Is Everyone a Multi-Millionaire?

[splitwdw]

If I buy a $180 turkey from a farm it damn well better have a name.

"Fool", comes to mind......lol

 

[FIREd]

For me, eating is more than just providing fuel for the body. It's part of life's basic pleasures. I did not save my money to eat rice and beans 3 times a day.

 

[MichaelB]

For me, eating is more than just providing fuel for the body. It's part of life's basic pleasures. I did not save my money to eat rice and beans 3 times a day.

+1

 

[explanade]

OTOH, most meals don't have to be culinary experiences.

Just on occasions, to treat yourselves.

Even without LBYM ethos, the idea of having extravagantly-priced meals frequently just doesn't add up. Too many $100 steak meals can't be great for your heart or wallet.

 

[eta2020]

This is not a kind of NW I have but:

One could have 3 Million in equities generating 60k of dividends.
Another lets say 2 million in 401ks and IRAs.

Couple retires at 55 and lives in expensive CA. Couple does not touch any 401k or IRA. The CA health care calculator was telling they can buy nice silver plan for 350 bucks (because they are LOW income). Their federal taxes will be 0. Their CA taxes will be less then 2K.

Then at 65 they get Medicare and don't need cheap Health Care. Hence they can start drawing from 401K and IRAs. If some of it is Roth they can still pay almost nothing in Federal taxes even with 100k income.

If couples has 300k in cash when they retire at 55. with this scenario they have 90k to live on between 55 and 65 and cheap health care and almost no taxes to pay.

 

[daylatedollarshort]

This is not a kind of NW I have but:

One could have 3 Million in equities generating 60k of dividends.
Another lets say 2 million in 401ks and IRAs.

Couple retires at 55 and lives in expensive CA. Couple does not touch any 401k or IRA. The CA health care calculator was telling they can buy nice silver plan for 350 bucks (because they are LOW income). Their federal taxes will be 0. Their CA taxes will be less then 2K.

Then at 65 they get Medicare and don't need cheap Health Care. Hence they can start drawing from 401K and IRAs. If some of it is Roth they can still pay almost nothing in Federal taxes even with 100k income.

If couples has 300k in cash when they retire at 55. with this scenario they have 90k to live on between 55 and 65 and cheap health care and almost no taxes to pay.

A Bronze plan is even cheaper. In addition to the 400% poverty level MAGI, a couple can have additional income as long as it is deductible from the O-MAGI, like income used to fund an HSA account or income offset by part-time business expenses (unsubsidized portion of health insurance, business travel):

http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf

Plus frequent flyer mile hacks and free air miles are not considered taxable income.

Forbes has a good article on how to generate tax free income -

Eighteen Ways To Get Tax-Free Income - Forbes

 

[eta2020]

A Bronze plan is even cheaper. In addition to the 400% poverty level MAGI, a couple can have additional income as long as it is deductible from the O-MAGI, like income used to fund an HSA account or income offset by part-time business expenses (unsubsidized portion of health insurance, business travel):

http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf

Plus frequent flyer mile hacks and free air miles are not considered taxable income.

Forbes has a good article on how to generate tax free income -

Eighteen Ways To Get Tax-Free Income - Forbes

Good point!!

In a nutshell what I am getting at is that one should very carefully plan his income in such way as to minimise cost of Health Insurance before they get Medicare and minimise taxes over their lifetime.

And you can be worth lot of money and have cheap insurance and not pay taxes once you FIRE.....

 

[Fermion]

Only silver plans allow cost sharing. Bronze plans don't work for cost sharing.

Silver baby, that is the way to go if you can control your income.

 

[obgyn65]

To answer the OP's question, I guess many retired participants here are multi millionaires either in investible assets, pensions rights, or both.


Sent from my iPad using Early Retirement Forum

 

[daylatedollarshort]

Only silver plans allow cost sharing. Bronze plans don't work for cost sharing.

Silver baby, that is the way to go if you can control your income.

No HSA that I can see and higher premiums, but they may work for you depending on what you normally spend in medical bills each year.

 

[explanade]

What is cost sharing in the context of the ACA?

 

[photoguy]

From covered-ca

Cost-sharing subsidies: Cost-sharing subsidies reduce the out-of-pocket amount of health care expenses an individual or family has to pay. These expenses might include copayments for health care services or other costs you pay when you get services. To find out more about cost-sharing subsidies, visit Individuals &* Families.

On covered ca the cost sharing can reduce max oop to ~2k instead of 6k.

 

[ejman]

Only silver plans allow cost sharing. Bronze plans don't work for cost sharing.

Silver baby, that is the way to go if you can control your income.

I guess I must be the only dummkopf that went straight to a bronze plan without bothering to check whether I qualified for silver subsidies or not. Sometimes being a multi in investable assets as the OP posted gives one the option of being generous with the public treasury and who knows, maybe some Karma is generated or then again maybe not... in these peculiar times we live in.

 

[Fermion]

I guess I must be the only dummkopf that went straight to a bronze plan without bothering to check whether I qualified for silver subsidies or not. Sometimes being a multi in investable assets as the OP posted gives one the option of being generous with the public treasury and who knows, maybe some Karma is generated or then again maybe not... in these peculiar times we live in.

I doubt you would qualify if you are a multi millionaire already retired. To get the cost sharing you have to have a REALLY low MAGI (around $14,000 to $20,000). If you have multiple millions and even part of them is in bonds, you probably make more than $20,000 just in interest. Muni bonds count.

 

[GTFan]

Actually it's up to 250% of FPL to get cost sharing for Silvers, which for a family of two is a rather generous $38,750 or so MAGI. My plan is to stay under 200% so my max OOP would only be 13% of covered expenses. This is very easy to do if living solely off of port WDs (and you don't need/want more than $50k to live on a year).

http://www.kaiserhealthnews.org/fea...chelle-andrews-on-cost-sharing-subsidies.aspx

Here's an example from that link:
In California, for example, a standard silver plan will have a $2,000 deductible, a $6,400 maximum out-of-pocket limit and a $45 copayment for a primary care office visit. Someone whose income is between 150 and 200 of the poverty level, on the other hand, will have a silver plan with a $500 deductible, a $2,250 maximum out-of-pocket limit and $15 copays for primary care doctor visits.

And greatly reduced premiums with subsidies, of course. I've seen quotes here for $150/mo. or so for a Silver with that income for two people.

 

[Fermion]

How do you prove the income for the cost sharing portion? We have had discussions about the subsidy portion and how you can get the refund at tax time. If you know your income is going to be $30,000 a year from interest and dividends but the previous year you had W2 income of $260,000, do you just have to go one year without cost sharing or is there some way to convince them that your income has really dropped.

It is my understanding that cost sharing is a use it or lose it. The cost sharing is not refundable at tax time if you were eligible but didn't get it during the year.

 

[GTFan]

Yes, you have to file with your lower projected income for the year to get the cost sharing - if you don't do this and try to recapture subsidies at tax time you lose the sharing part. From what I have read you send them your letter of retirement from work along with whatever else they want to justify income in the new year (interest/dividend/cap gains tax statements or maybe a copy of last years tax return with a note that wages are zero going forward).

I haven't done this yet (will be 2016 for me to get subsidies if everything goes as planned) so I am interested to hear what the experience has been for new retirees claiming the subsidy. Looks like you've been active in this thread so you know as much as I do after reading their experiences. Can't find much on the web about it.

 

[MRG]

How do you prove the income for the cost sharing portion? We have had discussions about the subsidy portion and how you can get the refund at tax time. If you know your income is going to be $30,000 a year from interest and dividends but the previous year you had W2 income of $260,000, do you just have to go one year without cost sharing or is there some way to convince them that your income has really dropped.

It is my understanding that cost sharing is a use it or lose it. The cost sharing is not refundable at tax time if you were eligible but didn't get it during the year.

I had that issue, 150k to 29k. All I did was answer 'yes our income has changed' on one question. They never asked for any proof. I remember other members saying they were asked for more documentation, IIRC folks sent in anything they had(brokerage statements etc.). I've never read where anyone was kicked out, but I could be wrong.

I remember the truing up the same as you do, subsidies get adjusted with 2014 income tax, to my knowledge cost sharing is use it or lose it, with no method to adjust either direction after the fact.

To me, this decision is a normal part of fine tuning the law after implementation. I opted, instead of a bigger Roth conversion, for the cost sharing this year for two reasons. 1) I was having a lot of health issues at the end of last year. 2) I assumed the law would be adjusted somehow.

 

[Meadbh]

The last couple of pages of posts have predominantly focused on the details of implementation of the Affordable Care Act in the US. Does this not merit a dedicated thread?

 

[GTFan]

Did you overlook all the OT healthy eating stuff in this thread? It's already way off the rails.

 

[MichaelB]

The last couple of pages of posts have predominantly focused on the details of implementation of the Affordable Care Act in the US. Does this not merit a dedicated thread?

I guess after 365 posts it's hard to stay on topic. Still, there are many ACA threads with a wealth of detail on implementation, plans, subsidies, metal levels and qualifications.

 

[sheldon cornped]

Net Worth info

Since this is a long thread, I'm not sure if anyone made reference to this Boglehead survey. This one has enough information to make your head spin. You can even submit your own. Clicking on the tabs in the spreadsheet will reveal graphs etc... showing you where your individual net worth is compared to others. Needless to say, a whole bunch of 1 and 2%ers.

Net worth is broken down into 5 categories of assets, and 5 categories of debt. The results can be viewed in a spreadsheet within Google, but only I can edit the cells. Please leave suggestions for plots and calculations in this thread. This is for Household Net Worth. I left a comments box at the end to mention your marital status, degree, school, etc.

Form: https://docs.google.com/spreadsheet...mkey=dG51blV5akxiX3lkREk1U19PRXZDYVE6MQ#gid=0
Results: https://docs.google.com/spreadsheet/ccc?key=0AsGY490lMuNRdG51blV5akxiX3lkREk1U19PRXZDYVE

 

[RobLJ]

Reading this forum, I was wondering the same thing as the OP posted. I feel really poor when reading these forums, but from net worth calculators, I think I'm in the top quarter or so for my age. I've never had a great salary, and much of my wealth is in the two houses I own, which makes me look even poorer in comparison.

I just keep telling myself I'm hanging out with the top 5-10% on here and that I'll get there.

This indicates that you are doing very well, particularly given the home ownership--it's all relative.

I was a little disturbed by the google survey summary (was it based on Bogle forum participants or here on Fire?) since it appeared net worth, portfolio and debt level were on median. I used family levels--if not I would have been much lower on the totem pole. So yes, we're hanging out with a predominantly rarified company here on FIRE (or the Bogleheads, if that was the population surveyed).

 

[lampshade]

Not a millionaire

I get the more money you have in retirement the better off you are. But did anyone here retire and NOT be a millionaire?

I figure we will retire with $900,000 and no bills when I hit 62. Our guestimate will be living for at least 30 years after retirement.

From 62 to Medicare we're covered with insurance that (as of now) we are not paying for.

How did you do it? Any and all suggestions are appreciated.

 

[Meadbh]

How did you do it? Any and all suggestions are appreciated.

Welcome to the forum, lampshade. Your profile says that you are a "poor saver". If that means you are poor, but saving, great! But if it means that you don't save very much, fixing that is the most important step towards a secure retirement. Everyone on this board aspires to LBYM.

LBYM = Living Below Your Means.