Retire in your 30s and Get Subsidized Healthcare? I don't get it.

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underwrite said:
I'm definitely on board with managing assets to avoid taxes as much as possible. Certainly understand that it's done at all ages. What I have a hard time with is coming up with a plan to quit working really young without budgeting for health care and then getting it free from others. Oh well, I understand that many don't agree. It's a free country. FIRE folks are interesting. I think of them as rugged individualists. So, when I see something like a 33 year old making this decision, it goes against that individualistic quality that I admire in most FIRE folks.
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I see nothing wrong with it, I take more offense from those on food stamps and government housing
 
I think it's odd that you're ok with a 53 year old doing it, but not 33. He's amassed a good amount in a short period. Good for him. Probably worked very hard in school and at a career, including planning, saving, and aggressive LBYM.

If that's not being individualistic I don't know what is? All of "society" judges him and thinks he's crazy to walk away from a big salary, security, comfort. He's decided he'd rather be comfortable, he has enough, and can be a better parent this way. He's also not exactly doing nothing - that blog doesn't write itself, it's at least a part time job.

Your main beef seems to be he's managing his income to allow for the legal subsidies. I suggest you expand your research into all the other things that receive subsidies in the US, and you'll probably find far more outrageous examples to distract you.
 
UW, the same arguments can be made about Medicare, SS, the mortgage interest deduction, child deductions, savings deductions, educational deductions and many others. IMO, all we can ask is that people follow the law and pay the taxes owed per the existing laws. No more no less. After all, tax policy is a political system. There are plenty of opportunities to change it.
 
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flintnational said:
UW, the same arguments can be made about Medicare, SS, the mortgage interest deduction, child deductions, savings deductions, educational deductions and many others. IMO, all we can ask is that people follow the law and pay the taxes owed per the existing laws. No more no less. After all, tax policy is a political system. There are plenty of opportunities to change it.
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I'd be equally bothered if I found out an able bodied person was getting Medicare or SS in their 30s.
 
Rather than complaining someone else getting a subsidy how about contacting your representatives? Maybe raise the point about why health care costs are running amuck in the USA?

I have friends all around the world and they think we're stupid for putting up with our system.
 
Aerides said:
I think it's odd that you're ok with a 53 year old doing it, but not 33. He's amassed a good amount in a short period. Good for him. Probably worked very hard in school and at a career, including planning, saving, and aggressive LBYM.

If that's not being individualistic I don't know what is? All of "society" judges him and thinks he's crazy to walk away from a big salary, security, comfort. He's decided he'd rather be comfortable, he has enough, and can be a better parent this way. He's also not exactly doing nothing - that blog doesn't write itself, it's at least a part time job.

Your main beef seems to be he's managing his income to allow for the legal subsidies. I suggest you expand your research into all the other things that receive subsidies in the US, and you'll probably find far more outrageous examples to distract you.
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He's one of my favorite bloggers so I feel bad picking on him. Just an example of the overall concept. I see here that many don't agree. The good news is that he's probably making more money because of me as I'm a regular reader. If I threw my whole life out there, I'm sure many could easily pick apart some of my decisions.
 
I find it interesting at the support for someone legally taking advantage of a govt program by controlling his income.

While at the same time many on this forum tend to cry "fraud" at hints of legal "elder law" tactics to have Mediciad pick up LTC.
 
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Dtail said:
Well I am managing my MAGI for ACA subsidies. I don't feel the least bit guilty. There are many other tax subsidies for richer folks than me/collective us.
I am sure the % gaming the system is small overall and the laws would have been changed if it were so important to change them.
Many folks against the subsidies are ones who can't use the system due to where they are living or the makeup of their income.
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Some of the responses have been similar to this. I find it very interesting. Many feel like finding the loophole is a badge of honor. We see that attitude in other areas of assistance from the government.

I continue to have some disagreement with this philosophy but I just feel myself blessed to be able to afford my high health insurance premiums.
 
underwrite said:
I'd be equally bothered if I found out an able bodied person was getting Medicare or SS in their 30s.
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Folks retiring in their 30's, 40's and 50's will get SS and Medicare at retirement age as long as they have the minimum years worked (10 IIRC). That's the reason there are minimum years worked requirements. You could raise the years worked requirement, but otherwise folks are simply complying with the law.

Are there major deductions you are planning to take that someone else might think are unfair or inappropriate? Remember, you are implying that folks pay taxes they do not owe. There might be folks that do that. But I have not met them. But, there are plenty that point out the "unfairness" in what others are doing.

Edit to add: My comments are a little tongue in cheek. Clearly there are lots of things wrong with any tax system and it can always be improved. However, I just don't think we can fault an individual or group for complying with the law.
 
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I don't worry about people using ACA legally as designed. I worry more about the lawyers and doctors who commit fraud on behalf of clients to get them benefits. For example, this guy and the so-called doctors he worked with:
https://www.kentucky.com/news/state/article140620328.html

Conn admitted he submitted false documents in “well over” 1,700 cases, the Department of Justice said.

...

The agency ultimately identified about 1,500 beneficiaries, most of them in Eastern Kentucky, for re-determination hearings, said Prestonsburg attorney Ned Pillersdorf, who led an effort to find attorneys for the people.

Most of the hearings are over, and a little less than half the people won decisions to keep their benefits, meaning about 800 people lost money they depended on, Pillersdorf said.
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Basically, through aggressive advertising, he got a lot of people disability benefits who didn't deserve them. Many of the clients didn't know much better, it really wasn't their fault. They may have a slight issue that normally would not qualify for full disability, but the fraudsters got it for them.

Now, after the case is exposed, they lose their disability and are dealing with clawbacks. It is "fair" for us, the taxpayers. I just find it horrible that so called professionals used these folks as pawns, so they are ultimately victims too, along with the tax payers.
 
underwrite said:
I was reading the Root of Good blog recently. If I remember correctly, the blogger retired at 33 and now earns around $40k per year. He's getting heavily subsidized healthcare through Obamacare, ACA or whatever you'd like to call it.

We're paying taxes to pay the subsidy for a guy to retire at 33 and get cheap healthcare? I don't get it.

It wouldn't bother me as much if he'd paid 'into the system' for a number of years and then retired in his 50s or even late 40s and then got subsidized. To retire at 33, able bodied, and then avoid paying much of his healthcare costs? Yikes.

I know it's legal, but it really bothers me. Am I overreacting?
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I don't think the law should have been set up to allow high net worth individuals to qualify for subsidies. However, it was. As such, I think it would be foolish of anyone who does qualify for subsidies to not take advantage of them.

I think many things about the tax code give benefits to people that haven't earned them, or don't deserve them, or otherwise shouldn't get them in my opinion. However, as long as the tax code says they can/do legally get them, then they should get them if they qualify for them.
 
Our out of pocket max with ACA subsidies is still around $14K per year for the two of us on a Bronze plan. Most years we spent much less when we had employer subsidized health insurance. Plus we helped a relative with their out of pocket max last year. With median household income under $60K, a $6 - 7K OOP is a pretty significant financial hit for most families, especially if they are out of work due to health issues.

My personal outrage is directed at why in the U.S. are our health care costs twice that of other developed countries for poorer outcomes -

U.S. Health Spending twice that of other countries with worse results
 
I follow his blog but lately it is getting too much about the adds . There was a long discussion on here years ago about using loopholes to avoid paying student loans that would interest some .
 
In essence, aren't the young and healthy the ones subsidizing the old and unhealthy in any healthcare system? I suppose we could just self insure and pay our fair share for all of what life brings at us... no subsidies to worry about.

As a former young person, I've done my fair share of subsidizing, and won't feel guilty if I end-up getting an ACA subsidy. Just like I don't feel guilty claiming a child tax credit, dependent exemptions, etc. when doing taxes, even though basically those without children are subsidizing that. At the end of the day, I would suspect that most people that are able to retire early have contributed far more than they're taking in terms of taxes, premiums, etc.
 
gamer-stu said:
In essence, aren't the young and healthy the ones subsidizing the old and unhealthy in any healthcare system?
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That's correct, if you omit the words "young" and "old".

The healthy ones subsidize the unhealthy ones in most healthcare systems. Despite being older than most of my coworkers, I spent many, many years paying for health insurance and never using it while younger coworkers got sick, injured, or pregnant. And then, I was diagnosed with cancer.

Almost everyone who is young eventually becomes old (consider the alternative).

But one never knows if/when someone who is healthy will become unhealthy.

That's what insurance is all about.
 
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underwrite said:
I'm definitely on board with managing assets to avoid taxes as much as possible. Certainly understand that it's done at all ages. What I have a hard time with is coming up with a plan to quit working really young without budgeting for health care and then getting it free from others. Oh well, I understand that many don't agree. It's a free country. FIRE folks are interesting. I think of them as rugged individualists. So, when I see something like a 33 year old making this decision, it goes against that individualistic quality that I admire in most FIRE folks.
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Would you suggest that they forgo subsidies that they are entitled to under ACA? They didn't write the law... the focus of your ire should be the morons that wrote the law rather than those who legally and legitimately derive benefits from it.
 
joeea said:
That's correct, if you omit the words "young" and "old".

The healthy ones subsidize the unhealthy ones in most healthcare systems. Despite being older than most of my coworkers, I spent many, many years paying for health insurance and never using it while younger coworkers got sick, injured, or pregnant. And then, I was diagnosed with cancer.

Almost everyone who is young eventually becomes old (consider the alternative).

But one never knows if/when someone who is healthy will become unhealthy.

That's what insurance is all about.
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Understood about the distinction you're making re healthy/unhealthy vs young/old. The point I'm trying to make is that, in general, the young subsidize the old in a health care system... so I won't begrudge a young person that retires early for taking an ACA subsidy that they are eligible for.
 
pb4uski said:
Would you suggest that they forgo subsidies that they are entitled to under ACA? They didn't write the law... the focus of your ire should be the morons that wrote the law rather than those who legally and legitimately derive benefits from it.
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+1 This is true for all tax advantages. Let them change the laws, if they are not fair (except for ACA) LOL
 
Dtail said:
Well I am managing my MAGI for ACA subsidies. I don't feel the least bit guilty. There are many other tax subsidies for richer folks than me/collective us.
I am sure the % gaming the system is small overall and the laws would have been changed if it were so important to change them.
Many folks against the subsidies are ones who can't use the system due to where they are living or the makeup of their income.
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Same here, and I think pretty much all the folks that have 'serious ethical issues' with gaming income for ACA are those that can't do it.

There is no 'ethical' issue with using the tax law as written to your advantage because there is no loophole here - means-based testing was considered and rejected as part of the law (for good reason given the complexities).

The issues that these folks have are with Congress, not the taxpayer.
 
Just another example of the Law of the Unintended Consequences.
 
daylatedollarshort said:
Meet the 18 profitable companies that paid no taxes for over 8 years
https://www.cbsnews.com/news/meet-the-18-companies-that-paid-no-taxes-over-8-years/
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Corporations were not created to employ people, pay taxes, or insure them despite the fact that many do. They were created to protect the owners from lawsuits, and make profits for their shareholders, and permit their shareholders to pay taxes at their own rates. Corporations don't pay taxes, their customers pay their taxes.
 
Winemaker said:
Corporations were not created to employ people, pay taxes, or insure them despite the fact that many do. They were created to protect the owners from lawsuits, and make profits for their shareholders, and permit their shareholders to pay taxes at their own rates. Corporations don't pay taxes, their customers pay their taxes.
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Corporate income taxes provide around 9% of the federal tax revenue.
 
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