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What's the reality of ER in Massacusetts?
Old 03-11-2013, 01:22 PM   #1
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What's the reality of ER in Massacusetts?

I'm fast approaching a time when ER is a reality rather than a distant goal and so I'd like to get some general idea of the financial and living experiences of other ERers in the New England/MA area. Maybe you can critique my financial circumstances, whether your planning has panned out and describe how you spend your time. I think I have this planned out, but actual experiences would be interesting to hear. How has health care worked for you?

I'm single and early in 2014 I will be 52 and be able to retire from w*rk and keep my very low deductible ($250 for a hospital admission) health policy for a monthly premium of $450. I'll have $350k in non-retirement accounts, $650k in deferred retirement accounts, no debt or mortgage and I own a two family home and get 1200/month rent from the downstairs apartment. My AA is 5/45/50 cash/bonds/stock held in low cost index funds and quite a bit of Wellesley. I'm budgeting on $3k/month of expenses. At 66 I'll get $4500/month from a combo of SS and a COLAed pension.
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Old 03-12-2013, 09:46 AM   #2
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Quote:
Originally Posted by nun View Post
I'm fast approaching a time when ER is a reality rather than a distant goal and so I'd like to get some general idea of the financial and living experiences of other ERers in the New England/MA area. Maybe you can critique my financial circumstances, whether your planning has panned out and describe how you spend your time. I think I have this planned out, but actual experiences would be interesting to hear. How has health care worked for you?

I'm single and early in 2014 I will be 52 and be able to retire from w*rk and keep my very low deductible ($250 for a hospital admission) health policy for a monthly premium of $450. I'll have $350k in non-retirement accounts, $650k in deferred retirement accounts, no debt or mortgage and I own a two family home and get 1200/month rent from the downstairs apartment. My AA is 5/45/50 cash/bonds/stock held in low cost index funds and quite a bit of Wellesley. I'm budgeting on $3k/month of expenses. At 66 I'll get $4500/month from a combo of SS and a COLAed pension.
will you be living in eastern mass or western mass. i live in western mass. big price difference
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Old 03-12-2013, 09:58 AM   #3
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will you be living in eastern mass or western mass. i live in western mass. big price difference
Well I'm living close to Boston now, but I've lived in Northampton in the past and might move out there at some point. I'd probably keep the two family in Boston and use the rent to pay for a nice place out West.

How have the MA health reforms affected you in retirement?
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Old 03-12-2013, 09:59 AM   #4
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I would think that with the changes to health care and insurance underwriting coming next year, Massachusetts loses much of its advantage to retirees who need guaranteed-issue, especially given its cost of living relative to other areas.
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Old 03-12-2013, 10:27 AM   #5
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Originally Posted by nun View Post
I'm fast approaching a time when ER is a reality rather than a distant goal and so I'd like to get some general idea of the financial and living experiences of other ERers in the New England/MA area. Maybe you can critique my financial circumstances, whether your planning has panned out and describe how you spend your time. I think I have this planned out, but actual experiences would be interesting to hear. How has health care worked for you?

I'm single and early in 2014 I will be 52 and be able to retire from w*rk and keep my very low deductible ($250 for a hospital admission) health policy for a monthly premium of $450. I'll have $350k in non-retirement accounts, $650k in deferred retirement accounts, no debt or mortgage and I own a two family home and get 1200/month rent from the downstairs apartment. My AA is 5/45/50 cash/bonds/stock held in low cost index funds and quite a bit of Wellesley. I'm budgeting on $3k/month of expenses. At 66 I'll get $4500/month from a combo of SS and a COLAed pension.
I think you're all set. In fact, what have you been waiting for?

Your expenses at $3k a month, your insurance $450 a month but you have $1200 a month in rental income, so you would need $2,250 a month net. The PV of $2,250 a month to fund your ER at 52 to 66 is $289k assuming a conservative 4% annual return, leaving $711k of investments in excess of what you need.

And after you turn 66, SS and COLA'd pension will provide all of what you need.

What does Firecalc tell you?

I retired at 57 and we also have guaranteed issue and my health insurance is $629/month for 2.... less than what I had budgeted before retiring and much less than COBRA...however it is a HD plan rather than your sweet LD plan.
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Old 03-12-2013, 10:45 AM   #6
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I think you're all set. In fact, what have you been waiting for?

Your expenses at $3k a month, your insurance $450 a month but you have $1200 a month in rental income, so you would need $2,250 a month net. The PV of $2,250 a month to fund your ER at 52 to 66 is $289k assuming a conservative 4% annual return, leaving $711k of investments in excess of what you need.

And after you turn 66, SS and COLA'd pension will provide all of what you need.

What does Firecalc tell you?

I retired at 57 and we also have guaranteed issue and my health insurance is $629/month for 2.... less than what I had budgeted before retiring and much less than COBRA...however it is a HD plan rather than your sweet LD plan.
The $3k/month includes the $450 for health insurance.....basically I'll have two fixed monthly costs; $550 for real estate taxes and $450 in health premiums leaving $2k to cover everything else. That's what I currently spend so I'm planning to live in ER just as I do now. If I need more income I can always move into the smaller downstairs apartment and rent out the larger unit I live in right now for around $2k a month so that's some insurance and I can always tap the equity on the house. Firecalc says I'm in good shape. But I'll probably look for a part time or volunteer job.

I'm actually way worst off wrt health insurance that I thought I'd be be as the state of MA (my employer) just gutted my retiree health plan. Before I would have been able to continue my plan from age 55 for $100/month (25% of the full premium), that's now changed to 100% of premium.
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Old 03-12-2013, 11:08 AM   #7
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I think marko is retired in your neck of the woods...
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Old 03-12-2013, 11:12 AM   #8
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Since you seem to be all set, is there something that happens between now and 2014 that is reflected above that makes a difference.

In other words, what are you waiting for?
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Old 03-12-2013, 11:39 AM   #9
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Since you seem to be all set, is there something that happens between now and 2014 that is reflected above that makes a difference.

In other words, what are you waiting for?
I have to get to 10 years service before I get access to the employer's health plan at the full premium. If I go before that I'll have to buy from the MA Connector and will only get a HD plan for $450.
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Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
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