Need opinions on my decision

[Tetto]

If the math works, then it's simply up to you to decide. For me, I decided I didn't want to trade time that I would never get back for money I would never need.

Good that you are tracking your expenses, which is the key metric in the equation. What I have found is that we seem to have lumpy expenses, with usually at least one lump per year (AC went out, next year the house needed painting, next year tankless water heater, next year we "needed" to paint the kitchen, etc.). So, plan for a lump or two.

Oh yes, new roof on the horizon in 3-5 years.

 

[sengsational]

People like you, that do the thorough analysis, often are also the kind of person that are also overly conservative. Will everything that possibly could go against you realistically go that way? And if the economy goes bad, you'll be in better shape than most people. You can be flexible, if you need to be. You've got this figured out. Don't wait if work isn't how you really want to spend your time. Nobody knows how many days they have left, and if there's things you want to do that work precludes, the time is now.

 

[Exchme]

When I was ready to retire I ran our situation through virtually every free retirement calculator known to man and they are gave me a green light. No regrets. One of the best decisions that I ever made. While it is hard to say since you didn't disclose what you need to live on but if your advisor and FIRECalc say you are good to go then you are probably good to go.

Have you considered downshifting to part-time? My employer had a formal program where you could work reduced hours for reduced pay and I did that for many years before totally quitting work. To them 50% of me was better than 0% of me.

This is what I'm doing now and so far it's a good enough balance. Not doing it for finances anymore, but for to keep the mind sharp, provide structure, satisfaction, social interaction, etc. It took me 40+ years to get really good at what I do, now I just do it part-time and mostly as a reviewer of the work of younger folks. It means I get to talk to smart people and solve real world puzzles while mostly avoiding pressure and paperwork.

It's not for everyone, but we all get to choose our own path.

 

[Surewhitey]

Yeah, our annual expenses are hovering right around $49K per year as we live now. Its doable for sure, plus we have post tax money to fill the gap and my DW SS starting next yearish, cutting the amount we need from our assets.

That's a big "no problemo". Tiny % to cover the non Ss needs.

 

[Route246]

Hi Folks,

DW and I are at a decision point in our life. We’ve accumulated 1.8mm in 401k, IRA and Trad IRA and cash. Zero debt, house paid off. I’ve researched the ACA (I’m 58, her 62) pretty well up to and including contacting a broker and talking everything through. We qualify (in CT, New London county) for a Gold BCBS plan, dental and vision coverage, and full health. 18k deductible as a family … for $11 bucks a month (as long as our AGI stays at $55k/year) if I input $60k, it floats to $70/month. Not bad at all!! My plan is to take SS at 70($4400/mth), her next year at 63 (~$1400/mth). I’m having trouble accepting/determining if we’re good to go. I’m pretty sure we are covered, but I can’t make that jump yet. Caveat, most of our assets are in 401k, pre tax. Not sure it matters too much at this point. Around 1.3mm pre tax.

What do you think? FireCalc says 100% in any scenario I manipulate, my FA (fee only…) says we are good to go too. But I’m extremely conservative and agonize over this decision. Thanks for any inputs!!

Tetto

The elephant in the room is there is a significant amount of minority political inertia in place today to do away with ACA or severely restrict it with no plan for replacement. It is not a zero chance at this point regardless of all of the happy talk. Not really a significant risk but it could happen. Even if it is a 5% chance of ACA vanishing it should be in your emergency contingency and how to account for it.

 

[Tetto]

The elephant in the room is there is a significant amount of minority political inertia in place today to do away with ACA or severely restrict it with no plan for replacement. It is not a zero chance at this point regardless of all of the happy talk. Not really a significant risk but it could happen. Even if it is a 5% chance of ACA vanishing it should be in your emergency contingency and how to account for it.

There will always be the risk of this, but I’m betting that won’t happen to such a popular program, but who knows? Life is fraught with risk.

 

[Koolau]

I'm trying to recall a popular (even temporary) gummint program that ever actually went away (and was not replaced by something more generous.) ACA is going nowhere IMHO. Tweaked a bit? Maybe, but not going away though YMMV.

 

[TheWizard]

Yeah, our annual expenses are hovering right around $49K per year as we live now. Its doable for sure, plus we have post tax money to fill the gap and my DW SS starting next yearish, cutting the amount we need from our assets.

$49k might be ok for basic expenses but what about buying a new car every 5-10 years?
And what about a European river cruise now that you have lots of free time?

It's better to have a Desired Retirement Income that's quite a bit higher than your basic expenses...

 

[Midpack]

Well, it’s not that I’m asking folks to make a decision for me. Maybe that was bad wording in my part. Really just using this forum for what it’s intended and I’ve seen it used for: commiseration, comparison, viewpoints, personal experiences, watch outs etc, I find this very helpful to enlighten and know I’m on the right track. I will pull that trigger when I’m good and ready however, not when someone here says to. It’s very nice though to see folks’ opinions on my situation and seems to validate what DW and I have been able to accomplish. Thanks for your .02 though, appreciated.

My point was not to imply you're asking us to make your decision. It was that you have no idea if your risk tolerance, longevity, % SIRE and other factors align with the random strangers who are providing their views, some with zero qualifying remarks. FWIW

And again what you're comfortable with will not align with everyone else - we are all different in that regard.

 

[momoney]

I'm trying to recall a popular (even temporary) gummint program that ever actually went away (and was not replaced by something more generous.) ACA is going nowhere IMHO. Tweaked a bit? Maybe, but not going away though YMMV.

The popular subsidy for Internet service just ended?

 

[G POP]

$49k might be ok for basic expenses but what about buying a new car every 5-10 years?
And what about a European river cruise now that you have lots of free time?

It's better to have a Desired Retirement Income that's quite a bit higher than your basic expenses...

OP mentioned earlier that he/they are 30% under what they could spend. That's a pretty good cushion for extra's like a new car or river cruise.

 

[Koolau]

$49k might be ok for basic expenses but what about buying a new car every 5-10 years?
And what about a European river cruise now that you have lots of free time?

It's better to have a Desired Retirement Income that's quite a bit higher than your basic expenses...

When it comes to being READY to FIRE, sometimes "good enough" (like $49K) is good enough. I was fortunate that by the time I'd had enough, I had significantly more than that. BUT at the time I was ready to go, I would have settled for a lot less if I needed to. Freedom was much more important than my ability to do whatever I wanted financially. Fortunately, I got both, but YMMV.

 

[Tetto]

Thanks for everyone’s replies, very insightful. It’s true we are good to a much higher income level, but I want to try to stay within the subsidy sweet spot and this is going to be awesome!

 

[Cassius King]

BUT at the time I was ready to go, I would have settled for a lot less if I needed to. Freedom was much more important than my ability to do whatever I wanted financially.

This is a fantastic statement. This hits very close to home as I sit in very toxic workplace and am trying to decide whether to leave now or pad the nest egg.

 

[Tetto]

as I sit in very toxic workplace and am trying to decide whether to leave now or pad the nest egg.

Quite the dilemma, isnt it? I feel you, same here, just not too toxic, but enough to make me post here! I protect myself knowing that if i have to, i'm out the door in an afternoon, knowing we will be alright. So I pad the egg for OMY instead.

 

[UpQuark]

Do you have experience having an HMO type of health plan? You should probably budget for paying out of pocket for private doctors in case the HMO fails to provide the care you should get. My parents had an HMO plan and when my father got cancer there was a three month wait for an appointment with the specialist. Though I do remember reading in the news about a successful lawsuit against an HMO to cover the cost of going to a private doctor when the HMO didn't provide timely appointments, so maybe it is better than in the past.

 

[Tetto]

Hi Tetto,

Congrats on reaching such a solid financial position! It sounds like you've done your homework with ACA and SS planning. Given your pre-tax assets and conservative nature, maybe consider a phased retirement plan or partial Roth conversions to manage future tax implications. FireCalc and your FA's confidence are great signs, but if you're still unsure, perhaps a second opinion from another fee-only advisor could provide extra peace of mind. Best of luck with your decision!

Cheers,

Thanks PixelPatch; a second opinion is something i'm seriously considering. I've a meeting next week with my FA and will press him hard on specifics. He's good and I like him, but an extra opinion can't hurt too. One thing I dont want to do is beat this to death. My home grown, original plan was for us to take SS at 62 (both) this would give us ~49K per year, then backfill with investments assets. I liked this cause it allowed us to take a minimal amount from our nest egg. FA says wait until 70 for me (gives me about $2000 extra per month vs @62 for "longevity...) Maybe makes sense, but not totally convinced. We shall see.

 

[street]

People like you, that do the thorough analysis, often are also the kind of person that are also overly conservative. Will everything that possibly could go against you realistically go that way? And if the economy goes bad, you'll be in better shape than most people. You can be flexible, if you need to be. You've got this figured out. Don't wait if work isn't how you really want to spend your time. Nobody knows how many days they have left, and if there's things you want to do that work precludes, the time is now.

This exactly! With what info you gave us, you are golden and have the means to adapt. You have a plan to fall back on, but I don't see a need, you will be fine.

 

[HI Bill]

Lifestyle creep? When I ER'd, I was used to spending $50K/year, saving $65K, and paying the rest in taxes. After I ER'd, started using VPW, and bought a house, I found that my wife and I could easily spend 4X the pre-retirement spend rate (with no need to save $). Is there anything you want/want to do that you can't afford to do under your current budget? Better to include some cushion and ensure that you're able to do what you want in ER.

 

[Dtail]

You can retire right now. The numbers work, so it depends on other thoughts to hold you back.
Don't be one of those posters who states I wished I retired 3 years earlier.

 

[orbops]

One subtle thing to keep in mind with the ACA is that if your AGI goes up from $55K to $65K, double check on your deductible and max out of pocket. My wife and I were on a silver ACA plan in Arizona using AGI of $35K which had a max out of pocket of $6K. I changed the AGI in May 2024 to $45K, and my premium only went up by $20/month. What I did NOT realize was that my max out of pocket jumped to $15K and my copays also jumped up. The next month I changed my AGI back to $35K and my max out of pocket came back down.

 

[Surewhitey]

One subtle thing to keep in mind with the ACA is that if your AGI goes up from $55K to $65K, double check on your deductible and max out of pocket. My wife and I were on a silver ACA plan in Arizona using AGI of $35K which had a max out of pocket of $6K. I changed the AGI in May 2024 to $45K, and my premium only went up by $20/month. What I did NOT realize was that my max out of pocket jumped to $15K and my copays also jumped up. The next month I changed my AGI back to $35K and my max out of pocket came back down.

Never heard of this, but good to think about. Thanks.

 

[Dtail]

Never heard of this, but good to think about. Thanks.

When your MAGI goes from 150% to 200% of the FPL, the deductible and OOP can rise a decent amount.

 

[Tetto]

Never heard of this, but good to think about. Thanks.

I did notice this when playing with income numbers on the CT website. I could clearly see how changing my affected taxable income would change the price of the plan, but honestly did not see the OOP of deductibles change. Maybe I wasn’t looking close enough, but will check it out.

 

[Retired Expat]

Hi Folks,

DW and I are at a decision point in our life. We’ve accumulated 1.8mm in 401k, IRA and Trad IRA and cash. Zero debt, house paid off. I’ve researched the ACA (I’m 58, her 62) pretty well up to and including contacting a broker and talking everything through. We qualify (in CT, New London county) for a Gold BCBS plan, dental and vision coverage, and full health. 18k deductible as a family … for $11 bucks a month (as long as our AGI stays at $55k/year) if I input $60k, it floats to $70/month. Not bad at all!! My plan is to take SS at 70($4400/mth), her next year at 63 (~$1400/mth). I’m having trouble accepting/determining if we’re good to go. I’m pretty sure we are covered, but I can’t make that jump yet. Caveat, most of our assets are in 401k, pre tax. Not sure it matters too much at this point. Around 1.3mm pre tax.

What do you think? FireCalc says 100% in any scenario I manipulate, my FA (fee only…) says we are good to go too. But I’m extremely conservative and agonize over this decision. Thanks for any inputs!!

Tetto

Like you I did all the online calculators and asked all the advisors. What no one includes are the changes to your life in retirement. I took up golf so there were club fees, gear and lessons, I/we took many more trips! I moved overseas. We bought a vacation home. Your changes in lifestyle only you can speak about and calculate for!

But we looked at the savings moving would create and we were golden so pulled the trigger!

In total, living in a LCOL area has us spending much less in retirement than our previous expenses were. Start small and think cheaply and add in luxuries and additional spending as your finances allow