i'm anxious

[Slater]

Im starting to get anxious...
Im 49 years old & have a very physical job as a heavy line auto tech in san diego dealership.
Only know one work speed & thats fast, try & give 100%. Been doing it for 30 years..
One back surgery under my belt 20 years ago, ruptured L5/S1, degenerative disc disease, & to this day deal with back pain / leg pain issues every day...just keep going!
Im tired, dont handle the stress like I use to...
When I started at the shop few old timers pulled me aside & said you need to invest your money, nobody will take care of you when youre old, SS wont be enough, bla, bla, bla...
Wouldnt listen to my own father when he told me I was being stupid & need to say my money, they lived paycheck to paycheck.
But I definetely listened to these strangers, thats a discussion for another time.
I dont have a plan, dont know what the answers are at this point. Dont necessarily want to sit on the couch at 50 but bottom line is, the job isnt fun anymore & very physical replacing engines, major repairs everyday...
At this point mostly everything is in the market & is invested still in an aggressive growth strategy
Me: total between rollover & roth $771K
Me: taxed brokerage acct $400K
Me: $25k HSA
Me: $200k in current 401k contributing 25%
all my free money goes into vanguard vtsax $25k
along with other various small trading accts, crypto, etc
Only have $18k as an emergency fund, considering dumping majority of that on vtsax also but also know that can be risky...
total $1.8mil
Continue to invest $2k monthly into the brokerage acct now that the house is paid for..
My significant other total between rollover & roth $350K, I started contributing to this recently as shes not in a position to but made some changes to get her on track. Shes going to start contributing $400 monthly into VTSAX moving forward...
Have a 13 year old son & have $25k saved in a taxable brokerage acct & still contributing to it, set aside for college if he decides to go that route.

My personal monthly total expenses is only $1200, house paid for, hoa fees, property tax, home & car insurance for entire household, utilities, internet, cell phone, car reg, cars paid for, etc....
Live well below my means & has always been that way.
The part that scares me is wasting money on health insurance!!
Like I said, dont have a plan & I know ill be fine whatever happens but really dont want to blow this hard earned money & not leave my son something when the time comes cuz I was selfish & threw-in the towel at 50...
paying $1000+ monthly for health insurance doesnt sound appealing!
Ok, think im done rambling
What do the wise people of this great forum that have been down this road say to encourage me

 

[travelover]

Congratulations on accumulating enough to early retire. Regarding health care, one can look quite poor on paper by withdrawing from after tax and Roth accounts. Poor enough to get considerable ACA health care subsidies until Medicare.

 

[Golden sunsets]

Under what circumstances would you be paying $1,000 for health insurance? If you retire early, which is the option I assume you are considering, wouldn't you be able to keep your taxable income below the cliff?

 

[levindb]

I would strongly encourage you and your SO to look to the future. Do not retire FROM something, but retire TO something. What will that first Monday look like? What will you accomplish that first year? Hobbies? Travel? Volunteer?
You have done a so much on the FINANCIAL side...now focus on the LIVING side.

 

[Dash man]

Should you choose to keep working for health insurance, would another type of job with less physical stress help out? This is a good time to be looking.
Different job at same employer?
Costco?
Home Depot or Lowes?
I believe these companies have decent healthcare plans.

 

[Slater]

Under what circumstances would you be paying $1,000 for health insurance? If you retire early, which is the option I assume you are considering, wouldn't you be able to keep your taxable income below the cliff?

Congratulations on accumulating enough to early retire. Regarding health care, one can look quite poor on paper by withdrawing from after tax and Roth accounts. Poor enough to get considerable ACA health care subsidies until Medicare.

Really havent even researched health coverage options, im a healthy individual at this point. Everyone states that health coverage is the biggest hurdle & is expensive....
I have a high deductible out of pocket plan through work now for my son & myself at the moment & pay roughly $120 wk / $450 monthly so just figured, cant be cheap....
First time I really heard of ACA...
Obviously from my monthly expenses I dont need alot of income.
SO & I do our hobbies every weekend at this point, fishing, she has her horse / trail rides, will focus on health / fitness, we definetely need to throw in some vacations as ive made sacrifices in that dept to help our situation later in life. Not the best mindset but it is what it is at this point...
Im the guy thats at work first, never / hardly takes vacations & I get 3 weeks a year, etc...
Lost my old-man at 60, he went back to New York for his moms 100th birthday as he wanted to see her one last time while she was still doing well as he hasnt seen her in 10 years, He had an aneurysm the very next day after her surprise birthday party...
sad, yes, life is short...

 

[Morgan22]

Please take a look at https://apply.coveredca.com/lw-shopandcompare/. You'll see that you can get a silver level plan for free or go on Medi-Cal, depending on how much income you will pull from your accounts.

If you keep your income low enough (about $18k for an individual) to go on Medi-Cal your federal taxes may be around $300 per year, and your state taxes will be about $25 for the year. (Or maybe they will be zero if you take into account EITC. You'll have to look into this.)

If you do not want to be on Medi-Cal you can bring your income up by doing Roth conversions.

With the amount of assets you have and your low cost life style you are all set. You could always just take a break for a year or so and test out the waters. If you don't like it, find a job doing something that is easier on your body.

 

[ivinsfan]

You have used the term SO and wife,it makes a difference which is correct. This detail can affect your ACA cost or eligibility.



How do you handle expenses?


It seems like you would a good fit for part time work in place like Napa or anywhere people buy car parts.

 

[Slater]

You have used the term SO and wife,it makes a difference which is correct. This detail can affect your ACA cost or eligibility.



How do you handle expenses?


It seems like you would a good fit for part time work in place like Napa or anywhere people buy car parts.

At this point not married, been together for 20+ years, we can change that if its beneficial .......
For tax return purposes when she was working full-time, filing separate / single was always best for maxing out our year-end tax refunds…
She works IHSS part time & her insurance is taken care of & she has no plans of ending that give as she assists my mother with caring for my sister with downs syndrome, my mother is 73....

what do you mean how do we handle expenses?
Due to SO doesnt take-in alot at this point shes responsible for all groceries, & house necessities...
She takes care of her horse expenses, about $400 monthly.
Separate checking accounts, for the most part we dont fight about money.

 

[dak2018]

Im starting to get anxious...
When I started at the shop few old timers pulled me aside & said you need to invest your money, nobody will take care of you when youre old, SS wont be enough, bla, bla, bla...

Great work on investing for your retirement! Before you punch out of the job, be the "old timer" to a few of the younger guys in the shop and at least plant the seeds of getting on the right track in their minds.

I am struggling with a $1200 budget for living expenses - have you carefully considered everything associated with maintenance of your lifestyle and property?

And while I certainly agree that health insurance is expensive, even on the ACA, it is simply indispensable. Your SO is one fall off a horse away from requiring serious orthopedic care, and I hear that people occasionally get fishhooks snagged in their eyeballs. Your current back issues may also end up kicking you back into some sort of treatment. IOW - be very careful with your health coverage. It seems expensive until you really need it.

As an aside, your experience doing a physical job in your 40s and 50s is why I advocate that everyone doing that type of work should have an early exit plan to something less physical.

 

[ivinsfan]

At this point not married, been together for 20+ years, we can change that if itsb beneficial .......
For tax return purposes when she was working full-time, single was always best maxing out tax returns
She works IHSS part time & her insurance is taken care of

So you are eligible for ACA through the state. I think it's called covered California now you need to do a little reading about coverage and income...for you and your boy it might be less then you are paying now.


I'd probably start collecting cash instead of going in the market until you get some numbers on the health costs and income guidelines.



You'll have questions about ACA that's fine but it's best if you do some reading about it beforehand.

 

[travelover]

.........First time I really heard of ACA.....

Also known as Obamacare

 

[RetiredAndLovingIt]

Look for a silver plan on Covered California if you can keep your income low.
They don't care how much you have in the bank or investments, they only care what shows on your tax return so by stopping work equals 0 income. Do a Roth conversion for $20K for your income and it will only cost you a couple of hundred dollars if that. If income is to low they will put you on Medi-Cal and you probably don't want that.
Open enrollment is closed, it normally runs from Nov 1st to January 31st.
Retiring should be a qualifying event. The actual monthly premium will he high but you will qualify for a subsidy that the state will pay monthly and you just pay the difference. At the end of the year you need to reconcile, if your income turns out to be higher on your tax return you have to pay some back, if it's lower any difference is added to your refund.
You don't need to create an account or apply to start shopping prices
Good luck
https://apply.coveredca.com/lw-shopandcompare/

 

[Dtail]

Since you are not married, the calculations for any ACA tax subsidies will only include your Modified Adjusted Gross Income (MAGI)
See below for what is included.

https://laborcenter.berkeley.edu/wp-content/uploads/2021/03/2021-03-MAGI-Summary.pdf

 

[tb001]

Kudos to you for accumulating at the level you have and spending so little! It’s quite an accomplishment, especially here in SoCA.

As other have said, health insurance should be a non issue, unless you plan on spending a LOT more than you are now. Go to the covered CA website and see what sort of subsidies you’ll get. My guess is your challenge will be making sure you have enough income to stay off medi-cal (which I wouldn’t recommend). Your actual healthcare costs should be close to zero I would think, unless you opt for a very premium plan.


My advice would be to look very carefully at your spend. Future car purchases, home repairs, etc… $1200 sounds very low for this area, so be sure it includes all of the regular but unexpected spend that comes up. Also be sure to include dental and vision expenses. Go over your spend in detail for as far back as you can. Look at what might need replacing and when. With your savings and low spend, you should be in great shape but I would want to be sure I wasn’t missing anything.

 

[Morgan22]

I currently live in the San Diego area and just left employment from a very large healthcare system in the area. From what I've seen, and what a family member has also experienced, Medi-Cal is not something to be afraid of having for health insurance. (Except I wouldn't be a Medi-Cal patient within a hospital system beginning with a K. But all others are fine.)

Just sayin, Medicaid insurance is not something to be afraid of in CA or MA for that matter. (Also have experience in Boston area of MA).

 

[Aiming_4_55]

Just my understanding on expenses: his expenses are $1200/month and his S/O is separate which include all groceries, & house necessities (not sure how much all this would be) ... plus horse expenses, about $400 monthly.

With his previous health condition, he should seek reasonable health insurance plan as h e is getting older. With Covered CA / ACA, and income, it should be very cheap or reasonable.

Anything automotive could be a good part time gig: parts store or dealership, part time neighborhood mechanic as a side hustle - work at your owner pace, teaching auto courses, etc. should be able to cover the monthly expenses or take a break for awhile/retire.

 

[Slater]

Kudos to you for accumulating at the level you have and spending so little! It’s quite an accomplishment, especially here in SoCA.

As other have said, health insurance should be a non issue, unless you plan on spending a LOT more than you are now. Go to the covered CA website and see what sort of subsidies you’ll get. My guess is your challenge will be making sure you have enough income to stay off medi-cal (which I wouldn’t recommend). Your actual healthcare costs should be close to zero I would think, unless you opt for a very premium plan.


My advice would be to look very carefully at your spend. Future car purchases, home repairs, etc… $1200 sounds very low for this area, so be sure it includes all of the regular but unexpected spend that comes up. Also be sure to include dental and vision expenses. Go over your spend in detail for as far back as you can. Look at what might need replacing and when. With your savings and low spend, you should be in great shape but I would want to be sure I wasn’t missing anything.

Have a 1500sq ft 3/3 condo, yes those #s do not include any sort of home maintenance like possibly having to replace a water heater, wall paint is cheap, car maintenance as I know people.... just monthly essentials. Im off a few hundred. Yes at some point a vehicle may need to be replaced 10+ years from now....
Some home related expense will come-up like an appliance will need replacing in my lifetime, etc...
Being a condo, really is low maintenance on my end, Also am aware that all these #s I listed will increase as time goes on.

Gas & electric $100-$200

vehicle / home insurance $200

hoa $330

property tax $440

internet $80, cut the cord 6 years ago & no subscriptions....

Cell $60

Not looking to jump ship tomorrow but really need to start educating myself on the ins & outs as I know I want to solidify an exit plan for when the time comes.
Like I said, didnt even know about ADA & that it was an option, figured someone would inquire about your overall net worth & kick me out of any sort of eligibility....

 

[Pellice]

Slater, I hope after reading these first responses that you feel somewhat less anxious. You've worked hard and saved hard. ACA is going to make this doable for you. You just need to do some research - on your expenses, and on health care. You can do it yourself, (lots of advice here), and/or pay a fee-only financial adviser for a one-time overlook of your financial situation. It would be expensive, but might give you great peace of mind. I really think you've done well and can achieve an exit from this physically wearing job. And, try to swap the high-deductible HI for a more generous policy. That should be doable, and once you leave the job, you are going to want to concentrate on feeling good and getting your body back into good health.

Is SO on board with all this? Having a supportive spouse has boosted so many people here. Main thing I want to say is: try to be as little anxious as you can. You have all the building blocks (and that's the hard part), you just need to put them in place.

 

[athena53]

On health insurance: what kinds of investments do you have in your $400K after-tax accounts? What investment income are you reporting on your taxes on those investments? The reason I ask is that if you have a lot of mutual funds, dividends and capital gains distributions on a portfolio that large could exceed $18,000 and make you ineligible for subsidies or eligible for lower subsidies. If you have your prior tax returns, take a look at those numbers. I never qualified for subsidies because of my after-tax investment income, most of which was dividends and capital gain distributions, so beyond my control.

On whether marriage might be advantageous- probably not in the long run. If you marry and your wife needs LTC and her funds run out, she wouldn't qualify for a Medicaid nursing home until YOUR funds (almost) run out- they let the spouse remaining in the home keep something like $130K. I'm widowed and it's one reason I'm unlikely to marry again.

And congratulations on listening to the old guys at work! Definitely give a word to the wise to the younger guys. Two very good examples motivated me to keep saving. One was Dad, who was edged out of a good job at age 55 but had the funds to ER, and the other was a coworker who was told he was being promoted to a position he didn't want and told he had no choice. Ah, but he did. He ER'd.

 

[Retired Expat]

Should you choose to keep working for health insurance, would another type of job with less physical stress help out? This is a good time to be looking.
Different job at same employer?
Costco?
Home Depot or Lowes?
I believe these companies have decent healthcare plans.

I was thinking someone with your skills should be teaching the mechanics of the future, or could become a Service Manager.

I was a builder and learned early that I couldn’t hump Sheetrock and bags of cement all day. But my knowledge had me teaching and supervising and then running huge construction projects.

 

[rodi]

Welcome Slater - from another San Diegan.

When I retired (hubby was already retired) we managed our income to be above MediCal (medicaid in California) and low enough to qualify for premium tax credits (aka subsidies) on CoveredCA. California has a higher level for the income 'cliff' to qualify for subsidies. If you want to avoid your son being put on MediCAL you need to be higher - California wants to make sure all children are covered so there is a tendency to push kids onto MediCAL at a higher income than adults. So plan your taxable income to be a bit higher (or estimate it will be higher when you are applying for insurance. After having my kids forced onto mediCAL when our income didn't qualify them for it - I learned to be generous in my estimate of income - knowing it would all work out when we filed taxes. IOW, we paid more premium up front, but got it back as a refund. For a family of 4 (two adults, two teenagers) we were paying about $1400/month before tax credits... that was for a HDHP/HSA plan with Kaiser. (Molina was similarly priced, but we're happy with Kaiser.) Your premiums will obviously be less. Older son is now on his own plan, hubby is on medicare - so younger son (college student) and I pay about $850 before premium tax credits for the same Kaiser HDHP.

You've done super well. Paid for house, great nest egg, super low spending is impressive here. Having the paid off house is what allowed me to retire. Hopefully you have low prop taxes (thanks prop 13) as well.

 

[Slater]

Thanks for all the great advice! Something for me to start further familiarizing myself with & start looking at all options..

 

[Go-NoGo]

Im starting to get anxious...

Live well below my means & has always been that way.
The part that scares me is wasting money on health insurance!!
Like I said, dont have a plan & I know ill be fine whatever happens but really dont want to blow this hard earned money & not leave my son something when the time comes cuz I was selfish & threw-in the towel at 50...
paying $1000+ monthly for health insurance doesnt sound appealing!to encourage me

Firstly, congratulations on doing well on your savings and having a nice sum of money saved (and invested!) over the years. That will give you a lot of options when you retire and later on in life.

Don't think of health insurance premiums as wasted - think of them as a form of "wealth insurance" premiums. One bad and long hospital stay or some chronic condition can wipe out a chunk of your wealth if you are uninsured.

ACA is very good option and since you live in CA, the premiums may even be very reasonable. Definitely check them out and buy the appropriate one for your health condition.

 

[RetiredAndLovingIt]

You can definitely drop that cellphone bill in half by going with a prepaid MVNO as opposed to the big guys. The MVNO's use their towers and charge a lot less. Who's your current carrier?
Once you're retired and keeping your income low you will also qualify for a discount on both your gas and electric bills approx 20% They also have a program to weatherize your house and replace old and inefficient gas heaters and a/c units and other stuff totally free, no gimmicks. You've been paying into this program for many years through a tax on your bills so if you can take advantage of it you should.
I do however draw the line though on applying for the free Obama phone service I could qualify for, I'll happily pay the $6 for my cellphone service which fits my needs perfectly. (T-Mobile MVNO)
You will learn so much in this group, just ask, there is no dumb questions.
I had no idea how things worked when my company closed the office and moved out of state. I was left job less and clueless. I paid Cobra insurance of close to $900 a month for the first year of retirement and that grew old pretty fast when no paycheck is coming in. Meantime I'd I joined this website and started learning how things really work in government programs, it was an eye opener. I've asked tons of questions over the past 3 years and everyone has been so helpful so don't be shy.