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View Poll Results: Who will survive early retirement better?
33 years old, $1.2 million, 3 kids, $65,000 expenses/yr, healthy 4 5.00%
53 years old, $700,000, no kids, $40,000 expenses/yr, healthy 76 95.00%
Voters: 80. You may not vote on this poll

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Old 04-03-2016, 09:26 AM   #21
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Even if you consider the finances even, you would have to go with the older couple. The 20 year age difference adds risk. Example: They both do great for the first 30 years of retirement. Then at age 83 the older couple die, and sometime in the next 20 years there is a complete melt down, hyper inflation zooms in, and their is a nuclear war followed by a world wide pandemic, and a shortage of dryer sheets!
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Old 04-03-2016, 09:52 AM   #22
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How? I must be missing something. Even leaving aside the difficulty of getting money out of tax deferred accounts at age 33, they will have to pay the normal 15% bracket on most of the withdrawals on the $65K, which is too high an amount to be safe anyway. If the money was in taxable accounts, they could play some games and minimize taxes, although the 5.42% WR is still too high to be safe.
Leave 100% of the money in the tax-deferred account. That is the plan.

They are probably eligible for Medicaid. If they are willing to move, here in MN, they would be eligible for MinnesotaCare. Child healthcare is 100% free, $0 premium, $0 deductible. Adults are ~$20 a month. It covers healthcare, pharmacy, vision, even transportation to and from the appointments. There are no asset tests.

If they can work just a little bit, they can get $6,242 as a tax credit, via the Earned Income Tax Credit (EITC).

Assuming they were able to work and make ~$11K a year, they could put in $11,000 into a Roth IRA, and get another $4,000 back from the IRS as another Savers Tax Credit.

With the EITC, and the IRA Savers Credit, that is more than enough to pay the actual amount that is put into a Roth.

As a low income family, they would be eligible for housing assistance. In MN, they could rent a place, possibly a town home or house, and get up to $1,300 for housing each month. That would include the rent and electricity. There are low-income assistance programs for utilities as well.

There are a whole host of other benefits that provide for food assistance, transportation, college, etc. but just from the above you can get healthcare and housing and utilities provided. And a nice contribution to a Roth.
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Old 04-03-2016, 10:31 AM   #23
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Savers credit is not refundable, so if you have only a $400 tax bill you will receive a $400 credit max.


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Old 04-03-2016, 12:17 PM   #24
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As a low income family, they would be eligible for housing assistance. In MN, they could rent a place, possibly a town home or house, and get up to $1,300 for housing each month. That would include the rent and electricity. There are low-income assistance programs for utilities as well.

There are a whole host of other benefits that provide for food assistance, transportation, college, etc. but just from the above you can get healthcare and housing and utilities provided. And a nice contribution to a Roth.
Don't they have asset tests in MN for assistance other than Medicaid?
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Old 04-03-2016, 12:22 PM   #25
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I still don't see where the $65K they need for expenses are coming from. If you're ignoring that need and saying live a Jacobean/MMM existence, no problem. But if they need the $65K for expenses I don't see how it would work.
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Old 04-03-2016, 12:35 PM   #26
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At 33 the couple still has plenty 'o years to qualify for the "early retirement" designation. At their savings rate ($1.2MM at 33) they can plug away until the ripe old age of 41 by which time they'll have amassed about $3.2MM and can fund their now $76K annual expenses at a 2.4% withdrawal rate.

Easy-peasy.
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Old 04-03-2016, 12:55 PM   #27
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Don't they have asset tests in MN for assistance other than Medicaid?
That is one reason the DGF is able to retire with me. No asset test.


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Does MinnesotaCare look at assets in considering my eligibility?
In keeping with the guidelines of the Affordable Care Act, MinnesotaCare no longer looks at a person’s assets. Assets refer to the things a person owns like savings accounts, retirement accounts, vehicles, houses, and so on. There is no limit on assets. However, the interest you earn on your assets is now counted as part of your income.

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Savers credit is not refundable, so if you have only a $400 tax bill you will receive a $400 credit max.
That is good to know. I am planning on the DGF using that credit to the extent she can.
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Old 04-03-2016, 01:06 PM   #28
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That is one reason the DGF is able to retire with me. No asset test.
I understand the ACA and expanded Medicaid states under ACA no longer have asset tests. However, in California it is my understanding that most of the other services you mentioned in your previous post like housing, utilities, college financial aid and food assistance would have asset tests.
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Old 04-03-2016, 01:07 PM   #29
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I still don't see where the $65K they need for expenses are coming from. If you're ignoring that need and saying live a Jacobean/MMM existence, no problem. But if they need the $65K for expenses I don't see how it would work.
If you assume that they will have taxes of ~$10K for the $65K, they only need ~$55K in income.

The all-inclusive healthcare is worth ~$15K a year. Housing is worth ~$15.5K. SNAP programs do not have asset tests in MN, that's worth maybe $5K. EITC is worth $6,242.

Other programs are available too. All in all, it's probably a $45K+ package.

Work just a bit and get to the $55K pretty easily. You need some income anyway to get many benefits like EITC.

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I understand the ACA and expanded Medicaid states under ACA no longer have asset tests. However, in California it is my understanding that most of the other services you mentioned in your previous post like housing, utilities, college financial aid and food assistance would have asset tests.

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There is no asset limit for SNAP. You can own as many assets as you'd like and still qualify for SNAP (assuming you meet all other program requirements).
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Old 04-03-2016, 01:09 PM   #30
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I understand the ACA and expanded Medicaid states under ACA no longer have asset tests. However, in California it is my understanding that most of the other services you mentioned in your previous post like housing, utilities, college financial aid and food assistance would have asset tests.
As far as I know, there is no asset test for Section 8.

You can even own a home and be on Section 8. income counts, I am not 100% sure if tax-deferred income counts. I suspect not.
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Old 04-03-2016, 08:49 PM   #31
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If you assume that they will have taxes of ~$10K for the $65K, they only need ~$55K in income.

The all-inclusive healthcare is worth ~$15K a year. Housing is worth ~$15.5K. SNAP programs do not have asset tests in MN, that's worth maybe $5K. EITC is worth $6,242.

Other programs are available too. All in all, it's probably a $45K+ package.

Work just a bit and get to the $55K pretty easily. You need some income anyway to get many benefits like EITC.
OK, I guess I see. I'm thrown by my desire to be FI, as opposed to FD(ependent). I don't even count on SS, since it's not my money. Different strokes, I guess. I'd hate to spend my retirement years dealing with the gov't that much. Just doing taxes is bad enough.
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Old 04-03-2016, 11:29 PM   #32
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You make an interesting argument that's it's better to be older than younger....... I wish I could buy into that, but at 68 yo, I can't.

Geezer - "I've had a nice life. It's mostly behind me now but no one can take the memories away from me so I'm glad I'm old and there is no risk that I'll have a short life."

Youngster - "The adventure of life is ahead of me, but gosh, I could die young. To avoid that risk, I wish I could just go to sleep and wake up old knowing that I survived to geezerhood!"
It's hard to be old. Damn, it was just yesterday when I was 20, in college and having a life ahead of me, but not really knowing how it was going to work out.

Still, I keep reminding myself not to envy the young. They will be old some day too, and it will come a lot quicker than they imagine. And some unfortunate ones will not get to grow old, as I have realized.

Life's so short, and people keep worrying about the future instead of living in the moment. And we geezers have no future, or so little of it left anyway.

I am going to make myself a gin and tonic now.
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Old 04-04-2016, 12:37 PM   #33
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I forgot to mention this quote that I heard in a movie recently (August - Osage County).

"The biggest surprise in a man's life is old age." - Leo Tolstoy
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