Healthcare is the only reason I don't retire now. Have to wait to see what happens to the ACA. Well, another reason is my Dad who is 92. He might need in home care or something that I would need to contribute to.
Sub $1M no pension retirement? Any out there?
- Thread starter garyt
- Start date
Healthcare is the only reason I don't retire now. Have to wait to see what happens to the ACA. Well, another reason is my Dad who is 92. He might need in home care or something that I would need to contribute to.
No mortgage , but will need a new car soon. We would like to move south.
Yes, both of us working making never more than $90K combined probably averaging more like $75-$80K. We're both savers but we still travel and enjoy life. we just don't blow money unneccessarily
It's definitely all about healthcare. If we had coverage in retirement I'd be gone now. Heck, if I thought the ACA would be around awhile I could manipulate my income enough to qualify for the largest subsidy, Medicaid even.
Me. For the last 27+ years.
... and considerably less than $1 million. Comparatively speaking, healthcare was a still a major expense, even in the 1990's.
http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251.html
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marko
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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+1 Who does have a bullet proof plan?
You to your math, plan for the worst, hope for the best, expect the unexpected, prepare to be flexible and adjust accordingly.
Same as the first 40-50 years that got you this far.
Freedom56
Thinks s/he gets paid by the post
If you have $800K to invest, you could build a portfolio investment grade preferred stocks corporate notes and get about $48K to $50K of interest and dividend income annually. That plus your $30K of SS income will give you about $80K annually without depleting your capital. If you are debt free, you can live very comfortably on $80K per year. Stay away from so called wealth managers. They will rob you.
Garyt,
Congratulations on your savings! You guys did a great j*b!
In my mind, the biggest question is what are your current expenses and how are these projected to change when you both retire?
Your $800K can give you roughly the same income as your SS at 62. Here are some examples at various SWR ("safe" withdrawal rates), assuming roughly a 30 year retirement plan:
$ 32K/yr at 4% annual withdrawal
$ 28K/yr at 3.5% annual withdrawal (fairly conservative for 30 yrs)
$ 24K/yr at 3.0% annual withdrawal (very conservative for 30 yr horizon)
So, say $ 30K/yr withdrawn from your investments + $ 30K/yr from SS = $ 60K/yr for living. Is this enough?? Don't forget to include taxes (probably much lower than when working) and ACA health insurance & projected Out of Pocket health expenses (checking healthcare.gov, could be $ 10K+ yearly if can't manage income for substantial ACA subsidies).
Also, how close are you to 65 & Medicare? Perhaps 3-4 years from Medicare and SS at 62 yo if necessary is more encouraging than if you are 10-15 years from Medicare.
Regarding ACA, I retired 2 years ago in good part because of ACA made health insurance portable, although not necessarily inexpensive. So I'm weathering the current situation, and although ACA seems to have survived the recent political challenge, little seems to have been done about increasing premiums and out of pocket and shrinking provider choices. So it help to have some margin/headroom in your calculations.
So retiring before Medicare and without the protection of big gov or Megacorp health bennies is NOT for the weak or the dumb. It's certainly a calculated risk that needs to be weighed with care. Still, you managed to rack up $800K on a sub 6 figure salary, so you must be either very lucky or very smart and determined
Additional caveat: safe withdrawal numbers assume very low investment expenses, say 0.2% or less. All bets are off if you are paying 1%+ to financial advisor PLUS 1-3% or more for expensive actively manage funds and/or annuities.
Good luck!
FB
Congratulations on your savings! You guys did a great j*b!
In my mind, the biggest question is what are your current expenses and how are these projected to change when you both retire?
Your $800K can give you roughly the same income as your SS at 62. Here are some examples at various SWR ("safe" withdrawal rates), assuming roughly a 30 year retirement plan:
$ 32K/yr at 4% annual withdrawal
$ 28K/yr at 3.5% annual withdrawal (fairly conservative for 30 yrs)
$ 24K/yr at 3.0% annual withdrawal (very conservative for 30 yr horizon)
So, say $ 30K/yr withdrawn from your investments + $ 30K/yr from SS = $ 60K/yr for living. Is this enough?? Don't forget to include taxes (probably much lower than when working) and ACA health insurance & projected Out of Pocket health expenses (checking healthcare.gov, could be $ 10K+ yearly if can't manage income for substantial ACA subsidies).
Also, how close are you to 65 & Medicare? Perhaps 3-4 years from Medicare and SS at 62 yo if necessary is more encouraging than if you are 10-15 years from Medicare.
Regarding ACA, I retired 2 years ago in good part because of ACA made health insurance portable, although not necessarily inexpensive. So I'm weathering the current situation, and although ACA seems to have survived the recent political challenge, little seems to have been done about increasing premiums and out of pocket and shrinking provider choices. So it help to have some margin/headroom in your calculations.
So retiring before Medicare and without the protection of big gov or Megacorp health bennies is NOT for the weak or the dumb. It's certainly a calculated risk that needs to be weighed with care. Still, you managed to rack up $800K on a sub 6 figure salary, so you must be either very lucky or very smart and determined
Additional caveat: safe withdrawal numbers assume very low investment expenses, say 0.2% or less. All bets are off if you are paying 1%+ to financial advisor PLUS 1-3% or more for expensive actively manage funds and/or annuities.
Good luck!
FB
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brewer12345
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There are some. My former employer has a pension plan with zero chance of default, you can start it as young as age 50 (at a discount to age 65 value), you can use 401k funds to buy more pension credit, and if you have 10 years of service by the time you retire at age 55 or later you are allowed to buy health insurance at the employer group rate. Bullet proof, as far as I can see.
ItDontMeanAThing
Full time employment: Posting here.
I retired, mostly voluntarily, with $580k in the pit of the global economic crisis of 2008. Became an expat. Eight years later in Dec '16 my nest egg was $870k and I started $20k SS. Projections are that will give me a comfortable life by my standards. Should the root causes of the high cost of US healthcare ever be fixed, I expect it would give me a comfortable life in the US. In the mean time, fueled by the extra 20k a year, I'm country shopping. Portugal is next.
DEC-1982
Full time employment: Posting here.
Well done garyt. Keep an eye on healthcare costs, since nobody really knows if Obamacare will still be available AND if the Obamacare insurers will continue in your retirement location. Obviously you have (or should have) a backup plan.
That would be more than enough. Any reccomendations or places I can read more? I'm not too up on preferreds.
There are a few here.
Not sure I would count - I am sub $1M and consider myself FI, but am still doing things. Last year did a startup that actually cost me money in the end (not too much, luckily). Am stopping that one right now. The year before that I basically did nothing, one or two consulting gigs adding up to two months of work (roughly).
At 36 I still feel like doing some silly things that add value. Because I want to, not necessarily for the money. Although increasing a buffer is always nice.
Next Tuesday I'll start a new venture. Getting a small salary out of it since I'm teaming up with another existing company, nothing compared to my (apparent and declining) market value. I actually offered to work for no salary, company wouldn't have it
Other example not on this forum: my mother. She doesn't even have SS (equivalent, Europe here). Healthcare (the big one) is covered though.
Not sure I would count - I am sub $1M and consider myself FI, but am still doing things. Last year did a startup that actually cost me money in the end (not too much, luckily). Am stopping that one right now. The year before that I basically did nothing, one or two consulting gigs adding up to two months of work (roughly).
At 36 I still feel like doing some silly things that add value. Because I want to, not necessarily for the money. Although increasing a buffer is always nice.
Next Tuesday I'll start a new venture. Getting a small salary out of it since I'm teaming up with another existing company, nothing compared to my (apparent and declining) market value. I actually offered to work for no salary, company wouldn't have it
Other example not on this forum: my mother. She doesn't even have SS (equivalent, Europe here). Healthcare (the big one) is covered though.
Just to follow-up, my impression from fora and net worth:
- Bogleheads very high: 3 to 10m is pretty typical
- Then this forum: typically 0.5 to 3m
- MMM, ERE (sort of defunct) lowest: rarely above 2m
- Reddit and such: aspirationals: mostly paying off credit cards and house.
brewer12345
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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As far as MMM goes, make sure your instrumentation is working if you go wading in over there.
Attachments
ItDontMeanAThing
Full time employment: Posting here.
The User Profile feature of this site allows you to input a location, which then displays in the left hand column of your posts between Join Date and Number of Posts. Mine says:
Location: Hua Hin, Thailand
swguy
Dryer sheet aficionado
Perhaps you are not aware, in the ER Forums app the information you mention is not displayed.
Sent from my SM-T550 using Early Retirement Forum mobile app
Lstansbury
Recycles dryer sheets
Do you live in a home that you own? We are very similar in situations, but I still have a mortgage. thank goodness its a condo, maintenance is a lot cheaper
Lstansbury
Recycles dryer sheets
Be careful on the Medicaid qualification. It isn't just about income, it's also about assets. Depending on the state, you might need to be down to $2K in assets not counting your home or car.
Surewhitey
Thinks s/he gets paid by the post
We're in a similar boat, here. Paid for home ($400k) and $850k spread out over many 401k's / accounts. We took off a few years living in Mexico. Healthcare is very reasonable there unless you have some exotic blood disorder, then the US or Europe may be the place to be. We had catastrophic insurance for that possibility.
Came back to TX as we now have a GD and decided to live down the street from them. Our expenses are like clockwork, $3000 / month for basics and travel. Add in insurance and property tax, that takes us to $4500, tops.
DW will get a small pension of appx. $900 at 65 and SS will likely be $3,500-ish for the two of us. The problem is we're 10-15 years from that. Our goal is $1mm + house to pull the plug or ease into full-time. The 3 year hiatus was a nice "test" period and we really enjoyed the experiences there. We're looking to the next 2 years to give us more clarity, but I'm ready to pull the plug on this "life"... we'll need a cash pile to cash flow us to FR or at least 59.5
BTW, we always had positive cash flow while in Mexico, so I feel pretty confident we can do it.
Came back to TX as we now have a GD and decided to live down the street from them. Our expenses are like clockwork, $3000 / month for basics and travel. Add in insurance and property tax, that takes us to $4500, tops.
DW will get a small pension of appx. $900 at 65 and SS will likely be $3,500-ish for the two of us. The problem is we're 10-15 years from that. Our goal is $1mm + house to pull the plug or ease into full-time. The 3 year hiatus was a nice "test" period and we really enjoyed the experiences there. We're looking to the next 2 years to give us more clarity, but I'm ready to pull the plug on this "life"... we'll need a cash pile to cash flow us to FR or at least 59.5
BTW, we always had positive cash flow while in Mexico, so I feel pretty confident we can do it.
From reading I thought (we have expanded Medicaid in Mi if that matters) that it was simply income? I guess I just tossed Medi in with the ACA subsidies?
Michigan has expanded Medicaid.
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