Would ER in a heartbeat but....

[jesaco]

Would love to retire early but.....afraid to lose health insurance from my Job.

currently 58 yrs old, DW is 52 and have a 14 yr old son. Current expenses is about $4T/month but can withdraw $5T a month from investments (to last 25 yrs adjusted at 3% inflation) DW works partime (2 days) earning about $800/month, but looking for a full time job now. Plan to take SS at 62 and lessen my withdrawals from investments to make it last longer. Our income should be enough to cover expenses EXCEPT health insurance cost. Still researching how obamacare works and how much it will cost.

Investments in 70% taxable, 20% 401K and 10% roth.

BTW, workplace has been toxic and stressful the past year with the new Boss, causing sleepless nights and getting quite depressed.

Wish I had the full confidence and courage to ER. I have been reading posts here and it has helped me and learned a lot from posters here. Thank You for this site.

Anybody here who wanted to retire early but something holding them back? ...Either health insurance concerns, lack or shortage of investment income, high expenses, family concerns etc. or did anyone pulled the trigger and ER facing these concerns? Did everything went well and found out the concerns were really baseless?

 

[cooch96]

Lack of sleep and depression will make you sick. I have a hard time wrapping my head around the concept of valuing health insurance more than actual Health. I would vote for quitting immediately and then figuring out what level of coverage you really need and can afford.

But please consider the source, folks are always telling me I'm crazy.

 

[EastWest Gal]

I am in a state that does not have its own healthcare marketplace so I used the national marketplace and it was very smooth. I see you are in NY, so you will have to check out your states website. I was able to browse the marketplace and see the plans and premiums ahead of time. It is expensive, but cheaper than COBRA by almost 50%. This year I will not qualify for a subsidy, due to payments received from my former job in January and quite a bit of other income.

To estimate your income minus your job income, look at your dividends, capital gains, and your wife's W2. Add those together. That is your income for ACA purposes. Withdrawals for living expenses don't count for tax purposes or for the ACA.

You can estimate your premiums and subsidy from the site without giving any information about yourself. I found that for us (similar age with one child) a subsidy kicked in at an income below $70 thousand.

Worth checking out.


Sent from my iPhone using Early Retirement Forum

 

[Golden sunsets]

If possible consider deferring SS to at least FRA. The difference in your SS increases by approximately 8 percent per year for each year you defer and makes a big difference in income, unless you have health concerns.

 

[jim584672]

I am in NY and it went alright for the sign up, some minor bumps, but that was more on the insurance company than the state exchange. My COBRA would have been $614 a month, a Platinum plan that is comparable to this was $560, but with subsidy it was $378.

 

[imoldernu]

Even back in 1989, when we retired, health insurance was big...
The decision to retire at 53, was made, figuring on a tight budget between then and age 62 when SS was available. We adjusted to the squeeze, always keeping in mind that it might be necessary to go back. We watched the numbers all the way, and managed to make it all the way. In a heartbeat, indeed, but also with an honest look at the projections and the actual every year.
A different decade, but even then, with a lot less in assets than you'd guess.
Just a matter of adjusting spending to what we had.
Our road to retirement here:
http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251.html

 

[NgineER]

Welcome to the board!

I'd recommend you posting your actual expenses, current income, nest egg and some of your assumptions.

People on this board are very good helping out with estimating expenses etc.

Have you run through fire calc etc?

 

[Kook]

I am in a similar situation and posted a similar question only a week or two ago (topic: What to Do?). The overwhelming response was to get the heck out now, while I still have my health... and I am now crafting my exit strategy. The thought of losing health insurance is scary, but the irony is that you are staying at your job for the health insurance....but your job is causing you to be unhealthy.
Life is too short to be unhappy.

 

[ERD50]

You'll need to find an estimate of your true retirement expenses. They can be quite different than working expenses, beyond just health care costs.

This comment concerns me:

"but can withdraw $5T a month from investments (to last 25 yrs adjusted at 3% inflation)"

25 years is not a long time for a 58/52 year old couple. And what if inflation is greater than 3%? I'd suggest getting those numbers together and using a historical reporting calculator like FIRECalc. Far better, IMO, than just guessing what inflation might be.

-ERD50

 

[Likes_to_Lurk]

I am also in NY. The difficulty that I found with the NY exchange was that NONE, and I mean NONE, of the carriers are offering out of network coverage. Any out of network expenses are on you. For me, that was just too risky.

If you are happy with your coverage, you might want to consider using COBRA until you figure something else out. If your wife is looking for a F/T job, she may be able to cover you both.

Let me add my voice to the chorus of those who are encouraging you to leave a toxic environment. You DO have options. Keep reading and posting here and you will sort it all out.

Good luck.

 

[daylatedollarshort]

As others have posted, run your numbers through some of the retirement calculators and plan to live a long time. You don't want to run out of money when you are 85.

You might consider downshifting or just changing jobs instead of full ER if you still have money concerns, or look at the budget to see if you can lower your expenses to make your numbers come out better.

 

[Choices]

Rick, I second the idea of finding another job rather than completely retiring. Without seeing more in-depth financials I am thinking things are too tight to retire just now. I plan for a life span of 105 years, just so I am confident we can be okay so your 25 years of retirement savings seems shortsighted. Best of luck !

 

[2B]

Health insurance is the easy part. You can buy it. If you can't fit it into your retirement budget, that's a different story. You have to balance your expenses (including heath care costs) against any pensions, SS, etc and portfolio. The rule of thumb is that you can take 4% out of your portfolio. When you figure out everything, if you can't live on this you need to keep a job. If you are in a toxic job, you can certainly consider finding something else.

"Hoping it all works out" is not a plan. Yes, things can go wrong; but if your numbers are clearly falling short, you shouldn't retire on the assumption that you will mega-above average market returns for the next 30 years.

 

[daylatedollarshort]

I just watched an Amazon Prime Nova show on laboratory grown replacement body parts and people maybe living forever. They had a car with 2M miles on it to show that if we can replace all our body parts maybe we could do the same. It is food for thought when making a retirement plan. What advances in medical science may come along over the next 30 years to allow us to live to very old ages?

 

[jesaco]

Thank you so much for all the replies and insights. It has really given me a lot of points to ponder. All of you been very helpful. I will probably stay in my job for now but will start looking for a new (hopefully better and less stressful) job. Until then, I have no choice but to deal with the enviroment in my current office, Hoping I can delay retirement a few more years. It would give me more time to grow my investments and be more comfortable doing ER.

Thanks again to everyone. really glad I found this site.

 

[Teacher Terry]

WE retired at 53 & 58 with expensive health insurance from the state (10K/year) on pensions that totaled $40k. We cut our expenses down to 30k. However, we knew we both wanted to work p.t. consulting in our fields & so our incomes have risen significantly in the last 3 years. This has worked out well since we mostly work from home, no office BS to deal with & only having to work p.t. Right now it is the best of both worlds for us. Good luck!

 

[Accumulating Wealth]

I wouldn't let the comments posted in this thread talk you out of early retirement. You didn't provide enough details for anyone to give you accurate advice. Unless you have a lot of debt you may be able to cut your expenses enough to make early retirement very safe and reasonable. Check out other early retirement sites like Mr Money Mustache for a different perspective.

People on that site retire in their 30's with $600k where on this site I've seen commenters tell people in their late 50's they can't retire with 2 million in assets.

It's a matter of how much you want it and how willing you are to cut your expenses.

 

[fh2000]

Anybody here who wanted to retire early but something holding them back? ...Either health insurance concerns, lack or shortage of investment income, high expenses, family concerns etc. or did anyone pulled the trigger and ER facing these concerns? Did everything went well and found out the concerns were really baseless?

Our reason may be quite different. DW wants to see if our 60/30/10 AA can survive the next market downturn without major impact. So we soldier on with OMY, watching market closely.

 

[2B]

People on that site retire in their 30's with $600k where on this site I've seen commenters tell people in their late 50's they can't retire with 2 million in assets.

It's a matter of how much you want it and how willing you are to cut your expenses.

The people with $2MM are usually crying that they can't see themselves cutting back spending to less that $250k/yr. I agree that lots of people could retire sooner if they would seriously re-prioritize their spending.

 

[daylatedollarshort]

I wouldn't let the comments posted in this thread talk you out of early retirement. You didn't provide enough details for anyone to give you accurate advice. Unless you have a lot of debt you may be able to cut your expenses enough to make early retirement very safe and reasonable. Check out other early retirement sites like Mr Money Mustache for a different perspective.

People on that site retire in their 30's with $600k where on this site I've seen commenters tell people in their late 50's they can't retire with 2 million in assets.

It's a matter of how much you want it and how willing you are to cut your expenses.

I think the advice here is generally pretty reasonable, especially this post from Gumby:

http://www.early-retirement.org/for...-answer-before-asking-can-i-retire-69999.html

The second chapter of The Millionaire Next Door, a perennial favorite here, is called Frugal, Frugal, Frugal. The first edition of that book came out in 1996. The first chapter is here:

http://www.washingtonpost.com/wp-srv/style/longterm/books/chap1/millionairenextdoor.htm

" We live well below our means. We wear inexpensive suits and drive American-made cars. Only a minority of us drive the current-model-year automobile. Only a minority ever lease our motor vehicles....Most of our wives are planners and meticulous budgeters. In fact, only 18 percent of us disagreed with the statement "Charity begins at home." Most of us will tell you that our wives are a lot more conservative with money than we are."

Most Millionaire Next Doors are actually cheap dates:

http://www.thomasjstanley.com/blog-articles/272/A_Cheap_Date.html

 

[jesaco]

Just an update...talked to my immediate supervisor and requested to work part time (2 and a half days - 2 days in the office and the half day at home) and she has agreed to it but requested if I can start the P/T schedule in April or May. I prepared a whole analysis on how much the company will save with me working P/T. (half salary/half benefits/increase in my health care contributions etc but with less responsibities). Did not care about the reduced income since I wanted to get out or minimized any interaction with the office. working P/T would be better than resigning which I almost did. My health is already getting affected just being in the office.

This should reduced my withdrawals and avoid paying for health care for now thru ACA till I do the ER next year. Currently have about $820T in taxable accts, $285T in a 401K plan and 100T in a roth IRAand about 50T in savings a/c. We also have about $150T for our son in 429, coverdell and a custodial 529 a/c. Quite modest compared to the assets of some of you here but I hope this would be enough to ER. current expenses around $4T but should be go down when we cut a few expenses. (2 car leases totals $750 a month. we plan to buy used but reliable cars once the leases end to lower expenses plus cut a few more here and there). Withdrawals should also be further reduced when I start taking SSS at 62 about $1,700/month. DW will still work and will increased her days from 2 days to 3-4 days a week to get more income.

Hope everything goes well and hoping I made a sound decision. This forum really helped me a lot, giving me confidence and lifting my spirits. I thank you all....

 

[Accidental Retiree]

Congratulations on getting approval for that part-time schedule.

Just an update...talked to my immediate supervisor and requested to work part time (2 and a half days - 2 days in the office and the half day at home) and she has agreed to it but requested if I can start the P/T schedule in April or May. I prepared a whole analysis on how much the company will save with me working P/T. (half salary/half benefits/increase in my health care contributions etc but with less responsibities). Did not care about the reduced income since I wanted to get out or minimized any interaction with the office. working P/T would be better than resigning which I almost did. My health is already getting affected just being in the office.

This should reduced my withdrawals and avoid paying for health care for now thru ACA till I do the ER next year. Currently have about $820T in taxable accts, $285T in a 401K plan and 100T in a roth IRAand about 50T in savings a/c. We also have about $150T for our son in 429, coverdell and a custodial 529 a/c. Quite modest compared to the assets of some of you here but I hope this would be enough to ER. current expenses around $4T but should be go down when we cut a few expenses. (2 car leases totals $750 a month. we plan to buy used but reliable cars once the leases end to lower expenses plus cut a few more here and there). Withdrawals should also be further reduced when I start taking SSS at 62 about $1,700/month. DW will still work and will increased her days from 2 days to 3-4 days a week to get more income.

Hope everything goes well and hoping I made a sound decision. This forum really helped me a lot, giving me confidence and lifting my spirits. I thank you all....

 

[2B]

Currently have about $820T in taxable accts, $285T in a 401K plan and 100T in a roth IRAand about 50T in savings a/c. We also have about $150T for our son in 429, coverdell and a custodial 529 a/c. Quite modest compared to the assets of some of you here but I hope this would be enough to ER. current expenses around $4T but should be go down when we cut a few expenses. (2 car leases totals $750 a month. we plan to buy used but reliable cars once the leases end to lower expenses plus cut a few more here and there). Withdrawals should also be further reduced when I start taking SSS at 62 about $1,700/month. DW will still work and will increased her days from 2 days to 3-4 days a week to get more income.

Have you run FireCalc on your numbers? Ignoring the 429 (529-?), you have liquid assets of $1.255 MM. The 4% rule of thumb says you can take $4,200/mo. and have a 95% safe 30 year retirement (inflation adjusted). The SS for you and your DW adds to this cash flow. Cutting expenses that don't add to life enjoyment is always good. Spend money on what means something to you.

If your health is being negatively impacted, you are ready to go. Congratulations on getting your DW to increase her work load so you can cut your hours. I don't see this very often. Based on my quick analysis, her sacrifice is not needed unless I'm missing something.

 

[jesaco]

2B, Sorry. I meant 529 not 429. I also did my numbers in fireCalc and I basically got the same results as you said based on a 30 year time. Guess that gave me the courage to tell them about the part time hours. When we leased our cars we did not have any thoughts of ER yet but this has changed. Thanks again for the inputs. DW likes her job and is very near our house. She always had the option on how many days she can work but already told her employer she will be adding a day or two and her boss said they are "Thrilled" about it. Finding this site has been truly a blessing...Learned a lot.

Have you run FireCalc on your numbers? Ignoring the 429 (529-?), you have liquid assets of $1.255 MM. The 4% rule of thumb says you can take $4,200/mo. and have a 95% safe 30 year retirement (inflation adjusted). The SS for you and your DW adds to this cash flow. Cutting expenses that don't add to life enjoyment is always good. Spend money on what means something to you.

If your health is being negatively impacted, you are ready to go. Congratulations on getting your DW to increase her work load so you can cut your hours. I don't see this very often. Based on my quick analysis, her sacrifice is not needed unless I'm missing something.

 

[Teacher Terry]

I think working p.t. can be the best of both worlds for many people. Congrats! Here's hoping that the reduction will help your health. Office BS can really be toxic.