How much $ to retire and how to fund your lifestyle in retirement

[dhanson865]

I have a while before ACA matters but I just spent a little time playing with www.healthcare.gov and seeing what income I needed to lose the subsidy in my state for a family of 2.

income I reported, monthly premium, annual premium, money left over after health care premiums.
$105,000 premium $391.33 x 12 $4,695.96 $100,304.04
$115,000 premium $462.33 x 12 $5,547.96 $109,452.04
$125,000 premium $533.33 x 12 $6,399.96 $118,600.04
$135,000 premium $603.33 x 12 $7,239.96 $127,760.04
$145,000 premium $674.33 x 12 $8,091.96 $136,908.04
$155,000 premium $745.33 x 12 $8,943.96 $146,056.04
$165,000 premium $816.33 x 12 $9,795.96 $155,204.04
$171,000 premium $858.33 x 12 $10,299.96 $160,700.04 (this level had $1 a month subsidy)
$175,000 premium $859.33 x 12 $10,311.96 $164,688.04 (this level was with no subsidy)

doesn't seem that scary losing the ACA subsidy, If I choose to pull more out I can just make it as high as I want and overcome any loss in subsidy.

Maybe when the cliff comes back there would be an small space where you would have to avoid by either going higher or lower in income to keep from being in some short term reversal in funds around that actual cliff.

 

[dhanson865]

@SageBrush You've had a few hours to think about it, care to share with the class?

 

[Oil4AsphaultOnly]

I have a while before ACA matters but I just spent a little time playing with www.healthcare.gov and seeing what income I needed to lose the subsidy in my state for a family of 2.

income I reported, monthly premium, annual premium, money left over after health care premiums.
$105,000 premium $391.33 x 12 $4,695.96 $100,304.04
$115,000 premium $462.33 x 12 $5,547.96 $109,452.04
$125,000 premium $533.33 x 12 $6,399.96 $118,600.04
$135,000 premium $603.33 x 12 $7,239.96 $127,760.04
$145,000 premium $674.33 x 12 $8,091.96 $136,908.04
$155,000 premium $745.33 x 12 $8,943.96 $146,056.04
$165,000 premium $816.33 x 12 $9,795.96 $155,204.04
$171,000 premium $858.33 x 12 $10,299.96 $160,700.04 (this level had $1 a month subsidy)
$175,000 premium $859.33 x 12 $10,311.96 $164,688.04 (this level was with no subsidy)

doesn't seem that scary losing the ACA subsidy, If I choose to pull more out I can just make it as high as I want and overcome any loss in subsidy.

Maybe when the cliff comes back there would be an small space where you would have to avoid by either going higher or lower in income to keep from being in some short term reversal in funds around that actual cliff.

How is that right?! For a household of 2, the FPL is $18,310, which means at an AGI above $73,240, you wouldn't get any subsidy. How are you getting quoted these subsidized rates?!

 

[SageBrush]

How is that right?! For a household of 2, the FPL is $18,310, which means at an AGI above $73,240, you wouldn't get any subsidy. How are you getting quoted these subsidized rates?!

Think about ACA this way:

mAGI up to 150% of FPL is eligible for full subsidy of a healthcare basket of goods called a 'silver plan'. The full premium subsidy for this basket is the local cost of the second lowest cost sliver plan in your area ("SLCSP")
If mAGI is over 400 of FPL, your contribution to the plan's premium cost will be mAGI*0.085 for the benchmark silver plan.If you choose a cheaper basket of goods (AKA 'bronze plan' or the cheapest silver plan), then your premium contribution is reduced by the difference in premium cost between the two plans.

A competitively priced bronze plan premium ( ~ hospital insurance) for my area is about $450 a month (12*450 a year) less than the second lowest cost (SLCSP) silver plan. That covers about (12*450/0.085) = $63,500 of mAGI

Example using 100k mAGI and $72k as the 400% FPL for a two person HH, and assuming a Bronze plan premium is $450 a month cheaper:
Silver plan: you will pay $100,000*0.085 = $8,500 a year as your contribution to the total premium
Bronze plan: you will pay about (100,000 - 63,500)*0.085 = $3,102.5 a year as your contribution to the total premium. This number can also be calculated as (100,000*0.085) - (450*12) -- use whichever expression makes more sense to you.

Calculating the exact premium contribution savings by choosing a 'Bronze plan'
Find the SLCSP for you area
Choose a bronze plan and note its total premium cost
Your reduction if of premium contribution will be (SLCSP - your_chosen_bronze_plan_premium)
Keep you calc consistent, using either monthly or annual

---------
^^ I want to re-emphasize that the above calc is true for current ACA rules that are set to run through the 2025 tax year.
My advice: learn the calc, and ignore the calculators and tables put on the internet. They are rife with error or are not up to date. My second piece of advice is to stop caring about or calculating the subsidy. Unless you are thinking about national healthcare policy, what you really care about is the premium cost *you pay* for any particular health plan.

In case people have a mAGI lower than 400% of FPL, here are the percentages to use to calculate the premium contribution. The exact percentage for any FPL is linear between the breakpoints on either side. E.g., a mAGI of 350% of FPL would multiply mAGI by 7.25%

 

[dhanson865]

How is that right?! For a household of 2, the FPL is $18,310, which means at an AGI above $73,240, you wouldn't get any subsidy. How are you getting quoted these subsidized rates?!

I dunno, I'm in TN so maybe the state is subsidizing to a higher level?

The site asks for a zip code so it's obviously taking into account something based on where I am.

Give me a zip code in your state (doesn't need to be the zip you actually live in) and I'll do a comparison between mine and yours to see the difference on my end so we are sure that it's an apples to apples comparison.

 

[SageBrush]

Here is an example from my homegrown calculator. I use it to set my mAGI so that my ACA premium contribution for a bronze plan is about zero.



Note that the maximum income number is not applicable under current ACA rules. The calculator was made back in the day when an mAGI over 400% FPL made a HH ineligible for ACA subsidy

 

[tivoboy]

Think about ACA this way:

mAGI up to 150% of FPL is eligible for full subsidy of a healthcare basket of goods called a 'silver plan'. The full premium subsidy for this basket is the local cost of the second lowest cost sliver plan in your area ("SLCSP")
If mAGI is over 400 of FPL, your contribution to the plan's premium cost will be mAGI*0.085 for the benchmark silver plan.If you choose a cheaper basket of goods (AKA 'bronze plan' or the cheapest silver plan), then your premium contribution is reduced by the difference in premium cost between the two plans.

A competitively priced bronze plan premium ( ~ hospital insurance) for my area is about $450 a month (12*450 a year) less than the second lowest cost (SLCSP) silver plan. That covers about (12*450/0.085) = $63,500 of mAGI

Example using 100k mAGI and $72k as the 400% FPL for a two person HH, and assuming a Bronze plan premium is $450 a month cheaper:
Silver plan: you will pay $100,000*0.085 = $8,500 a year as your contribution to the total premium
Bronze plan: you will pay about (100,000 - 63,500)*0.085 = $3,102.5 a year as your contribution to the total premium. This number can also be calculated as (100,000*0.085) - (450*12) -- use whichever expression makes more sense to you.

Calculating the exact premium contribution savings by choosing a 'Bronze plan'
Find the SLCSP for you area
Choose a bronze plan and note its total premium cost
Your reduction if premium contribution will be (SLCSP - your_chosen_bronze_plan_premium)
Keep you calc consistent, using either monthly or annual

---------
^^ I want to re-emphasize that the above calc is true for current ACA rules that are set to run through the 2025 tax year.
My advice: learn the calc, and ignore the calculators and tables put on the internet. They are rife with error or are not up to date. My second piece of advice is to stop caring about or calculating the subsidy. Unless you are thinking about national healthcare policy, what you really care about is the premium cost *you pay* for any particular health plan.

In case people have a mAGI lower than 400% of FPL, here are the percentages to use to calculate the premium contribution. The exact percentage for any FPL is linear between the breakpoints on either side. E.g., a mAGI of 350% of FPL would multiply mAGI by 7.25%

View attachment 976666

Well now there’s two things we know.

1) all of the above, and
2) we’ve now confirmed that @SageBrush is indeed an AI

;-0

Or maybe that is sage brush with a space. I get them confused.

/s

 

[dhanson865]

How is that right?! For a household of 2, the FPL is $18,310, which means at an AGI above $73,240, you wouldn't get any subsidy. How are you getting quoted these subsidized rates?!

Low Cost Marketplace Health Care, Qualifying Income Levels | HealthCare.gov then selected TN, 2, above
78,880 and click GO, then Preview 2023 plans with estimated prices based on your income, before logging in. That takes me to Health insurance plans & prices | HealthCare.gov Enter the zip code and Continue. Tell about household, You and Other People, Married - Yes, additional dependents - No, Set age to 52 M and 45 F (not our actual ages, but close enough) and choose none of these. Set estimated income to 171,000 and Continue, see $1 per month subsidy

Go to another browser and start at Health insurance plans & prices | HealthCare.gov and it lets me do the zip code and family steps.

37501 Memphis $171,000 = 0 subsidy, $167,000 = $5 subsidy
37901 Knoxville $171,000 = $1 subsidy
37011 Nashville $171,000 = $11 subsidy, $172,000 = $4 subsidy
38501 Putnam County $171,000 = $123 subsidy, $188,000 = $3 subsidy
38462 Hohenwald $171,000 = $205 subsidy, $199,000 = $7 subsidy

I don't see the logic right away on why these zips differ in subsidy. Different cost of living, different cost of health care?


91006 Arcadia the wizard won't let me choose zip codes in Los Angeles County.
Alameda, San Francisco, San Diego, I tried a bunch of CA zips and none of them worked on this web page.

So I tried a random zip code in Oregon

97001 Wasco County OR $171,000 = $125 subsidy, $188,000 = $5 subsidy


Similar to TN. I guess California is the odd duck out on this one.

 

[kabin]

I mean just open a marcus savings account with g sachs, they give like 2.2% even now - Please show me 'any' savings account that is paying you 2.2%.

It's a good way to maintain yield and liquidity. Fidelity's SPRXX money market fund is over 4%.

 

[tivoboy]

Low Cost Marketplace Health Care, Qualifying Income Levels | HealthCare.gov then selected TN, 2, above
78,880 and click GO, then Preview 2023 plans with estimated prices based on your income, before logging in. That takes me to Health insurance plans & prices | HealthCare.gov Enter the zip code and Continue. Tell about household, You and Other People, Married - Yes, additional dependents - No, Set age to 52 M and 45 F (not our actual ages, but close enough) and choose none of these. Set estimated income to 171,000 and Continue, see $1 per month subsidy

Go to another browser and start at Health insurance plans & prices | HealthCare.gov and it lets me do the zip code and family steps.

37501 Memphis $171,000 = 0 subsidy, $167,000 = $5 subsidy
37901 Knoxville $171,000 = $1 subsidy
37011 Nashville $171,000 = $11 subsidy, $172,000 = $4 subsidy
38501 Putnam County $171,000 = $123 subsidy, $188,000 = $3 subsidy
38462 Hohenwald $171,000 = $205 subsidy, $199,000 = $7 subsidy

I don't see the logic right away on why these zips differ in subsidy. Different cost of living, different cost of health care?


91006 Arcadia the wizard won't let me choose zip codes in Los Angeles County.
Alameda, San Francisco, San Diego, I tried a bunch of CA zips and none of them worked on this web page.

So I tried a random zip code in Oregon

97001 Wasco County OR $171,000 = $125 subsidy, $188,000 = $5 subsidy


Similar to TN. I guess California is the odd duck out on this one.

All healthcare insurance and cost is classified by employee / subscriber HOME zip code.. so between two, either the average cost of living, or cost of healthcare delivery is different. One can game the system a bit with a PPO type plan, but not really with an HMO plan.

 

[tivoboy]

It's a good way to maintain yield and liquidity. Fidelity's SPRXX money market fund is over 4%.

If one can short term park 1M the FMPXX yields 5.3% and has for a few months now..you can take as much money out as you want under that level after initial inception. I expect it to rise 10-15 Bps here pretty soon.

 

[dhanson865]

Low Cost Marketplace Health Care, Qualifying Income Levels | HealthCare.gov then selected TN, 2, above
78,880 and click GO, then Preview 2023 plans with estimated prices based on your income, before logging in. That takes me to Health insurance plans & prices | HealthCare.gov Enter the zip code and Continue. Tell about household, You and Other People, Married - Yes, additional dependents - No, Set age to 52 M and 45 F (not our actual ages, but close enough) and choose none of these. Set estimated income to 171,000 and Continue, see $1 per month subsidy

Go to another browser and start at Health insurance plans & prices | HealthCare.gov and it lets me do the zip code and family steps.

37501 Memphis $171,000 = 0 subsidy, $167,000 = $5 subsidy
37901 Knoxville $171,000 = $1 subsidy
37011 Nashville $171,000 = $11 subsidy, $172,000 = $4 subsidy
38501 Putnam County $171,000 = $123 subsidy, $188,000 = $3 subsidy
38462 Hohenwald $171,000 = $205 subsidy, $199,000 = $7 subsidy

I don't see the logic right away on why these zips differ in subsidy. Different cost of living, different cost of health care?


91006 Arcadia the wizard won't let me choose zip codes in Los Angeles County.
Alameda, San Francisco, San Diego, I tried a bunch of CA zips and none of them worked on this web page.

So I tried a random zip code in Oregon

97001 Wasco County OR $171,000 = $125 subsidy, $188,000 = $5 subsidy


Similar to TN. I guess California is the odd duck out on this one.

OK I had to use a different website for California so google took me to Covered California™ | The Official Site of California's Health Insurance Marketplace

and 91006 Arcadia the barely subsidized level was $125000 = $5 subsidy.

Anyone from California want to speak to the accuracy of that comparison?

 

[Oil4AsphaultOnly]

OK I had to use a different website for California so google took me to Covered California™ | The Official Site of California's Health Insurance Marketplace

and 91006 Arcadia the barely subsidized level was $125000 = $5 subsidy.

Anyone from California want to speak to the accuracy of that comparison?

That sounds about right. High cost of living to offset the high income from dual-earner households, but low thresholds for assistance.

 

[dhanson865]

My question is healthcare.gov/see-plans is on a gov domain and is for sure the right site to use, but coveredca.com is on a com domain and I'm not sure if it is the right site to use.

Was I mislead or is the coverdca.com domain really the government approved site for California health care market price comparisons as the google search results implies?

 

[Oil4AsphaultOnly]

My question is healthcare.gov/see-plans is on a gov domain and is for sure the right site to use, but coveredca.com is on a com domain and I'm not sure if it is the right site to use.

Was I mislead or is the coverdca.com domain really the government approved site for California health care market price comparisons as the google search results implies?

It looks to be the official one, since it's linked to by the ca.gov site: Agency Details | www.ca.gov

 

[tivoboy]

My question is healthcare.gov/see-plans is on a gov domain and is for sure the right site to use, but coveredca.com is on a com domain and I'm not sure if it is the right site to use.

Was I mislead or is the coverdca.com domain really the government approved site for California health care market price comparisons as the google search results implies?

Coveredca is THE site for ACA plans in CA, always has been.. states were instructed to setup their OWN marketplaces for plans (since health insurance is regulated mostly at the STATE level) back in 2010’ish and they did, but many states did NOT.. so healthcare.gov was setup for the states that didn’t want to comply, were too small, other reasons..

 

[⚡️ELECTROMAN⚡️]

These are good things to worry and think about ahead of time.

I'm early retired with about a decade between me and Medicare. I've discovered that I can't buy, for any price, health care that matches my employer provided health care. The best I've found costs $1200/month for the 2 of us, and carries a $9k annual deductible for each of us ($18k deductible vs. $7k (ish) previously). It is also strictly in-network, where previous had out-network benefits as well. And this is from the same company, and we didn't move to a new geographical area. I can't remember the monthly premium on the employer provided insurance - something more like $200-500/month; definitely a lot less than we're paying now.

The retiree health care plan is more like $2500/month and has a higher deductible, though not the $9k each. It's also through a company that we've had medical insurance with in the past and will never do business with again unless they are the very last option available to us (then we'll search for an alternative anyway, like self-insuring).


We've looked into asset based mortgages and OMG is there a wide variety of plans and programs. One company sized up the mortgage they would providing using something like 40 or 50 years of monthly payments for a 30 year mortgage. Another company was closer to 50 months. Some had significantly higher interest rates, others had the identical interest rates to a standard / conforming 30 year mortgage.

Some will count retirement assets, some won't - seems like most will count them with some discount.

That being said, I didn't find it particularly difficult to find lenders that would talk to me and even write pre-approval letters, typically for a lot more than we were going to pay. I'm sure the lending standards are higher than the free money oughts, but if you're early retired with the sort of cushion you're talking about, there are lenders that want to talk to you . You know the one - if you don't need a loan then its easy to get one; if you do need a loan then its hard!

We will be continuing to look for another property - that hasn't changed. So we'll be facing this again. Definitely plan to bring 20 or 25% down payment, and closer to 50% will probably open up your range of options by a lot.

How come you don't just get on the Oregon Health Plan?

 

[dhanson865]

Previously I said the TSLA stock price would decide when I retire.

If the share price hit $1,000 or was approaching it fast I'd ignore my age and retire. 10% early withdrawal penalty be damned.

If the share price was below that or didn't look to be heading that way I'd wait. Try and get a better price later and avoid that 10% early withdrawal penalty.

Considering my cost basis, I don't really want to sell down here in the sub $300 range.

Spoiler: cost basis (not a full / current list)

I still don't know what my next job is, but the stock price says I need to keep working. I've been on the same contract since 2012 but it's ending this year.

Even if I don't pick up more work I won't be selling TSLA at these levels. I have funds not in TSLA stock I'd live on until TSLA moves into a range I want to sell at.

But I suppose it's possible I'll be forced into a "Barista FIRE" type early retirement or a full on Retirement if I can't find something at my current company. Who knows maybe I'll grab a part time job at my local Tesla Service Center / Adviser / Delivery Center just for the insurance.

 

[dhanson865]

OK I setup my first Roth conversion (a few hundred shares of TSLA) and scheduled on online IRS estimated tax payment for Halloween (through that was appropriate). I guess when I do my taxes in a few months I'll find out how well I estimated things.

My current contract got extended to Dec and I have paid time off accrued that will cover to the end of the year so it's just 2024 and 2025 and 2026 that are in question on are those retirement years or working years?

 

[M|S|M MYP]

OK I setup my first Roth conversion (a few hundred shares of TSLA) and scheduled on online IRS estimated tax payment for Halloween (through that was appropriate). I guess when I do my taxes in a few months I'll find out how well I estimated things.

My current contract got extended to Dec and I have paid time off accrued that will cover to the end of the year so it's just 2024 and 2025 and 2026 that are in question on are those retirement years or working years?

Maybe 2024 will be a working year, all the mess gets cleared up and you are in the clear for 24 and onwards.