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Old 10-29-2015, 12:17 PM   #21
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Ok, you talked me into it. If I were in his position i'd retire. His home is paid off and he has no dependents. He should be able to cut back on spending in the early years if needed. Once he hits 60 he'll be in great shape for the rest of his life.

Yep. I agree. He can do it. He has plenty of levers to modulate his spending if the need should arise. Home is fully paid too. .. Not sure that asset value but downsizing is always a buffer option too. Then social security ... Not to mention his openness to a part time gig for some income. I think he can do it.
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Old 10-29-2015, 12:27 PM   #22
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I have not seen anybody mention going to a lower level metal plan...

You said $500 for Gold, so I bet Bronze is much less.... also, you will probably be subsidized and you get free (or almost free) insurance....


As others have mentioned, if the work environment is bad (I did not see mention of this, only you are not getting pleasure), change jobs and find a place where it is better...

I would never stick around for 7 years to try and get a benefit with such low value.... which also can be taken away at the whim of the company.... but if the paycheck is good enough and you do not hate it.... and you do not think you have enough then by all means stick around...
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Old 10-29-2015, 12:31 PM   #23
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Pension is non-cola'd and freezes this year so no need to stick around for that [astute readers probably have a pretty good idea of who cuts my paychecks :-)
Wouldn't be our pal the Big Blue "B" would it? The pension freeze was a big part of my decision to exit at the end of this year.
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Old 10-29-2015, 01:34 PM   #24
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I'm in a similar situation but at 54, a little closer to the finish line. I am essentially trying to make it Jan 1 to access my 401K penalty free and then fall of 2016 when I turn 55 to quality for retiree med benefits.

I guess I look at my current lifestyle and see all I truly need are my savings and ACA and I'd be fine. The retiree medical benefit is the cherry on top. If I get it great, if not, fine.

I'm sure you would be able to earn $500 a month to pay the ACA premiums with a very low stress, low responsibility job until Medicare kicks in.

I see that the US median income is about 50K and and your assets would certainly support that with a somewhat higher SWR. Considering a pension and SS in the future it makes the risk of failure small.
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Old 10-29-2015, 02:52 PM   #25
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Online modeler for retiree medical is telling me I'd be on the hook for about $220 as my contribution if I could leave today.

Soooooooo, if retiree medical is only worth about (500-220) x 12 x 10 = $33,600 total and could (will) go away at anytime, I think the answer is clear.

Thanks, all. I think I've worked through my angst about parting ways with the company.
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Old 10-29-2015, 05:43 PM   #26
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Figure it this way... the $500/month that you spend on medical insurance (and as TP points out could be much less if you are relatively healthy and can downshift to a bronze plan) is part of the price for freedom to do whatever you want.... IMO that is cheap (mine was $900/month for 2).
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Old 10-30-2015, 06:49 PM   #27
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Thanks, all. I think I've worked through my angst about parting ways with the company.
You are cheaper and faster than a therapist!
Great! We'll mail you our invoice. We appreciate your prompt payment!!
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Old 10-30-2015, 06:59 PM   #28
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Online modeler for retiree medical is telling ................. snip I think the answer is clear.

Thanks, all. I think I've worked through my angst about parting ways with the company.
You are cheaper and faster than a therapist!
Just hold on a minute, if we have not collectively induced doubt and indecision, we still need to work on you a bit more
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Old 10-30-2015, 08:02 PM   #29
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Looks like I'll have lots to keep me entertained this weekend.

Some additional info:

Pension is non-cola'd and freezes this year so no need to stick around for that [astute readers probably have a pretty good idea of who cuts my paychecks :-) ]

I didn't include SS in the pension number. SS website estimates $2600/ mo but that assumes working to FRA so the real number should be much less. I don't include SS in any of my calculations. I don't expect it to be there. If it is, so much the better. I see it as a hedge against rising healthcare/unknowns ect

I see the lack of taxable savings as an issue. This year I throttled back the 401k to just hit the pre-tax limit and funnel the rest into another brokerage account slated as retirement money.

I'm thinking I may be better off changing companies. A healthy raise siphoned off could replace the retiree medical. A 2nd career is certainly a possibility. It would be nice to do something you actually enjoy.



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How close are you to the limit on Social Security taxes and for how many years? If you look at the social security benefit formula if your wage adjusted 35 year average monthly pay exceeds 5200 then your in the 15% bracket on social security. If your average monthly amount is 5157 you would get at full retirement age about 2125. Since you suggest the estimator shows 2600 that sort of implies wages at or about the cap. But if you do the calculation, it works out to about $42 per month per additional year worked once you top 5200 average monthly wages.
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Old 10-31-2015, 08:03 AM   #30
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School me on the calculating the SS benefit. Just reviewed the SS website and found the calculation sheet. If I remember correctly, the online estimator takes the current wage you enter and runs it forward to full retirement age. If I retire early, those years go to zero and the lower wages earlier on become a factor again, dragging down the benefit, so it would be less than that prediction.


Since my wages are plateauing, the incremental increase in benefit will be much less than if my wages were to continue to grow, correct? If you have many, many years of high wages, dropping out for the last 10-15 years wouldn't radically reduce your benefit. Sadly, that's not the case in my situation.


Between potential reduction in benefits, means testing, etc... it's all just sort of a curious exercise from my standpoint. Whatever check shows up in the mail will be mad/Vegas money. I don't intend to count on it in any meaningful way.


Switching gears, how does this sound for a plan, starting next year:
- continue to contribute to 401k and Roth.
- place 100% of what's left into account A, effectively sequestering my paycheck as if it was no longer there.
- pay expenses from account B, funded by quarterly transfers from taxable accounts based on projected expenses.
- monitor health of taxable accounts (i.e. are my returns keeping up with expenses).
- watch money pile up in account A, having full and ready access should the need arise.
- continue until it becomes apparent I really don't need the paycheck (subject to some reasonable minimum time, thinking year or two, not just a few months).


Sort of a practice early retirement with a safety net...
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Old 10-31-2015, 08:27 AM   #31
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Originally Posted by Geld ist Freiheit View Post
School me on the calculating the SS benefit. Just reviewed the SS website and found the calculation sheet. If I remember correctly, the online estimator takes the current wage you enter and runs it forward to full retirement age. If I retire early, those years go to zero and the lower wages earlier on become a factor again, dragging down the benefit, so it would be less than that prediction.

Since my wages are plateauing, the incremental increase in benefit will be much less than if my wages were to continue to grow, correct? If you have many, many years of high wages, dropping out for the last 10-15 years wouldn't radically reduce your benefit. Sadly, that's not the case in my situation.

Sort of a practice early retirement with a safety net...
Not sure how to calc ss benefit , maybe talk to ss directly.

One potential downside, if you stop contributing payroll taxes, eligibility for ss disability and medicare prior to 65 if disabled will go away , IIRC 10 recent quarters ss covered earnings are needed for ss disability, and medicare for a disabled person is linked to ss disability. You will end up with a gap. not a factor , unless you became disabled prior to 65 .
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Old 10-31-2015, 09:11 AM   #32
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In two words: Probably not.

I had thought I would work until at least 66 since I was in very good health and had long lived ancestors. In a period of 5 years I lost three friends/family to unexpected sudden illness as well as suffered some health issues myself that fortunately have not been that bad.

pb4uski is right. $6000 a year, if you have it is a small price to pay for each each additional year of freedom to live life as you wish, control your time, and generally be happier. Oh, did I mention that since retiring I now have more time to take care of my health? No small factor, IMHO.
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Old 10-31-2015, 09:36 AM   #33
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That is a good point about the disability. That keeps slipping my mind. No one thinks it will happen to them until it does.

$6000 is a small price to pay for freedom. The escalating rates are the danger. $6k this year could be $7.5k next year and $10k after that.


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Old 10-31-2015, 11:00 AM   #34
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I like to "bracket" SS by running their estimator with my salary until I retire and then run it again with a salary of $1 per year. This produces two different estimates which turn out to be surprisingly close to one another. You have to use the estimator that doesn't give you the report. There are two different estimators within SS and only one allows this method of estimating.

You can also get different estimates for ages 62, 65, 67, & 70 or any age you wish.

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Old 10-31-2015, 11:44 AM   #35
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That is a good point about the disability. That keeps slipping my mind. No one thinks it will happen to them until it does.

$6000 is a small price to pay for freedom. The escalating rates are the danger. $6k this year could be $7.5k next year and $10k after that.


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Bingo, start paying some max out of pocket for any health problems and the number could escalate rapidly...it isn't the actual 6K, it's giving up the subsidy portion of the premium.
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Old 10-31-2015, 02:44 PM   #36
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Nah, he can do a Roth pipeline.

Let us assume the $300k in taxable has a 50% basis (so he pays long term cap gains on 50% of withdrawals from that).

Year one he takes $50k out of the taxable, converts $25k of the 401K to Roth, pays tax on $50k of income (some LTCG) which likely would be no more than $5k, net $45k to live on.

Keep doing this until year seven, when his taxable is now close to zero.

In year seven his Roth now has at least $350k ($200k + $150k of new contributions). He takes out $50k of the contributions and converts $50k of the 401K to Roth. He pays tax on the $50k, probably still netting $45k.

He can continue in this manner until age 60 when he can directly access the 401K if he desires.

If his taxable currently has a better basis than 50%, he can probably work his taxes a lot lower than $5k a year. He could fund a HSA which would remove $3300 from taxable income while still giving him some access to that money.
Thank you Fermion! I think I now understand how to model converting to a Roth in our low/no income tax years. We are updating DH's spreadsheet to play with this option now. Sorry for hijacking this thread!

To OP, as someone else mentioned, go to the ss.gov estimator. When your results come up, click on the button "Add Another Estimate" and it will take you to screen where you can put in next year as your retirement year and list $0 as your income between now and then, and it will spit out what your benefits would be at 62, FRA and 70 you stopped contributing/w*rking now. You can model all sorts of scenarios. Good luck! (BTW, I worked for a company that terminated free retiree medical coverage in the 80s and won a lawsuit over it, which case I think is the legal precedent for it not being protected like pension benefits!)
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Old 10-31-2015, 03:21 PM   #37
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Not sure how to calc ss benefit , maybe talk to ss directly.

One potential downside, if you stop contributing payroll taxes, eligibility for ss disability and medicare prior to 65 if disabled will go away , IIRC 10 recent quarters ss covered earnings are needed for ss disability, and medicare for a disabled person is linked to ss disability. You will end up with a gap. not a factor , unless you became disabled prior to 65 .
create a SS account and download your benefits statement (to get amounts credited up till now, and download the anypia app from ss. Then take the amounts from the statement and enter them into the anypia app. If you just enter what is there and the last years that have not made the form, you will be able to get your benefit at any age, that you already have. Then add estimates for the future and recalculate the estimate. Change the estimates and recalcute etc.
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Old 10-31-2015, 04:28 PM   #38
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I believe you can estimate your social security benefits with no further income using the link provided on this page -- but the link is currently not working (probably because all the file and suspend people have overwhelmed it):

https://www.ssa.gov/retire/estimator.html
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Old 10-31-2015, 05:02 PM   #39
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"$6000 a year, if you have it is a small price to pay for each each additional year of freedom to live life as you wish, control your time"

Wow, that line should be on the startpage of E-R.org
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Old 11-01-2015, 12:28 PM   #40
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If risk of running out of life is greater than risk of running out of money, retire sooner.
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