Author Topic: Need some advice  (Read 3253 times)

Nateson

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Need some advice
« on: November 25, 2019, 06:26:38 PM »
Hello friends,

I am 28 with roughly 265k saved up across 401k, Roth, HSA, and taxable investment accounts. My request for help is more the need for a few confirmations, if any of you all would be so kind!

1. If I retire in Florida (medicaid non-expansion state) with ~14k in annual income & expenses, then I should receive a substantial subsidy for health insurance from the government? 2. If I retire in Arkansas (medicaid expansion state) with ~14k in annual income & expenses, then I would receive medicaid coverage? A high deductible plan is completely fine; I'm really looking to anticipate any unforeseen premiums.

Even though I'll feel comfortable leaving the full-time workforce with 350k-400k, the question of health insurance really does keep me awake at night. I've even considered getting a part-time job at Costco or Starbucks for the benefits.

Please share your knowledge with me; I remain a humble mini-stache.
- Nathan

SimpleCycle

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Re: Need some advice
« Reply #1 on: November 25, 2019, 07:57:16 PM »
In Medicaid non-expansion states, you must have a MAGI of 100% of the federal poverty guidelines to qualify for ACA subsidies.  Iím guessing youíre a household of one, but the guidelines adjust every year.  Also, Roth withdrawals donít count in your MAGI, so you need to make sure you actually have enough income.

former player

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Re: Need some advice
« Reply #2 on: November 25, 2019, 10:42:58 PM »
At 28 with $265k invested you are doing very nicely - congratulations.

You don't say what your annual savings rate is, but I'm guessing it will take you more than a year to get to your proposed $350k - $400k.  In which case, I would suggest waiting until after the next Presidential election as that will give you a better idea of the direction of future health insurance costs than anything that can be said here.  Unless the courts rule ACA unlawful before then, of course, in which case all bets are off.

Nateson

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Re: Need some advice
« Reply #3 on: November 26, 2019, 04:43:20 PM »
Thank you both very much!

Simple - You are correct. I am a household of one, and it is super helpful to remember the lower bound limit for subsidies. Thank you.

Former - I appreciate the accolade. I try to use MMM's advice to create sustainable habits. You are also correct. My savings rate is roughly 77% of an annual 95k gross, which should mean 2 to 3 years more. Waiting to see what direction our country will take is extremely prudent, and I agree with you entirely. Thank you.

FatFI2025

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Re: Need some advice
« Reply #4 on: November 28, 2019, 11:18:45 AM »
Your savings rate is admirable -- looks like you're just a couple years out. If the future cost of insurance premiums is really keeping you up at night, why don't you just plan to work part-time and CoastFIRE? Retiring with a stache of $400K is pretty risky.

Malcat

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Re: Need some advice
« Reply #5 on: November 28, 2019, 11:50:33 AM »
Your savings rate is admirable -- looks like you're just a couple years out. If the future cost of insurance premiums is really keeping you up at night, why don't you just plan to work part-time and CoastFIRE? Retiring with a stache of $400K is pretty risky.

Precisely, with your age, earning potential, and low expenses, you could easily work very part time, generate more than enough to live on, and leave the stache alone to grow enormously depending on how long you coast.

Nateson

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Re: Need some advice
« Reply #6 on: November 29, 2019, 05:38:11 PM »
FatFI - Thank you kindly! I've been extremely lucky to get where I am now. I think you have a strong point to work part-time. What do you think is a good part-time pursuit? I've played with the idea of hosting AirBnB or some kind of hands-on retail like Lowe's.

Malkynn - Thank you! I agree with you as well. I do have the benefit of time on my side (I hope so, at least!). I think my biggest hesitation in part-time work would be the compensation difference. I'm not familiar with 'professional' part-time jobs, so my only reference point are the easy to get Starbucks, Costco, etc. jobs that pay ~$15 at most. Earning 15k to cover expenses puts me at about 20 hours/wk. Is this the same type of employment you were thinking of? I work in operations (large factories), and it's not exactly a 'work from home' or 'take Saturdays off' profession.

FatFI2025

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Re: Need some advice
« Reply #7 on: November 30, 2019, 12:21:47 PM »
FatFI - Thank you kindly! I've been extremely lucky to get where I am now. I think you have a strong point to work part-time. What do you think is a good part-time pursuit? I've played with the idea of hosting AirBnB or some kind of hands-on retail like Lowe's.

Malkynn - Thank you! I agree with you as well. I do have the benefit of time on my side (I hope so, at least!). I think my biggest hesitation in part-time work would be the compensation difference. I'm not familiar with 'professional' part-time jobs, so my only reference point are the easy to get Starbucks, Costco, etc. jobs that pay ~$15 at most. Earning 15k to cover expenses puts me at about 20 hours/wk. Is this the same type of employment you were thinking of? I work in operations (large factories), and it's not exactly a 'work from home' or 'take Saturdays off' profession.

The salary difference is the main driving factor why I don't plan to CoastFIRE. There are a few lower-paying jobs I might be happy doing, but I also don't want to walk away from a high salary to find out the new gig is just as draining but now I have to do it for twice the number of years. That's why CoastFIRE isn't for me.

If you have experience in service or retail, and are happy to do it, that's easy to pickup anywhere. AirBnB will take a change of plans for you -- you'll need to be in a travel destination and have sufficient capital to get up and running.

I think you should stay open minded to 1) moving out of your current career soon and into another professional career you might like doing for longer and 2) that your personal preferences will definitely change over the decades.
« Last Edit: November 30, 2019, 12:25:02 PM by FatFI2025 »

Malcat

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Re: Need some advice
« Reply #8 on: November 30, 2019, 12:32:52 PM »
FatFI - Thank you kindly! I've been extremely lucky to get where I am now. I think you have a strong point to work part-time. What do you think is a good part-time pursuit? I've played with the idea of hosting AirBnB or some kind of hands-on retail like Lowe's.

Malkynn - Thank you! I agree with you as well. I do have the benefit of time on my side (I hope so, at least!). I think my biggest hesitation in part-time work would be the compensation difference. I'm not familiar with 'professional' part-time jobs, so my only reference point are the easy to get Starbucks, Costco, etc. jobs that pay ~$15 at most. Earning 15k to cover expenses puts me at about 20 hours/wk. Is this the same type of employment you were thinking of? I work in operations (large factories), and it's not exactly a 'work from home' or 'take Saturdays off' profession.

Most professional industries have some kind of consulting market, it's not unusual for businesses to require either part time or temporary professional level work.

Do some research and find out what kind of work doors you either have open to you or that you could open for yourself with a bit of work or training.

Nateson

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Re: Need some advice
« Reply #9 on: November 30, 2019, 05:10:18 PM »
FatFI - I see where you are coming from and greatly appreciate your input about CoastFire and AirBnB. You mentioned 400k for me as pretty risky. What do you think would be a good number to target? I guess the technical FatFI number for me would be right at 420k. What are you looking to get as a multiple of your annual expenses? I'm actually semi-satisfied with my current occupation and would prefer to get it done with one fell swoop - similar to you I think.

Malkynn - I will look into operations consulting. Thank you kindly for your advice/feedback!
« Last Edit: November 30, 2019, 05:24:16 PM by Nateson »

Fuzz

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Re: Need some advice
« Reply #10 on: December 02, 2019, 06:44:33 PM »
I dunno. I get that this is an early retirement forum and I've gotten so much out of MMM's message, so I recognize that I'll get flamed for this question: but why the urgency to quit ASAP?  You're making great money and saving a ton. You even say you are semi-satisfied at work. It seems like an extra year or three would provide a huge cushion, especially if you want kids.

In absolute terms $420K is not a lot of money to live on for another 60 years. But if your annual expenses are only $15K...then the math works. I am kind of amazed that your annual expenses are that low.

On my journey, I've dialed back my interest in FIRE, but not FU money. I don't actually think I would be that much happier FIRE than I am at my current job. My satisfaction would be the same, so I keep working and spend a bit more than a true mustachian but much less than a consuma-sucka.

FatFI2025

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Re: Need some advice
« Reply #11 on: December 03, 2019, 07:39:01 PM »
What are you looking to get as a multiple of your annual expenses? I'm actually semi-satisfied with my current occupation and would prefer to get it done with one fell swoop - similar to you I think.

I was referring to your planned spend of $14K which drives the multiple. First you will have limited ability to absorb financial shocks. Second you basically decide at a young age that you're going to live in poverty, literally, for the rest of your life. When you hit 40 or 60 you might change your mind but then it will be way harder or impossible to reenter a high-paying career. Even if you end up not spending more, you should still want to give yourself options.

My barebones RE is income $55K, but my handle is FatFI for a reason. If another person planned for $36K x 25 = $900K NW, I'd think that was tight, but manageable in a LCOL area if that person is already spending at that level. While I think a 77% savings rate is wow crazy admirable, I think a $400K FIRE nest egg is wow crazy a bad idea.

Here4theGB

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Re: Need some advice
« Reply #12 on: December 04, 2019, 07:47:19 AM »
Retiring at ~30 with less than a half mill banked is just plain silly.  Who wants to live at or below poverty their whole lives?  So you're not working, you also can't afford to do anything other than sit in your tiny place and stare at the walls or read library books.  Do you want to get married or have a relationship, kids?  Good luck finding a mate who would be on board for this lifestyle.

Malcat

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Re: Need some advice
« Reply #13 on: December 04, 2019, 08:06:01 AM »
Retiring at ~30 with less than a half mill banked is just plain silly.  Who wants to live at or below poverty their whole lives?  So you're not working, you also can't afford to do anything other than sit in your tiny place and stare at the walls or read library books.  Do you want to get married or have a relationship, kids?  Good luck finding a mate who would be on board for this lifestyle.

"Retiring" from a career you don't love at ~30 with 300-400K and a very low spend to explore what else life has to offer is an amazing option, especially if actively looking for more interesting and satisfying sources of income.

No one would consider doing this if they were happy in their career and life, so obviously doing something else is a really reasonable option to consider.

Says the 30-something who left their own highly lucrative full time career, lives in a 1 bedroom, reads a lot of library books, and has a really great life.

If OP spends the next few decades discovering fun and profitable hobbies like myself or MMM, and generally doesn't touch their 'stache too much, they'll also probably end up with the same problem that myself and MMM will have in our senior years: way too much money.

The world is filled with amazing things to do, and you don't need a net worth over 1M to start doing them.

AO1FireTo

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Re: Need some advice
« Reply #14 on: December 04, 2019, 08:07:15 AM »
Wow you are really doing well.  I'd be tempted to work a couple of more years and build up a bigger nest egg.  Emergencies happen, life changes especially if you want to get married and have kids etc.  I'd also start exploring skills that you can learn that could generate a good side hustle post fire at least part time.

Fire2025

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Re: Need some advice
« Reply #15 on: December 04, 2019, 08:14:30 AM »
Nateson,
I have no better advice than you have already gotten.  I just wanted to pop in to say congratulations!!!!!!!

My partner is FIRED, lives on the same amount-ish, and he lives a great life in a HCOL area. 

Living on 15K, with a $425,000 stache, is not the same as living in poverty. 

Nateson

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Re: Need some advice
« Reply #16 on: December 04, 2019, 05:01:25 PM »
Friends - I appreciate all of the varied insights and the congratulations/accolades. It's really neat we can have this discussion.

I certainly don't feel like I live in poverty now. I quite enjoy my time spent outside work. If anything, I feel wealthier than any other time in my life while spending substantially less. It's remarkable.

I see no future where I sit on my thumbs in 'retirement'. I will be outside finding opportunities, helping people, and learning new things - something I don't have the time for now.

Who knows, maybe I'll stumble upon a solution before I hit my number anyway. Now that would be neat.

Much love all. Thank you again.