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Ignoring the politics, will policy affect your ER plans?
Old 10-21-2012, 06:00 AM   #1
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Ignoring the politics, will policy affect your ER plans?

If we can avoid the politics, I wonder how many will adjust their plans based on future policy. I will. I have a 5 year window starting next week and I see policy as the biggest variable in the scenarios.

"Consider a 62-year-old worker with $38,500 in income, $4,000 from investments. Such a worker could qualify for a $6,500 ObamaCare subsidy, paying $3,700 toward premiums with perhaps a $2,000 deductible.
But if she retires and claims Social Security, with roughly $14,000 a year in benefits, her ObamaCare premium subsidy would rise to $9,400 with almost no deductible.
Factoring in a state and federal tax bill of $6,500, that worker would have an after-tax, after health cost (premium and deductible) income of $26,000, vs. $17,100 in the old early-retirement scenario. In other words, the pre-tax gap between working and retiring early would shrink from $20,500 to just $8,900."


Read More At IBD: ObamaCare Work Disincentives: 4 Cliffs That Hit Employees, Firms - Investors.com
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Old 10-21-2012, 06:39 AM   #2
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Not sure what is meant by "future policy", the PPACA is current law. The example quoted shows that a person with lower income is eligible for more premium subsidy. We would expect a subsidy to work that way. The linked article looks at 3 other parts of the law and highlights specific possible downsides. Lets leave those out if this discussion, as they are not related to early retirement.

Are you asking if any members are modifying their early retirement plans to take advantage of this and perhaps retire sooner? Some expressed those thoughts in this thread Patient Protection and Affordable Care Act It is an interesting question. Are you?
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Old 10-21-2012, 07:09 AM   #3
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There was a recent article at the Retire Early Home Page that discussed the benefits of the health care law on early retirees. Here's a link....

Obamacare makes it really easy for millionaires to retire early?

The article points out that the loophole is unlikely to last. IMHO there are many issues with the Affordable Care Act (aka Obamacare) that will need to be addressed. The only question is "how?"

In response to MichaelB, health care is a major budget item that gives me angst in my planning which contributes to my delay. A full implementation of Obamacare is not going to happen until 2014. Right now, I believe that the issues that need to be addressed are being minimized due to our political cycle. After this election things will start to be addressed. The "winners" will be driving the reform.
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Old 10-21-2012, 07:17 AM   #4
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Seems like any change in laws/policy would force you to reevaluate your choices, don't see why this would be any different. Early retirements should open up jobs for people that want them instead of people working just to have access to health insurance.
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Old 10-21-2012, 08:45 AM   #5
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Nope. I'm staying retired.
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Old 10-21-2012, 09:02 AM   #6
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Thanks MichaelB. I want avoid politics and to concentrate on the effects of implementation (although they will certainly change). For myself, as the incentive to continue working (enjoy the j*b, hate the travel) is reduced, it shifts the equation to retire earlier (for all the right reasons per the experts on this board).
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Old 10-21-2012, 09:17 AM   #7
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Yes. Having inexpensive health insurance available makes retiring early much more attractive. Actually doing it, though, will still be a tough decision.
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Old 10-21-2012, 09:28 AM   #8
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I may adjust my plans based on "future" policy. In particular, if I want to retire earlier than Medicare age (65) I need to have a plan for healthcare insurance. My employer plan is good for at most 18 months of COBRA. My early retirement could bridge the gap between COBRA and Medicare with a private policy, but I am very concerned that IF I leave my job and find that private policies are unavailable for medical reasons or unaffordable that I could put myself into a pickle where I am 18 months out of work, only to find I cannot continue my healthcare insurance. At that point I'm in trouble because my work skills and contact would be stale, the state of the economy then is unknown, and I'm without health care coverage.

There's been a lot of talk about repealing or revising the PPACA and I am uncomfortable launching myself into a future plan that depends on it, unless I have more certainty that it will be there, or some other future policy will be there, to insure that I'm insurable. There's a lot about PPACA to like or dislike and I'm not making a political statement in favor (or against it) but my future plans are contingent on getting more certainty around healthcare policy and I will defer or adjust plans while still employed until it is more clear what future policy will be.
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Old 10-21-2012, 09:29 AM   #9
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Health Insurance is the 800# gorilla in our household. It is a major consideration in my waiting until 2014-15 to retire. I still need tosee how it will shake out. Currently I am eligible for retiree benfits but who knows where this going.
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Old 10-21-2012, 10:21 AM   #10
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Thanks to everyone for their views.
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