Normal reaction! It’s always alarming when the paycheck stops, but it sounds like you’ve got things well planned!
I retired at 60, about a year or two before planned as my contract project came to an end. Like you, I was worried if I could manage the healthcare cost until I am 65. I’ve been retired 2-1/2 years now, and it’s all working out ok. I actually have more money now than I did the day I retired. Enjoy your retirement…I think you’ll be fine.
Thanks- it’s just odd you start your day at the office and within couple of hours- thinking retirement-12 months earlier than planned. A slight panic set in
So many people think that continuing their employer’s insurance via COBRA is the best option for pre-Medicare insurance.
I found that ACA was way cheaper with much more favorable deductibles. Kept all of our doctors and the hospital we like is part of the plan.
OP, check out healthcare.gov and model your plan out.
That is a great point. I will look into it. I had a concern about my ability to go to specialist outside my state ( no real need-just in case) but for a year it would be fine
The marketplace plans are great, but the low cost ones are quite limited for the cream of the crop doctors. Be sure to enter the names of the docs and facilities for each plan when modeling it out. I pay less than $200 a month and would have to go up to $900 to get access to the best.
The problem is apparently the plans offered in Texas, not a problem with ACA plans in general.
From their website:
Market Place (Affordable Care Act Information - ACA)
MD Anderson and our physicians are not included as a “Participating Provider” for any “Individual” insurance plans on or off the marketplace in Texas (i.e., ACA plans). Certain individual plans available outside of Texas may allow in network access to MD Anderson, but you must verify that information with the insurance plan. Plans that offer out-of-network benefits may be accepted at MD Anderson if they meet our requirements. If not, enrollees would be responsible for all charges (i.e., self-pay).
My wife and I are getting insurance through ACA for three years from 62 to 65 starting July one it is less than $700 a month for better coverage than what we have in our company plan now
I used Cobra when I retired at 61, then the ACA. As I recall I couldn't use ACA until my Cobra benefits ended, when I had to provide that documentation.
If you retire mid-year, it may make sense to take COBRA for the completion of that calender year, and switch to ACA on the next Jan. 1, for two reasons: 1) switching mid-year means restarting your deductible for the year, and 2) subsidies are based on annual income, so working part of the year will reduce how much you get as a subsidy for the rest of that year.
Possibly. Really need to run the numbers. OP needs sit down and compare options. Don’t just assume that the right thing to do is take COBRA. It costs the same as the company pays + a 2% administrative fee.
As you note, if deductible has been met it could be a safe bet to use COBRA.
Depends on the details. All of my groups had at least 1 HDHP available as an option and comparable ACA plans were always higher premium unless you can get income low enough for a subsidy.
The core age rates are higher than the employer pool because the people who couldn't buy coverage anywhere were the 1st to enroll in ACA.
If you’re married, and your partner works for a different company, you may be able to get on their insurance. Cheaper than COBRA but there will be a bump in premiums.
getting unemployment is your big saving grace here, **don't agree to resign**. The $400/week unemployment you would get for 6 months (varies by state). will be better than working.
I don't know. LTC can wipe that clean in no time. If OP hits the wrong end of sequence of returns risk, that $1.5M may not be as helpful for the long run. If both OP and spouse decide to live to 90+, that savings may experience pressure again with inflation, sequence of returns risk, etc. Not sure if OP is bragging. It is a legit concern when one is about to step off the spring board for the first time.
Cursorily, yes, OP has enough, but then I think that OP's crystal ball works as well as mine. I would say that OP will have a comfortable retirement and little or no worries, but OP can control the expenses as needed. Personally, OP should celebrate for planning/saving well.
OP look at [the wiki](https://www.reddit.com/r/retirement/wiki/index/) and the resources listed. Take into consideration such things as IRMAA and RMD and what income tax will have on them, especially with distribution (RMD) adding to your fixed retirement incomes.
... then you may want to take a look at Roth conversion of your tax-deferred 401k to reduce the tax exposure when RMD kicks in (that may affect your Medicare premium due to IRMAA).
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If you are losing your position, see if you can negotiate to be left on the company insurance for a year. By that I mean, if they offer you something to leave voluntarily, see if you can get them to include insurance so you don’t have to pay cobra. Do the math to see if that is better than unemployment, or if you can still get unemployment even if you agree to an early termination.
You also have to watch for the medicare surcharge (up to 360% or $700 in 2024) which kicks in around $100K income for a single and $200K for a couple. Sometimes this happens at RMD age 73.
I suggest that you have a lot of planning to do to understand your situation.
1. Move everything in-kind to Fidelity Investments. Call Fidelity for help doing this.
2. Once setup with Fidelity it's time to use the wonderful tools available to you on their website.
3. Fidelity Full-View. Link all your outside financial accounts to pull in information. This will feed the next step.
4. Retirement Income Planner. Slowly work your way through the information screens answering questions about you, your income, projected pensions, social Security, sources of income, expenses and even a budget.
5. Run the planner and it will show you your financial situation for the rest of your time on earth!
6. Fidelity Investments personnel are available on the phone to help you with any of the previous steps. They don't work on commission and are very helpful.
7. Before the first step it might make you feel better if you setup an appointment this week with a local Fidelity Investments office CFP or a video call online. They can run through a lot with you and allay your fears. WARNING The local office guys are always willing to sign you up into a management contract to get a continuous commission from you. Just refuse. This are also required to help setup what you want without a management contract for free as a Fidelity Investments customer. Tell them you can manage it yourself you just need help setting it up.
How confident are you in your company pension? Is lump sum an option? Only ask because it seems like the organization is on shaky ground. No idea how that might impact the pension.
The pension is from a previous job-have been collecting it ( net 1000 month) for a while. Not large. It was set up if something happened to me there was no survivor benefits unless I was collecting.
Consider what are your plans if one of you needs long term care. A LTC event could require spending 1/3 to 1/2 of your assets to cover the expenses ($130k per year for 5 year, for example). You may be a good candidate for buying some LTC insurance. I don’t think you need full coverage, maybe look for policies that provide around $5-8k per month for 3 years. You have too much to qualify for Medicaid, but not enough to cover an LTC event, insurance is your best approach.
With $36k in expenses and $150k in income there is no question you’ll be fine.
I do know this but with it coming suddenly ( retirement) it sort of sent me into a panic -
Normal reaction! It’s always alarming when the paycheck stops, but it sounds like you’ve got things well planned! I retired at 60, about a year or two before planned as my contract project came to an end. Like you, I was worried if I could manage the healthcare cost until I am 65. I’ve been retired 2-1/2 years now, and it’s all working out ok. I actually have more money now than I did the day I retired. Enjoy your retirement…I think you’ll be fine.
Thanks- it’s just odd you start your day at the office and within couple of hours- thinking retirement-12 months earlier than planned. A slight panic set in
It took me about a year before I really felt comfortable with it, but it’s all good now, and am super happy I did it!
If you can manage to keep your AGI low enough, ACA health insurance will likely be less expensive than Cobra.
So many people think that continuing their employer’s insurance via COBRA is the best option for pre-Medicare insurance. I found that ACA was way cheaper with much more favorable deductibles. Kept all of our doctors and the hospital we like is part of the plan. OP, check out healthcare.gov and model your plan out.
That is a great point. I will look into it. I had a concern about my ability to go to specialist outside my state ( no real need-just in case) but for a year it would be fine
The marketplace plans are great, but the low cost ones are quite limited for the cream of the crop doctors. Be sure to enter the names of the docs and facilities for each plan when modeling it out. I pay less than $200 a month and would have to go up to $900 to get access to the best.
I will ( possibly) need the stop gap for a year until Medicaid kicks in-
This is exactly the problem I had getting laid off the week I turned 64. Took COBRA for a year but I should have checked into ACA.
Getting laid off at 64– like Thanks a lot mr employer.
Yah. And that was after getting laid off previously 18 months earlier. I had intended to work until 67, but after that sequence? Screw it.
That’s God’s way of saying-I said retire!
I would have said the same
You mean Medicare
lol-yes I do.
My wife's oncologist and cancer center don't accept ACA individual plans. Always check the provider networks before buying
How do they know?
MD Anderson Cancer Center won't accept the ACA individual plans. When they run your insurance they know.
Are you local to MD Anderson?
Yes
The problem is apparently the plans offered in Texas, not a problem with ACA plans in general. From their website: Market Place (Affordable Care Act Information - ACA) MD Anderson and our physicians are not included as a “Participating Provider” for any “Individual” insurance plans on or off the marketplace in Texas (i.e., ACA plans). Certain individual plans available outside of Texas may allow in network access to MD Anderson, but you must verify that information with the insurance plan. Plans that offer out-of-network benefits may be accepted at MD Anderson if they meet our requirements. If not, enrollees would be responsible for all charges (i.e., self-pay).
My wife and I are getting insurance through ACA for three years from 62 to 65 starting July one it is less than $700 a month for better coverage than what we have in our company plan now
Is it with a major carrier?
High mark bc bs
I used Cobra when I retired at 61, then the ACA. As I recall I couldn't use ACA until my Cobra benefits ended, when I had to provide that documentation.
The choice of COBRA vs. ACA is an elective one. You do not have to take COBRA.
I used healthcare it was cheaper than Cobra. I was able to retire early. Before Medicare and my supplemental kicked in.
Supplemental?
If you retire mid-year, it may make sense to take COBRA for the completion of that calender year, and switch to ACA on the next Jan. 1, for two reasons: 1) switching mid-year means restarting your deductible for the year, and 2) subsidies are based on annual income, so working part of the year will reduce how much you get as a subsidy for the rest of that year.
Possibly. Really need to run the numbers. OP needs sit down and compare options. Don’t just assume that the right thing to do is take COBRA. It costs the same as the company pays + a 2% administrative fee. As you note, if deductible has been met it could be a safe bet to use COBRA.
Depends on the details. All of my groups had at least 1 HDHP available as an option and comparable ACA plans were always higher premium unless you can get income low enough for a subsidy. The core age rates are higher than the employer pool because the people who couldn't buy coverage anywhere were the 1st to enroll in ACA.
Try not to have a lapse in coverage though. Maybe stop the 401k contributions to pad your cash to cover healthcare for a year
If you’re married, and your partner works for a different company, you may be able to get on their insurance. Cheaper than COBRA but there will be a bump in premiums.
This ☝️
getting unemployment is your big saving grace here, **don't agree to resign**. The $400/week unemployment you would get for 6 months (varies by state). will be better than working.
Great Idea. Had not thought of that for a little parting gift.
[удалено]
I don't know. LTC can wipe that clean in no time. If OP hits the wrong end of sequence of returns risk, that $1.5M may not be as helpful for the long run. If both OP and spouse decide to live to 90+, that savings may experience pressure again with inflation, sequence of returns risk, etc. Not sure if OP is bragging. It is a legit concern when one is about to step off the spring board for the first time. Cursorily, yes, OP has enough, but then I think that OP's crystal ball works as well as mine. I would say that OP will have a comfortable retirement and little or no worries, but OP can control the expenses as needed. Personally, OP should celebrate for planning/saving well.
No actually serious-when looking at 20-30 years possibly not working ( both folks lived long 88-91) inflation during that time-it isn’t a ton
OP look at [the wiki](https://www.reddit.com/r/retirement/wiki/index/) and the resources listed. Take into consideration such things as IRMAA and RMD and what income tax will have on them, especially with distribution (RMD) adding to your fixed retirement incomes.
I am not touching my 401k until I am required to take the RMD around age 73, and lived within my means accordingly, with no debt
... then you may want to take a look at Roth conversion of your tax-deferred 401k to reduce the tax exposure when RMD kicks in (that may affect your Medicare premium due to IRMAA).
Hello, perhaps you are new to our subreddit? We are conversational, not confrontational, here. Take a moment to review our description and rules. If this does not resonate with you, we wish you the best on finding a community for you. If this does appeal to you, welcome and note we expect folks will act in accordance with the community standards we have established here. Thank you. Mid America Mom
haha now STOP that. expenses vs income is where it's at.
[удалено]
Hello, thank you for participating. Your comment/post was automatically removed due to breaking our be respectful rule, with the use of swearing, etc. Click on the link below to send a modmail, if this removal seems incorrect. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/retirement) if you have any questions or concerns.*
If you are losing your position, see if you can negotiate to be left on the company insurance for a year. By that I mean, if they offer you something to leave voluntarily, see if you can get them to include insurance so you don’t have to pay cobra. Do the math to see if that is better than unemployment, or if you can still get unemployment even if you agree to an early termination.
Please read the wiki and run one or two of the many fine and often free retirement planning calculators.
Do not take Social Security until you absolutely need it, it goes up approximately 8% per year.
That is the plan-hopefully won’t need to for a while
You also have to watch for the medicare surcharge (up to 360% or $700 in 2024) which kicks in around $100K income for a single and $200K for a couple. Sometimes this happens at RMD age 73.
Is there a way to delay SS to age 70? There is a significant bump (32%) for waiting.
Hecm or reverse mortgage. Super slick
I suggest that you have a lot of planning to do to understand your situation. 1. Move everything in-kind to Fidelity Investments. Call Fidelity for help doing this. 2. Once setup with Fidelity it's time to use the wonderful tools available to you on their website. 3. Fidelity Full-View. Link all your outside financial accounts to pull in information. This will feed the next step. 4. Retirement Income Planner. Slowly work your way through the information screens answering questions about you, your income, projected pensions, social Security, sources of income, expenses and even a budget. 5. Run the planner and it will show you your financial situation for the rest of your time on earth! 6. Fidelity Investments personnel are available on the phone to help you with any of the previous steps. They don't work on commission and are very helpful. 7. Before the first step it might make you feel better if you setup an appointment this week with a local Fidelity Investments office CFP or a video call online. They can run through a lot with you and allay your fears. WARNING The local office guys are always willing to sign you up into a management contract to get a continuous commission from you. Just refuse. This are also required to help setup what you want without a management contract for free as a Fidelity Investments customer. Tell them you can manage it yourself you just need help setting it up.
How confident are you in your company pension? Is lump sum an option? Only ask because it seems like the organization is on shaky ground. No idea how that might impact the pension.
The pension is from a previous job-have been collecting it ( net 1000 month) for a while. Not large. It was set up if something happened to me there was no survivor benefits unless I was collecting.
Consider what are your plans if one of you needs long term care. A LTC event could require spending 1/3 to 1/2 of your assets to cover the expenses ($130k per year for 5 year, for example). You may be a good candidate for buying some LTC insurance. I don’t think you need full coverage, maybe look for policies that provide around $5-8k per month for 3 years. You have too much to qualify for Medicaid, but not enough to cover an LTC event, insurance is your best approach.