
 
ClayMore said:
I found some info on MAGI calculation for ACA that is helpful. Apparently, the calculation for ACA allows you to deduct IRA contributions, HSA contributions and a portion of medical expenses. While its a bit circular, premiums are also deductible. That should work for me because I can defer pension payout to age 65 and am only required to be paid out for the SRP portion of the pension and full amount of deferred comp. That amounts to ~ $75k. I have to do the math but with these deductions , I stand a decent chance of managing MAGI to below the subsidy cliff. If not, there’s always south of the Border for care and north of the Border for meds. Since we are no longer faced with a tax penalty for ACA non-compliance, I’m more optimistic about my ability to meet my health care needs. Step 1 is to swap 150 minutes per day of stressful commute for 30 minutes of walking and 120 minutes of peacefulness with DW and the fur babies!:dance:
Click to expand...

Dtail said:
Claymore,
I didn't know that the ACA medical premiums were an MAGI calculated deduction.
Click to expand...
They're not. IRA and HSA contributions can reduce MAGI but not health care premiums.

See here for ACA MAGI calculations http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf
 
ClayMore said:
I found some info on MAGI calculation for ACA that is helpful. Apparently, the calculation for ACA allows you to deduct IRA contributions, HSA contributions and a portion of medical expenses. While its a bit circular, premiums are also deductible. That should work for me because I can defer pension payout to age 65 and am only required to be paid out for the SRP portion of the pension and full amount of deferred comp. That amounts to ~ $75k. I have to do the math but with these deductions , I stand a decent chance of managing MAGI to below the subsidy cliff. If not, there’s always south of the Border for care and north of the Border for meds. Since we are no longer faced with a tax penalty for ACA non-compliance, I’m more optimistic about my ability to meet my health care needs. Step 1 is to swap 150 minutes per day of stressful commute for 30 minutes of walking and 120 minutes of peacefulness with DW and the fur babies!:dance:
Click to expand...

If your income is $75k wouldn't you already be over the subsidy cliff for a couple?

No IRA contribution deduction allowed unless you have earned income (which you will have in 2018 since you are still working but I presume not in 2019 and beyond) but you could do a HSA without earned income but that still leaves you at $66,250 and 400% FPL for 2018 is $64,960.

Why not just suck it up and pay the freight for an unsubsidized ACA plan rather than do the contortions south and north of the border?

Also, since the lowest cost bronze plan would be more than 8% of your income you could buy a catastrophic plan even though you are over 30... the deductible will be highe but the premium will be lower.
 
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Dtail said:
ClayMore,
I would look into the the ACA policies on the Healthcare Exchange for Atlanta.
It might not be in the 30k range.
I am 57 and pay a monthly premium of 156 and max yearly OOP of $1,250. This is for a Silver Plan in Tampa Florida from Florida Blue.
Edit - the above is based on managing MAGI down to 20k yearly.
Click to expand...

Dtail, is this a national plan? If so that's a nice, low premium.

ClayMore - Congrats! You may want a national provider network if one is available in your area. You may have more flexibility and healthcare choices. Something to keep in mind when you compare policies on and off the Exchange.
 
Cayman said:
Dtail, is this a national plan? If so that's a nice, low premium.

ClayMore - Congrats! You may want a national provider network if one is available in your area. You may have more flexibility and healthcare choices. Something to keep in mind when you compare policies on and off the Exchange.
Click to expand...

Cayman - these rates are for 24k Household MAGI with dependent (brother) offered by Florida Blue. Florida in general has quite a few (50+) plans and a few insurance companies. Must be all of us? old people. :D
 
Ok, gotcha Detail. A plan with a nation-wide provider network may offer much more flexibility and healthcare choices, versus health plans offering a very limited choice of local/regional providers.

There are fewer national networks available than in years past, and the exchange website no longer makes the distinction easy to see. This year, I had to click through each plan individually to learn whether it's national or not. There was 1 national plan available in our area out of more than 30 plans. $2k/mo, $13k deductible.
 
Cayman said:
Ok, gotcha Detail. A plan with a nation-wide provider network may offer much more flexibility and healthcare choices, versus health plans offering a very limited choice of local/regional providers.

There are fewer national networks available than in years past, and the exchange website no longer makes the distinction easy to see. This year, I had to click through each plan individually to learn whether it's national or not. There was 1 national plan available in our area out of more than 30 plans. $2k/mo, $13k deductible.
Click to expand...

Unfortunately the OP is in the Atlanta area. We have two choices, Kaiser and Ambetter. Both are local HMOs. Or, I guess the third option, go without. :nonono:
 
Just to clarify, is that an annual pension of $60k per year going forward, or is that somehow just a part of deferred comp payout?

If you have a yearly pension of $60k going forward after package is accepted, a net worth of $1.3mm, and SS just on the horizon, I would probably go for it. If you don't have fancy tastes and be flexible the first few years, you should have no problem.

Oh, and heading down to Mexico for a few years is even better! A great life experience and a lower cost of living? If you really were concerned about things being a bit tight, you could head down to Mexico or/and Panama for a bit and pick up a part time job doing something fun for 10-15 hours a week and pull in $10-$15k a year. You would meet some friends, occupy a bit of your newly found free time, and help alleviate some of your financial concerns. I'd go for it.
 
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