Insurance After Retirement

[RetiredAt49]

I’ve been working at large tech companies for the past 25 years. I am 49 years old and about to retire but I can’t believe how much premiums cost for insurance. I’m used to paying $150-300 a month and on the marketplace the cheapest is around $1,300/month. Does that sound d accurate?

 

[Montecfo]

It does yes. Health insurance is expensive and and employees typically pay only a small percentage of the cost.

Have you priced your Cobra coverage? Maybe not cheaper but could be better coverage. But it's a stopgap but gives you time to figure things out.

Also not sure if you are including dental, but many of us find it not to be cost effective when unsubsidized.

Just a thought.

 

[2017ish]

Seems high for 49 year old. What state are you in?

For us, if we had done the marketplace in our late 50s, it would have been about 12-1300 per month for the two of us in Tennessee. We went another route though.

Another option, followed by many here, is to keep reported income low and take advantage of subsidies on ACA marketplace.

E.T.A.--per MonteCFO, yeah, check your COBRA. We didn't check and just went with that initially--it was pricier than ACA for us. (and way more than the non-qualified plan that we have been on for 3 years.)

P.S.--everything is also dependent upon your (and yours') health status/expenses....

 

[jim584672]

Estimate Health Insurance Premiums and Subsidies for Health Insurance Coverage through Marketplaces

https://www.kff.org/interactive/subsidy-calculator/

 

[RetiredAt49]

Seems high for 49 year old. What state are you in?

For us, if we had done the marketplace in our late 50s, it would have been about 12-1300 per month for the two of us in Tennessee. We went another route though.

Another option, followed by many here, is to keep reported income low and take advantage of subsidies on ACA marketplace.

E.T.A.--per MonteCFO, yeah, check your COBRA. We didn't check and just went with that initially--it was pricier than ACA for us. (and way more than the non-qualified plan that we have been on for 3 years.)

P.S.--everything is also dependent upon your (and yours') health status/expenses....

We are in Idaho. When you say “keep your reported income low”… I have $3 million in stock account but have $200k in savings so initially I’m. Not going to pull anything out (a.k.a make money) because I have ample in saving to live a year or two… so can I have millions in the bank (and brokerage account) and show low/no income - at least for the first year or two?

I’m currently making $220k a year but want to retire just not sure what I have to report the moment I switch/retire

 

[Out-to-Lunch]

I have $3 million in stock account but have $200k in savings so initially

Welcome to E-R!

What exactly do you mean by "stock account"? Is it a 401(k) or IRA? Or a taxable brokerage account? Or something else?

 

[RetiredAt49]

Welcome to E-R!

What exactly do you mean by "stock account"? Is it a 401(k) or IRA? Or a taxable brokerage account? Or something else?

Taxable brokerage account invested in 100% stocks. I don’t plan to touch that account for 1-2 years and just use my savings account.

 

[youbet]

Taxable brokerage account invested in 100% stocks. I don’t plan to touch that account for 1-2 years and just use my savings account.

You don't have to "touch" that account for it to generate taxable income. 3 million in a diversified stock portfolio is probably going to generate $45k of dividend income and likely some cap gains on top of that.

What divs and cap gains did your 1040 show last year?

If you're with one of the major brokerage houses, they likely have an online tool which will forecast your ongoing div + interest income given your mix of investments. Predicting realized cap gains can be more challenging.

 

[RetiredAt49]

What divs and cap gains did your 1040 show last year?

I sold my home for $3 million so this is my first year having that taxable brokerage account.

 

[youbet]

I sold my home for $3 million so this is my first year having that taxable brokerage account.

Well then you'll just have to look at what you own and estimate what divs and realized cap gains the three mil will throw off.

This year really doesn't matter because you worked all year and your W2 income alone puts you well over any ACA subsidy level. But you can look at your portfolio and estimate what your taxable investment income will be for 2022. Then there are certain actions you can take to reduce that income that have been thoroughly discussed here. You can do a search for the threads.

You have about 16 years to cover for health insurance so it will be well worthwhile to work on it.

 

[Sunset]

I sold my home for $3 million so this is my first year having that taxable brokerage account.

So maybe you are going to move ?

If you want to control the amount of reported capital gains from your regular brokerage account, I would advise to stay away from funds and to invest in ETF's and stocks.
Some funds have little tax impact, but many have quite a large unpredictable impact.

 

[Scuba]

How many people are covered by this insurance premium? If just you, it sounds high. But if you and your spouse, it sounds about right. DH and I are paying almost $1,500/month now. When we RE’d 5 years ago, it was less than $700/month. Healthcare inflation is real so make sure you account for that in your plans.

 

[jebmke]

Prior to Medicare we budgeted $1K per person for insurance and out of pocket. I think it worked out pretty close. Some of this was paid for by retiree health insurance.

 

[FANOFJESUS]

I’ve been working at large tech companies for the past 25 years. I am 49 years old and about to retire but I can’t believe how much premiums cost for insurance. I’m used to paying $150-300 a month and on the marketplace the cheapest is around $1,300/month. Does that sound d accurate?

If your income is not to high it might be under $300 on the ACA. If your income is above about 52k for a single yes to could be $1300

 

[pb4uski]

bubba, what you should do is an analysis of what your tax return income would be in retirement. You should be able to look at your $3m of taxable stock holdings and estimate the annual dividends. Same for your $200k in savings.

At 2% that would be about $64k a year.

 

[FANOFJESUS]

Under about 70k you should be able to go on the ACA for a couple in normal years(not in 21 or 22). With no cliff in 21 and 22 you can get some help above the old cliff levels.
Run this https://www.healthcare.gov/see-plans/#/