Eureka Moment... Maybe?

[Popeye]

As many do, I have been lurking for some time here. I stumbled upon this site late last year and luckily bookmarked it. I came back in earnest around March and have been reading many threads. I started crunching numbers recently to see how close I may be. I was seeing too much disagreement between Firecalc and I-Orp. Finally I saw that I had a monthly figure in Firecalc for SS instead of a yearly figure! Duh!

So now I feel close to the end zone. I am 53, single, male. It seems that more and more, like Popeye, I am saying to myself "That's all I can stands, I can't stands no more!" If I look at 55 and out, I now think I will be good to go. I-Orp spits out $59K annual after tax spending possible. If I run my numbers through Firecalc at a spend of $55K, I get 97% success rate. I am liking those numbers! With my care being paid off this month, I am living on $35K. Now that has no provision for health care. Even if I figure $10K for that, I still see a nice safety margin. I have enough in after tax to carry thru to 59 1/2 for unfettered (but not untaxed) access to the 401K monies. So am I as close as I think?

Thanks in advance for any thoughts.

Popeye

 

[Winemaker]

I wrote a $18060.00 check in July for healthcare for DW and I. I know you said you are single. YMMV

 

[gauss]

I wrote a $18060.00 check in July for healthcare for DW and I. I know you said you are single. YMMV

Winemaker- I suspect that you are not receiving ACA subsidies due to income in excess of 400% of federal poverty level.

 

[2017ish]

Have you investigated what individual policies cost (and what out-of-pocket limits they carry) in the locale in which you'll be living? That would give you an idea for your costs for 2017. After that, who knows?

Given all the uncertainties in this area, I'm just using a SWAG of 1000 each, per month, for the two of us (2 and 3 years older than OP)--but we want a wide network that includes good out-of-state coverage (which may not exist for the 2018 policy year anyway....). As observed by gauss, ACA subsidies are a big factor that may assist you (but not us) under the current structure.

 

[Winemaker]

Winemaker- I suspect that you are not receiving ACA subsidies due to income in excess of 400% of federal poverty level.

You are very correct, and the whole thing makes me sick!

 

[gauss]

You are very correct, and the whole thing makes me sick!

Thanks for the verification.

FWIW - our plan also shows us always over the 400% FPL and thus no subsidies.

For now (could change at any time) we will have access to subsidized retiree health care so ACA is just a fallback plan at this point. With 14 years until Medicare, however, I suspect that this will all change.

-gauss

 

[ivinsfan]

As many do, I have been lurking for some time here. I stumbled upon this site late last year and luckily bookmarked it. I came back in earnest around March and have been reading many threads. I started crunching numbers recently to see how close I may be. I was seeing too much disagreement between Firecalc and I-Orp. Finally I saw that I had a monthly figure in Firecalc for SS instead of a yearly figure! Duh!

So now I feel close to the end zone. I am 53, single, male. It seems that more and more, like Popeye, I am saying to myself "That's all I can stands, I can't stands no more!" If I look at 55 and out, I now think I will be good to go. I-Orp spits out $59K annual after tax spending possible. If I run my numbers through Firecalc at a spend of $55K, I get 97% success rate. I am liking those numbers! With my care being paid off this month, I am living on $35K. Now that has no provision for health care. Even if I figure $10K for that, I still see a nice safety margin. I have enough in after tax to carry thru to 59 1/2 for unfettered (but not untaxed) access to the 401K monies. So am I as close as I think?

Thanks in advance for any thoughts.

Popeye

Is care actually car? So, you still will have either car expenses (repair) or replacement in your future, have you accounted for this? With after tax money to live your health care will be heavily subsidized until you hit 59.Do you actually have a budget for your post working life?

 

[pb4uski]

Have you investigated what individual policies cost (and what out-of-pocket limits they carry) in the locale in which you'll be living? That would give you an idea for your costs for 2017. After that, who knows?

Given all the uncertainties in this area, I'm just using a SWAG of 1000 each, per month, for the two of us (2 and 3 years older than OP)--but we want a wide network that includes good out-of-state coverage (which may not exist for the 2018 policy year anyway....). As observed by gauss, ACA subsidies are a big factor that may assist you (but not us) under the current structure.

Along that health insurance line of thought, healthsherpa.com is a good place to start getting pricing for health insurance.

 

[Sunset]

Is care actually car? So, you still will have either car expenses (repair) or replacement in your future, have you accounted for this? With after tax money to live your health care will be heavily subsidized until you hit 59.Do you actually have a budget for your post working life?

+1
Exactly what I was thinking,
OP add to your budget annual cost for car easily $2,500/yr (saving up for one, while driving the other into the ground).

 

[scrabbler1]

As many do, I have been lurking for some time here. I stumbled upon this site late last year and luckily bookmarked it. I came back in earnest around March and have been reading many threads. I started crunching numbers recently to see how close I may be. I was seeing too much disagreement between Firecalc and I-Orp. Finally I saw that I had a monthly figure in Firecalc for SS instead of a yearly figure! Duh!

So now I feel close to the end zone. I am 53, single, male. It seems that more and more, like Popeye, I am saying to myself "That's all I can stands, I can't stands no more!" If I look at 55 and out, I now think I will be good to go. I-Orp spits out $59K annual after tax spending possible. If I run my numbers through Firecalc at a spend of $55K, I get 97% success rate. I am liking those numbers! With my care being paid off this month, I am living on $35K. Now that has no provision for health care. Even if I figure $10K for that, I still see a nice safety margin. I have enough in after tax to carry thru to 59 1/2 for unfettered (but not untaxed) access to the 401K monies. So am I as close as I think?

Thanks in advance for any thoughts.

Popeye

I am 53, single, male, and have been retired for the last 8 years. When I was putting together my ER plan, I split it into two parts. The first part, the more challenging one, was getting from my ER age (45) to age ~60, when the first of my reinforcements would become accessible in an unfettered manner (my rollover IRA). The other reinforcements which I could begin tapping into later in my 60s are SS and my frozen company pension. But it is getting to age ~60 which is the most important because I can use only my taxable investments. Also, health insurance is my shakiest expense but thanks to the ACA, it is under control.

 

[Aerides]

OP you are close, just need to do some work more on the specifics of expenses. You mention calculating from 55 out? If you are planning to stay working then for 2 years, assuming you have a good savings rate (max 401k, etc, pocket any bonuses, look to optimize your AA) then you could well give yourself a comfort over that margin.

If you were thinking of quitting now, less wiggle room, probably more finite research on those expenses and HC first.

 

[Popeye]

Have you investigated what individual policies cost (and what out-of-pocket limits they carry) in the locale in which you'll be living? That would give you an idea for your costs for 2017. After that, who knows?


Given all the uncertainties in this area, I'm just using a SWAG of 1000 each, per month, for the two of us (2 and 3 years older than OP)--but we want a wide network that includes good out-of-state coverage (which may not exist for the 2018 policy year anyway....). As observed by gauss, ACA subsidies are a big factor that may assist you (but not us) under the current structure.

Yes, found a good website that lists out the various plans offered for my zip code at variou ages. There are actually quite a few offered. But as you say, who knows what comes next year, next election, etc. Luckily i have not incurred any health expenses the last few years. Although that kidney stone experience was painful and potentiallly expensive. I think ACA subsidies make the end zone a couple of years closer, but with some uncertainty.

Is care actually car? So, you still will have either car expenses (repair) or replacement in your future, have you accounted for this? With after tax money to live your health care will be heavily subsidized until you hit 59.Do you actually have a budget for your post working life?

Yes, that was car. My one real splurge was the Audi. It is paid off this month. I love it but going forward a new one just represents an extra year of work to me. Trouble free so far with another year under warranty. We'll see how that german quality holds up.

In a pinch i can just revert to the 69 GTO in the garage. At least i can fix anything on that myself!

Along that health insurance line of thought, healthsherpa.com is a good place to start getting pricing for health insurance.

Ill check there too.

Thanks for the feedback. I will keep crunching budget numbers to see what spending in the future looks like. I have tweaked it a few times but need to add provisions for potential expenses. My condo will be paid off in under 9 years unless i ramp up payments. Thatwill be like a $939 per month raise.

 

[Popeye]

OP you are close, just need to do some work more on the specific expenses. You mention calculating from 55 out? If you are planning to stay working then for 2 years, assuming you have a good savings rate (max 401k, etc, pocket any bonuses, look to optimize your AA) then you could well give yourself a comfort over that margin.

If you were thinking of quitting now, less wiggle room, probably more finite research on those expenses and HC first.

Agreed. I max out 401K which caps me at 10 %. plus the catch up. There is also a 6 % match plus another 6 % company contribution based on years of service since they killed the pension plan. I am working the AA to get about 50/ 50 or perhaps 60 / 40. I did let the cash and fixed income get too high over the past few years. Vanguard is my new best friend. Thanks to this site i am more aware of expense ratios and acting accordingly.

I guess it is a balance between wiggle room and more time. If nothing else this info has changed my perspective.

 

[GravitySucks]

OP you are close, just need to do some work more on the specifics of expenses. You mention calculating from 55 out? If you are planning to stay working then for 2 years, assuming you have a good savings rate (max 401k, etc, pocket any bonuses, look to optimize your AA) then you could well give yourself a comfort over that margin.

If you were thinking of quitting now, less wiggle room, probably more finite research on those expenses and HC first.

OP,
I really like Fidelity's planning tool (used to be called RIP) as it guides you through expenses pretty thoroughly.
I believe you can register an unfunded account and use it for free if you are not a FIDO customer.
https://www.fidelity.com/calculators-tools/planning-guidance-center

Sent from my Moto G (4) using Early Retirement Forum mobile app

 

[Popeye]

Update

fast forward six months or so and here we are...

I spent the last months refining expenses and budgets. Using some pointers from the folks here, I added in accruals for things like car expense, appliance expense, and healthcare expense among others. Of course, the latter is a bit of a guess now. I used actual quotes for my zip code which has lots of options, for now. So that built me a $50K budget against a Firecalc number that is over $62K at near 100%. For another measure, it represents under a 4% SWR, ignoring SS completely. Popeye is feeling good about end of the year at the latest to set sail.

W*rk is devolving into the ridiculous. A restructure looks likely by then but exit packages have been targeted not open or voluntary. I'm pondering strategies in that regard.

 

[exnavynuke]

fast forward six months or so and here we are...

I spent the last months refining expenses and budgets. Using some pointers from the folks here, I added in accruals for things like car expense, appliance expense, and healthcare expense among others. Of course, the latter is a bit of a guess now. I used actual quotes for my zip code which has lots of options, for now. So that built me a $50K budget against a Firecalc number that is over $62K at near 100%. For another measure, it represents under a 4% SWR, ignoring SS completely. Popeye is feeling good about end of the year at the latest to set sail.

W*rk is devolving into the ridiculous. A restructure looks likely by then but exit packages have been targeted not open or voluntary. I'm pondering strategies in that regard.

Sounds like you have a solid plan that should work for you. Congrats

 

[evilanne]

I have enough in after tax to carry thru to 59 1/2 for unfettered (but not untaxed) access to the 401K monies. So am I as close as I think?

Between 55 & 59.5, will you be using SEPP to access funds from 401K?

 

[Popeye]

Between 55 & 59.5, will you be using SEPP to access funds from 401K?

No, I have enough in non-tax deferred money to last until 59 1/2. So I should not need to touch 401K monies. If I can last until January 2018, that will be the year I turn 55. One can access one's 401K from a job left in the year one turns 55 without the 10% penalty. Something I learned from this site that most folks don't seem to know.

Having said that, lasting to year's end is looking harder and harder. Dow 21,000 is like a devil on the shoulder saying "go now, go now!" I am hoping a nice golf vacation next month will boost my resolve.

 

[evilanne]

You can also access before 55 without penalty if you use IRS 72t rule i.e. Substantially Equal Periodic Payments or Life Expectancy Calculations but you have to be careful to follow the rules

 

[2017ish]

Have you investigated what individual policies cost (and what out-of-pocket limits they carry) in the locale in which you'll be living? That would give you an idea for your costs for 2017. After that, who knows?

Given all the uncertainties in this area, I'm just using a SWAG of 1000 each, per month, for the two of us ....

Wow. In less than a year, we are now 2K-3K estimate jf we go with ACA compliant plan (assuming available via private market or COBRA, which may not be the case) .... Oh well.

 

[cooch96]

No, I have enough in non-tax deferred money to last until 59 1/2. So I should not need to touch 401K monies. If I can last until January 2018, that will be the year I turn 55. One can access one's 401K from a job left in the year one turns 55 without the 10% penalty. Something I learned from this site that most folks don't seem to know.

Having said that, lasting to year's end is looking harder and harder. Dow 21,000 is like a devil on the shoulder saying "go now, go now!" I am hoping a nice golf vacation next month will boost my resolve.

I understand this 55 rule is not universal. I recommend to double check the language of your 401k plan to make sure it's one of the plans that offer this.

 

[Popeye]

Update

Well, another 8 months of the returns we've all been seeing. I've broken through all the trip wires I have set for myself and now have a more comfortable cushion. So today I breached the RE topic with my boss. We talked for about an hour and will meet again Friday. His only point of real surprise was when he asked when and I said ASAP. I'll help any transition but it will need to be measured in weeks not months. I've been transitioning folks even though they did not know it.

So close I can taste it!

 

[Sunset]

No, I have enough in non-tax deferred money to last until 59 1/2. So I should not need to touch 401K monies. If I can last until January 2018, that will be the year I turn 55. One can access one's 401K from a job left in the year one turns 55 without the 10% penalty. Something I learned from this site that most folks don't seem to know.
..

You need to read carefully the rules on your 401K, not all 401K's allow the age 55 rule.
It would be pretty terrible to quit and find out afterwards you are denied.

I see back in April, someone told OP this, and yet no mention of it by OP....

 

[Popeye]

You need to read carefully the rules on your 401K, not all 401K's allow the age 55 rule.
It would be pretty terrible to quit and find out afterwards you are denied.

I see back in April, someone told OP this, and yet no mention of it by OP....

Thanks for the reminder. I did check and double check the plan documents and verified. In addition, this would be a last resort. I now have about 10 years of funds outside of deferred accounts. I can leave the 401k alone until well past 59 1/2.