Good BBC video on FIRE

[cheyrl]

ACA?

My ? Is medical insurance. What do you do for ins when you retire early? I judt tirned 62 and thats what is holding me back is cost of insurance.Any cheap ideas?

We retired at 61 due to an outsourcing at my husband's employer.

We were accustomed to living frugally, due to saving for retirement and paying for kids' college. We were able to live on about $50k per year(withdrawn from IRA) and qualify for subsidies. Lucky to be in good health, we paid 0 for health care by choosing a bronze plan with a high deductible, knowing that we likely wouldn't have many medical expenses. With paid-off house and no debt, we didn't need much income. We didn't mind if our IRA balance decreased while we were waiting for Social Security, but it has increased (a lot!).

 

[jollystomper]

Because I love to argue silly counter-points, one could just as easily ask:

Why are people who are early retired, receiving no earned income, so sensitive as to always label others who are, as not really retired?

In my view, the issue is not about the fact that they are earning. I look more at what happens when what they are earning is severely impacted and goes away.

I again point to the "worst" of the pandemic, when many "FIRE" folks and bloggers were in a panic because their earned income or "side hustles" were severely impacted or dried up, as they needed it to live. If losing earned income disrupts your finances to that degree, I cannot see how one can truly be retired. Maybe REFD (Retired early, financially dependent) .

 

[scrabbler1]

Decent but not spectacular video. I always feel a little deceived when people in these videos never mention health insurance because that is one thing we have to make sure we have covered as get older, especially if we (in the USA) are short of Medicare eligibility. Yes, the ACA has greatly eased what was prior to it an often large expense. But if you live in a country which has some sort of national HI plan, that can make it a lot easier to FIRE. Nonetheless, HI should surely be mentioned more often in these video pieces.

As to what constitutes FIREd, I'd say if any earned income or its benefits from a job are required to maintain your standard of living, then you aren't really FIREd (something others have mentioned already). FLSUnFIRE's mowing gig wouldn't disqualify him/her from being FIREd because I doubt very much the $10 makes any real difference in the day-to-day living. My former volunteer work included some compensation (voluntary of their part) in the range of $100 per year, nowhere near any effect on my day-to-day lifestyle. The fact that it disappeared thanks to the pandemic (it was with some area schools) is further proof of the absence of any effect it had financially.

 

[ncbill]

My ? Is medical insurance. What do you do for ins when you retire early? I judt tirned 62 and thats what is holding me back is cost of insurance.Any cheap ideas?

Go to healthcare.gov, create an account, input your information, including household income to see:

1. what subsidy you are eligible for this year &

2. if you're happy with the ACA plan options in your specific area (zip code)

 

[jayanu]

The biggest expense in the USA is the Medical Insurance. No one in the video talked about that expense and how they take care of that. This can be easily $800+/person, so almost $20,000/year for a couple has to budget! 25 times that is $0.5Million savings just for normal medical insurance, and that will not be enough if later on in life one needs long term care!

 

[Koolau]

The biggest expense in the USA is the Medical Insurance. No one in the video talked about that expense and how they take care of that. This can be easily $800+/person, so almost $20,000/year for a couple has to budget! 25 times that is $0.5Million savings just for normal medical insurance, and that will not be enough if later on in life one needs long term care!

I never felt Financially Independent until Health Care was figured out (as much as that is possible.) One of the black swans we fear most is potential need for long term care. Even with LTC insurance, there are still unknowns. All you can do is all you can do - and then hope. YMMV

 

[jayanu]

You are correct - LTC is a known Black Swan!

LTCi is inadequate, expensive and hard to get. Many have gone out of business, reduced benefits/increased premiums. I looked at age 70 and the quote was $2,800/month for a couple for $125K/yr benefits

Typically, LTCi is for 3-5 years at $125K/year for the couple. Today's nursing home median cost in NJ is $125K for a semi private room. If both are in the nursing home at the same time, then the benefits are cut in half! Average stay is 3 years, but if you have neurological disease (e.g. Parkinson's or Dementia) then one can be in for 8-12 years, possibly bankrupting the finances for many.

Medicare does not pay for it Most of us will not qualify for Medicaid and the nursing homes that accept Medicaid are likely for profit and less quality service.

Go to Genworth.com to see what will be the LTC cost are today and projected for future.

You are correct - LTC is a known Black Swan! Some have doe genetic analysis (43 and me) to understand the genetic possibility of neurological disease, but no guarantee. No one in my family, maternal, or paternal side had neurological disease and yet my brother (very healthy who walked 2-3 miles a day) ended up with Shy-Drager's syndrome (Variant of Parkinson's) for 12 years. It was tough on him and the family. His wife dies two years after his death with colon cancer (no history either) possibly with the stress of caring for him for years.

We decided to move into a Type-A LifeCare Continued Care Retirement Community (CCRC) to avoid the Black Swan - https://www.willowvalleycommunities.org/

Love
Jay Shah