Retire next year at 56?

[GMoney]

I am 55, single, empty nest. I am ready to pull the trigger next year, I have never earned more than 75k a year and currently make 50k. My expenses are $15k a year now, I expect 25k in expenses a year when I retire to include probably 10k in healthcare premiums and expenses for 9 years until medicare. I have 1.3m now, probably have 1.5m by next year. I know I will never spend it all, Investments 91% in stock market in two 401k's, one IRA, and a investment account, 9% other in cash and safe investments.
I looked up Healthcare.gov costs at around $500 a month for good plans. I am a very healthy 55 year old diabetic.
I am looking for reassurance that I have nothing to worry about.
I plan to travel, at least 2 or 3 trips to many overseas locations a year, I'm in Florida. I traveled every week with a previous job with Honeywell and loved going to a different city every week and want to see the world, and believe I am financially able to do it.
I am looking for insight from people who have retired around 56 and had in excess of 25 times their current expenses or 10 times their current income.

 

[street]

Well good for you!! One thing that caught my eye was your Health Insurance expense. I know you mentioned it put you should look into ACA for insurance. I', pretty sure it don't coat you 25K a year.
I think you will be just find to retire with your holdings and WR.

 

[travelover]

Welcome. If you have enough in after tax accounts, you may be able to get ACA insurance very cheaply as your taxable income will very low if you withdraw from after tax accounts first.

 

[Dtail]

Welcome fellow Floridian.
As mentioned, try your best to take advantage of the tax subsidies for an ACA plan. In general, the ACA plans in FLA are very good, inclusive of most doctors and can be relatively inexpensive.
Be safe with the upcoming storm Elsa.

 

[aaronc879]

Why wait until next year? You should be good to go as soon as you want. Good luck

 

[RetiredHappy]

You maybe able to work your income numbers so that after you retire, you can get subsidies for both share of cost and premium with a ACA silver plan. It is very inexpensive.
Where we live, none of my doctors take any of the ACA plans, so you should check if it is an issue for doctors whom you current see. I have complexed health issues and as such, I have to see particular specialists.

When you said you only need $15K in living expenses, it raised my interest that it is almost quite impossible to live on that amount where we live. I wish I can live that cheaply! My HOA, utilities, home insurance and property tax already cost $26K a year. Since you woud like to travel after retirement, the living expenses would also increase.

 

[GMoney]

Thanks for the insight, ACA plans varied in cost, as low as $150, as high as $900 a month. I know I get what I pay for, so mid priced plan should cover me now with no current health issues except paying for insulin and supplies. I'm not worried about Elsa, going to be tropical storm, probably 35 to 45 mph winds. I've been in for 18 years, no worries. Thanks.

 

[GMoney]

Yeah, I worded that incorrectly. I updated it. I expect $800 a month for ACA being a diabetic.

 

[GMoney]

My house will be paid off. Taxes and insurance on house are $1700 a year. My house is $190k.
Pinellas County homestead taxes are cheap.

 

[aaronc879]

My house will be paid off. Taxes and insurance on house are $1700 a year. My house is $190k.
Pinellas County homestead taxes are cheap.

Wow, I pay over twice that for a house worth around $125K.

 

[aaronc879]

Yeah, I worded that incorrectly. I updated it. I expect $800 a month for ACA being a diabetic.

That's for the premium plus out of pocket costs, right? Being diabetic shouldn't increase the premium cost just the amount you have to pay towards your out of pocket max. I don't know what your MAGI is but it seems you may qualify for cost sharing which would keep your out of pocket max lower and you may not have near $800/mo in costs. The most I can possibly spend on healthcare is $1200 for the year if I use in-network providers. You probably won't be that low but you may be lower than you think.

 

[Dtail]

That's for the premium plus out of pocket costs, right? Being diabetic shouldn't increase the premium cost just the amount you have to pay towards your out of pocket max. I don't know what your MAGI is but it seems you may qualify for cost sharing which would keep your out of pocket max lower and you may not have near $800/mo in costs. The most I can possibly spend on healthcare is $1200 for the year if I use in-network providers. You probably won't be that low but you may be lower than you think.

Thinking the same thing.
If you could keep your MAGI to 150% of FPL, I would think you would not be over $200 monthly for a Silver plan.

 

[MRG]

Retired 8 years ago at 56. We had a little more than 25x expenses and 10x last years income. You sound good and it's been a great time to be retired. If you can keep magi below 200% of fpl health care can be very affordable.

Now on to the important things like what are you going to do all day and when to take SS.
/s

 

[ut2sua]

OP, If your 401k plan allows rule 55 withdrawal, you should be good. If not, you may not have access to your 401K/IRA funds the straight forward way (there are other ways to get the $). Make sure you have access to $ from now until 59.5. Congrats on the FIRE plan

 

[RunningBum]

Thanks for the insight, ACA plans varied in cost, as low as $150, as high as $900 a month. I know I get what I pay for, so mid priced plan should cover me now with no current health issues except paying for insulin and supplies.

Don't shop plans based on price, thinking a medium or high premium policy will be better. Look to see that the doctors you want to see are part of a plan. Then do a spreadsheet with your known expenses, and then add various levels of extra expenses to see which works best.

I usually find a bronze policy best for low usage, which makes sense because of the low premium. Then a silver or gold is best for a window of expenses (usually when I hit their lower deductibles). As I approach max out of pocket the bronze gets better again, since the Max OOP tends to be similar across policies.

That may be specific to me, so do your own work. An HSA may only be available on bronze policies, so that's an extra incentive. But you may be able to get the cost sharing reductions on a silver, which heavily favors that.

I recall hearing one post say that their ex- wanted them to get a gold policy since the kids were on it and she "wanted the best". Doctors don't do a half-assed job on bronze policyholders, and try extra hard for the gold. It just doesn't work that way.

 

[GMoney]

Retired 8 years ago at 56. We had a little more than 25x expenses and 10x last years income. You sound good and it's been a great time to be retired. If you can keep magi below 200% of fpl health care can be very affordable.

Now on to the important things like what are you going to do all day and when to take SS.
/s

I only make 50k a year now, fed limit for getting ACA help is 60k or less. I'm not going to take withdrawals from retirement accounts until at least 60 years old. I shouldn't have any issues with it. I'm thinking I should take SS at 62, why wait, I'm not married, don't ever plan to again. It's $700 more a month if I wait until 67 but what if I die before then, it just doesn't make sense to me to wait.
I play tennis, golf, ski, bike, want to travel to so many places overseas. I've already been to 45 of the 50 states here so Europe, Asia, Australia are in my future first. No rush, two or three trips a year for a few weeks at a time.

 

[GMoney]

OP, If your 401k plan allows rule 55 withdrawal, you should be good. If not, you may not have access to your 401K/IRA funds the straight forward way (there are other ways to get the $). Make sure you have access to $ from now until 59.5. Congrats on the FIRE plan

I have investments giving me 15k a year in dividends, and 300k that isn't in 401k's and my IRA, so I don't think I'm going to have to take any retirement money until around 62 probably. Thanks for the input.