Looking to Retire Soon and add More Cars to the Collection - Healthcare is on my mind

[GTOMike]

Hello, I am going to be 60 in June, wanting to retire with about $1.2MM in IRA, $125K in Roth IRA, and $50K cash savings.

Starting to look into options for healthcare coverage until I am qualified for Medicare.

Zero Debt.

Look forward to going thru the site for some guidance,

Mike

 

[Diogenes]

Healthcare... or cars?

I too would like to acquire, maintain, restore and race more cars... but that requires a totally different housing footprint than that which is currently sensible... thus a cascade of events, that has to be triggered and pursued, before the car-hobby can be realized. Might take a few years, might take decades, and might never actually happen.

 

[imjustawarrior]

Welcome aboard.

Be sure to post any specific questions.

Most people who retire before Medicare age purchase insurance off of the ACA exchanges or use employer retiree health insurance.

 

[TickTock]

Welcome!

Healthcare until Medicare is a big concern; good on you for looking now. Income taxes are likely to be the biggest spending reduction category.

Also congrats on zero debt.

 

[GTOMike]

Thanks, I guess I doe have the ACA and COBRA thru my current employer, I need to look into both. Wife and I are in good health currently.

 

[disneysteve]

Healthsherpa.com and Healthcare.gov are the places to go to shop for insurance. Or your state's exchange site if they have their own.

Congrats on the impending retirement. I retired in 2024 shortly before turning 60 myself.

 

[GTOMike]

Healthcare... or cars?

I too would like to acquire, maintain, restore and race more cars... but that requires a totally different housing footprint than that which is currently sensible... thus a cascade of events, that has to be triggered and pursued, before the car-hobby can be realized. Might take a few years, might take decades, and might never actually happen.

LOL both. I however would have to knock out the back of my garage to add space for two more cars. There goes my retirement budget.

 

[COcheesehead]

I made the mistake of thinking Cobra was the easiest. It was and way more expensive. I cut my insurance in half by going to the ACA.

 

[TickTock]

In our experience, COBRA was the most expensive, followed by company provided medical, followed by ACA. YMMV.

 

[APP01]

Welcome aboard.

For my DW and I, COBRA was slightly less expensive than our state marketplace for equivalent coverage. ACA was not an option for us. Been on it 14 months and I am starting Medicare in June which is a life event. This allows the DW to take over ownership and extend it another 18 months, bridging her to 65. Other plus is since it is a high deductible plan, and DW will now own it, it allows her to contribute 1 more year into an HSA.

I liked your title. am also a car guy and a drag racer, and DW a car gal. When time came to think about retiring, we downsized our classic car collection and only kept the ones we used the most. Also downsized the home, building one that better matched our lifestyle, including a bigger garage.

 

[Koolau]

GTO Mike. Have you run FIRECalc yet. It can help you to decide if you are financially ready to retire.

Welcome to the forum.

FIRECalc: A different kind of retirement calculator

www.firecalc.com

 

[imjustawarrior]

Keep in mind that currently the ACA subsidy cliff is set to come back for next year. Legislation could change that, but I have not heard anything about it getting extended. BTW, I don't hear about a lot of things.

 

[engineernerd]

Thanks, I guess I doe have the ACA and COBRA thru my current employer, I need to look into both. Wife and I are in good health currently.

A little free advice, worth every penny you paid for it:
When shopping health plans on the ACA exchange, pay close attention to two things.

One is the OOPM (out of pocket maximum) for each plan. Be aware that medical costs are crazy and getting crazier all the time, especially at hospitals. Sit and consider what it means that this year the SLCSP in my area has a LOWER premium than my HSA Bronze plan, despite its lower deductible. It has a lower deductible, but a higher OOPM!

The other is customer reviews. I considered switching to the plan with the lowest premiums, from Lifewise, in 2024 - until I started reading their truly AWFUL Google reviews. Basically, they were United Healthcare - you needed preauthorization for a lot of important stuff, and they were masters at "delay" and "deny," and probably also "defend."

 

[MC Rider]

It has a lower deductible, but a higher OOPM!

I think that is the sound you make if you get hit by a big bill. OOPM! And maybe ACK!

I could fit a couple more motorcycles in my garage easy. I suppose the N+1 rule applies to cars as well as bikes. LOL.

 

[COcheesehead]

A little free advice, worth every penny you paid for it:
When shopping health plans on the ACA exchange, pay close attention to two things.

One is the OOPM (out of pocket maximum) for each plan. Be aware that medical costs are crazy and getting crazier all the time, especially at hospitals. Sit and consider what it means that this year the SLCSP in my area has a LOWER premium than my HSA Bronze plan, despite its lower deductible. It has a lower deductible, but a higher OOPM!

The other is customer reviews. I considered switching to the plan with the lowest premiums, from Lifewise, in 2024 - until I started reading their truly AWFUL Google reviews. Basically, they were United Healthcare - you needed preauthorization for a lot of important stuff, and they were masters at "delay" and "deny," and probably also "defend."

We’ve had UHC for the better part of the last 20 years. Either a company policy or the ACA policy and have not had any issues getting care, whether it’s been routine or in the case of my wife, major surgery.

 

[engineernerd]

We’ve had UHC for the better part of the last 20 years. Either a company policy or the ACA policy and have not had any issues getting care, whether it’s been routine or in the case of my wife, major surgery.

Glad it's working out for you. Right after the Brian Thompson shooting a graph comparing insurance company claim denial rates was circulated widely. It showed UHC as the highest at 32%.

 

[Diogenes]

LOL both. I however would have to knock out the back of my garage to add space for two more cars. There goes my retirement budget.

A car hobby is a wonderful activity in retirement... physically, mentally, spiritually. Do you have enough space behind your garage, for an expansion? That, and not the cost of walls/construction ,would be the limiting factor. I'm looking at houses now, with an eye towards building a large garage... tall enough for a "professional" hydraulic lift, and an overhead gantry crane above the lift, for things like engine swaps. That means high ceilings and some heavy duty concrete for the floor... not an easy build, and not easy to get through permitting... meaning, not easy to find a house where such a project would be tractable.

I made the mistake of thinking Cobra was the easiest. It was and way more expensive. I cut my insurance in half by going to the ACA.

Exact opposite here, during my Barista FIRE. Didn't qualify for any ACA subsidies --> very expensive. COBRA was both cheaper and better coverage.

 

[COcheesehead]

Glad it's working out for you. Right after the Brian Thompson shooting a graph comparing insurance company claim denial rates was circulated widely. It showed UHC as the highest at 32%.

Hmmm, right after the shooting…and widely circulated. Some will understand that.

 

[TickTock]

Exact opposite here, during my Barista FIRE. Didn't qualify for any ACA subsidies --> very expensive. COBRA was both cheaper and better coverage.

Currently ACA subsidies zero out at 8.5% of SLCSP. Premiums vary, but for a 50 yo, $850 / mo is a reasonable ballpark premium. $850 * 12 / .085 = $120,000.

As others noted, taxes are the key discriminator.... but I don't mean $120K before-tax or after-tax. I mean, what if your annual income tax bill is itself $120K? Or more? Dividends in a taxable portfolio are expensive, as are RMDs from a tax-deferred one (even more so). How do we juxtapose actual living-expenses, with taxes? As a semi-retiree currently in "Barista FIRE", easily two thirds of my total expenses - including of course housing, food, insurance, everything - are federal and state income taxes.

So your other-than-fed-and-state income tax spend might reasonably be $40,000 ($3,333 / mo) and income taxes $80,000.

Call me a whiner - or more bluntly, just plainly stupid - but had I realized 20 or 30 years ago, how expensive it is to be "rich", I'd not ever have gone to the trouble.

A single taxpayer with $120,000 income and standard deduction pays ~$18,000 in taxes in 2025. State income taxes vary; perhaps 1/3 of federal. $24,000 total. Leaving $56,000 in taxes for dividends / RMDs (I haven't detected in your posts that you're of RMD age yet).

Seems to me that you can afford a "wonderful activity in retirement... physically, mentally, spiritually"

My enduring goal was to never withdraw from my portfolio. I've thought of it as Roach Motel: money can check-in, but it can never check-out!

If you let go of that goal.

 

[TickTock]

Hmmm, right after the shooting…and widely circulated. Some will understand that.

Perhaps some data prior to (12/4/24) [pre-shooting].

Note that this data is for in-network claims for 2023 ACA plans.

Here's the link: Insurance Claim Denials: Worst Companies and How to Appeal

 

[COcheesehead]

Perhaps some data prior to (12/4/24) [pre-shooting].

View attachment 55808

Note that this data is for in-network claims for 2023 ACA plans.

Here's the link: Insurance Claim Denials: Worst Companies and How to Appeal

No problems for us or almost 70% of others. Thanks.

 

[TickTock]

No problems for us or almost 70% of others. Thanks.

Not quite. The 33% denial rate is per claim, not per customer. I'm glad you haven't experienced a claim denial.

 

[COcheesehead]

Not quite. The 33% denial rate is per claim, not per customer. I'm glad you haven't experienced a claim denial.

So almost 70% of claims end well.

 

[TickTock]

Yes, roughly 2/3 of UHC claims are not denied.

For BCBS, roughly 4/5 of claims are not denied.

For Kaiser, roughly 19/20 claims are not denied.

 

[COcheesehead]

Yes, roughly 2/3 of UHC claims are not denied.

For BCBS, roughly 4/5 of claims are not denied.

For Kaiser, roughly 19/20 claims are not denied.

I would like to see claims paid/dollar spent. That would be an interesting metric. UHC has been the best cost for us on ACA with an expenditure cap, a max out of pocket. So you have protection on the upper end. If not needed, you’re saving money most of the time.