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Old 08-10-2010, 02:48 PM   #21
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How is everyone handling health insurance?
It's a part of our Megacorp benefits.

(we retired with over 1 million and a non cola'd pension)
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Old 08-10-2010, 02:57 PM   #22
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Free/cheap obamacare coupled with a low taxable income (to make it free/cheap).
Is there no asset test for Medicaid? You qualify strictly on the previous year's income, regardless of whether it is earned or passive?
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Old 08-10-2010, 03:01 PM   #23
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We ER'd with well less than a million (couple, no kids), crossed that magic threshold briefly in '07 and are back in the "well under" category today, thanks to the magical market

If we had it to do over (or the economy was better for our skill sets) we'd be back wo*%ing part time, but as things stand we've had to get good at minimizing expenses. For at least the next 4 years (until Obamacare kicks in fully in 2014) we'll be Mexico based and only visiting the U.S., due in large measure to health insurance premium madness (we have no company coverage and private insurance is a very bad joke).

On less than 2K a month from investments we will be eligible for Medicaid under Obamacare with room to spare (our taxable income last year was ~12K). My experience is it's really hard to pull off this kind of lifestyle in the U.S. without living in a trailer in some place you'd just as soon not be, but in Mexico, Costa Rica, Ecuador, Thailand, etc. it's easy. Not to say expat life appeals to many Americans, but it seems to me a lot of Baby Boomers who had no intention of considering such choices may well have to.
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Old 08-10-2010, 03:10 PM   #24
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Talking about health care subsidies, it looks like you would have to make less than 400% of the poverty level to qualify. For a couple, that would be roughly $50K / per year. Our planned retirement income would be just above that although, in bad market years, we may qualify. That could help soften the blow.

I found this nifty simulator yesterday that shows what impact Obamacare could have based on income:

Health Reform Subsidy Calculator
I just ran the link for a family of four. At $95K a year the credit is zero but at $90K a year the credit is over $6.5K. Wow, talk about effective marginal tax rate increases and a disincentive to earn more.
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Old 08-10-2010, 03:22 PM   #25
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Is there no asset test for Medicaid?
Medicaid is managed state by state. In ours, you can't have more then $2k in assets.

Sorry, I would not want to be in the position of that being my assets, but I get "free" health insurance...
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Old 08-10-2010, 03:26 PM   #26
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If this was 2014, all my remaining debt was paid off, and I had a million bucks invested, then I would just barely feel comfortable ER'ing. But I would probably keep working "just one more year" to make sure I have enough wiggle room for the decades ahead.
I say 2014 because that is when the government is generous enough to give me free/extremely cheap health insurance.
A million would get you $30,000-40,000 a year in spending. If that meets your projected expense needs then it should be fine.
If you wanted to move it up:
7/1/12, do the cobra thing for 18 months (which you have to do anyway), then 1/1/14 apply for obamacare.
TJ
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Old 08-10-2010, 03:57 PM   #27
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Medicaid is managed state by state. In ours, you can't have more then $2k in assets.
So it sounds like in many/most states FIREees won't get any health care subsidies. If premiums rise as a result of the new laws, we will be worse off in 2014 than we are now.
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Old 08-10-2010, 04:07 PM   #28
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I just ran the link for a family of four. At $95K a year the credit is zero but at $90K a year the credit is over $6.5K. Wow, talk about effective marginal tax rate increases and a disincentive to earn more.
Has there ever been a time when the marginal tax rate was above 100%? Because that is what this represents. $5K more income and your taxes go up $6.5K.

Unfortunately, this may be lost on some people. I've heard from more than one person who thought getting 'bumped into the next bracket' thought that meant your take home pay went down, rather than the additional $ earned above that point got taxed at the higher rate.

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Old 08-10-2010, 04:10 PM   #29
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So it sounds like in many/most states FIREees won't get any health care subsidies. If premiums rise as a result of the new laws, we will be worse off in 2014 than we are now.
FIREees may not qualify for Medicaid, but if their income stays below 400% of poverty levels, they could still qualify for subsidies (correct me if I'm wrong).
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Old 08-10-2010, 04:26 PM   #30
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FIREees may not qualify for Medicaid, but if their income stays below 400% of poverty levels, they could still qualify for subsidies (correct me if I'm wrong).
That is my understanding, but since I do not believe that the rules to implement the law have been written, I would not count on anything just yet.
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Old 08-10-2010, 04:32 PM   #31
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Just curious if anyone has successfully FIRE'd on less than $1Million and DID NOT have a defined benefit pension plan from their employer.
I ER'd at age 29 with $59, a case of lentils, a taste for buzzard jerky, and a plan to use the system to my advantage.

I keep my livin' expenses low so that I don't have to work for the man. I'm not gonna let some corporation take my life away. Nosiree ! Between welfare and food stamps I git what they owe me.

Workin' is for suckers !

Stop workin' and start livin now ! The good life awaits you !
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Old 08-10-2010, 04:32 PM   #32
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If you wanted to move it up:
7/1/12, do the cobra thing for 18 months (which you have to do anyway), then 1/1/14 apply for obamacare.
I have thought of that, too. Not for me but my husband has a corporate job and that is where we get our health insurance. But I do wonder if the new health care law might be repealed at some point in the future. We have a number of years we have to cover yet before we could get Medicare. We have more of a concern with health insurance about his early retiring from corporate life than we do over the money part since we have a small business that brings in an income.
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Old 08-10-2010, 04:38 PM   #33
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No, the asset test for "regular" Medicaid does not apply to the new health insurance plan. Rather than rehash everything here's the link to a long thread about this I started over on the Raddr forum:

Raddr's Early Retirement and Financial Strategy Board :: View topic - radical ER health insurance strategies

Agreed much could change between now and 2014, but the government is just not likely to be concerned with the miniscule % of the population that is ER'd, living off of substantial assets but with low taxable income, etc. Given the insanity of the system, gaming it seems like a moral imperative
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Old 08-10-2010, 05:04 PM   #34
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How is everyone handling health insurance?
1. Being in Europe.
2. Having an employer who extends beyond-the-basics cover to retirees for a 1% contribution. I could move to the US with my pension and be fully covered for life. I cannot justify this, but I'm not going to refuse it...
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Old 08-10-2010, 05:07 PM   #35
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a long thread about this I started over on the Raddr forum
Interesting and helpful. Thanks.
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Old 08-10-2010, 05:55 PM   #36
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MasterBlaster:

I really don't appreciate your posting pictures of my house and car. Please be more sensitive in the future.

Just kidding.

Actually that car is newer than mine.
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Old 08-10-2010, 06:51 PM   #37
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If you wanted to move it up:
7/1/12, do the cobra thing for 18 months (which you have to do anyway), then 1/1/14 apply for obamacare.
TJ
I have considered exactly that! We won't have a million in the bank in 1.5 years. In 4 years? Maybe.
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Old 08-10-2010, 06:59 PM   #38
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Is there no asset test for Medicaid? You qualify strictly on the previous year's income, regardless of whether it is earned or passive?
As others have said, no asset test (as of now) for medicaid eligibility with the new law. Income up to 133% Fed poverty level qualifies for medicaid (free insurance). Above that you pay some. I just checked family of 4, and at $44000 in income, I would pay $2500 or so for health insurance. And get an $8500 credit to pay for the rest of the premium.

I'll say that this new health insurance "freebie" took us a lot closer to FIRE. And we should be FIRE-ready a year or two after the 2014 start date, so we can see how it works and how to maximize our gaming of this freebie.

I think I might have to have a couple more babies to make sure I stay nice and close to the Federal Poverty Level. Gotta go, duty calls!
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Old 08-10-2010, 07:32 PM   #39
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Just curious if anyone has successfully FIRE'd on less than $1Million and DID NOT have a defined benefit pension plan from their employer.
I am sure it is possible, but it's too tough!

We have quite a bit more than that, but with no pension, no health care benefits, the expenses of two houses and a newly added thirsty RV, I am still w*rking part-time.

By the way, the part-time work also keeps me from engaging in more costly leisure activities. What ya do all day indeed!
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Old 08-10-2010, 09:42 PM   #40
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We plan to ER with about $500k in savings. The key is that we won't be in the US, but in Taiwan, which has national health insurance. That will cost us (me and wife) about $100/month. Our in-laws will provide us with a modest condo. We've budgeted about $15-20k/year expenses. I will probably continue to do some part-time consulting for a few years just to be safe financially. We already live simply and frugally, so this won't be a huge step down for us as far as lifestyle goes. I don't see how we could ER in the US given the cost of health care.
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