Healthcare insurance is where we caught a major break allowing us to retire before we could get on Medicare. Since my wife worked for our local city, she was allowed to stay on their plan as part of her retirement package. Since I was also on the plan, we are paying less than $300 a month for great insurance through BCBS. When she hits 65 early next year, the rate for me goes up to around $500 a month, still much cheaper than what I could find through the exchange.
Retirement Targets
- Thread starter yowza
- Start date
We’re planning around retirement income of 60% of our current income.
The other reason these simple rules aren’t very helpful for retirement planning, is that most people have there income vary quite dramatically over the 30-40 years they’re working. So the ‘percentage of income’ can vary wildly depending on what time period one uses as a reference
You’re not exaggerating health care if you are married. Two years ago, before we went on Medicare, we paid $1500 per month for health insurance. Plus, we paid for deductibles, copays, prescriptions, etc.
Medicare For All. That is what we need.
If you retire early you should be able to structure your taxable income (roth ladder, 72-t, large after tax brokerage) to be low income enough to get free or nearly free insurance through exchange subsidies.
That is the wifes plan, in a couple years. I will be on medicare and she will retire at 62. Or she can keep working if she changes her mind.
60-65 is tricky time. It's great time to make your income look low for those types of discounts. On the other hand, it's a great time to do roth conversions at super low rates.
Just have to run the numbers to see what is the bigger lifetime benefit. Tax savings at RMD time or medical insurance discounts from 60-65. I plan to split the difference and do smaller Roth at top of lower tax bracket. As stated earlier, this is where New Retirement software can really be a help.
I really like that software but it doesn't factor in ACA discounts. It would be pretty hard for it to factor in those discounts, since they range widely.
Food/Dining out. Is that a combo of grocery's and dining out? Or, just dining out?
Combined and just a total guess. Now that I look at my actual spending, that's way under what we spend now on a combo of groceries, restaurants, and alcohol. Probably closer to 12k, which is sort of embarrassing. I may have to start drinking Coors.
For ACA comparisons, I have no idea. For retirement modeling/planning, I highly recommend Newretirement.com. It is $120/yr.
How do you factor in inflation? Income needed 10-20 years from now will certainly be higher than now.
Cyclonepride
Thought Police
If you are investing, putting your funds somewhere to create funds, they should handle the inflation factor. I always take what I estimate for my income at retirement and factor in 2.5 percent annual inflation.
SS has a COLA. That certainly helps. Investments like farmland or rental property should yield income that grows with inflation. Asset value would rise as well with inflation.
Money and stocks would be most harmed by inflation. Diversified assets of real property and financials is best.
Currently my scenarios give me a 4% yearly raise for inflation
