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Over 50, and Under No Illusions
Old 01-13-2013, 03:06 AM   #1
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Over 50, and Under No Illusions

Interesting article in today's NYT :

http://www.nytimes.com/2013/01/13/bu...=business&_r=0

"IT’S a baby boomer’s nightmare. One moment you’re 40-ish and moving up, the next you’re 50-plus and suddenly, shockingly, moving out — jobless in a tough economy."

Everyone needs a plan B. What is yours ? Mine is a mix of 1) annuities mainly at a later stage in life, 2) stay the course (as they say on Bogleheads) until I FIRE, 3) maybe w*rk part time hours locum tenens and 4) keep LBYM.
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Old 01-13-2013, 05:06 AM   #2
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My plan B is (thank God) having tenure. If my current administrative position at the university folds for some reason (it won't) I'll go back to teaching in my former department.
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Old 01-13-2013, 05:22 AM   #3
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My plan B was to save/invest enough to be able to live off investments starting at age 40. Thus when I got to age 50, I didn't need a plan B.
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Old 01-13-2013, 06:15 AM   #4
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What LOL said. FI by 40 was my plan, and I'm FIREing this year at 44.
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Old 01-13-2013, 08:12 AM   #5
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We were talking about this this morning - if it weren't for health care, we would be FI already. (Quite frankly, unless you have absolutely guaranteed, high-quality health insurance from a former employer, or a government pension, or something like that, I don't think anyone can really be sure that they have FI unless they're "there" twice over, now, given how there is really no way to know what health insurance will cost.)
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Old 01-13-2013, 08:38 AM   #6
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Have you tried the Kaiser Permanente calculator? .
Quote:
Originally Posted by bicker
given how there is really no way to know what health insurance will cost.)
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Old 01-13-2013, 08:40 AM   #7
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Re: "Kaiser Permanente calculator"
Quote:
Your health today
BMI calculators
Know your risks
Your emotional well-being
Pregnant or planning
Set goals, take action
Lose weight
Eat well
Get active
Quit smoking
Kids' games and activities
Get help making decisions
Symptoms
Medical tests
Surgeries and treatments
Medications
I don't see a "How much will it cost me, all told?" calculator.
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Old 01-13-2013, 08:46 AM   #8
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http://healthreform.kff.org/Subsidyc...ncomeAgeTables
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Old 01-13-2013, 08:50 AM   #9
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Thanks... that covers 2014... What I'm worried about 2024 and 2034, though.
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Old 01-13-2013, 09:16 AM   #10
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Originally Posted by bicker View Post
Thanks... that covers 2014... What I'm worried about 2024 and 2034, though.
I'll be on medicare by then, if it survives. Here's another calculator for PPACA

National Health Care Calculator

The cost was one issue, I was more worried about accessibility. It doesn't matter how much money you have when they will not sell you insurance, which is pretty much anybody 50+ regardless of what "conditions" you have. I found you could do COBRA, use it up, and then are eligible for state pool via HIPAA.
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Old 01-13-2013, 09:37 AM   #11
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I was saving as much as I could while working and when I did get laid off (at the age of 45), I didn't have as much saved as I wanted. However, I found that by trimming my material standard of living, I was able to not go back to work. This was a good thing, because I didn't really feel like re-inventing myself, which is what it would have taken to gain new employment. I may work part-time in the future to supplement my income but I can't see myself committing to a career in the same way ever again.

So far, the plan's working, and my income should go up a little over time (above and beyond merely keeping up with the rate of inflation.)

I can only talk to a few of my friends about money, and I try to impress upon them the need to save earnestly. With one of them, my message is actually starting to get through.
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Old 01-13-2013, 09:39 AM   #12
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Quote:
Originally Posted by bicker View Post
We were talking about this this morning - if it weren't for health care, we would be FI already. (Quite frankly, unless you have absolutely guaranteed, high-quality health insurance from a former employer, or a government pension, or something like that, I don't think anyone can really be sure that they have FI unless they're "there" twice over, now, given how there is really no way to know what health insurance will cost.)
I don't think anything can be considered "absolutely guaranteed". The question is are you willing to wait an additional 10 years (or however long it takes for your portfolio to double) to FIRE? or will you decide the risks are acceptable with the Affordable Care Act? or split the difference somehow?
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Old 01-13-2013, 09:58 AM   #13
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Quote:
Originally Posted by Major Tom View Post
I was saving as much as I could while working and when I did get laid off (at the age of 45), I didn't have as much saved as I wanted. However, I found that by trimming my material standard of living, I was able to not go back to work. This was a good thing, because I didn't really feel like re-inventing myself, which is what it would have taken to gain new employment. I may work part-time in the future to supplement my income but I can't see myself committing to a career in the same way ever again.

So far, the plan's working, and my income should go up a little over time (above and beyond merely keeping up with the rate of inflation.)

I can only talk to a few of my friends about money, and I try to impress upon them the need to save earnestly. With one of them, my message is actually starting to get through.
I was terminated in '98 from Megaconglomocorp, during one of many re-orgs, but they left the backdoor open, and I went right back into a tech job, for more money, mostly because of the gawd-awful depressed compressed shift I worked, with all the built-in OT. I saved a bunch during the ensuing years, and managed to make the "bridge" before being outsized permanently. This allowed me to get subsidized HI, so that base is covered. Sheer, dumb luck My advanced skill set got me back to work at a university shortly thereafter, and I managed to save a bunch while getting severance and unemployment. Getting pretty close to the number now, but, alas, the funding for my program is disappearing, and the chances of new funding are currently unknown. So, may be out on the street again this summer. I could FIRE now with an early SS check, but I'm still 3.5 years from that. The thought of interviewing, and sucking up to some 30yo asking me what my "five year plan" is, gives me hives and heartburn!!

Ideally, another 2-3 years of w*rk would get me where I'd like to be, but if the doo hits the rotating, oscillating blade, and my alternative is sweeping the floor at Home Depot, I may decide to go ultra frugal for a couple of years, then when SS gets close, go to full-bore FIRE.

The good thing is that I'm comfortable enough that I have a choice.
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Old 01-13-2013, 10:01 AM   #14
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Plan A = Don't get sick Plan B = If sick, die quickly!

The gov't just can't shrink that prescription doughnut hole fast enough to suit me!

Seriously, until "Obamacare" is priced, cannot be sure if I am FIRE. Hope to know premium details by late summer so I can negotiate a "package" with employer.

Plan B is to work one more year which I would rather not do...
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Old 01-13-2013, 10:04 AM   #15
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Originally Posted by HFWR View Post
The good thing is that I'm comfortable enough that I have a choice.
And that is the best reason for saving that I try to get across to my less financially-savvy friends - the fact that having money put aside gives you choices and more freedom. They see it as mainly an opportunity to buy more stuff!
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Old 01-13-2013, 10:14 AM   #16
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Originally Posted by obgyn65 View Post
Interesting article in today's NYT :

http://www.nytimes.com/2013/01/13/bu...=business&_r=0

"IT’S a baby boomer’s nightmare. One moment you’re 40-ish and moving up, the next you’re 50-plus and suddenly, shockingly, moving out — jobless in a tough economy."

Everyone needs a plan B. What is yours ? Mine is a mix of 1) annuities mainly at a later stage in life, 2) stay the course (as they say on Bogleheads) until I FIRE, 3) maybe w*rk part time hours locum tenens and 4) keep LBYM.
My plan B was simply to save and invest as much as possible so that I could become FI/ER as soon as possible. By the time my early 50's rolled around I was in a position to ER and did so at 52. I drove the same car for a minimum of 10 - 15 years. Always packed my own lunch, had a comfortable but modest house . Although I had very good income, I didn't spend it all and certainly no debt. LBYM is simple and it really, really works. Result was when the crash of 2000-2002 rolled around it did nothing to derail my ER plans and I ER'd at end of 2002.
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Old 01-13-2013, 10:50 AM   #17
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My "plan" was to stick it out in my federal career and in the military reserves long enough to secure 2 COLA'd pensions that when combined would provide enough income to support my wife & I, not lavishly, but comfortably.

Additionally, since she'll have survivor's benefit's from both pensions, and her own Social Security, plus our hopefully paid-off home, she should be okay. *We still have to buy & pay for the house...)

There were plenty of days when I wasn't sure I'd make it to retirement, due to having an urge to come in shooting (kidding, sort of) I am happy I hung in there.

Of no small importance is the fact that we'll have health benefits from both of my former careers. Regular health insurance, employer-subsidized from the civilian job, plus later on...TriCare from the military career. We'll be ok. I'm glad I stayed the course. We're not rich, but we're happy!

Oh yeah...Plan B(b) was to not rely on my future pension(s) alone, but to also max my TSP contributions for several years as well, even though no employer match, and to also contribute generously to wife's 401k. She'll work at least 3 years more, and we plan to double her contributions through that period. Maybe even to the max, if we can swing it!
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Old 01-13-2013, 11:11 AM   #18
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Plan A : build investments on a solid foundation of historical backtesting (history is all we have, there is no future knowledge). Do the number crunching myself so I really understand the risks. Do intelligent tax planning.

Plan B : sell the big house.

I stopped reading that NY Times article in the OP when it talked about a US lady moving to Islamabad, Pakistan -- that is totally nuts.
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Old 01-13-2013, 11:58 AM   #19
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I've seen this happen to a few people, quite sad really.

My Plan B when I grew tired of megacorp in 2012 was to move into contract work in my regular field. I've worked all the days that I've been available, making more $$ working less hours. If and when the assignment expires, I'll look for another contract assignment, but will probably take a few months off, hoping for summer of 2013.

I think it's easy for me to accept as I have a Plan C/D.

Plan C - real estate investing and landlord for family assets. I did it to help my mom find a place to live years ago, but bought a few units over the years, so now the income covers our "normal" family budget.

Plan D - $1M plus invested in low cost index funds.

Plan E - agree with DW that she should work outside of the household. Both kids will be in full time school in Sept 2013.

I am under no illusions, I was lucky with a tad of hard work.
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Old 01-13-2013, 12:39 PM   #20
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Plan B if I lose my current position is to consult part-time. I did this for two years when I was fired a few years ago from another position. Really enjoyed it and wound up working for one of my clients; would do it again. No debt, 1.5M in investments, another $400,000 in home and other assets, age 59.
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