Can we FIRE with less than a MILLION???

[Dtail]

Another favorite saying here is today will likely be the healthiest that you are for the rest of your life.

 

[Koolau]

Another favorite saying here is today will likely be the healthiest that you are for the rest of your life.

Now THAT is a scary thought!

 

[Pellice]

Another favorite saying here is today will likely be the healthiest that you are for the rest of your life.

But, contra, many people's health has improved, sometimes substantially, after retirement due to decrease in stress, increase in exercise, better eating, etc.

 

[2HOTinPHX]

But, contra, many people's health has improved, sometimes substantially, after retirement due to decrease in stress, increase in exercise, better eating, etc.

Good points. This is kinda what I am hoping for. I want to be on our timeline..not sitting at a desk from 8 to whenever and increase exercise, better eating, etc. ect, ect,,,,

 

[ncbill]

Another favorite saying here is today will likely be the healthiest that you are for the rest of your life.

All I really need to know I learned [-]in Kindergarten[/-] from The Simpsons:


Bart: "This is the worst day of my life!"


Homer: "The worst day of your life...so far!"

 

[Rambler]

2HOTinPHX,
To answer your question straight up point blank honestly? No, we could not. We are both 60, and have had a few health problems ourselves, and we are retired. We are also here in the Valley of the Sun, and just to give you an example, we’ve had to replace our AC unit this year ($12k), had to pay a deductible for radiation therapy ($8.7k), not to mention everyday expenses, in just the past few weeks. Several years back, health insurance declined to pay for gold standard cancer treatment, so to get it, we paid $50k out of pocket. And we still hope for another 20-25 years (both cancers were caught early, thank goodness).

What I’m saying is, some people might be able to do it. If we had retired with the assets you described, we’d never be able to make it, first because these extraordinary expenses seem to have become the ordinary, and second, we have been accustomed to a higher income for quite a long time, so it just would not work for us.

The only advice I have for you is to think long and hard about it before pulling the trigger, and make sure to plan for healthcare and other “extraordinaries”.

 

[albundyz]

IMO, a lot depends on your location. I can only speak for So California, but we retired with just under a million ONLY because our house was paid for. Cost of living and taxes can be drastically different depending on location.

also, remember Ca has prop 13 tax law which basically states that once your house's assessed value is established, your taxes can (roughly) go up a max of 2% per year. Huge difference in property taxes if you bought 20 yrs ago, or just bought yesterday. Both houses may be worth $800K today, but one will pay a lot less in prop taxes.

 

[Lisa99]

There is a Facebook forum called Retirement on a Shoestring. Many retire with far less. It just depends on what kind of life you're looking forward to in retirement.

 

[ucfparents]

One thing regarding the ACA that I learned from this forum is to have separate policies for each spouse. That keeps the out of pocket minimum lower for each spouse. For example if the OOP is $6,500 for one but $13,000 per family plan; if only one spouse is injured/sick the OOP of $13k is the ceiling for combined policies. Stay with individual policies.

Not sure I understand this. If you have both people on the policy, and only 1 gets sick the MOOP is $6,500 for the sick person. The $13,000 is for both. The sick person will not pay more than $6,500. This happened to us 2 years ago in an employer sponsored plan. Is it different under ACA? Please clarify for me as we will be taking an ACA plan for 2023.

Thanks

 

[Aerides]

Not sure I understand this. If you have both people on the policy, and only 1 gets sick the MOOP is $6,500 for the sick person. The $13,000 is for both. The sick person will not pay more than $6,500. This happened to us 2 years ago in an employer sponsored plan. Is it different under ACA? Please clarify for me as we will be taking an ACA plan for 2023.

Thanks

That's how mine works. We have a joint plan (DH and me), but we each have our own deductibles to meet. There would be no difference if we had separate plans or not.

 

[2HOTinPHX]

2HOTinPHX,

To answer your question straight up point blank honestly? No, we could not. We are both 60, and have had a few health problems ourselves, and we are retired. We are also here in the Valley of the Sun, and just to give you an example, we’ve had to replace our AC unit this year ($12k), had to pay a deductible for radiation therapy ($8.7k), not to mention everyday expenses, in just the past few weeks. Several years back, health insurance declined to pay for gold standard cancer treatment, so to get it, we paid $50k out of pocket. And we still hope for another 20-25 years (both cancers were caught early, thank goodness).



What I’m saying is, some people might be able to do it. If we had retired with the assets you described, we’d never be able to make it, first because these extraordinary expenses seem to have become the ordinary, and second, we have been accustomed to a higher income for quite a long time, so it just would not work for us.



The only advice I have for you is to think long and hard about it before pulling the trigger, and make sure to plan for healthcare and other “extraordinaries”.

Thanks for sharing your experience. Glad they caught the cancer early. Yes health care coverage is a big concern and one of the main reasons most keep working. Even while working if you have a serious health problem it can get expensive and with all the unknowns of what may or may not be covered it can be a really scary time. Having a larger emergency fund and no debt helps eleviate some of the worry for us.

Our single family house is fairly small at 1300 sqft. Feels like a condo inside without sharing walls. Perfect little retirement home if it weren't for the occasional scorpion visit and long extremely hot summers. AC replacement cost is probably around 7 to 8 K according to neighbors who recently replaced theirs. Will get that done before the end of the year before turning of the income stream.
We are definitely looking at all sides of retirement and the timing of it. Seems like things keep getting crazier in the world and it makes you question everything. Right now seems like the worse time to even consider retirement but at the same time tomorrow is not guaranteed for anyone and that is where we are stuck.

 

[2HOTinPHX]

IMO, a lot depends on your location. I can only speak for So California, but we retired with just under a million ONLY because our house was paid for. Cost of living and taxes can be drastically different depending on location.



also, remember Ca has prop 13 tax law which basically states that once your house's assessed value is established, your taxes can (roughly) go up a max of 2% per year. Huge difference in property taxes if you bought 20 yrs ago, or just bought yesterday. Both houses may be worth $800K today, but one will pay a lot less in prop taxes.

Yes prop 13 is a big help for those who have owned a home a long time in California. It has helped many people like my parents from being hit with huge property tax bill increases just cause the lived in SF Bay area. Sure their house value increased dramatically but to them it was just their happy home not an investment. The new owners are now going to be paying about 10 times the property taxes for the same home. Seems there should be some sort of balance. Property taxes are forever...wages are not.

 

[ncbill]

Yes prop 13 is a big help for those who have owned a home a long time in California. It has helped many people like my parents from being hit with huge property tax bill increases just cause the lived in SF Bay area. Sure their house value increased dramatically but to them it was just their happy home not an investment. The new owners are now going to be paying about 10 times the property taxes for the same home. Seems there should be some sort of balance. Property taxes are forever...wages are not.

Even with Prop 13, CA property taxes in urban areas are enormous.

My buddy in a bedroom community of San Jose who bought nearly 25 years ago still is paying over $9,000 annually on his 3/2, ~1,000 sqft. small ranch home...tax valuation is only ~1/3 of current market value, so, what, roughly triple current taxes for any new owner?

IMHO only if one's parents bought back when Prop 13 passed would they enjoy the full benefit of it as an urban CA homeowner.

 

[Alex The Great]

Even with Prop 13, CA property taxes in urban areas are enormous.

My buddy in a bedroom community of San Jose who bought nearly 25 years ago still is paying over $9,000 annually on his 3/2, ~1,000 sqft. small ranch home...tax valuation is only ~1/3 of current market value, so, what, roughly triple current taxes for any new owner?

IMHO only if one's parents bought back when Prop 13 passed would they enjoy the full benefit of it as an urban CA homeowner.

Well, I bought a home in San Jose ~15 years ago and currently property tax is around $14K annually. Still, my plan is to retire here because it is a nice area and property tax is not a deal breaker even with 2% increase every year. I also consider alternatives and looking at other places but cannot really find anything which fit the life style and amenities present here. For example Reno, NV is a nice place but prices are rising rapidly and there is no Prop 13 in place. I'm not sure if property tax would be higher than I currently have in Bay Area some day.

 

[Letj]

Now THAT is a scary thought!

That depends. I am physically stronger and feel healthier now than I felt 20 years ago. I also think mental health improves with age.

 

[daylatedollarshort]

Even with Prop 13, CA property taxes in urban areas are enormous.

That may be true in some urban areas, but not all. Some of our neighbors are paying $1 - $2K in property taxes on $2M homes. Our property taxes are .25% of the current market value.

 

[daylatedollarshort]

I also consider alternatives and looking at other places but cannot really find anything which fit the life style and amenities present here.

For us it has been a great place to be retired. We've been retired here for over ten years now and I feel like we've barely scratched the surface on all the things to do and day trips.

 

[ncbill]

That may be true in some urban areas, but not all. Some of our neighbors are paying $1 - $2K in property taxes on $2M homes. Our property taxes are .25% of the current market value.

Did they buy back when Ford was President?

I am well aware that other places have no limits.

Even here in flyover country the large home where I grew up last sold for 3x what my mom sold it for ~30 years prior...its value essentially keeping up with inflation.

But over that same time period the annual property tax went up sixfold.

 

[daylatedollarshort]

Did they buy back when Ford was President?

More like Harding. Between capital gains, high transaction costs of selling and Prop 13, there is a lock in effect that keeps people from moving around much. Also, it often doesn't really pay to downsize as the price per square foot is often higher on smaller homes.

 

[Koolau]

I've mentioned before that I look at our property tax as being a bargain at less than $2K with assessed valuation on the order of $0.6 Mil. The problem we have is that our HOA dues are $10K and going up 8 to 10% per year now.

THAT would strain a less-than-a-million-dollar retirement stash. It really points out that retirement location is key. Less than a million is still doable - but not everywhere though YMMV.

 

[Eastbayboy]

Even with Prop 13, CA property taxes in urban areas are enormous.

My buddy in a bedroom community of San Jose who bought nearly 25 years ago still is paying over $9,000 annually on his 3/2, ~1,000 sqft. small ranch home...tax valuation is only ~1/3 of current market value, so, what, roughly triple current taxes for any new owner?

IMHO only if one's parents bought back when Prop 13 passed would they enjoy the full benefit of it as an urban CA homeowner.

If they owned the house for 25 years and within a recent time they did an addition which added sqft, then the county will reassess the home at the current value. This happen to me in the early 90s. My tax bill shot up by 40%. At the 2% per year really wouldn’t go up that high. Did they add an Additional Living Unit or something that would trigger a property tax hike?

 

[RetMD21]

Did they add an Additional Living Unit or something that would trigger a property tax hike?

I understand that California is trying to encourage ADUs but that would seem to be an uphill battle with the potential property tax consequences

 

[daylatedollarshort]

I understand that California is trying to encourage ADUs but that would seem to be an uphill battle with the potential property tax consequences

The state laws are encouraging 1 ADU and a garage conversion per house to increase the housing supply and overriding the NIMBY (not in my back yard) local laws. This site says median rental prices for ADUs in California are $2.8K, so I doubt anyone would come out behind building an ADU to rent out - https://www.sfgate.com/realestate/article/how-to-price-ADU-unit-rental-sf-ca-16534151.php.

The neighbors we know of in our neighborhood are for adult kids or parents, so any extra property taxes would be minor compared to the cost of the relatives buying a house or condo on their own.

 

[Katiek]

My main question is how sure are you of that expense number? Have you tracked actual spend or is this an estimate? If you're confident of the numbers, play around with firecalc and see what it tells you,

 

[2HOTinPHX]

My main question is how sure are you of that expense number? Have you tracked actual spend or is this an estimate? If you're confident of the numbers, play around with firecalc and see what it tells you,

Yes we have been keeping budget and track expenses on a spreadsheet for many many years.

Current idea is to wait till the end of the year and maybe FIRE then. See if things look a little better by then as far as economy and world go.
Still trying to learn best way to use funds and if Roth conversions should be considered in our plans. So far considering delaying my SS till 67 and wife takes hers at 62. So tough to plan for the unknown...