Early retirement experiences?

CAinCA said:

In reply to wake74 :

I've been pretty happy with the Boldin Retirement Calculator. Every review I have seen gives it a positive rating too. 

https://www.boldin.com

Another advocate for Boldin (formerly New Retirement) here!  LOVE the analysis that it allows me to so, well beyond even the best spreadsheet that you might think you can create.  On top of that, there are a few Youtubers that have been very helpful as I plan my exit event from the day to day workforce - my favorite being Joe Kuhn.  He made the leap in his mid 50's, has ~ 6 years under his belt, and does a good job articulating his experiences along the way.  

einy (Forum Supporter) said:

CAinCA said:

In reply to wake74 :

I've been pretty happy with the Boldin Retirement Calculator. Every review I have seen gives it a positive rating too. 

https://www.boldin.com

Another advocate for Boldin (formerly New Retirement) here!  LOVE the analysis that it allows me to so, well beyond even the best spreadsheet that you might think you can create.  On top of that, there are a few Youtubers that have been very helpful as I plan my exit event from the day to day workforce - my favorite being Joe Kuhn.  He made the leap in his mid 50's, has ~ 6 years under his belt, and does a good job articulating his experiences along the way.  

From a quick look this morning, this is closer to what I'm looking for. Both my Fidelity and Vanguard accounts, allow some level of account compilation to determine Net Worth but neither does any trending or sophisticated forecasting. Only gives you a static snapshot and some level of generic (useless) forecasting.  I want something I can check in once a quarter, and not only see where I am at, but also how am I doing against the plan.  This will be a good project for next week's PTO.

Mid-50s is my goal, but we'll see.  One wild card is how much to carry in the forecast for health care insurance if I retire before 60.  $25k, $30k a year? Assuming I won't get any type of subsidy.

I'm not a big Youtube guy, but will  look up Joe Kuhn and watch a few.

cfiresim can do a lot of that too, while running over 100 simulations to compare against historical data and determine probabilities of failure.

kff.org has a decent ACA subsidy calculator that has been useful for my planning process ... link is below.  You might be surprised at what income levels you still currently qualify for a subsidy.

Health Insurance Marketplace Calculator | KFF

Vanguard has another good healthcare cost estimator in this link ... free to all, I have used it and do not have an account with them:

https://advisors.vanguard.com/advisors-alpha/health-care-cost-estimator/calculator

As a high end of the cost spectrum data point, if there is a way to get the current year's COBRA rates from your employer without raising suspicions, that is good to know.  You can use that as an (up to) 18 month bridge, worst case, and if that cost model works in your overall plan, groovy.

Hope these help!

einy (Forum Supporter) said:

CAinCA said:

In reply to wake74 :

I've been pretty happy with the Boldin Retirement Calculator. Every review I have seen gives it a positive rating too. 

https://www.boldin.com

Another advocate for Boldin (formerly New Retirement) here!  LOVE the analysis that it allows me to so, well beyond even the best spreadsheet that you might think you can create.  On top of that, there are a few Youtubers that have been very helpful as I plan my exit event from the day to day workforce - my favorite being Joe Kuhn.  He made the leap in his mid 50's, has ~ 6 years under his belt, and does a good job articulating his experiences along the way.  

I'm a big fan of Joe Kuhn too.

RX Reven' said:

In terms of drawing money from a Roth IRA to keep your income low enough to get good ACA subsidies.  As I understand it...

• Money converted in a year from a traditional IRA to a Roth IRA counts as income for purposes of ACA subsidy calculations during that year.
• There is a penalty for withdrawing from a Roth IRA within five years of making the contribution.
• The MAGI income limit before hitting the phase out level for contributing to a Roth IRA is 146K for singles and 230K for those filing jointly.

I don't believe the "backdoor" Roth IRA conversion option avoids the five year rule for penalties but am I missing something?

You are correct, backdoor Roth is not a strategy aimed at early retirement (though it can help with tax minimization). 

72(t) is the droid you're looking for, depending on your age.

Substantially equal periodic payments | Internal Revenue Service

The health insurance is the biggest challenge of this early retirement journey.  I had COBRA for 18 months which was expensive but worth every penny.  Now I have been forced to go to the marketplace because I can't get the same plan I had.  The coverage is not great, at least compared to what I had.  We did get some subsidy but not a lot.

I'm not a financial guy.  I don't understand Roth, IRA, etc...not all that familiar with how they work or even what they are.  I leave that to my advisor.  I've told him that while I don't want to blow my money and live in a cardboard box when I'm 70, I do want to be able to enjoy the fruits of my labor while I still can.  I don't want to be 70 and have a pile of money I can't do anything with because I'm too feeble.  I want to enjoy life while I still can.  That's the strategy we're working from.

einy (Forum Supporter) said:

kff.org has a decent ACA subsidy calculator that has been useful for my planning process ... link is below.  You might be surprised at what income levels you still currently qualify for a subsidy.

Health Insurance Marketplace Calculator | KFF

Vanguard has another good healthcare cost estimator in this link ... free to all, I have used it and do not have an account with them:

https://advisors.vanguard.com/advisors-alpha/health-care-cost-estimator/calculator

As a high end of the cost spectrum data point, if there is a way to get the current year's COBRA rates from your employer without raising suspicions, that is good to know.  You can use that as an (up to) 18 month bridge, worst case, and if that cost model works in your overall plan, groovy.

Hope these help!

Those were helpful  Thanks. Looks like $25k isn't too far off possible costs.

Health insurance is the primary reason I'm still working. I don't want to pay out $20k+ a year for what I currently pay less than $3k a year. Especially not for a large part of a decade.

That's one of the best benefits of being in the military reserves, access to Tricare and very affordably.  There'll be a few years I'll have to bridge between when I leave the reserves and when I get my retirement benefits.  I can stay on Tricare, just have to pay more.

Much of our situation is very similar to Duke's, but...

I trial retired earlier this year and returned to work part time when they asked. I made sure they know I'm only working til next spring and they need to be ready.

In the last year things have changed a lot. Our situation went from planning (hoping) to continue to live as we do through retirement,  spending a lot of time around the house, riding and camping, to the recent realization that we can actually make a big step up in comfort and lifestyle if we want. We started thinking about spending the cold months somewhere warm, and possibly buying another property.

With this realization I decided to take the whole family (we have two boys mid/late 30's) on vacation, because we could. While there I wanted to have a talk with our oldest son and his wife about how much money they've been spending lately, and make sure they're OK. Well, they gave us some very surprising, and positive news about her business. They said they're planning to sell it in about three years, and retire,  and have expressed an interest in moving somewhere warm full time. Hmm. It is entirely possible at this point that all of us could make a big move, and we may very well do that.

My life is a little upside down right now. In a good way.

In reply to Peabody :

Good for you and your family!

In reply to Peabody :

It's always good to hear stories like that when you constantly hear how many people are so very unprepared to retire. 

https://www.retirementsimulation.com
says 73% of simulations have me not going broke.

In reply to CAinCA :

Thank you.

In reply to alfadriver :

I'm naturally frugal, but we've almost always lived below our means with an eye to the future. Early retirement, we're a year older than the Dukes,  was looking good, but everything just seemed to come together in the last little while and we're in a place we never expected to be. The news from our son and his wife shocked us. We thought they were doing ok, but it looks like they're making in one year almost what we have saved for our entire retirement.

In reply to Peabody :

That's great!  Good for everyone in your family!

RX Reven' said:

In terms of drawing money from a Roth IRA to keep your income low enough to get good ACA subsidies.  As I understand it...

To be clear, if you are replying to me, I am barely not old enough to take money out of any IRA yet (without penalty).  I am converting regular IRA to ROTH IRA to show some income, both to have more ROTH for later and because if your income is too low, the ACA wants you to be on Medicaid.

• Money converted in a year from a traditional IRA to a Roth IRA counts as income for purposes of ACA subsidy calculations during that year.

Yes.

• There is a penalty for withdrawing from a Roth IRA within five years of making the contribution..

Yes.  I do not plan to use the newly-converted ROTH money until 5 years after it is converted.

• The MAGI income limit before hitting the phase out level for contributing to a Roth IRA is 146K for singles and 230K for those filing jointly.

I don't believe the "backdoor" Roth IRA conversion option avoids the five year rule for penalties but am I missing something?

I don't think you can avoid the 5-year rule.  A "backdoor" ROTH as I understand it is just contributing to a regular IRA (because you can't to do a ROTH because of some rule) and then converting it all to ROTH at the end of the year.

In reply to Peabody :

Is your son hiring? Lol