NA - Retirement recon? NA

[Matthew]

The gap I always look at is the time where I am between my current health insurance and Medicare.

Every year I postpone retirement is one more year I don't have to come up with approx $2k/month (with no subsidy) for an ACA plan.

I have about 7 yrs before Medicare, 7*12*2000 = $168k in today's premium dollars.

So my early "retirement" might consist of working to offset those premiums.

 

[wayne]

The gap I always look at is the time where I am between my current health insurance and Medicare.

Every year I postpone retirement is one more year I don't have to come up with approx $2k/month (with no subsidy) for an ACA plan.

I have about 7 yrs before Medicare, 7*12*2000 = $168k in today's premium dollars.

So my early "retirement" might consist of working to offset those premiums.

That's something I'm concerned about as well. My wife will be covered for the gap while I'm still working, but if I retire before 65 there won't be anything other than getting coverage on the open market. Right now I'm planning on retiring before 65, so.....

 

[weilke]

So my early "retirement" might consist of working to offset those premiums.

That job doesn't have to be in your main career. Some public employers give you access to employee health plans with lless than .5 FTE.

 

[wayne]

Well 10% would be great. @EdFred could get 3 figures for a cool million (before inflation).
Yet on the conservative side, say 4%, that's going to take 2.5 million. Quite a stretch for most homies.
Lest ye include social security, then it drops, but if you add inflation...

I typically run models from 6-8%; more frequently at 8% (I'm optimistic and a bit aggressive on my investing ). Until Facebook and other tanked recently my 401k (at work, versus the rest from prior jobs) was up ~10% YTD; it was waaay up last year. Even still it's up 7.6% and the market is currently in the green so far today.

 

[Everskyward]

The gap I always look at is the time where I am between my current health insurance and Medicare.

Every year I postpone retirement is one more year I don't have to come up with approx $2k/month (with no subsidy) for an ACA plan.

I have about 7 yrs before Medicare, 7*12*2000 = $168k in today's premium dollars.

So my early "retirement" might consist of working to offset those premiums.

That's a problem for me since my COBRA runs out in November. However, I was not going to stay around just for the heath insurance. I'll bite the bullet and pay whatever it is. I will only have about 3 1/2 years to go until medicare, though.

 

[SoCal RV Flyer]

9.5 years till Medicare for me. Fortunately, I'm very healthy so I have a minimal policy with a $6K deductible for the catastrophic event that might come up. The upside is that with current meager income it's $1/month after subsidy. Not to veer too much into politics, but Obamacare allowed me to get a policy despite a pre-existing condition (a one-time pleuritis issue that cropped up...treated with Advil! But it was enough to be denied coverage from the insurance bastages).

 

[paflyer]

That's something I'm concerned about as well. My wife will be covered for the gap while I'm still working, but if I retire before 65 there won't be anything other than getting coverage on the open market. Right now I'm planning on retiring before 65, so.....

Before 2009 this wasn't a major expense.

 

[Matthew]

That's a problem for me since my COBRA runs out in November. However, I was not going to stay around just for the heath insurance. I'll bite the bullet and pay whatever it is. I will only have about 3 1/2 years to go until medicare, though.

You might find that your COBRA and ACA premiums are pretty close to each other. But your deductible might be a lot higher. Dunno.

I went onto the website and just put in zip, age, non-smoker, male. I think those are the only 4 questions allowed to be asked. I also entered my wife's info. I put in a current income as a baseline and ended up seeing quotes between $1800 and $2300/month depending on deductibles.

My guess is premiums will go up each year because of our ages and because of inflation.

A few months ago I played around with several income numbers and found something interesting (I should do it again today, but feel free to try it yourself and see if you can replicate it). There is a certain income point where you will go from full premium to subsidized premium. It isn't linear, either. You can be $1 above the limit and pay the full premium or at or below the limit and get the subsidy. I tried several different income levels and it always seemed to be an all or nothing. So $1 above the limit and we get charged $2k/month and at or below the limit and it's subsidized down to $50. Maybe I did something wrong, but I remember that's what I saw.

 

[charheep]

My current plan is to quit here when I turn 50 and find work doing a second life type of thing. The stress and responsibility is pretty draining. I would love to take a week vacation and not have to carry a work phone. So second life job would be something that would allow that. Then work until about 62. That would get my kid out of college and have time to pay off all debts.
At that point I would have options to do what makes the most sense. My dad retired around 50 and stood up some small businesses and worked when he wanted. I kinda want that freedom and get away from a 9-5 job with a constant tether (emails). I dont fear that I will become sedentary, my biggest deciding factor will be health insurance payments.

Not much to add to the conversation, but its nice to type it out (for me at least)

 

[Matthew]

Are there any airport jobs (I'm not an instructor) that seem like a decent retirement gig? Line service seems like a young person's job.

 

[Everskyward]

You might find that your COBRA and ACA premiums are pretty close to each other. But your deductible might be a lot higher. Dunno.

I went onto the website and just put in zip, age, non-smoker, male. I think those are the only 4 questions allowed to be asked. I also entered my wife's info. I put in a current income as a baseline and ended up seeing quotes between $1800 and $2300/month depending on deductibles.

My guess is premiums will go up each year because of our ages and because of inflation.

A few months ago I played around with several income numbers and found something interesting (I should do it again today, but feel free to try it yourself and see if you can replicate it). There is a certain income point where you will go from full premium to subsidized premium. It isn't linear, either. You can be $1 above the limit and pay the full premium or at or below the limit and get the subsidy. I tried several different income levels and it always seemed to be an all or nothing. So $1 above the limit and we get charged $2k/month and at or below the limit and it's subsidized down to $50. Maybe I did something wrong, but I remember that's what I saw.

COBRA is about $450/month. ACA (Covered California around here) would double that, for a higher deductible. I looked at the subsidy level and don't think I would fall under it since they count all income, not just earned income.

 

[Matthew]

COBRA is about $450/month. ACA (Covered California around here) would double that, for a higher deductible. I looked at the subsidy level and don't think I would fall under it since they count all income, not just earned income.

Your COBRA is pretty low, then. I think I'm so used to paying a family or employee/spouse premium that I forget a single can be quite a bit better.

For ACA, I think yours is about what I'm seeing here, roughly $1k per person at our age.

 

[Skip Miller]

When I have enough put away to maintain a six figure income without touching the principle

Principal. But if she (or possibly he) files a sex harassment complaint don't blame me!

-Skip

 

[asicer]

Are there any airport jobs (I'm not an instructor) that seem like a decent retirement gig? Line service seems like a young person's job.

On the other hand, if the FBO also rents planes you could get some discounted flight time. Maybe you can work out a deal with your coworkers: "You take the high wings and I'll take the low wings."

 

[weilke]

Are there any airport jobs (I'm not an instructor) that seem like a decent retirement gig? Line service seems like a young person's job.

Unless you work for a big outfit like Signature, line service is not likely to come with access to employee health insurance. It's a young mans job because it doesn't pay well and and folks move on eventually. If you only do it for entertainment and bennies, I dont see how age is a limitation.

I paid my way through college driving a taxicab at night. I always envied the shuttle bus driver for the Holiday Inn as he could sit at the airport and read the newspaper just waiting for the air crews and his paycheck would show up regardless of how many trips he did in a day. I always threaten my wife that once I am done with my career, I'll just drive the shuttle for the Radisson. There are lots of things you can do if you dont have any ambition to turn it into a career. Back when I drove a cab, I knew a couple of folks who could have lived off their investments/rentals/farmland but chose to drive anyway.

As for the line job. Chatted with a FBO operator somewhere in a small town in VA. He mentioned an anecdote when some years before an owner flown citation pulled up at the FBO and the pilot instructed the 'lineman' who was sitting on a bench in front of the FBO to move his luggage to the rental car. The 'lineman' did as told, gracefully accepted his $2 tip, walked over to his S-class and drove back to his cardiology office for the afternoon patients.

 

[Matthew]

Unless you work for a big outfit like Signature, line service is not likely to come with access to employee health insurance. It's a young mans job because it doesn't pay well and and folks move on eventually.

By "young", I meant the physical aspect of it. I'm not sure how well this guy is going to function when fueling and moving things around the ramp in <0F or >100F wx, multiple times a day.

 

[Doug F]

The thought of retirement scares the crap out of me -as someone rapidly approaching the Medicare age who largely defines himself by being useful- since it's official notice that you will be dead soon, possibly following a long period of declining health and mobility.

Everybody dies. When...who knows? My folks are nearly 90 and doing great for being that old. You could have 5 years or 35 years. Live like you have 35, deal with the aches and pains, and stay busy. I'm 64 and had the same kind of discussion with myself. Even 30 years is going to go fast so I'm trying to cram in the fun stuff early and then drop my activity level as required. I'm just gonna ride that slide to the end on a greased sled!

 

[Piperonca]

“Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming "Wow! What a Ride!”

― Hunter S. Thompson

 

[weilke]

By "young", I meant the physical aspect of it. I'm not sure how well this guy is going to function when fueling and moving things around the ramp in <0F or >100F wx, multiple times a day.

A good reason to stay in shape. Most of what I see the linemen do at HEF involves a fuel truck or a tug. Sure, there is a physical aspect to it, but its not like working as a baggage loader at ATL.

 

[Sundancer]

Does your agency use contractors ? I live in Fed-land and everyone who retires seems to go back as contractor for a couple of years (before they move to North Carolina).

They ALL use contractors! I thought about it, but I'd have to change jobs, and it just isn't worth it to me for one year. Though I do plan to bolt to NC . . .I really don't know anyone planning to stay in the DC area after retiring, though some don't move as far as NC. DC metro area taxes, traffic, cost of living, cost of housing, algebraically summed, are about the worst in the country.

The common theme I'm reading here is there isn't much regret by the folks who packed it in, made a clean break.

 

[yetti]

Are there any airport jobs (I'm not an instructor) that seem like a decent retirement gig? Line service seems like a young person's job.

I am a couple months into wildland fire training and working on my Pack Test. Pack test is a good metric for staying fit. While those are not needed for this job, it would help. I am sure the PPL will also help. https://www.usajobs.gov/GetJob/ViewDetails/503409300

 

[ColoPilot]

“Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming "Wow! What a Ride!”

― Hunter S. Thompson

Hmm, an interesting quote from someone who killed themselves at 67...

 

[ColoPilot]

I am not close t retirement (unless I come across the winning lotto ticket), but it is the inflation piece that would concern me. If you retire this year with $100,000/year in retirement income, with 3% inflation you'll need almost $250,000/year for equivalent purchasing power after 30 years. That's requires a lot larger nest egg or better returns.

 

[weilke]

They ALL use contractors! I thought about it, but I'd have to change jobs, and it just isn't worth it to me for one year. Though I do plan to bolt to NC . . .I really don't know anyone planning to stay in the DC area after retiring, though some don't move as far as NC. DC metro area taxes, traffic, cost of living, cost of housing, algebraically summed, are about the worst in the country.

Well, I live on the cheap side of DC. Can't complain about traffic or even cost of real estate.

I would not limit the perspective to a year. Contractor work is based on well contracts ;-) If you are not young and hungry you can choose to some extent which ones you do. Some of the fed retirees who have absconded to NC or FL either do some of their work remotely or during 1 and 2 week stints in VA with a hotel paid for by the company. Particularly if you hold a clearance, rates for contractor work can be quite favorable compared with what you get as an employee. You may not have to work all that much to make it worthwhile to make some beer or flying money.

The common theme I'm reading here is there isn't much regret by the folks who packed it in, made a clean break.

There may be a bit of a selection bias. Nobody is going to write ' I retired 5 years ago, gained 40 lbs, my money is running low and I'll have to stop flying' on a pilots forum.

 

[weilke]

I am a couple months into wildland fire training and working on my Pack Test. Pack test is a good metric for staying fit. While those are not needed for this job, it would help. I am sure the PPL will also help. https://www.usajobs.gov/GetJob/ViewDetails/503409300

How open are those management jobs to someone not already tied into the federal wildland firefighting world ?

 

[Rushie]

I "retired" many years ago to be a stay at home mom. Kids grew up and moved out, the dogs died, and I found I had no purpose in life so I became an independent consultant. Absolutely love it. I plan to do it until I no longer function cognitively.

 

[chemgeek]

Out of curiosity, at what avg. return rate would you use for calculation?
Some say 4%, some 5, 6, or 8.
It seemed Dave Ramsey was pushing a whopping 12% at one time.
When I thought of anyone retiring with that expectation, all I could do was gulp.

A spending rate of 4% is currently typical to ensure you won't run out of money during your lifetime, but this could vary slightly depending on your retirement age and portfolio compidition. There is no reasonable scenario where spending 8% of your portfolio is sustainable today unless you plan on a very short retirement period. To forestall a negative sequence of returns issue, one should have an appropriately diversified portfolio of investments. A financial planner who acts as a fiduciary can help set up the appropriate strategy and is well worth the investment. Among other things a good planner will also know about optimizing tax exposure in retirement. This can make a big difference. Planning ensures a smooth transition to retirement.

If you can defer SS until age 70, you "earn" 8% per year in your payout, which is hard to beat right now. Not everyone can afford to do that, however.

 

[chemgeek]

Gross or net?

Income planning is different in retirement, as you are no longer saving for retirement, and are likely to be paying lower taxes. And you may have supplemental income from SS or part time work. On the other hand you may be paying a little more for health care prior to Medicare eligibility. A financial planner can be very helpful for figuring this out for the long term and optimizing tax issues. One often tries to maintain about the same take home income as before, depending on retirement plans. You might need more, might need less.

 

[wayne]

I am not close t retirement (unless I come across the winning lotto ticket), but it is the inflation piece that would concern me. If you retire this year with $100,000/year in retirement income, with 3% inflation you'll need almost $250,000/year for equivalent purchasing power after 30 years. That's requires a lot larger nest egg or better returns.

That's exactly why retirees need to still be invested for growth, especially so at the beginning of retirement.

You can see this on a good retirement planning graph. They show the savings amount growing early in retirement and then later finally going down. The overall goal is to have it not hit zero until after you die.

 

[Bill]

You can see this on a good retirement planning graph. They show the savings amount growing early in retirement and then later finally going down. The overall goal is to have it not hit zero until after you die.

That graph is the most important thing I want to see. Is there still money left at 90? Good!

 

[wayne]

If you can defer SS until age 70, you "earn" 8% per year in your payout, which is hard to beat right now. Not everyone can afford to do that, however.

The break even point for the payments is in the early to mid 80's. If your family lives longs, genes are the #1 indicator of your lifespan, then wait if possible.

I read an article recently that said that break point was only true for immediately spending the money. If the SS payments were saved early-on, i.e. you had some other income stream (you or spouse working, savings, other income), then the break even point was into your 90's.

Mostly you should file when you need the money. If your family lives long and you are in good health, then filing later can be beneficial financially.

 

[Chip Sylverne]

I "retired" many years ago to be a stay at home mom. Kids grew up and moved out, the dogs died, and I found I had no purpose in life so I became an independent consultant. Absolutely love it. I plan to do it until I no longer function cognitively.

A friend of mine did this, consulting to management. His business card just says "Expert".

 

[wayne]

Another investment vehicle is HSA; Health Savings Account. If you have a high deductible medical insurance plan you should also be able to save money in an HSA. HSA savings can be invested. The funds going into an HSA are pre-tax dollars. If spent on qualified medical expenses the withdrawals are tax free as well.

There are often significant medical expenses late in life.

 

[weilke]

Mostly you should file when you need the money. If your family lives long and you are in good health, then filing later can be beneficial financially.

And most of the money will be paid out at a point when you have little opportunity to spend it. You also have to trust the .gov not to curtail your benefit down the line through scams like 'means testing'.
Take it when you are eligible, use it to pay the tax bill on your house and keep your own investments until you need them.

 

[X3 Skier]

Probably the biggest surprise for me in retirement is the RMD’s from my Thrift Savings Account (sort of a Government 401k) and my IRA. So far, I have ended up with more money in the account each year after getting the RMD. Since RMD’s are supposed to result in zero at the end of your life expectancy, I guess I’m immortal.

Cheers

 

[weilke]

The overall goal is to have it not hit zero until after you die.

The goal is to hit zero the day before you have to go into the nursing home (while maintaining access to wealth not creditable for Medicaid calculations).

 

[wayne]

Probably the biggest surprise for me in retirement is the RMD’s from my Thrift Savings Account (sort of a Government 401k) and my IRA. So far, I have ended up with more money in the account each year after getting the RMD. Since RMD’s are supposed to result in zero at the end of your life expectancy, I guess I’m immortal.

Cheers

My Dad complains that the RMD is more than he and my mother spend in a year. They travel quite a bit, including international travel. So, he reinvests the extra amount. I like that. It means there's a very low chance that I'll have to fund their expenses late in life.

Now if I could just get him to put a Will and Living Will/DNR together.

 

[Skyrys62]

The overall goal is to have it not hit zero until after you die

The goal will be different based on a persons desires. Some, like myself and I believe @EdFred prefer to not touch our investment. For me, this means my children will get something when I'm gone...and that's important to me.

Makes it a heap harder to retire early though lol.
But as many have said, several folks retire only to end up working again later.
I doubt that will be me. I have many interests....a couple of very expensive ones dang it.

 

[Gerhardt]

I "retired" many years ago to be a stay at home mom. Kids grew up and moved out, the dogs died, and I found I had no purpose in life so I became an independent consultant. Absolutely love it. I plan to do it until I no longer function cognitively.

You're a girl? Am I the only one here who didn't know this?

Not that it matters, but I just keep mental notes on which pilots wear the bumpy flight jackets so I know when to suck in my gut when posting.

 

[weilke]

Probably the biggest surprise for me in retirement is the RMD’s from my Thrift Savings Account (sort of a Government 401k) and my IRA. So far, I have ended up with more money in the account each year after getting the RMD. Since RMD’s are supposed to result in zero at the end of your life expectancy, I guess I’m immortal.

Cheers

Wait for the next 2008/2009 and you'll project your death for early next fall.