How close to FI are we?

[Murse]

Hello everyone,

Basically to sum it all up our net worth has nearly quadrupled in the last year from 300k to 1.1m. Our goal was to both go part time once our net worth hit 600k but now I feel we are so close to FI we might as well grind it out.

Our annual expenses were around 50k last year but we have had some changes recently. We purchased a house in 12/2020 and just had our first child. I guesstimate our housing expenses are now 15-20k more then before. Also the question of health insurance comes up- I have never explored this issue because our prior plan was to continue working part time.

I understand the math says we need 1.75m+ whatever is needed for health insurance but once we hit 1.75m I could pay off the house (400k mortgage) reducing our annual housing costs by 20k/year and leaving us with 50k annual expenses+ health insurance, and 1.35m.

I am unsure how we could use the aca to get ourselves FI (I do not wish to have the moral debate on this, just the nuts and bolts of how it works.)

Any and all input/resources are welcome.

PS, I am sure I am going to get a lot of questions about how we did this, the short answer is I put basically everything we have (including taking margin loans) into spr at an average cost of around 24$/share. It will take several years to back out of our spr position in a tax efficient manner but I do believe it will go up another 50-100% over the next year. Of course we will be selling as quickly as we can in a tax efficient manner and I will not be waiting for the share price to continue improving.

[terran]

Here are a couple a good posts on how ACA premiums work: https://seattlecyclone.com/marginal-tax-rates-under-the-aca/ and https://rootofgood.com/affordable-care-act-subsidy/. Both are a few years old, so the principles are the same, but here are the relevant Federal Poverty Levels for more current years: https://thefinancebuff.com/federal-poverty-levels-for-obamacare.html

The most recent stimulus bill removes the subsidy cliff such that no one will pay more than 8.5% of their income and the subsidies at lower incomes are better too, but these changes are only for 2021 and 2022. Hopefully these changes will become permanent or be replaced with something even better (one can dream), but I wouldn't count on it and rather base things on the previous posts.

Remember that only pensions, withdrawals from tax deferred accounts, earned income, interest, dividends, and capital gains will count towards income while Roth withdrawals and investment basis won't, so your income might be significantly lower than what you can spend depend on your mix of accounts and investments.