I retired at just shy of 62. How to pay for medical insurance until 65? Mrs. yoyo and I stockpiled enough cash so that we could limit our 1040 income to ~$40k which gives us significant ACA subsidies. The cash stockpile is used to supplement our spending above $40k (cash on the side, except for interest earned, isn’t 1040 income).
We paid just over $111/mo for both of us on an ACA Silver plan during the first part of pandemic. This year, our final year on ACA, we dropped down to a Bronze plan but the premiums are up to $305/mo. We’re both in good health and HC usage is low for us, so crappy coverage with low premiums is fine. Basically treating it as a catastrophic coverage policy.
Our monthly premium on Medicare + Plan G gap + Part D will more than double from current premium.
Edit: the full premium for our current crappy policy is something between $25k and $30k per year!
Right on. If I can work half-time around age 55 I’ll considerably scale back my savings to just get teh 401k match. Plus it would give me an opportunity to experience having my income be on the retirement scale and let my nest egg grow. By that time I’ll probably have $20K of stock waiting to vest (then $15, $10, $5) so if I make $50K or $70K I get $20K that I would have kissed goodbye too.
It does have to come out of the 401k specifically rather than an IRA so this would be the first time in my life I left a 401k out there rather than rolling it up.
Envisioning your day to day life well before punching out is key. We did that kind of vision and planning for a few years prior to retirement and it’s served us well. Have I EVER been bored in retirement? Well, yes, of course, but it hasn’t been a problem at all. Do I ever miss working? Eff no! And I was one of those who enjoyed his work and the people I worked with. I still have lunch with some guys from work about every month.
Yep that’s part of the plan. About $40K is the magic number. over $500k of my nest egg is either Roth or cash so withdraw $40K taxable and add $30K nontaxable and as long as the ACA continues I have extremely affordable health insurance. I’m reasonably healthy but would do well to improve, but apart from an MRI for a brief bout with sciatica last summer usually have 1 dr visit and 4 chiro visits each year.
Also if I needed something done that was going to eat up a $9K deductible, I would seriously consider a medical vacation. I’m quite appalled at how expensive medical procedures are (and I used to work at a BCBS in the department that came up with the fee schedules, it was my job to calculate the impacts) and if I could get it done for $3K in England or France that leaves $6K to vacation with.
Same here, I do love my work, I just love not working more. So I don’t want to give it up cold turkey but just lower the number of hours. I’m a bit more willing to no go to work and see the people, but my co-workers are nice.
I also want to go to Europe every 12-18 months as long as it makes sense. I’ve got enough frequent flyer miles for 2-3 trips over there, and as soon as the credit card companies allow me to get more, I’ll sign up. I typically go by myself (family doesn’t like to travel) although the sister will be with my for Spain/Italy in May.
I caught some grief on the AO for having this plan for our medical coverage. The argument was something like I was cheating the system when I could have afforded the full premiums. Oh, okay.
Yeah by that logic we shouldn’t take the standard deduction either, since we can afford to pay more tax. I’m sure it would be onerous to make the ACA need-based and try to have the whole world document (or hide) their assets to qualify. But if the standard is going to be taxable income, I am going to meet that standard unapologetically.
I wouldn’t say “cheating” but clearly exploiting it for a purpose that it wasn’t really intended though that’s on congress for only having income test limits and not net worth limits as well.
I’m planning on getting some ACA subsidies. I don’t know, I have been paying $30k plus per year in FIT for a long time. Whatever. Haters can come at me.
The deferred income kicks in the January after I end part-time work. So:
Jan 2026 (age 54.3): Start working part-time, vest stock/options
Apr 2028 (age 56.5): Stop working (collect bonus, leave a bit of stock/options on the table)
Jan 2029-2033 (age 57-61) Annual deferred income payments of $30K-$40K (this year’s deferral is across 7 years but everything else will be 5)
2034+ (age 62) Social Security ($3,500/mo)
It doesn’t have to happen that quickly, I won’t be disappointed if I don’t collect SS until 63 or 64, but this plan allows me to retire early while retaining an “income path”
A health actuary at the AO said that one of the stated purposes of ACA was to provide a way for people to retire early and make room for new entrants to the profession and open a spot for someone to move up.
1.5 Million can be plenty but it depends upon your lifestyle. It’s about 3 times what I expect to retire with and it’s oodles more than the median (something like 30% have virtually nothing).
I’m hoping to retire at 55-60ish… so far am on a good path. I’ll definitely want more than 1.5M, maybe more like 2.5M given inflation over ~a couple decades. But we’ll see where life leads… haven’t been close enough to worry about seeing a static number, am just saving as much as I can manage.
We have one child, and 50 is a bit of a stretch but possible depending on how the market does. Two kids and retiring at 50 would be really aggressive. I’m debating whether I’d rather retire at 52, or semi-retire at 50 and do some odd work here and there to help fill the gap.
