Author Topic: Finessing FIRE plans + health insurance questions  (Read 3492 times)

KBecks2

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Finessing FIRE plans + health insurance questions
« on: July 26, 2015, 05:53:00 PM »
Hi Everybody,

I am re-examining our 'stache, which right  now, could put out just under $30k/year at 4%.

So we are getting in the neighborhood of FIRE, if our budget is low.  However, we need to practice budgeting.

I have questions about health insurance on low income.  What are the FIREd doing for health insurance here? 

$30k year / 12 months = $2,500 mo.

Looking at MINT we have a lot to work on for the budget.

Last 12 months:
Food and Dining - $13,210 = $1,100 / mo.
Bills & Utilities - $4,350 = $363/mo.
Car insurance - $459 (this seems low)
Gas & Fuel - $3,375 = $281 / mo. (includes work mileage that is reimbursed)
Health & Fitness - $4983 = $415 / mo.
Clothing - $1,400 = $116 / mo.
Home - approx $2400 = $200 / mo.

We still have a mortgage and property taxes.  Annual property taxes are $6k.  Rolled into our mortgage payment we are around $1,600/mo.  I hope to get the mortgage paid off.

This isn't everything, I am just nosing through our past year expenses.

I am not sure how to have a conversation about any of this with my husband.  He gets depressed when I want to talk with him about budgets and money.  This could be a joyful conversation but I feel he only sees the bad in it and the things we don't have, or would cut back on as being personal losses to lifestyle.   I need to speak with him about the freedom, but I think he wants the everyday luxuries.

We are obviously not close enough, and we would need to figure out health insurance.  What is realistic?  We are a family of 5.  Our 3 elementary age kids add expenses right now and we want them to have sports and activities and a few of those things.  (Our big one is Tae Kwon Do.)  We can obviously work a LOT on the food. 

What kind of plan / timeline would you shoot for if you were in our shoes?  How would you transition to a better plan for FIRE?  I am hoping we could be FIRE within 5 years, hopefully with some ease.

Thanks so much.


P.S.  Realistically we don't have a plan right now…   I (we) need to work on a plan.





forummm

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Re: Finessing FIRE plans + health insurance questions
« Reply #1 on: July 26, 2015, 06:18:31 PM »
You can get health insurance at healthcare.gov. You can see what's available in your area and how much it will cost based on your retirement income. Healthcare policy could change depending on the election next year. But as of now, the ACA is very good for early retirees.

http://forum.mrmoneymustache.com/welcome-to-the-forum/information-on-the-affordable-care-act-with-a-focus-on-early-retirees/

Gimesalot

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Re: Finessing FIRE plans + health insurance questions
« Reply #2 on: July 28, 2015, 08:00:23 AM »
I feel like I am in a similar boat with my husband.  He is constantly stressed out from working so much, but when I bring up FIRE he gets even more stressed out because "we won't be able to have fun."  He wants to retire and go to concerts and fancy restaurants every night.  Even if we worked until we were 75, we would never be able to finance that kind of consumption.

The agreement we came to is that our stash would cover items that we both considered "necessary" (our definition includes lots of travel, dance lessons, and some eating out).  Any "fun" items, expensive restaurants, fancy clothes, nightly concerts, would have to be paid for by part-time work, side gigs, or general hustling.  This works for both of us because I am happy with spending most days doing free stuff, so I probably won't have to work very much, and he wants to be a spendy pants, so he will have to work more.

KBecks2

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Re: Finessing FIRE plans + health insurance questions
« Reply #3 on: July 30, 2015, 05:49:51 AM »
I'm glad you can relate.  We still have a lot of work to do on our budget, mostly eating out, and it's the convenience type stuff.  We have money, so it trickles out, not on big things, but a sandwich here or there, a shirt or shoes now and then.  I think my husband doesn't want to feel poor in retirement.  I also think that the extremely thin budgets aren't going to satisfy him.  We will need some cush for a few nicer things, you know, a birthday dinner, holiday gifts, those small luxuries.   Also as our kids get older we will need to have money for them, not that they need a lot of things, but we need to be able to care for them and do some things like activities and some travel.  Need to figure the exact priorities here.

BTDretire

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Re: Finessing FIRE plans + health insurance questions
« Reply #4 on: July 30, 2015, 08:51:33 AM »
 It would seem your hubby wants a bit more in retirement than you. I'm with him.
You have 3 young children, they will start to cost more.
Get a better handle on what you spend now, how far under $30,000 are you?
  I would approach your husband from a slightly different direction.
Darling, Studly, whatever, can we look at putting a 5 year (financial)or(savings) plan together.
I'd like to see if we can accumalate $1.2M in assets within 5 years.
From there, move to your budget and where you need to cut.
 In 5 years you will have a perfect track of your spending and know exactly
what you can live on. You might have your mortgage paid off, that's a $1000 raise!
Also, if the stock market cooperates with your 5 year plan, you
could have $1.2M.

 "When the stock market is working for you, the second million is a lot easier than the first."

That $6K property tax makes me sick and is one of my pet peeves.
You can spend 30 years paying for your  home, but the government continues
to charge you rent for the rest of your life. If you don't pay it, they take it away from you.
I pay $932 yearly, and don't like it.

Need2Save

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Re: Finessing FIRE plans + health insurance questions
« Reply #5 on: July 31, 2015, 08:01:29 AM »
It would seem your hubby wants a bit more in retirement than you. I'm with him.
You have 3 young children, they will start to cost more.
Get a better handle on what you spend now, how far under $30,000 are you?
  I would approach your husband from a slightly different direction.
Darling, Studly, whatever, can we look at putting a 5 year (financial)or(savings) plan together.
I'd like to see if we can accumalate $1.2M in assets within 5 years.
From there, move to your budget and where you need to cut.
 In 5 years you will have a perfect track of your spending and know exactly
what you can live on. You might have your mortgage paid off, that's a $1000 raise!
Also, if the stock market cooperates with your 5 year plan, you
could have $1.2M.

 "When the stock market is working for you, the second million is a lot easier than the first."

That $6K property tax makes me sick and is one of my pet peeves.
You can spend 30 years paying for your  home, but the government continues
to charge you rent for the rest of your life. If you don't pay it, they take it away from you.
I pay $932 yearly, and don't like it.


I don't know if there is another thread on that topic, but the fact that you only pay $932 in property taxes a year, really popped out at me.  Like the OP, we pay a little over $6k a year, so over $500/month!!  We are planning to pay off our mortgage in under 7 years, but we'll still be stuck with that monthly bill.  It is a major reason why when we are ready to FIRE, we'll be looking to relocate to another state where the property taxes aren't so steep.  Plus we won't need such a big house when our two boys are off on their own adventures!  We hope to unlock the money in this property into wherever we downsize to and invest the rest to supplement the other money we are saving.  Obviously size of home/size of property acreage affects this, but wow going from $500 month to under $100 a month sounds so wonderful!!! 

Sibley

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Re: Finessing FIRE plans + health insurance questions
« Reply #6 on: July 31, 2015, 08:24:19 AM »
OP, it sounds like you need to work on selling the dream. There's posts by MMM and others on the forum that address this. Once he's on board then it'll get easier.

Otherwise, the plan of creating a minimum budget and having income to fund that, then any extras are funded by continuing work would probably work. He may change his mind on what he considers necessary if you're not working or working very little while he's still working FT or whatever.

KBecks2

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Re: Finessing FIRE plans + health insurance questions
« Reply #7 on: July 31, 2015, 09:06:39 AM »
This is good.  We're going to have a kids free night tonight and I would like to talk about goals.

The property taxes suck, but we so love our location, close to school, park, library, grocery.  And we have a well.  The next county over has lower taxes, but will have water problems for properties without wells.  I suppose I could keep an eye on the communities next door, but we are so settled here.  Where do you get $900 year taxes?

Bric-a-Brac

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Re: Finessing FIRE plans + health insurance questions
« Reply #8 on: July 31, 2015, 09:15:20 AM »
Healthcare policy could change depending on the election next year.

Ugh, that will suck if the GOP holds all 4 limbs of government and repeal it as promised.  I'm retiring in 3 weeks and it will be a real pain without the preexisting-condition protections of the ACA.

BTDretire

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Re: Finessing FIRE plans + health insurance questions
« Reply #9 on: July 31, 2015, 11:19:33 AM »
This is good.  We're going to have a kids free night tonight and I would like to talk about goals.

The property taxes suck, but we so love our location, close to school, park, library, grocery.  And we have a well.  The next county over has lower taxes, but will have water problems for properties without wells.  I suppose I could keep an eye on the communities next door, but we are so settled here.  Where do you get $900 year taxes?

Florida Panhandle, 3bd, 2 bth, 2 car garage. Value~ $140,000, although peaked at $260k or $270K before the 2007 bust.
My pet peeve; some get a bailout on their loses or a reduction in principal, Paid by you the hardworking taxpayer.
Because I saved, lived right and paid for my home, no relief for me!
Best revenge--FI

*btw. I only paid $81k, 20+ years ago, so not  looking for sympathy.
Just not happy paying someone elses loses because the went into debt and because
I didn't go into debt my loses aren't covered.
I do understand there is an argument for the program.

BTDretire

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Re: Finessing FIRE plans + health insurance questions
« Reply #10 on: July 31, 2015, 11:31:30 AM »
Healthcare policy could change depending on the election next year.

Ugh, that will suck if the GOP holds all 4 limbs of government and repeal it as promised.  I'm retiring in 3 weeks and it will be a real pain without the preexisting-condition protections of the ACA.
  I suspect preexisting-condition protections will be in the next iteration.
Since you started it; I've had about a 90% in my BCBS healthcare premium since
2012 when the ACA regulations kicked in.
I'm now paying $7,768 for a family of 3, an ACA policy that is pretty equivalent is $13,508.
But the wonderful hardworking taxpayers will give me About $6,700 as subsidy on an ACA policy.
So, I could save money with an ACA policy.*
*assumes I can beleive what the ACA site tells me, some got burned with a increased
tax bill after signing up.

Monkey Uncle

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Re: Finessing FIRE plans + health insurance questions
« Reply #11 on: August 01, 2015, 04:25:30 AM »
This is good.  We're going to have a kids free night tonight and I would like to talk about goals.

The property taxes suck, but we so love our location, close to school, park, library, grocery.  And we have a well.  The next county over has lower taxes, but will have water problems for properties without wells.  I suppose I could keep an eye on the communities next door, but we are so settled here.  Where do you get $900 year taxes?

I pay about that much in property tax on a 2,600 sf $150k house in West Virginia.  It's a beautiful place, no traffic or other city/suburb hassles.  Generally low COL except for groceries (not many choices, so not many bargains to be had).  But its only for those who have no kids in school and don't need a job.  In most US localities, property tax is the primary funding mechanism for schools, so generally any place that has super-low property taxes also has super-sucky schools.  And you can't just decide you're going to move here (or any similar LCOL area) and find a decent job.  They simply don't exist unless you're a doctor, lawyer, or federal employee.

Edit:  Actually, if you're a plumber, carpenter, electrician, roofer, HVAC contractor, or similar tradesman, and you're willing to 1) answer your phone messages, 2) give an accurate quote and stick to it, 3) show up when you say you're going to show up, 4) do a good job, 5) finish the job, and 6) finish the job on time, you can probably move here and get all the work you want!
« Last Edit: August 01, 2015, 04:58:52 AM by Monkey Uncle »