Almost there....I hope

[monte1022]

Hey folks...this is our first ever post so please be kind.



We are looking for a critique of our plan. But first, I am a 52 yo healthcare professional earning apprx 150k/yr. DW is 49yo, a healthcare professional working part time and earning 52k/yr. Our plan is to FIRE in 36 to 48 months. We are debt free, 2 children (age 21 and 16), and own our home (275k). The assets are as follows:


1. 440k cash (305k mm 2.35%, 15k checking, 120k SPY etf)
2. 485k Roth (90/10 S&P index etf/small cap etf)

3. 1.145m 401k, tIRA (70/30 S&P index mf/fixed 3%)
4. 220k various cds for "kids" college at in state schools (21yo is starting senior yr college). All left over funds will go to the "kids."



My 401k gets 15.6k/yr with match (I lowered my contribution to boost cash balances)
DWs Roth 401k gets 28k/yr with match

My Roth gets 7k/yr as a backdoor.

DWs has tIRA so no Roth contributions unless we fall under the income limit.

Our cash savings to mm account@ 2.35% is 48k min to 60k max/yr. (includes money from net income, int, and div)



No pensions. My SS $2150, $3064, and and $3800 62, 67, and 70yo.
DWs SS $1250, $1827, and $2290 62,67, and 70yo



We will replace both cars before exit (20k or less each), a new roof (15k) and new HVAC (10k).


No post retirement HC so we will use the ACA. If it goes away before our exit then we will adjust our plans.


We DO NOT want to w*rk after our exit, but being licensed healthcare professionals does makes it fairly easy to pick up some shifts.



We run everything possible through a CC making our expenses easy to track. Outside of CC are utilities, insurance, spending cash, taxes, misc. Our all in expenses for the last 12 months were $5000/mo. We included several one time house updates, annual vacations, and nerdy computer parts to average up our needs so as not to underestimate expenses.



We just started tracking ALL expenses via software so our numbers will become more accurate as we approach our exit.



We want a min of 8k/mo in retirement after tax. We will probably never spend 8k/mo, but we like to over plan.



In two days we will get a plan from a fee only planner. We are eager to have opinions from the members here as well as our planner.



Thank you in advance to everyone taking the time to read and/or respond.

 

[Dtail]

Welcome to our wonderful forum.
I think you are in good shape overall. You have a decent amount of after tax income to keep your HC costs lower while using ACA in its current form.
I ran your numbers through Firecalc with retirement in 3 years, no additions to investment assets, DW taking SS at 62 and you at 70 and got 100% success rate with a maximum spend of 105k.

 

[monte1022]

Thank you for your response.

 

[street]

I'm not an expert but the numbers won't lie. With 2.4M and spending at 65000 a yr. for 40 yr. you get 100% on FIRECalc. That doesn't include SS or any other income you may acquirer. I can't see any issues and good luck and wish you well.

 

[Mdlerth]

I promise I'm worth twice what you paid. And I have a money-back guarantee!

I'm not a fee-only planner; I'm a no-fee planner, and you get what you pay for.
But let's take a cursory look:

Your base run rate is 5k/mo, but you're budgeting 8k/mo plus tax to add cushion;
You're making provision for foreseeable lumpy expenses (cars,,roofs, HVACs, college) while you're still drawing paychecks;
You've got ~2.1M saved now (not counting the college accounts);
Average age ~50, headed out in 3-4 years during which you'll save another ~100k each year;
Even with zero market growth for the next two decades, your cash pile alone would hold you for the 5-6 year interval before you both hit 59.5 and can tap your tax-advantaged kitties;
If you hold off collecting till age 70 your combined SS will cover 75% of your cushioned run rate, dropping your WR to <2% which is sustainable for approximately eternity.

And the answer is...

...you should be more than good to go on schedule. You are cleared for landing. Keep a firm hand on the stick as you make your approach.

But what do I know? Consult FIREcalc. It costs no more than I did, and it crunches numbers with a bit more rigor.

Meanwhile, I'll add a welcome and a request to post more often. Don't be shy.

 

[monte1022]

Thank you.

 

[monte1022]

Healthcare costs

Hello again


My "fee only" planner offered up some very sobering numbers on healthcare costs over the next decade. Our healthcare will cost an estimated 31k/yr and inflate to 69k/yr. Of course these numbers assume the ACA will not survive. Since we are not going to exit for another 3 to 4 years perhaps the fate of "Obamacare" will be better known. I sure miss the part time work healthcare benefit option of yesteryear.

 

[pj.mask]

Hello again


My "fee only" planner offered up some very sobering numbers on healthcare costs over the next decade. Our healthcare will cost an estimated 31k/yr and inflate to 69k/yr. Of course these numbers assume the ACA will not survive. Since we are not going to exit for another 3 to 4 years perhaps the fate of "Obamacare" will be better known. I sure miss the part time work healthcare benefit option of yesteryear.

Just thinking about this doesn’t make sense. More than an average family makes to get health care? Only 25% of the country going to have health insurance?

I have seen up to ~$1k/month/person for insurance as a current top end. Add in $6k to meet deductible and I can see possibly the $31k/yr.

I get costs are rising but I can’t see the average person paying those rates as sustainable.

 

[pb4uski]

Are those numbers for 2 or for 4?

In my state, unsubsidized premiums for a couple for a bronze plan are $12k a year.... $17k for a family. We're pretty healthy so add $1-2k to that for deductibles, co-pays, things not covered, etc.

I also priced similar coverage in Florida and it was ~$20k a year for bronze for a couple.

So our real-world costs for a couple are less than half of your planner's estimate. Also, we have been on private health insurance since 2012 and our premiums in 2019 are 180% of what they were in 2012.

Where I used to work if you worked 20 or more hours a week you qualified for employee health insurance the same as a FTE.

 

[ivinsfan]

Hello again


My "fee only" planner offered up some very sobering numbers on healthcare costs over the next decade. Our healthcare will cost an estimated 31k/yr and inflate to 69k/yr. Of course these numbers assume the ACA will not survive. Since we are not going to exit for another 3 to 4 years perhaps the fate of "Obamacare" will be better known. I sure miss the part time work healthcare benefit option of yesteryear.

Gosh what else did this planner say.I wouldn't have much faith in them after hearing that number.If ACA doesn't survive not one knows what health care is going to cost. Does this number include you paying for both kids health care until they hit 25?

 

[HarveyS]

Hello. Are your SS #'s correct based on ER and no earnings? Or, are they a projection assuming you continue to earn like you are currently earning?

 

[SnowBound]

Hello again


My "fee only" planner offered up some very sobering numbers on healthcare costs over the next decade. Our healthcare will cost an estimated 31k/yr and inflate to 69k/yr. Of course these numbers assume the ACA will not survive. Since we are not going to exit for another 3 to 4 years perhaps the fate of "Obamacare" will be better known. I sure miss the part time work healthcare benefit option of yesteryear.

Those last few years before 65 can really be high health expense years. Overall, guessing that health care costs only go up 2X the rate of inflation. It is that "being older now" thing that is expensive.

 

[monte1022]

#people on health ins/SS#s

-The "planners" healthcare costs were for two people.



-Our SS amount will be lower by 10% or so based on estimates if we leave work as planned.


-We can easily meet our living expenses in retirement, but the healthcare estimate if the ACA fails is almost a bridge too far. However, nothing worth having is ever easy.

 

[joeea]

the healthcare estimate if the ACA fails is almost a bridge too far. However, nothing worth having is ever easy.

It appears that the assumption is that the ACA fails with nothing at all to replace it.

That seems unlikely to me.

 

[monte1022]

It appears that the assumption is that the ACA fails with nothing at all to replace it.

That seems unlikely to me.

I agree. I am holding out hope that the Medicare age will be lowered to at least 55 or the ACA stays in force. Per my 2018 W2, my employer paid $31428 for our healthcare. I pay an additional $220/pay for this coverage which includes dental, rx, and health. All in the cost is $36708 and we still have high deductibles. This cannot continue.......

 

[joeea]

I agree. I am holding out hope that the Medicare age will be lowered to at least 55 or the ACA stays in force.

It seems unlikely that the Medicare age would be lowered. There's a much, much better chance that the ACA or something quite like it stays in force.

This cannot continue.......

Why not?

 

[ivinsfan]

It looks like your planner pulled a number from your W-2 and used it for projecting the future.

So a couple things to consider with so much cash around to use for living expenses you should able to get almost free healthcare under ACA..(yes can't guarantee this but the odds legislation will get passed that raises you HC from 0 to 30K ever happens are almost none. I'd firm up my plans and see where things sit in 4 years.

And the money you have set aside for your kids colleges, fine to say they get any leftovers but if you really want to ER you might need to open your mind to fact you could take that money and use it for healthcare, if need be.

It's also ironic to me that 2 health professionals with great wages who want to be completely retired by their mid 50's are anxious about the cost of health care.

I certainly believe people in HC earn their wages, yet if you guys that earn their living in the system think it's out of control what are the rest of us supposed to think?

I would have pressed your planner a little more as to that number that used for HC expenses. As the law sits today it should have been much close to zero then 30k.

 

[monte1022]

ivinsfan

I guess I should have left out the part about what we do for living


Good to know going forward.

 

[ivinsfan]

I guess I should have left out the part about what we do for living


Good to know going forward.

Oh no.. I think it's important that we know that even people working in the system are worried about the cost of health care. No one has their head in sand about HC costs fixing it is the problem...

 

[flintnational]

Welcome to the forum. Your plan looks solid. As you mention, the HC backgrounds provide a backstop if things don't go as planned. I don't think you will need it, but more options mean less risk.

 

[pb4uski]

-The "planners" healthcare costs were for two people. ....

Then unless you live is a really high cost area for health insurance his numbers are stupid.

 

[pb4uski]

I agree. I am holding out hope that the Medicare age will be lowered to at least 55 or the ACA stays in force. Per my 2018 W2, my employer paid $31428 for our healthcare. I pay an additional $220/pay for this coverage which includes dental, rx, and health. All in the cost is $36708 and we still have high deductibles. This cannot continue.......

Have you priced out a health insurance policy for your zip code using healthsherpa.com or your state exchange? That $31k is really high compared to what many of us are paying.

 

[HI Bill]

Hello again


My "fee only" planner offered up some very sobering numbers on healthcare costs over the next decade. Our healthcare will cost an estimated 31k/yr and inflate to 69k/yr. Of course these numbers assume the ACA will not survive.

America's health care system would implode with such high costs, unless the financial planner is projecting for inflation, 30 years out. Very few would be able to pay into the system, and the hospitals would be empty, with people dying at home at earlier ages...I just don't see it getting that bad, not matter what happens (IMHO).

 

[monte1022]

healthsherpa

I frequently use the Kaiser ACA calculator and find the results encouraging. My "planner" refuses to consider the ACA as an option going forward. Perhaps he wants us to devise a plan that will survive a worst case outcome. I must admit that I am spending even more time with my numbers (and here) post planner meeting.


We have time. We are still employed and debt free. My wife is just now starting to explore the psychology of not having a job. I started dreaming about the prospect at 23yo.



The 3 to 4 yr glide path will hopefully provide ample time and opportunity to make adjustments for a smooth landing. This board has and I am sure will continue to give solid advice during the journey.

 

[MichaelB]

My "planner" refuses to consider the ACA as an option going forward. Perhaps he wants us to devise a plan that will survive a worst case outcome. I must admit that I am spending even more time with my numbers (and here) post planner meeting.

There's no "right" or easy answer to that, and it's often discussed here. IMO it's prudent to be aware of the full, unsubsidized cost of health care insurance, and to have a "Plan B" in case the subsidy goes away. The same applies for Medicare.

Access itself is something we really can't address now, nor can we plan for it, so no reason to fret.