We are hoping to retire a little early. Concerned about health care without a job. We both are working, with 1,000,000 invested, in index funds, cds, and looking at tax free bond fund to reduce risk. We are seeking information to help us have a level of comfort to pull the trigger.
Couple just joined, 63, want to do it right or at least OK.
- Thread starter Debbyot
- Start date
Welcome to the forum!
If you haven't see it already there is a list of questions that you'll want to have solid answers for here:
http://www.early-retirement.org/for...re-asking-can-i-retire-69999.html#post1399715
If you haven't see it already there is a list of questions that you'll want to have solid answers for here:
http://www.early-retirement.org/for...re-asking-can-i-retire-69999.html#post1399715
- Joined
- Nov 17, 2015
- Messages
- 13,948
If you are 63, remember when leaving your employer for any reason you can opt to Cobra for up to 18 months (longer in CA). So that might give you a bridge if you're concerned about maintaining HI with the least friction - you basically stay on your current plan completely. It costs more than ACA insurance generally, but there's some benefit to not having to make any changes.
Beyond that, you can also look at healthsherpa for ideas of the coverage and plans available in your area (of course, open enrollment and actual 2019 offerings are a couple of months away).
Souschef
Thinks s/he gets paid by the post
The thing you have not mentioned is your asset allocation. IOW, what % is in funds, what % in CDs, etc.
I am 81 and am 100% in equities. I am somewhat risk adverse, but the buy and hold seems to be working for me.
I cannot agree on you putting money into bonds, as they are not paying diddly and you will be eaten up by inflation.
Full disclosure: Our income from SS and pensions is about 70 K, and we are both on Medicare Advantage..
I am 81 and am 100% in equities. I am somewhat risk adverse, but the buy and hold seems to be working for me.
I cannot agree on you putting money into bonds, as they are not paying diddly and you will be eaten up by inflation.
Full disclosure: Our income from SS and pensions is about 70 K, and we are both on Medicare Advantage..
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HI Bill
Thinks s/he gets paid by the post
- Joined
- Dec 26, 2017
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- 2,556
Wow! At FIRE minus 2 years, I was 100% equities, but I re-composed my AA to includes some bonds and MM, as I'm 16 years from taking SS, and I wouldn't feel comfortagble trying to FIRE with 100% in equities; the 3+ years of bonds/MM enable me to sleep at night, even with the market's current turbulence. Now you have me wondering, when I hit 70 and start taking SS, will I increase my equities exposure or just spend more on a better house?
Do you have goals for your retirement?
Do you know what your expenses will be?
Are you clear on all the sources of retirement income - from Social Security, pensions, savings, and anything else?
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Tax free bonds have lower yield than taxable bonds, so before heading that direction it is important to look at your tax rate. For lower tax brackets, the after-tax return on taxable bonds will probably be higher than the return on tax free bonds. The goal is to maximize the amount of money in your pocket. If that involves paying some taxes, so what? IOW do not let the tax tail wag the investment dog.
Re risk, tax free funds are not generally thought of as risk-reducers, especially compared to government securities. And government securities are not subject to state income taxes, which gives them an advantage over corporate bonds.
So bonds can be a bit of a complicated equation. Your rep at a firm like Schwab or Fido can help you understand the tradeoffs or just do some studying and reading.
