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Early Retirement (2006)

philip.greenspun.com

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Re: Early Retirement (2006)

#261

Post by jorblumesea »

lotsofpulp wrote: post #225
jorblumesea wrote: post #218

Earlier quoted context omitted.

Those premiums are significantly above what corporate employees pay. My premiums at my current and last job were way below those figures. Keep in mind "private employers" is a huge bucket and would encompass a wide range of companies, including smaller companies with likely small budgets. It is not reflective of many of the benefits many SWEs would get.

Again, I am talking about the total cost of insurance, not just the portion of the cost of insurance that an employer asks an employee to pay. Just because an employer is paying for $18k out of $20k of your annual health insurance premiums (again, check code DD box 12 of your W2), does not mean that health insurance costs (meaningfully) less for an employer. It is simply a portion of your total compensation, which bo…

I just think that's wrong. Private insurers pools are still less expensive, even if the employer was not going to pay some percentage of your premium. If you look at the plans that most large employers have (Microsoft, Amazon etc) their total premium cost is still far less. I understand what you're saying, it's just not correct for the vast majority of large company workers.

Your total private insurer cost is all of the US, which includes many small businesses which are on inferior plans. But for an swe, your total premium cost is far less (regardless of how much your employer chips in) due to the fact that your private insurer pool is filled with relatively wealthy, educated workers. Private mom/pop pool != private Microsoft/Amazon pool.

What you're saying is just...wrong...for most talented eng workers.

Re: Early Retirement (2006)

#262

Post by hintymad »

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…

Why is health insurance is a concern for early retirement? The platinum option of obamacare costs about $35K a year? Is it because the 10% copay can still mount to a huge expenditure because the healthcare in the US costs too much?

Re: Early Retirement (2006)

#263

Post by lotsofpulp »

jorblumesea wrote: post #261
lotsofpulp wrote: post #225

Earlier quoted context omitted.

Again, I am talking about the total cost of insurance, not just the portion of the cost of insurance that an employer asks an employee to pay. Just because an employer is paying for $18k out of $20k of your annual health insurance premiums (again, check code DD box 12 of your W2), does not mean that health insurance costs (meaningfully) less for an employer. It is simply a portion of your total compensation, which bo…

I just think that's wrong. Private insurers pools are still less expensive, even if the employer was not going to pay some percentage of your premium. If you look at the plans that most large employers have (Microsoft, Amazon etc) their total premium cost is still far less. I understand what you're saying, it's just not correct for the vast majority of large company workers. Your total private insurer cost is all of…

> If you look at the plans that most large employers have (Microsoft, Amazon etc) their total premium cost is still far less.

Is this data available somewhere? I cannot find anything specifically related to big tech companies, although I did acknowledge about there might be some slight advantage due to population. But many of these tech companies are huge with tens and hundreds of thousands of employees. I highly doubt Amazon, with 1.2M employees, most of them not highly paid software engineers that sit in chairs all day, has a risk pool that is materially less costly than any random healthcare.gov plan.

The only other way is if some people here employed by FAANG pipe in with what their W-2 says the employer paid portion of their health insurance costs were.

Re: Early Retirement (2006)

#264

Post by dasil003 »

beervirus wrote: post #82
rubicon33 wrote: post #78

Earlier quoted context omitted.

As a mid-30s software developer who is trying to save as much as possible, with the hopes of retiring before I'm old and deprecate, this really sucks to read. $2 million in investments AND a payed off mortgage and still, it doesn't pencil out to retire? Seems like over the past decade+ the 'value' of even $1 million has become more and more diluted. To support even just a middle class, to upper middle class lifestyle…

Inflation is very real, and it’s most apparent in home values right now. Even if you pay off your mortgage, your property taxes keep going up as values increase.

I agree with you in general, although I think the home prices probably overstate the case given the huge value transfer from commercial to residential real estate for work-from-home purposes. Not that I think we'll go back to anything like the pre-pandemic distribution, but it'll be interesting to see where it nets out when the dust settles in 4-5 years.

Re: Early Retirement (2006)

#265

Post by magneticnorth »

hintymad wrote: post #262
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…

Why is health insurance is a concern for early retirement? The platinum option of obamacare costs about $35K a year? Is it because the 10% copay can still mount to a huge expenditure because the healthcare in the US costs too much?

$35k a year is a lot if you don't have any income - at a 4% withdrawal rate that requires an additional $875k in savings to cover, and at most incomes it takes many years to save up that much (plus obviously all the years you work to save 1.5M for your $60k/year or whatever in living expenses).

There is also the fact of a 10% or however much copay, which will be a lot over time if you get a chronic illness (which would also reduce your ability to go back to work).

Additionally, most people expect healthcare costs to rise with age, so will want a buffer on top of what healthcare currently costs to cover future bigger expenses.

Re: Early Retirement (2006)

#266

Post by tejohnso »

showerst wrote: post #92
tejohnso wrote: post #47

Earlier quoted context omitted.

> unless you want to live like a single 24 year old your whole life. Controlling expenses and living a humble life style is pretty much the opposite of living like a single 24 year old. At least for me and most of the single 24 year olds I knew back then. It takes wisdom and maturity to realize that you don't need all that stuff. And if you can find a partner with the same outlook, you can certainly avoid spending te…

> It takes wisdom and maturity to realize that you don't need all that stuff This is _exactly_ what I take issue with. Look, "live below your means and be thoughtful about what spending will make you happier" is great advice. So is "plan for a future where you don't have to work". "Get a high paying remote job from a young age with no student loans, move somewhere cheap, actually find a partner there, don't dare find…

> Describing FIRE as easy and saying that anyone who fails to do it is somehow less wise or immature is nonsense peddled by a bunch of people who retired early by writing "how to get retire early" blogs.

I haven't heard anyone claiming it's easy or that any failure to do it is due to a lack of wisdom or maturity.

I think wisdom and maturity are required, but that's not all that is required. There's also a fair amount of discipline, and alignment with the tradeoffs, plus a good helping of privilege and luck.

> "Get a high paying remote job from a young age with no student loans, move somewhere cheap, actually find a partner there, don't dare find someone that makes teacher or non-professional salary or has health problems or student loans, wait until you're retired at 38 to have children, don't dare have kids with health problems or special needs, and lecture everyone else about how easy it is." is perhaps not the wise and mature advice you think it is.

That's not even close to what I claimed required wisdom and maturity to realize.

Re: Early Retirement (2006)

#267

Post by debug-desperado »

My retirement plan involves stuffing as much money into creditor-protected assets and then declaring bankruptcy if I get a huge medical bill. I see no alternative in today's world of "surprise" out-of-network charges.

The types of assets are protected in Texas: 1. 401k + IRA (plus Roth versions) 2. Home 3. Two vehicles 4. Permanent insurance (i.e. whole life / indexed universal life - not optimal unless you want to leave money to heirs)

Other states aren't quite as generous with the creditor protection, so check your state's laws.

Re: Early Retirement (2006)

#268

Post by jleyank »

xyzzy_plugh wrote: post #104
kache_ wrote: post #65

Earlier quoted context omitted.

My plan is: - Move to America, become rich - Move back to Canada, retire - Win :P

Just an FYI that if you avoid permanent US residency via green card or US citizenship you can potentially take advantage of a step-up of the cost basis of ALL your taxable assets when you move back to Canada, thus erasing any tax on the capital gains -- both short and long term. (In Canada, there is no distinction of short or long term gains). Assuming that you have little-to-no Canadian assets now, dispose of everyt…

If you’re Canadian, can’t you work on a TN visa? Thought this was renewable multiple times and had no credit for immigration…

Re: Early Retirement (2006)

#269

Post by jleyank »

MattGaiser wrote: post #62
cyberlurker wrote: post #49

Earlier quoted context omitted.

Do people in countries with universal healthcare not have this problem? What are the types of products and services that are so significant? Surely we aren’t talking about things like Netflix and utilities?

Depends on what is covered under universal health care. In Canada, doctors and hospitals are covered. But if you need a lot of drugs, you might need to keep working. You also need to budget for dental and vision, as those are also tied to employment agreements.

In Ontario, there is a provincial drug plan for 65+. I think Quebec has something similar. Ontario tried to extend it to all but the government change a few years back killed that.

Re: Early Retirement (2006)

#270

Post by isthis129283 »

flowerlad wrote: post #97
isthis129283 wrote: post #61

Earlier quoted context omitted.

I agree. But a material chunk of the $14M belongs to the government (not available for the individual to spend). If someone takes out a $2M loan at the age of 58, and retires at 59 (before any of it is paid back), do you think that should be money considered in a retirement calculation?

Any growth in the "government's portion" is yours until you sell. Also, if you sell after retirement the tax rate is going to be low if you don't have much non-investment income.

I agree it's yours until you sell. We are just debating semantics (does retiring with $14M mean retiring with $14M you can spend, or $14M minus taxes that you can spend).

Also, Capital gains is treated differently than ordinary income.

Your income tax bracket is irrelevant in determining your capital gains rate (at least for now).

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