Clover5
Recycles dryer sheets
- Joined
- May 4, 2013
- Messages
- 78
As I approached my December 31 retirement (59yo) I was concerned with how to manage spending, fund insurance and was I going to be comfortable with life without a paycheck. So nine months out from retirement day I decided to re-arrange my accounts to essentially behave as if I was not receiving my normal paycheck.
My biggest initial concern by far was how to pay for medical insurance. I most probably am not going to get a subsidy due to rental income. So, I figured out how much I needed to fund 5.5 years of medical insurance including 18 months of Cobra and the remaining months on ACÁ. I changed my work direct deposit to go to a new account at Fidelity, which I call my medical insurance account. By the time my last paycheck arrives I will have fully funded 5.5 years of medical insurance. The side effect is that because all my paycheck is going to funding insurance I have no paycheck funding my day to day life.
Then I wanted to pay myself similar to a paycheck so I setup a automatic withdrawal that moves 5k a month, on the first of the month, from an account I call my savings account into my day to day account. Essentially paying myself on the first of each month. I also change my taxable accounts to send interest and dividend to my savings account.
In the past few months after starting this I finally have the confidence that I will be able to manage our money without a paycheck. That I can pay for insurance no matter what happens. And that we are going to be fine with our spending going forward. I am sure there are many ways to accomplish the above, probably simpler ways too, but it was useful for us.
My biggest initial concern by far was how to pay for medical insurance. I most probably am not going to get a subsidy due to rental income. So, I figured out how much I needed to fund 5.5 years of medical insurance including 18 months of Cobra and the remaining months on ACÁ. I changed my work direct deposit to go to a new account at Fidelity, which I call my medical insurance account. By the time my last paycheck arrives I will have fully funded 5.5 years of medical insurance. The side effect is that because all my paycheck is going to funding insurance I have no paycheck funding my day to day life.
Then I wanted to pay myself similar to a paycheck so I setup a automatic withdrawal that moves 5k a month, on the first of the month, from an account I call my savings account into my day to day account. Essentially paying myself on the first of each month. I also change my taxable accounts to send interest and dividend to my savings account.
In the past few months after starting this I finally have the confidence that I will be able to manage our money without a paycheck. That I can pay for insurance no matter what happens. And that we are going to be fine with our spending going forward. I am sure there are many ways to accomplish the above, probably simpler ways too, but it was useful for us.