Early Retirement (2006) • Hacker News Board

Re: Early Retirement (2006)

#201

Post by granshaw » Wed, Aug 04, 2021, 4:55 PM UTC

cfeduke wrote: post #29

The greatest expense for me in retirement is now health insurance so it makes sense for me to instead work for insurance coverage and put my wealth towards an inheritance for my children. I used to naively believe once I paid off my mortgage, had a substantial retirement account and savings - a couple million dollars - I'd no longer work. It's also very difficult to get off of the treadmill of spending a lot of money…

Have you tried to get a < 40 hrs/wk full-time job, to get the benefits but do less hours? If so, how has that been?

Re: Early Retirement (2006)

#202

Post by throwaway894345 » Wed, Aug 04, 2021, 4:57 PM UTC

marktangotango wrote: post #36

cfeduke wrote: post #29

The greatest expense for me in retirement is now health insurance so it makes sense for me to instead work for insurance coverage and put my wealth towards an inheritance for my children. I used to naively believe once I paid off my mortgage, had a substantial retirement account and savings - a couple million dollars - I'd no longer work. It's also very difficult to get off of the treadmill of spending a lot of money…

This is the reality of the situation; until you're eligible for (edit) medicare, health is a significant expense. When paired with the "hedonistic treadmill" of spending, early retirement takes a lot more investment than many suspect. Even at a safe withdrawal rate of 4%, $2M is "only" $80k a year. You're not driving around in Ferrari's and eating caviar on that (parodying a rich lifestyle here). Of course there are…

> When paired with the "hedonistic treadmill" of spending, early retirement takes a lot more investment than many suspect. Even at a safe withdrawal rate of 4%, $2M is "only" $80k a year.

Right, which is why people should save 10-15% starting from a young age.

> Even at a safe withdrawal rate of 4%, $2M is "only" $80k a year.

That's quite a lot more than the median household income and by the time you're withdrawing your retirement that $80K is purely spending money--your house should be paid off and you're not setting 15% of that $80K aside for retirement any more. $80K/year is a lot of spending money to most people.

> You're not driving around in Ferrari's and eating caviar on that (parodying a rich lifestyle here). Of course there are levels, and one could live modestly in a LCOL area on that, but that's not what most people have in mind. Particularly for a "millionaire".

The meme of a millionaire driving Ferrari's and eating caviar is dated due to inflation. Most people with any real-world experience with money (including my no-higher-education, blue-collar family) understand that millionaires don't live like that these days due to inflation.

Re: Early Retirement (2006)

#203

Post by lotsofpulp » Wed, Aug 04, 2021, 4:58 PM UTC

jorblumesea wrote: post #197

lotsofpulp wrote: post #180

Earlier quoted context omitted.

They are not that different in my experience. The same metal level plan on healthcare.gov are pretty similar to what employers will be offered by the insurance companies. There might be some savings for those working at white collar firms with younger employees like tech and finance and law, but that will not apply to most people in the US. Your portion of the insurance premium was $0 to $50 per pay period via your e…

They are significantly different if you see the plans and the network you're in. Just look at the costs for the plans I linked above. It's really not the same, or even close. Let's take one of the more popular plans on the exchange for Washington state. https://www.insurance.wa.gov/rates/bridgespan-health-company... https://www.insurance.wa.gov/sites/default/files/2020-09/bri...

Those premiums look the same as those for employer sponsored health insurance:

https://www.statista.com/statistics/632151/premiums-for-empl...

https://www.commonwealthfund.org/sites/default/files/2020-11...

https://files.kff.org/attachment/Summary-of-Findings-Employe...

Re: Early Retirement (2006)

#204

Post by throwaway894345 » Wed, Aug 04, 2021, 4:59 PM UTC

ryandrake wrote: post #68

marktangotango wrote: post #36

Earlier quoted context omitted.

This is the reality of the situation; until you're eligible for (edit) medicare, health is a significant expense. When paired with the "hedonistic treadmill" of spending, early retirement takes a lot more investment than many suspect. Even at a safe withdrawal rate of 4%, $2M is "only" $80k a year. You're not driving around in Ferrari's and eating caviar on that (parodying a rich lifestyle here). Of course there are…

Will $80k a year be enough for any lifestyle? That's the question I struggle with. It's more than enough in today's dollars. But I have no idea what will happen with inflation and costs between now and retirement day. Maybe by the time I retire, $80k/yr will be poverty level. Maybe health insurance premiums alone will cost $80k/yr. Who knows! What will the value of the dollar be and to what extent will healthcare cos…

By the time you're withdrawing, your house should be paid off and you no longer need to save anything for retirement so that $80K is all spending money. Further, you're collecting social security and a good chunk of your healthcare is covered by medicare.

Re: Early Retirement (2006)

#205

Post by handrous » Wed, Aug 04, 2021, 5:00 PM UTC

lotsofpulp wrote: post #189

handrous wrote: post #181

Earlier quoted context omitted.

> Not sure what you mean by "annual risk". Do you mean out-of-pocket costs? Yeah, max out-of-pocket per year. Something like ~$24,000 family / $12,000 individual on our ACA plans. Gold and Silver ACA plans are basically identical in this state, you're just guaranteeing you pay more in premiums with Gold (so, in a bad year, the totals work out about the same, but in a good year the Gold is more expensive). We have exa…

https://www.healthcare.gov/glossary/out-of-pocket-maximum-li... > For the 2021 plan year: The out-of-pocket limit for a Marketplace plan can’t be more than $8,550 for an individual and $17,100 for a family.

Yep, just checked, you're right, that's gotten a fair bit better, matching your numbers.

Re: Early Retirement (2006)

#206

Post by UnpossibleJim » Wed, Aug 04, 2021, 5:01 PM UTC

gfiorav wrote: post #86

UnpossibleJim wrote: post #35

Earlier quoted context omitted.

I had a similar situation. I worked hard and went back to school and became a professional artist. I was paid decently, but ended up never drawing or painting for myself. I hated it. It took me close to a decade to start liking the process of creating visual arts again, and even then it was tentative. I read something not all that long ago that I wished I had read when I was much younger. "Make something you like you…

I took me 10 years to buy an MPC again. And I barely touch it. The scars are real. A couple good things though: - I can finally listen to music without overanalyzing it. Which is to say I can now enjoy music. - I find a lot of ways to use creativity in my job, and has given me an edge thus far (or so I think).

I do think the fast ideation strategies I learned in art school definitely help me in software development, as well as not becoming overly attached to my children and accepting criticism. There are, for sure, many wonderful lessons to be learned in creative classes that cross over. I haven't been to a "Code Camp", but I have to imagine that this form of purely technical training (on its own) would have its down sides (though, I only have a liberal arts education as well, who stumbled into a technical field because of my hobbies).

Re: Early Retirement (2006)

#207

Post by EvanAnderson » Wed, Aug 04, 2021, 5:03 PM UTC

handrous wrote: post #205

lotsofpulp wrote: post #189

Earlier quoted context omitted.

https://www.healthcare.gov/glossary/out-of-pocket-maximum-li... > For the 2021 plan year: The out-of-pocket limit for a Marketplace plan can’t be more than $8,550 for an individual and $17,100 for a family.

Yep, just checked, you're right, that's gotten a fair bit better, matching your numbers.

But that's still on top of premiums. My last year on an ACA "Silver" family plan (2019) was just shy of $20,000 in premiums w/ a $13,500 family deductible.

Re: Early Retirement (2006)

#208

Post by BeetleB » Wed, Aug 04, 2021, 5:04 PM UTC

cyberlurker wrote: post #56

flowerlad wrote: post #44

Earlier quoted context omitted.

> The greatest expense for me in retirement is now health insurance Obamacare changes that. If you don't have much income you get ACA federal tax credits.

If you withdraw from a 401k, doesn’t that become taxable income? I’m assuming if someone takes enough out per year to hit $50k+ they will reduce their federal credits to zero.

> If you withdraw from a 401k, doesn’t that become taxable income?

Currently, if you're married, the first $24K or so is tax free. If you're in California, there are plenty of credits/deductions, so it's likely more than $24K.

Also, you can have a 401K Roth, where all withdrawals are tax free.

Re: Early Retirement (2006)

#209

Post by lotsofpulp » Wed, Aug 04, 2021, 5:06 PM UTC

EvanAnderson wrote: post #207

handrous wrote: post #205

Earlier quoted context omitted.

Yep, just checked, you're right, that's gotten a fair bit better, matching your numbers.

But that's still on top of premiums. My last year on an ACA "Silver" family plan (2019) was just shy of $20,000 in premiums w/ a $13,500 family deductible.

Health insurance premiums are a tax, not actual insurance premiums priced to one's own health risks.

The Affordable Care Act stipulates various terms which result in young and/or healthy people explicitly subsidizing old and/or unhealthy people:

1) only age, location, and smoking status are able to be taken into account for pricing. And everyone must be offered insurance (i.e. no exclusions for pre existing conditions)

2) age rating factors - premium for costliest person (64 years old) must be at most 3x those of least costly person (21 to 24 years old)

3) out of pocket maximums

Re: Early Retirement (2006)

#210

Post by DickingAround » Wed, Aug 04, 2021, 5:06 PM UTC

"In olden times, the average person didn't expect to be happy" - I don't think that statement is supported by any evidence or logic. People are happy sometimes even when they're food-scarce. Only the dead are truly never happy.

Similarly, the concept of 'pursuit of happiness' then referenced was a sort of adaptation of the 'right to property'.

Perhaps this article would be stronger with a deeper research into history of people a few hundred years ago, or philosophy of work/life at that time.