Author Topic: Mustachian cocktail party chatter  (Read 4370 times)

Trudie

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Mustachian cocktail party chatter
« on: August 23, 2015, 02:23:10 PM »
We went to a 60th birthday party for a friend Friday night and found ourselves sitting next to a shrewd and fun-loving pal whose just retired in the last couple of years (in his early 60s).  My husband started bragging about how I had figured out our retirement investments, income, and how to get subsidies under the ACA which will allow us to retire.

So there we were -- me with wine in one hand and party snacks in the other -- and I was explaining the ACA and sources of income included in the MAGI for subsidy purposes, and how you could have income as high as 400% of FPL and still get a significant subsidy, and the all-importance of engineering what gets included on line 37B of your 1040.  I then explained why you should max out an HSA (above the line credit) and the benefits of doing so.  I ended by saying, "We're retiring in 5 years, and my husband's just learning that I have it all figured out."

I was comfortable going into it with this particular friend.  I just never thought that it would make for cocktail party chatter.

Calvawt

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Re: Mustachian cocktail party chatter
« Reply #1 on: August 24, 2015, 05:39:33 PM »
nice!  I often get in to the basics of FI in social settings.  When done right, it is just information sharing not bragging.  I sometime see disbelief, but not outright denial of the possibility.   


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Bajadoc

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Re: Mustachian cocktail party chatter
« Reply #2 on: August 25, 2015, 08:38:57 AM »
Almost all I encounter are mass consumers who love to regale me with intricate tales of there latest shopping success. It is kind of entertaining and usually cracks me up. It is a rare instance when I can talk to someone who is wise with money.
« Last Edit: August 25, 2015, 01:48:02 PM by Bajadoc »

Thegoblinchief

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Re: Mustachian cocktail party chatter
« Reply #3 on: August 25, 2015, 07:39:36 PM »
Much more likely to have this happen in that age bracket, as 60 is well within the "planning for traditional retirement" window.

I haven't had it come up at a party per se, but I have had folks email me privately for budget help after some off-hand remarks about FI related topics.

Trudie

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Re: Mustachian cocktail party chatter
« Reply #4 on: August 26, 2015, 08:11:28 AM »
I think people are shocked that I can be talking about it and have things figured when I'm only 45.

The more traditional retirement track folks have different realities -- some of which are not all bad.  For instance, some have defined benefit pensions and early retirement health care benefits, so much of what I'm talking makes little sense to them.

Such is the way of the world...

Frugal D

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Re: Mustachian cocktail party chatter
« Reply #5 on: August 26, 2015, 01:49:24 PM »
So there we were -- me with wine in one hand and party snacks in the other -- and I was explaining the ACA and sources of income included in the MAGI for subsidy purposes, and how you could have income as high as 400% of FPL and still get a significant subsidy, and the all-importance of engineering what gets included on line 37B of your 1040.  I then explained why you should max out an HSA (above the line credit) and the benefits of doing so.  I ended by saying, "We're retiring in 5 years, and my husband's just learning that I have it all figured out."

Holy shit. I think I just realized my own ignorance when it comes to accounting. Any links and/or resources you can share?

Trudie

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Re: Mustachian cocktail party chatter
« Reply #6 on: August 27, 2015, 11:32:49 AM »
This book contained the best and most simple explanation on how the ACA and subsidies work:
http://www.amazon.com/How-Retire-Early-Getting-Retiring-ebook/dp/B00C1T16H4/ref=sr_1_1?ie=UTF8&qid=1440696089&sr=8-1&keywords=Charlton+retire+early

The UC Berkley Labor Center has a great summary of what's included in AGI for the Affordable Care Act:
http://laborcenter.berkeley.edu/modified-adjusted-gross-income-under-the-affordable-care-act/

If you file the 1040 long form, line 37 is the all-important line.  I just ran some copies of the 1040 and meshed it with my own spreadsheets (with sources of income) and tried out some different scenarios.

A few items of note:
Roth distributions are NOT included in AGI
Only the taxable portions of IRAs are included in AGI
Certain credits, including the HSA deduction, reduce your AGI.  (If you have a HDHP under the ACA there really isn't a reason you shouldn't have an HSA.)

Bottom line:  Because you can strategize in your retirement over the timing and sources of your funds you can engineer your income to legally get a premium credit under the ACA.  You will just have to play around with different scenarios.


Basenji

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Re: Mustachian cocktail party chatter
« Reply #7 on: August 27, 2015, 11:53:25 AM »
Nice! I can only talk to two friends in depth about MMM, but I do often drop the name of "a blog I follow on money."

Longwaytogo

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Re: Mustachian cocktail party chatter
« Reply #8 on: August 28, 2015, 10:40:55 AM »
Nice! I talk about MMM a decent amount with some friends and my family (never really with DW's family)

Noone really takes me seriously though as I havent shaken my "Ultimate consuma sucka" image that I had from about age 16-32 (still have relapses into that realm actually which probably makes it harder for them to believe I want/ think I can retire around 50)

surething22

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Re: Mustachian cocktail party chatter
« Reply #9 on: August 28, 2015, 10:51:39 AM »
Awesome -- I talk about MMM with my brother, who actually aspires to live out of a van someday. Some friends are steadily becoming more cognizant of the decisions they make and saving for retirement (traditional, let alone early) so it has led to some interesting decisions about index funds, spending, etc.

DCKatie09

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Re: Mustachian cocktail party chatter
« Reply #10 on: August 28, 2015, 10:52:01 AM »
I ended up talking money a bit at the end of a recent happy hour with a friend (3 years younger than me at 29, in a good gov't job, 2 years out of law school) - we'd gotten there by comparing parents. His folks are about 10 years older than mine, and yet my dad retired last year at 55. This got us on to general financial planning, me mentioning that my DH has RE goals, and he finally just asked "well, but how can you do that?" and I said "We'll have about a million dollars saved up in the next 10 years. I'd be happy to chat with you more about how you can get your own finances in order if you want..." He was a little dumbfounded, but emailed me two days later to say he'd like to hear more. :)

Trudie

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Re: Mustachian cocktail party chatter
« Reply #11 on: August 28, 2015, 01:17:35 PM »
I ended up talking money a bit at the end of a recent happy hour with a friend (3 years younger than me at 29, in a good gov't job, 2 years out of law school) - we'd gotten there by comparing parents. His folks are about 10 years older than mine, and yet my dad retired last year at 55. This got us on to general financial planning, me mentioning that my DH has RE goals, and he finally just asked "well, but how can you do that?" and I said "We'll have about a million dollars saved up in the next 10 years. I'd be happy to chat with you more about how you can get your own finances in order if you want..." He was a little dumbfounded, but emailed me two days later to say he'd like to hear more. :)
Yep - I think there's a way to low key it -- which you seem to have done here -- and present it in a way to other people that it doesn't sound like you're judging or evangelizing.  I can usually tell when someone is receptive too.  When you realize the fear people are living under about finances, health insurance, and the reality that not a lot of "facts" get out there in mainstream media, it's rewarding to be able to gently steer people in a direction in which they can have more control.

I just helped another friend last night.  She had a lot of mistaken notions (not consistent with the Affordable Care Act) about being able to be denied coverage, being "experience rated", having her premiums skyrocket as she got older, being kicked off for poor health, and the kicker -- not being able to afford/purchase it in the first place.  She was gobsmacked when I explained the new law to her in broad brushstrokes, then referred her to a friend who's a real expert (sells policies).