Author Topic: 4 months into FIRE-Life now vs Before  (Read 4369 times)

IslandFiGirl

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4 months into FIRE-Life now vs Before
« on: June 02, 2020, 10:30:46 AM »
I always love reading other people's stories about FIRE, so I thought I'd share what mine has been like over the past 4 months since leaving my job.  I like to talk, so this will probably be long, fair warning!  (Not sure if this matters but I'm a single mom of 3 kids (2 are adults) in my mid 40's)

Leaving Work
I left my job on February 4th, 2020 after becoming completely, totally crispy fried and burnt out.  I was about as close to having enough money to FIRE as I thought I could get without going insane, so I decided it was worth my mental (and physical) health to get out of there before I completely melted down.  (I managed a 911 dispatch center and had been there for 15 years and although I loved the job in so many ways, I was tired of being the public's punching bag, and was tired of being on call every stinking minute of my life!)  Giving my notice was by far the scariest part.  I stressed so much over the fact that I was "leaving my people" behind and what would they EVER do without me, how could they manage, this was such a betrayal!  HAH!  How wrong I was!  If I can impart any wisdom to anyone...here it is.  They can do without you, they WILL replace you, they will get along, it will be FINE.  Live your life for you.  That's the advice I had to give myself and I'm so glad I took that advice because here I am 4 months later, with no panic attacks, no work stress, it's great!  Anyway, after giving notice, I only had to deal with 2 weeks worth of questions from EVERYONE...Why are you leaving?  What will you do next?  That part was hard for me because I really didn't want to tell anyone anything but people want to know!  At first I said I was keeping my future endeavors to myself...people didn't like that.  They wanted to know!  When I gave my notice, I told my boss I was leaving for a new opportunity...I didn't mention that the opportunity was to do whatever the hell I wanted and not work!  Eventually I just said I was taking some time off to spend with my family because 2 of my kids would be moving on to their adult lives this year and I didn't want to spend the last few months I had with them stuck at work for 12-14 hours a day.  Thankfully the 2 weeks ended and I had my last day of work, which was kind of emotional because all of the people I had worked with for the last 15 years did a final call for me over the police radio, all saying goodbye and thanking me for my service.  It was very sweet and unexpected but it didn't stop me from running right out of that building like my ass was on fire!  I can laugh about it now, but after getting home from work on my last day, I got a text from the interim manager asking if I could possibly work a shift tomorrow since someone had called in sick.  HAHAHAHAH, NO!  No, I could not!  I just quit this job, remember? Somehow they managed.

First few weeks after FIRE'ing
For the first few weeks after leaving work, I woke up super early.  Like 4:30 to 5:00am.  I didn't have anywhere to be so I tried to learn how to sleep in.  That didn't really work, so I just went with it and figured at some point, I might start waking up later.  I went to the gym almost every day, sometimes twice a day.  I wanted to lose weight, but somehow it wasn't really working.  Maybe I forgot about the eating less part of losing weight, haha!  The transition was a little difficult.  I think I was still stuck in the mindset that I should be working or doing something with my life.  Or that I thought someone might tell me that I should be working or judge me and that I would have to find a way to defend my choices.  I know that people always say you should retire TO something rather than AWAY from something, but hey, these were my circumstances and I was doing the best I could.  My big plan was to buy a truck and a small travel trailer and get out and explore, and this was going to be easy because summer was coming and I'd only have one kid left at home, so coordinating all of this would be easy, right?  During those first few weeks (and even now) I was also feeling some guilt.  Not some...a lot of guilt.  I had saved money for a long time, but a good portion of my money came from an inheritance from my parents who had died within the last few years.  I was really struggling with what a jerk I was being for just using that money to live off of when they were dead and couldn't enjoy it for themselves.  They both had retired and died almost immediately after retiring.  It was so heartbreaking to know that they couldn't go on any more cruises, no more fun trips...they worked all their lives and it ended so abruptly.  I had nightmares every night, in fact, I still do, but not quite as frequently.  My recurring nightmare is that one or both of my parents somehow come back to life and I had to scramble to explain that I had sold their house and give back their money and explain why I had it and why I was so selfish to think I could use that money to live on when they needed it.  It's still something I struggle with, but I am doing what I think is right for me and my family and I can only hope they would think that what I'm doing is good.  Ok, Enough sad stuff...

How quickly plans change!
I was just starting to think I could settle in to being fired, started making plans to go camping and have adventures, carefully watching my budget, when I started hearing rumblings of a pandemic.  I usually don't get too worked up about things but around the first week of March I felt like this would be a big deal, so I went out and spent about $1,000 on groceries.  During that week my next door neighbor moved out and left a perfectly good fridge outside his house for free, so I snagged that and filled it up too.  During this time, my daughter's college boyfriend was in town visiting her from his Cruise line job and they got engaged.  Super exciting time!  When he was scheduled to go back to work, they told him not to come and he ended up losing his job, so now I had an extra person living with us and another mouth to feed.  My budget was blown instantly...I stocked up on food, medicine, anything I could think of in case things went bad, but I was grateful to have the money to do this and happy that I didn't have to go to work during scary times.  It didn't take long for my oldest daughter to lose her job and suddenly nobody in the household had a job.  Now I was supporting a household of 5 people and I was getting nervous, especially when the stock market took the first big hit.  I didn't allow myself to look at my accounts, knowing it would make me sick and scared, so I just decided that I had enough money and we would be ok.  This strategy proved to be effective.  If I've learned anything from here it's to set your plan and stick with it, if you set it up right, outside influences shouldn't effect you much.  Live frugally and you should always have enough.  That about sums it up...even though the pandemic stock market hit initially set me back about $95k, I'm now back to within about $4k of where I was at when I fired.  I'm soooo glad the pandemic happened a month after I FIRE'd though because I am not sure I would have had the guts to leave knowing my investments were losing so much money.  Pandemic living has evened out here.  At first it was hard having an extra person living with us, but after some time, we have adjusted, and I think it probably has brought us all closer together.  I'm glad I got to spend this time with my daughter and her fiance before they move away this summer, I feel that it has made our bond stronger for the future, and for that I am grateful.

Money, bills, health insurance, oh my!
As soon as I left work, I got to work on getting health insurance.  I decided that no matter what, I was not going without insurance, I've seen too many people get into deep doo doo because they didn't have it and I didn't want to get some terrible illness or injury and wipe out my savings.  I ended up getting no subsidies on the marketplace because I qualified for Medicaid.  I didn't want Medicaid and didn't feel I needed to be on that so I went ahead and purchased my own insurance for about $350/ month.  I hated that it cost that much but a lot of docs do not take Medicaid around here so I decided to buy the insurance.  Peace of mind is what I really bought, and that is ok with me.  I have to say it's really weird to not have a paycheck hit my account every month.  I've been using credit cards to pay bills so that I get the points from the cards.  I don't really like this method though, and I think this month I will just go back to paying cash for things.  Having to pay the credit card balance off every month is not a huge deal but I don't like the idea of owing anybody anything.  It's unnatural to me and doesn't feel good, even with the tiny perks I get from the cards.  I also think I spend a bit more knowing I'm using a credit card.  All in all though, I don't have many bills and even though the pandemic hurt my budget for a little while, it's not near as bad as I thought it would be.  I wanted to track everything so I could say, oh, I spent this much on food and this much on this or that, but it's become exhausting.  I know myself and I know I am careful with money so even though I have a general idea of what goes out every month, I don't obsess over my budget like I used to.  It just became too exhausting to worry about it.

Fun!
As spring approached and the weather got better, all I could think about was having fun outside!  I love warm weather and couldn't wait to get out on the water with my paddle board.  Wanting to have fun is usually what makes me spend the most money.  This time was no exception.  I sat here in my living room thinking of all the fun I'd like to have on the lake and realized I wanted a new toy!  An inflatable paddle board.  I did tons of research and found a really good one and knew I had to have it, an inflatable fits in my car so easily, so it is so much better than a hard board that you have to strap on top of your car.  After I bought the board, I realized I needed an electric pump...and a cooler...and a special quick drying towel...and a waterproof phone case...and another cooler.  I could see myself quickly getting out of control so I decided to stop spending money and just be happy with this toy!  If I let myself, I would keep finding new cool things to buy, so it was time to nip it in the bud!  Not long after that, I decided I wanted to build a shed in my backyard with my son.  Neither of us have a clue what we are doing, but I bought plans for the shed, bought the wood, borrowed some tools and we went to town.  The shed is still in progress, but we are learning a lot...mostly what not to do with things like nail guns.  Needless to say, safety is first and foremost in our minds after the nail gun incident of 2020, when my son's pinky got nicked with a nail.  Whoops!  I am not sure if I am not doing much outside the house because of the pandemic or because I am more of a homebody.  It's hard to tell.  But I end up spending a lot of time in my comfy chair in the backyard, watching the butterflies, birds and squirrels, sprucing things up, watching the fire in the fire pit and grilling food.  I spend at least an hour every day studying the Korean language, it's something I learned back in my Army days and I try not to lose that knowledge.  It's only recently that I have had the time to study, and it's nice to be able to understand it.  I meet up with one or two friends on occasion and we typically just talk and eat or go hang out at the lake and fish.  I can't say I've done anything terribly exciting, but again, this is during an odd time.  Nothing is normal during a pandemic, I guess.

Future plans
On occasion I will think about getting a job, maybe something part time, just for fun.  I did commit to not working for at least one year to really give myself a chance to just chill and find out what I'm all about, so I'm not going to think about that too much until next year.  If my youngest daughter is not able to get scholarships for college, I may consider going to work at the University in a couple years to get a discount for her.  We shall see.  But mostly what I think about is how awesome it is to not have answer to a boss or a schedule and how can I keep doing this for as long as possible.  If that means working sometimes to keep from depleting my stash (stache?) I can manage that.  But full time work, I don't know if I can ever stomach that again. 

Goals
My biggest goal was to lose weight and improve my health, and I'm happy to report that I have finally figured out what works for me and I've lost 20 pounds since February.  My gym has reopened and I'm so happy to get back there to see people and socialize and workout and just finally be able to have more options to focus on my overall well being.  I feel like removing the stress of work has helped me be better able to plan meals, shop, cook more often (almost never go out to eat now), and just be available to focus on feeling good and doing good things for myself.  Everybody in my family benefits when I am doing well and it has been soooo worth it to put effort into me for once.

Friends, Connections, etc.
I've always been kind of on the fence about social media.  At times I find it strange, the things people will post, the humble bragging, the dirty laundry being aired, the cattiness, back biting, I don't really like it.  However, it seems there has been a huge shift in the way people deal with each other and not having a social media account has kind of made it where I'm obsolete with a good portion of my friends.  I seem to get left out of a lot of things.  I always wonder if I should try to use it again, make a facebook account, so I can better connect with people, but I remember how it was the last time I used it about 5 years ago and I didn't like how you could so easily post something to someone, but not really get more in depth with them, and I don't want to have that superficial type of thing with people again.  It's food for thought.  I have a few best friends that I talk to frequently and that is satisfying, so maybe one doesn't need social media at all. 

After having been FIRE'd for 4 months, I can safely say, I like it.  I don't need to be defined by a job.  I don't need to impress other people or conform to how they think I should live.  If I am able to I would like to continue this lifestyle and I'll continue to find ways to hang on to it. I wish I had figured out a way to do it sooner.  I love that the possibilities are endless and if there's something I want to do, I can probably figure out a way to make it happen.  I highly recommend this and wish I could convince everyone I know to do the same!  Thanks for reading my long long long story!  :)




Nangirl17

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Re: 4 months into FIRE-Life now vs Before
« Reply #1 on: June 02, 2020, 10:55:13 AM »
Such an inspiring story; I enjoyed reading!
Thanks!

Rdy2Fire

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Re: 4 months into FIRE-Life now vs Before
« Reply #2 on: June 02, 2020, 11:15:18 AM »
Awesome post!! Good for you!

BTW, like yourself I used to, years ago, hate my credit cards and wouldn't use them. Then I started to care about the points (because I like to travel) and now pay every single thing I can with them. I still pay them off in full but it allows me to get 'free travel' in addition, for me, it's a consolidated place to see exactly what I spend and where. This is something I am still working on as I am only in my first year too. Just something to consider as you move forward since some of the signup bonuses are a free trip or two by themselves.

bacchi

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Re: 4 months into FIRE-Life now vs Before
« Reply #3 on: June 02, 2020, 11:24:11 AM »
Great post, IslandFiGirl. Maybe you should start a journal?

Congrats on making the leap.

lollylegs

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Re: 4 months into FIRE-Life now vs Before
« Reply #4 on: June 02, 2020, 02:09:42 PM »
thanks for sharing this, its encouraging to see as someone who is feeling burnt out and trying to hang in for another couple of years.  I took a year off work a few years ago and within a few month had lost lots of weight with not much effort - I'm convinced workplace stress plays a big part in chronic health problems.  look forward to hearing more about 'life after work' from you.

Mr. Green

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Re: 4 months into FIRE-Life now vs Before
« Reply #5 on: June 02, 2020, 02:46:24 PM »
It's sounds like you've had a wonderful four months! It always makes me happy to hear someone else enjoying their new life. :)

blue_green_sparks

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Re: 4 months into FIRE-Life now vs Before
« Reply #6 on: June 02, 2020, 08:05:20 PM »
After a year and 3 months post FIRE, I relapsed. It's true. Early this morning I had a quasi-awake dream about some sort of work nonsense. As I began to fully wake up I heard the rain pounding on the metal roof. And then I smiled. There would be no umbrellas this morning.

Paul der Krake

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Re: 4 months into FIRE-Life now vs Before
« Reply #7 on: June 02, 2020, 09:22:11 PM »
As soon as I left work, I got to work on getting health insurance.  I decided that no matter what, I was not going without insurance, I've seen too many people get into deep doo doo because they didn't have it and I didn't want to get some terrible illness or injury and wipe out my savings.  I ended up getting no subsidies on the marketplace because I qualified for Medicaid.  I didn't want Medicaid and didn't feel I needed to be on that so I went ahead and purchased my own insurance for about $350/ month.  I hated that it cost that much but a lot of docs do not take Medicaid around here so I decided to buy the insurance.
You're going about this the wrong way. Income is easy to manufacture when you're FIRE, so long as you have a 401(k) or a traditional IRA? Congratulations, you can make income out of thin air.

Step 1: figure out what is the absolute lowest annual income that still qualifies you for ACA subsidies instead of being pushed to Medicaid. For illustration purposes, let's say it's $15,000.
Step 2: figure out what your tentative income from dividends and interest and odd jobs will be that year. Let's say it's $8,000.
Step 3: apply for a marketplace plan and say your income for the year will be $15,000. Be amazed by the plans you're being offered for free or nearly free.
Step 4: live your best FIRE life that year
Step 5: near the end of the calendar year, compute exactly what your actual income has been that year. Let's say you were slightly off and made $8,500 instead of the projected $8,000.
Step 6: convert 15,000 - 8,500 = $6,500 from a pre-tax account to Roth
Step 7: congratulations! Your income for the year is what you told the marketplace it would be: $15,000.

blue_green_sparks

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Re: 4 months into FIRE-Life now vs Before
« Reply #8 on: June 03, 2020, 06:21:21 AM »
As soon as I left work, I got to work on getting health insurance.  I decided that no matter what, I was not going without insurance, I've seen too many people get into deep doo doo because they didn't have it and I didn't want to get some terrible illness or injury and wipe out my savings.  I ended up getting no subsidies on the marketplace because I qualified for Medicaid.  I didn't want Medicaid and didn't feel I needed to be on that so I went ahead and purchased my own insurance for about $350/ month.  I hated that it cost that much but a lot of docs do not take Medicaid around here so I decided to buy the insurance.
You're going about this the wrong way. Income is easy to manufacture when you're FIRE, so long as you have a 401(k) or a traditional IRA? Congratulations, you can make income out of thin air.

Step 1: figure out what is the absolute lowest annual income that still qualifies you for ACA subsidies instead of being pushed to Medicaid. For illustration purposes, let's say it's $15,000.
Step 2: figure out what your tentative income from dividends and interest and odd jobs will be that year. Let's say it's $8,000.
Step 3: apply for a marketplace plan and say your income for the year will be $15,000. Be amazed by the plans you're being offered for free or nearly free.
Step 4: live your best FIRE life that year
Step 5: near the end of the calendar year, compute exactly what your actual income has been that year. Let's say you were slightly off and made $8,500 instead of the projected $8,000.
Step 6: convert 15,000 - 8,500 = $6,500 from a pre-tax account to Roth
Step 7: congratulations! Your income for the year is what you told the marketplace it would be: $15,000.

Yes, that is what I do. My target income is $12,500. There are other factors that qualify a person for Medicare besides income however, such as disability. Not sure if ACA plans are an option if that is the case.

xbdb

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Re: 4 months into FIRE-Life now vs Before
« Reply #9 on: June 03, 2020, 12:13:35 PM »
During those first few weeks (and even now) I was also feeling some guilt.  Not some...a lot of guilt.  I had saved money for a long time, but a good portion of my money came from an inheritance from my parents who had died within the last few years.  I was really struggling with what a jerk I was being for just using that money to live off of when they were dead and couldn't enjoy it for themselves.  They both had retired and died almost immediately after retiring.  It was so heartbreaking to know that they couldn't go on any more cruises, no more fun trips...they worked all their lives and it ended so abruptly.

This right here. I hope that every single person reading this, who has not FIRED but COULD will take this to heart. Time is the only currency we have. PERIOD. I had a close friend who worked hard and saved his pennies for the good times that he WILL SURELY have when he finally retired. Well, he retired and less than six months later he was tragically killed by a careless driver while crossing the street. Time is promised to nobody. If you can FIRE then FIRE. Don't wait until you're "ready."
 

Quote
  I had nightmares every night, in fact, I still do, but not quite as frequently.  My recurring nightmare is that one or both of my parents somehow come back to life and I had to scramble to explain that I had sold their house and give back their money and explain why I had it and why I was so selfish to think I could use that money to live on when they needed it.  It's still something I struggle with, but I am doing what I think is right for me and my family and I can only hope they would think that what I'm doing is good.  Ok, Enough sad stuff...


Uff. Your parents would want you to enjoy your inhertiance just like you would want your daughter to enjoy it should something happen to you. Also, thank you for your service in the Army and also in the call center. You undoubtedly saved many lives.

bmjohnson35

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Re: 4 months into FIRE-Life now vs Before
« Reply #10 on: June 03, 2020, 12:38:23 PM »
As soon as I left work, I got to work on getting health insurance.  I decided that no matter what, I was not going without insurance, I've seen too many people get into deep doo doo because they didn't have it and I didn't want to get some terrible illness or injury and wipe out my savings.  I ended up getting no subsidies on the marketplace because I qualified for Medicaid.  I didn't want Medicaid and didn't feel I needed to be on that so I went ahead and purchased my own insurance for about $350/ month.  I hated that it cost that much but a lot of docs do not take Medicaid around here so I decided to buy the insurance.
You're going about this the wrong way. Income is easy to manufacture when you're FIRE, so long as you have a 401(k) or a traditional IRA? Congratulations, you can make income out of thin air.

Step 1: figure out what is the absolute lowest annual income that still qualifies you for ACA subsidies instead of being pushed to Medicaid. For illustration purposes, let's say it's $15,000.
Step 2: figure out what your tentative income from dividends and interest and odd jobs will be that year. Let's say it's $8,000.
Step 3: apply for a marketplace plan and say your income for the year will be $15,000. Be amazed by the plans you're being offered for free or nearly free.
Step 4: live your best FIRE life that year
Step 5: near the end of the calendar year, compute exactly what your actual income has been that year. Let's say you were slightly off and made $8,500 instead of the projected $8,000.
Step 6: convert 15,000 - 8,500 = $6,500 from a pre-tax account to Roth
Step 7: congratulations! Your income for the year is what you told the marketplace it would be: $15,000.

Yes, that is what I do. My target income is $12,500. There are other factors that qualify a person for Medicare besides income however, such as disability. Not sure if ACA plans are an option if that is the case.

I fired at the end of February and the pandemic has definitely impacted our retirement and made it a little anti-climatic. As long as you are less than 65 and meet the income requirements, ACA is probably and option.  You probably won't be able to sign up until the next sign-up period late in the year.  I would definitely take the time to research your options based on your local area.  Luckily, you have the time!

BJ
 

oneday

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Re: 4 months into FIRE-Life now vs Before
« Reply #11 on: June 03, 2020, 04:00:29 PM »
Thank you for sharing your story!  I started a sabbatical in January, and find that it's not what I dreamed it would be due to the pandemic either. 

Also lol'd that your employer called you back the very next day.  I had that happen at a prior job, where I had truly left for another employment opportunity.  They must have been both desparate and had not planned ahead.  Yeah, not sure what they did, but life does go on!

myobjectivism

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Re: 4 months into FIRE-Life now vs Before
« Reply #12 on: June 03, 2020, 11:57:26 PM »
Hats off to you @IslandFiGirl. It is very inspiring to read your post. Keep rocking.

Your focus on Health is amazing. Well-being is very important than anything else to live life effectively in all aspects.

I am retiring early in next couple of weeks and your post is inspiring.

robartsd

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Re: 4 months into FIRE-Life now vs Before
« Reply #13 on: June 04, 2020, 04:11:15 PM »
I managed a 911 dispatch center and had been there for 15 years and although I loved the job in so many ways, I was tired of being the public's punching bag, and was tired of being on call every stinking minute of my life!
I've had a few coworkers who worked in dispatch. Sounds like a very tough job to work in for that long. I met them because they got out to work in less stressful public sector jobs.

On occasion I will think about getting a job, maybe something part time, just for fun.  I did commit to not working for at least one year to really give myself a chance to just chill and find out what I'm all about, so I'm not going to think about that too much until next year.
Sounds like an excellent plan. No reason to stress about it now. Evaluate your situation next year and decide if you need some income for financial security or not.

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #14 on: June 09, 2020, 10:41:40 PM »
Awesome post!! Good for you!

BTW, like yourself I used to, years ago, hate my credit cards and wouldn't use them. Then I started to care about the points (because I like to travel) and now pay every single thing I can with them. I still pay them off in full but it allows me to get 'free travel' in addition, for me, it's a consolidated place to see exactly what I spend and where. This is something I am still working on as I am only in my first year too. Just something to consider as you move forward since some of the signup bonuses are a free trip or two by themselves.

Thanks for the tip.  For now I'm still using the cards, it just feels weird after paying cash for everything for so many years.  It is nice to get something out of it though.

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #15 on: June 09, 2020, 10:42:51 PM »
Great post, IslandFiGirl. Maybe you should start a journal?

Congrats on making the leap.

I have a journal already, buried somewhere here, I probably should update it, I'm super bad about that!

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #16 on: June 09, 2020, 10:46:19 PM »
thanks for sharing this, its encouraging to see as someone who is feeling burnt out and trying to hang in for another couple of years.  I took a year off work a few years ago and within a few month had lost lots of weight with not much effort - I'm convinced workplace stress plays a big part in chronic health problems.  look forward to hearing more about 'life after work' from you.

Workplace stress is incredible!  I had no idea how sick work was making me.  That's so great you got to take a year off of work, did you end up going back to the same job?

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #17 on: June 09, 2020, 10:47:48 PM »
It's sounds like you've had a wonderful four months! It always makes me happy to hear someone else enjoying their new life. :)

Even my most boring days sitting at home are 1,000 times better than the best days I had at work.  Whoever came up with this not working idea is a genius! 

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #18 on: June 09, 2020, 10:48:53 PM »
After a year and 3 months post FIRE, I relapsed. It's true. Early this morning I had a quasi-awake dream about some sort of work nonsense. As I began to fully wake up I heard the rain pounding on the metal roof. And then I smiled. There would be no umbrellas this morning.

Haha, that's so great.  I've had a few of those days.  It's so nice to realize it was all a bad dream!

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #19 on: June 09, 2020, 10:53:16 PM »
As soon as I left work, I got to work on getting health insurance.  I decided that no matter what, I was not going without insurance, I've seen too many people get into deep doo doo because they didn't have it and I didn't want to get some terrible illness or injury and wipe out my savings.  I ended up getting no subsidies on the marketplace because I qualified for Medicaid.  I didn't want Medicaid and didn't feel I needed to be on that so I went ahead and purchased my own insurance for about $350/ month.  I hated that it cost that much but a lot of docs do not take Medicaid around here so I decided to buy the insurance.
You're going about this the wrong way. Income is easy to manufacture when you're FIRE, so long as you have a 401(k) or a traditional IRA? Congratulations, you can make income out of thin air.

Step 1: figure out what is the absolute lowest annual income that still qualifies you for ACA subsidies instead of being pushed to Medicaid. For illustration purposes, let's say it's $15,000.
Step 2: figure out what your tentative income from dividends and interest and odd jobs will be that year. Let's say it's $8,000.
Step 3: apply for a marketplace plan and say your income for the year will be $15,000. Be amazed by the plans you're being offered for free or nearly free.
Step 4: live your best FIRE life that year
Step 5: near the end of the calendar year, compute exactly what your actual income has been that year. Let's say you were slightly off and made $8,500 instead of the projected $8,000.
Step 6: convert 15,000 - 8,500 = $6,500 from a pre-tax account to Roth
Step 7: congratulations! Your income for the year is what you told the marketplace it would be: $15,000.

Thanks for that advice...So... when I went to sign up for insurance, I put in what I thought would be the income that would qualify me for a subsidy and then the site asked me if I had any dependents that did not need health care, which I do, and somehow answering that question threw everything off kilter.  I tried for hours and days to figure it out and eventually gave up.  If you know anything about that...I am all ears, I have to admit I was frustrated as heck and just needed o make sure I was covered. 

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #20 on: June 09, 2020, 10:58:27 PM »
During those first few weeks (and even now) I was also feeling some guilt.  Not some...a lot of guilt.  I had saved money for a long time, but a good portion of my money came from an inheritance from my parents who had died within the last few years.  I was really struggling with what a jerk I was being for just using that money to live off of when they were dead and couldn't enjoy it for themselves.  They both had retired and died almost immediately after retiring.  It was so heartbreaking to know that they couldn't go on any more cruises, no more fun trips...they worked all their lives and it ended so abruptly.

This right here. I hope that every single person reading this, who has not FIRED but COULD will take this to heart. Time is the only currency we have. PERIOD. I had a close friend who worked hard and saved his pennies for the good times that he WILL SURELY have when he finally retired. Well, he retired and less than six months later he was tragically killed by a careless driver while crossing the street. Time is promised to nobody. If you can FIRE then FIRE. Don't wait until you're "ready."
 

Quote
  I had nightmares every night, in fact, I still do, but not quite as frequently.  My recurring nightmare is that one or both of my parents somehow come back to life and I had to scramble to explain that I had sold their house and give back their money and explain why I had it and why I was so selfish to think I could use that money to live on when they needed it.  It's still something I struggle with, but I am doing what I think is right for me and my family and I can only hope they would think that what I'm doing is good.  Ok, Enough sad stuff...


Uff. Your parents would want you to enjoy your inhertiance just like you would want your daughter to enjoy it should something happen to you. Also, thank you for your service in the Army and also in the call center. You undoubtedly saved many lives.

You are 100% right...every time I see someone wondering if they could maybe make it on whatever huge amount of money they have, I think, just do it!  Do it right now!  And if it sucks and you hate it, fine, go back to work and get some more money or work if that is what makes you happy...but if working is sucking the life out of you and you don't HAVE to work....my gosh, just quit! 

Thanks for thanking me for my service, it was my pleasure, a lot of great years were spent serving others and I'm happy I got to be that person.  I hope in the future I can figure out another way to do more without losing myself in the process.  :)

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #21 on: June 09, 2020, 11:00:11 PM »
Thank you for sharing your story!  I started a sabbatical in January, and find that it's not what I dreamed it would be due to the pandemic either. 

Also lol'd that your employer called you back the very next day.  I had that happen at a prior job, where I had truly left for another employment opportunity.  They must have been both desparate and had not planned ahead.  Yeah, not sure what they did, but life does go on!

Yeah it's so funny how they think they can just call us up and we will come running right back into work.  I hope your sabbatical is going better now that things are sort of starting to get more normal.  What a year to start that and find out you can't do a darn thing!

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #22 on: June 09, 2020, 11:01:48 PM »
Hats off to you @IslandFiGirl. It is very inspiring to read your post. Keep rocking.

Your focus on Health is amazing. Well-being is very important than anything else to live life effectively in all aspects.

I am retiring early in next couple of weeks and your post is inspiring.

Thanks!  :)  I'm glad to finally have more time to focus on what's important to me.  I hope your retirement starts off great, if nothing else, the decrease in responsibilities is AMAZING!!!!

Paul der Krake

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Re: 4 months into FIRE-Life now vs Before
« Reply #23 on: June 10, 2020, 01:37:40 AM »
You are 100% right...every time I see someone wondering if they could maybe make it on whatever huge amount of money they have, I think, just do it!  Do it right now!  And if it sucks and you hate it, fine, go back to work and get some more money or work if that is what makes you happy...but if working is sucking the life out of you and you don't HAVE to work....my gosh, just quit! 

Thanks for thanking me for my service, it was my pleasure, a lot of great years were spent serving others and I'm happy I got to be that person.  I hope in the future I can figure out another way to do more without losing myself in the process.  :)
The exchange can be frustrating to use, because it tries hard to guide people in their current situation, and isn't really geared to power users who can make up their own situations. That being said, having a dependent who doesn't need coverage shouldn't complicate things much.

I like to use HealthSherpa first to get an idea of what is available.

If you follow this link, I prefilled a profile for a 35-year-old woman who lives in Columbus, OH, makes $30,000 a year, and has a dependent who is NOT applying for coverage.

Click "edit" on the top left of the page to enter your own details, you should see something like this:



This isn't a bad start, but can we do better? If we update the income down, at some point we'll reach a number where you won't see any premium credits, but a message saying you're too poor, try medicaid. That's when you've found the limit. For the hypothetical woman that I modeled, that number is $23,792. So I'd encourage her to signup using a number slightly above that.

Once you've found that threshold, make sure to look at all the plans available, not just the one HealthSherpa thinks is best for you.

Hope this helps! It's likely too late for you to get coverage for 2020 using this, but the idea should be the same when the next enrollment period comes around.


jim555

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Re: 4 months into FIRE-Life now vs Before
« Reply #24 on: June 10, 2020, 03:05:42 AM »
I don't understand the objection to Medicaid.  You can get ACA subsidies probably, but object to Medicaid?  They probably spend more on subsidies for a person than for Medicaid anyway.

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #25 on: June 10, 2020, 03:24:41 AM »

The exchange can be frustrating to use, because it tries hard to guide people in their current situation, and isn't really geared to power users who can make up their own situations. That being said, having a dependent who doesn't need coverage shouldn't complicate things much.

I like to use HealthSherpa first to get an idea of what is available.

If you follow this link, I prefilled a profile for a 35-year-old woman who lives in Columbus, OH, makes $30,000 a year, and has a dependent who is NOT applying for coverage.

Click "edit" on the top left of the page to enter your own details, you should see something like this:



This isn't a bad start, but can we do better? If we update the income down, at some point we'll reach a number where you won't see any premium credits, but a message saying you're too poor, try medicaid. That's when you've found the limit. For the hypothetical woman that I modeled, that number is $23,792. So I'd encourage her to signup using a number slightly above that.

Once you've found that threshold, make sure to look at all the plans available, not just the one HealthSherpa thinks is best for you.

Hope this helps! It's likely too late for you to get coverage for 2020 using this, but the idea should be the same when the next enrollment period comes around.
[/quote]

Awesome, thanks!  I will play around with that and see if I can get a better handle on it for next enrollment period.  Thanks!

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #26 on: June 10, 2020, 03:27:17 AM »
I don't understand the objection to Medicaid.  You can get ACA subsidies probably, but object to Medicaid?  They probably spend more on subsidies for a person than for Medicaid anyway.

I could be wrong, but I feel like if I got a serious disease, like cancer, I'd like have better treatment options if I had regular insurance rather than medicaid.  And my current doctor does not accept medicaid and I really wanted to stick with his practice as I've had nothing but good experiences with him.  If I wasn't worried about ever getting sick, I'd probably just go on Medicaid and not worry about it...but there is history of serious illness in my family, so that's where my reasoning comes from.

jim555

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Re: 4 months into FIRE-Life now vs Before
« Reply #27 on: June 10, 2020, 03:35:46 AM »
I don't understand the objection to Medicaid.  You can get ACA subsidies probably, but object to Medicaid?  They probably spend more on subsidies for a person than for Medicaid anyway.

I could be wrong, but I feel like if I got a serious disease, like cancer, I'd like have better treatment options if I had regular insurance rather than medicaid.  And my current doctor does not accept medicaid and I really wanted to stick with his practice as I've had nothing but good experiences with him.  If I wasn't worried about ever getting sick, I'd probably just go on Medicaid and not worry about it...but there is history of serious illness in my family, so that's where my reasoning comes from.
I would check the provider network in the Ohio Managed Care plans:
https://medicaid.ohio.gov/FOR-OHIOANS/Programs/Managed-Care-for-Ohioans
While most don't take fee-for-service Medicaid they might be in a Managed Care plan.

Another subsidy calculator:
https://www.kff.org/interactive/subsidy-calculator/


LightTripper

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Re: 4 months into FIRE-Life now vs Before
« Reply #28 on: June 10, 2020, 04:00:19 AM »
Loved reading your story, thank you for sharing!

Paul der Krake

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Re: 4 months into FIRE-Life now vs Before
« Reply #29 on: June 10, 2020, 05:05:20 AM »
I have no idea where OP lives, I just picked Ohio as a random populous state with expanded Medicaid for illustration purposes. But boy do their plans suck. All HMOs from companies I've never even heard of. So I hope OP doesn't actually live there. :)

jim555

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Re: 4 months into FIRE-Life now vs Before
« Reply #30 on: June 10, 2020, 06:17:56 AM »
I have no idea where OP lives, I just picked Ohio as a random populous state with expanded Medicaid for illustration purposes. But boy do their plans suck. All HMOs from companies I've never even heard of. So I hope OP doesn't actually live there. :)
In NY all the plans are HMO plans, even the "metal" plans.  I was in the United Healthcare Community Plan for a while since it had the same doctors from Megacorp.  I didn't see any quality difference, just lower bills.

Edit add:  Since we don't know where the OP lives a lot of this discussion might have been for nothing.
« Last Edit: June 10, 2020, 08:43:22 AM by jim555 »

jim555

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Re: 4 months into FIRE-Life now vs Before
« Reply #31 on: June 10, 2020, 08:56:30 AM »
I don't understand the objection to Medicaid.  You can get ACA subsidies probably, but object to Medicaid?  They probably spend more on subsidies for a person than for Medicaid anyway.

I could be wrong, but I feel like if I got a serious disease, like cancer, I'd like have better treatment options if I had regular insurance rather than medicaid.  And my current doctor does not accept medicaid and I really wanted to stick with his practice as I've had nothing but good experiences with him.  If I wasn't worried about ever getting sick, I'd probably just go on Medicaid and not worry about it...but there is history of serious illness in my family, so that's where my reasoning comes from.
Do you live in an expansion state? It makes a difference for ACA and your other options.

IslandFiGirl

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Re: 4 months into FIRE-Life now vs Before
« Reply #32 on: June 10, 2020, 04:21:35 PM »

Do you live in an expansion state? It makes a difference for ACA and your other options.
[/quote]

I'm in Colorado, so I think it is an expansion state.

jim555

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Re: 4 months into FIRE-Life now vs Before
« Reply #33 on: June 10, 2020, 05:36:01 PM »
I'm in Colorado, so I think it is an expansion state.
Yes it is.

Colorado has managed care plans and not fee for service delivery.  If I was you I would review the provider network for the plans and compare that to the "metal" ACA plans to see if one is better than the other.

If you want to avoid Medicaid then these are the income levels to be over for each household size:
1 $17,609
2 $23,792
3 $29,974
4 $36,156


duyen

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Re: 4 months into FIRE-Life now vs Before
« Reply #34 on: June 22, 2020, 12:05:18 AM »
@jim555 What happens in the case where my retirement income or investment growth is already mostly taxed and I won't be able to meet the income limit?

1) Let's say I say my income will be above the limit and sign up for a medicare. End of the year when filing taxes my income is below. Will I need to pay for the full insurance price then?
2) I sign up for medicaid and then I get new income in the year. I assume in that case when filing taxes I pay the premium for my new income limit?

jim555

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Re: 4 months into FIRE-Life now vs Before
« Reply #35 on: June 22, 2020, 08:15:37 AM »
@jim555 What happens in the case where my retirement income or investment growth is already mostly taxed and I won't be able to meet the income limit?

1) Let's say I say my income will be above the limit and sign up for a medicare. End of the year when filing taxes my income is below. Will I need to pay for the full insurance price then?
2) I sign up for medicaid and then I get new income in the year. I assume in that case when filing taxes I pay the premium for my new income limit?
If you need to create income you can always do a Roth conversion.  There is no minimum income for Medicaid.  In non-expansion states you need over 100% FPL to get to an ACA metal plan with subsidies between 1x to 4x poverty level income.

Medicaid is based on monthly income while ACA subsidies are based on calendar year income.  If you are on Medicaid and report an income change (as you legally required to) then you will be placed in an ACA plan.  In my state you keep it until the annual recertification date.  Subsidies are calculated for those months you are on a ACA plan.  It is possible to have some months with subsidies and others in Medicaid.  It is also possible to drop into Medicaid with an income drop mid-year.

Padonak

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Re: 4 months into FIRE-Life now vs Before
« Reply #36 on: June 22, 2020, 08:47:44 AM »
As soon as I left work, I got to work on getting health insurance.  I decided that no matter what, I was not going without insurance, I've seen too many people get into deep doo doo because they didn't have it and I didn't want to get some terrible illness or injury and wipe out my savings.  I ended up getting no subsidies on the marketplace because I qualified for Medicaid.  I didn't want Medicaid and didn't feel I needed to be on that so I went ahead and purchased my own insurance for about $350/ month.  I hated that it cost that much but a lot of docs do not take Medicaid around here so I decided to buy the insurance.
You're going about this the wrong way. Income is easy to manufacture when you're FIRE, so long as you have a 401(k) or a traditional IRA? Congratulations, you can make income out of thin air.

Step 1: figure out what is the absolute lowest annual income that still qualifies you for ACA subsidies instead of being pushed to Medicaid. For illustration purposes, let's say it's $15,000.
Step 2: figure out what your tentative income from dividends and interest and odd jobs will be that year. Let's say it's $8,000.
Step 3: apply for a marketplace plan and say your income for the year will be $15,000. Be amazed by the plans you're being offered for free or nearly free.
Step 4: live your best FIRE life that year
Step 5: near the end of the calendar year, compute exactly what your actual income has been that year. Let's say you were slightly off and made $8,500 instead of the projected $8,000.
Step 6: convert 15,000 - 8,500 = $6,500 from a pre-tax account to Roth
Step 7: congratulations! Your income for the year is what you told the marketplace it would be: $15,000.

This is great advice. A question about dividends. For the purpose of calculating MAGI, does it make any difference if the dividends are "qualified" or not? Also, dividends in 401K, IRA and ROTH IRA are not included in this calculation, correct?

jim555

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Re: 4 months into FIRE-Life now vs Before
« Reply #37 on: June 22, 2020, 09:50:05 AM »
This is great advice. A question about dividends. For the purpose of calculating MAGI, does it make any difference if the dividends are "qualified" or not? Also, dividends in 401K, IRA and ROTH IRA are not included in this calculation, correct?
Makes no difference whether dividends are qualified or not, they still count.  Interest from tax free bonds also counts.
Advocate’s Guide to MAGI:  https://healthlaw.org/resource/advocates-guide-to-magi/

Retirement accounts are like a black box so nothing that happens in them matters, it only matters when you withdraw or convert.
« Last Edit: June 22, 2020, 10:22:34 AM by jim555 »

robartsd

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Re: 4 months into FIRE-Life now vs Before
« Reply #38 on: June 30, 2020, 11:09:18 AM »
Medicaid is based on monthly income while ACA subsidies are based on calendar year income.  If you are on Medicaid and report an income change (as you legally required to) then you will be placed in an ACA plan.  In my state you keep it until the annual recertification date.  Subsidies are calculated for those months you are on a ACA plan.  It is possible to have some months with subsidies and others in Medicaid.  It is also possible to drop into Medicaid with an income drop mid-year.
This sounds like it could be a pain to have variable income close to the Medicaid threshold.

If you drop below the medicaid threshold mid-year, I know that you can apply for medicaid based on your lowered income, but are you required to? If you can stay on an ACA plan after a mid-year income drop and your total annual income ends up being below the medicaid threshold, how is your subsidy calculated?

Paul der Krake

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Re: 4 months into FIRE-Life now vs Before
« Reply #39 on: June 30, 2020, 02:36:00 PM »
Medicaid is based on monthly income while ACA subsidies are based on calendar year income.  If you are on Medicaid and report an income change (as you legally required to) then you will be placed in an ACA plan.  In my state you keep it until the annual recertification date.  Subsidies are calculated for those months you are on a ACA plan.  It is possible to have some months with subsidies and others in Medicaid.  It is also possible to drop into Medicaid with an income drop mid-year.
This sounds like it could be a pain to have variable income close to the Medicaid threshold.

If you drop below the medicaid threshold mid-year, I know that you can apply for medicaid based on your lowered income, but are you required to? If you can stay on an ACA plan after a mid-year income drop and your total annual income ends up being below the medicaid threshold, how is your subsidy calculated?
The last question of this FAQ deals with this exact scenario:
https://www.irs.gov/affordable-care-act/individuals-and-families/questions-and-answers-on-the-premium-tax-credit

The devil is in the details, and the 1040 instructions go over this is a lot more details. My general recommendation is to try really hard to avoid it.

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Re: 4 months into FIRE-Life now vs Before
« Reply #40 on: June 30, 2020, 10:59:18 PM »
Medicaid is based on monthly income while ACA subsidies are based on calendar year income.  If you are on Medicaid and report an income change (as you legally required to) then you will be placed in an ACA plan.  In my state you keep it until the annual recertification date.  Subsidies are calculated for those months you are on a ACA plan.  It is possible to have some months with subsidies and others in Medicaid.  It is also possible to drop into Medicaid with an income drop mid-year.
This sounds like it could be a pain to have variable income close to the Medicaid threshold.

If you drop below the medicaid threshold mid-year, I know that you can apply for medicaid based on your lowered income, but are you required to? If you can stay on an ACA plan after a mid-year income drop and your total annual income ends up being below the medicaid threshold, how is your subsidy calculated?

I don't believe there is any requirement for people not on Medicaid to report changes in income to the exchange mid-year.