Afraid to take the leap

[Deep Blue]

Hi, I am 60 and hoping that 2020 will be my year to turn in the hard hat. I can only imagine what my life would feel like without the stress of my job. But, I am a little apprehensive to let go. I came across his community and have found so much good information already. So here is my story. I am 60, my wife is 58. She doesn’t work. Our home is fairly new and paid for. Vehicles paid for as well. We don’t have any other debt. I will receive a pension of $69600, this includes taking the SS option right away with my pension. We have $750000 in our 401k. It is 100% in Fidelity U.S. Bond index fund. We also have just over $100000 cash. My biggest concern is health care. I plan to use Cobra which is $1120 per month for 18 months and that is calculated into my spending. After that I will have to purchase healthcare elsewhere. We don’t live lavishly and The big expenses for our hobbies are already paid for. We would like to travel a few times a year in our RV and spoil our grandkids. I did complete the calculator and received a 100% score. But it seems to good to be true. Any comments or advise will be appreciated.

[braumeister]

Welcome!

This might help:
Some Important Questions to Answer Before Asking - Can I Retire?

[njhowie]

I think you're in very good shape. That pension provides an extremely nice backstop for you.

[Bob_Walter]

Does the pension have a survival benefit for your spouse? Is there a cola? What age does the Social Security leveling kick in?
How much is your spending? I downloaded all my bank statements for the past several years (added 10% to to anything more than 4 years to account for inflation) to average out what I spend, this includes all credit cards per year, it was more than I thought. This way there were no surprises if I decide to pull the plug. If you want to be extra careful, do that and add 10% or so. $15k-$20k/yr/couple is reasonable for health insurance until Medicare kicks in.

[Vacation4us]

Can you get healthcare cheaper? The ACA perhaps.

What are your expenses?

Your AA of 100% bonds seems overly conservative during your accumulation phase did you ever have any % in stocks?

Your still good to retire in my eyes But the above may lead to more $$

[Deep Blue]

Being over conservative With my 401 has certainly cost me. But 2019 and so far this year my personal rate of return year to date is 8%. I just don’t know enough to change right now. I hope to learn from this group of retirees. I’m so glad I found this site.
I used the spending calculator and was surprised at how fast everything added up. My estimates were a lot higher than the examples. I came out only 5k in the green. However I believe I over estimated quite a bit.
My retirement is Level income with 100% J&S to 62. Together we will receive 69600 and she would receive 44800 if she outlives me.
Healthcare still keep me awake at night.

[cat4ever]

Quote:

Originally Posted by Deep Blue Healthcare still keep me awake at night.

Newbie here as well, and something I haven't seen mentioned much is that health care costs are more than just your insurance rate. Insurance only pays so much and the rest can add up quickly. IMO you need to add maxing out a Health Savings Account to your health care costs ($3,550 for self-only and $7,100 for family coverage.), and even that may not be the end of your costs.

[DrRoy]

I found that the SS income leveling option with my pension was too big a hit to the payment amount. You should consider skipping the leveling and either reduce your spending for a couple years or take it from savings. The difference over time may be worth it. Once you decide which is better, then pull the trigger.

[pb4uski]

Quote:

Originally Posted by cat4ever Newbie here as well, and something I haven't seen mentioned much is that health care costs are more than just your insurance rate. Insurance only pays so much and the rest can add up quickly. IMO you need to add maxing out a Health Savings Account to your health care costs ($3,550 for self-only and $7,100 for family coverage.), and even that may not be the end of your costs.

Nah.

While I agree that you need to consider deductible and co-pays in addition to health insurance premiums in assessing your overall health care costs, I diagree with the idea of including HSA contributions.

One year of HSA contributions would cover 5 years of deductibles, co-pays, dental and vision for us. I recently did a HSA withdrawal for our qualified medical expenses for 2010-2019 and it was only $18,000 for 2 people.... so our average health care expenses excluding health insurance premiums were only $1,800 a year... much less than $7,100 HSA conribution.

[cat4ever]

Quote:

Originally Posted by pb4uski Nah. While I agree that you need to consider deductible and co-pays in addition to health insurance premiums in assessing your overall health care costs, I diagree with the idea of including HSA contributions. One year of HSA contributions would cover 5 years of deductibles, co-pays, dental and vision for us. I recently did a HSA withdrawal for our qualified medical expenses for 2010-2019 and it was only $18,000 for 2 people.... so our average health care expenses excluding health insurance premiums were only $1,800 a year... much less than $7,100 HSA conribution.

I would say do it the other way around, plan for maxed out HSA ($8100 now for us) at least until you get a good sum accumulated (good being subjective), and don't add anything else, assuming HSA funds will cover those extras.
I was planning on maxing out until we get at least 40-50k accumulated for use now and our future with medicare.
I have very good (18k/year family w/ dental) insurance now but until we hit our deductible of $2800 we pay all the costs that aren't considered preventative. After that we will still pay 10%/40% for in network/out network costs until we hit the out of pocket maximum ($6200). If you have any issues it adds up quickly. We've managed to hit the out of pocket max almost every year and have only accumulated 15k in our HSA after 10 years. We do have 2 kids though, so you should be able to half all of my numbers, including max HSA contribution.
Perhaps I'm being too conservative?

[pb4uski]

No, you just are failing to consider that HSA contributions are not costs of health care... they are more moving money from one pocket to another pocket... costs are when the money leaves your pocket to go into the pocket of a doc or hospital or other medical service provider.

I think it prudent to at least include what you expect to have to pay to medical providers in addition to health insurance premiums, but it may not be the entire deductible for everyone, in our case it has only been about $1,800 a year over the last 10 years.

[Deep Blue]

Being as clueless as I am. We planned to set aside $50k for healthcare costs. This will be for meeting deductibles and other out of pocket medical expenses. We are both reasonably healthy with no major issues. So I hope to make it to Medicare with most of that money still in the bank
I made a mistake of filling in a health insurance online questionnaire thinking I would get a quote and an idea of private insurance costs. I am still getting bombarded with useless propaganda and no closer to solving my problem.
This is why I will chose Cobra until I can figure it out.
Will I qualify for AHC? My pension will be $69600. And I plan to take some interest from my 401k money.
Does an affordable private health insurance that you can actually use if you become sick even exist?

[Deep Blue]

Being as clueless as I am. We planned to set aside $50k for healthcare costs. This will be for meeting deductibles and other out of pocket medical expenses. We are both reasonably healthy with no major issues. So I hope to make it to Medicare with most of that money still in the bank
I made a mistake of filling in a health insurance online questionnaire thinking I would get a quote and an idea of private insurance costs. I am still getting bombarded with useless propaganda and no closer to solving my problem.
This is why I will chose Cobra until I can figure it out.
Will I qualify for AHC? My pension will be $69600. And I plan to take some interest from my 401k money.
Does an affordable private health insurance that you can actually use if you become sick even exist?