retiring

[Travelover]

At age 50, you can safely withdraw about 3% of your initial principal yearly, adjusted upward yearly for inflation assuming your investments are 50/50 stock and bonds. So, figure out your yearly spending including health care (HealthSherpa.com for costs in your area), subtract off any pensions or Social Security and that leaves what your investments need to contribute. There are a number of free online calculators that allow more detailed input. I like the one at Fidelity. Another good one is FireCalc.

 

[polkwrangler]

I will be selling my house and land central florida has become one big development ,very little debt land is payed off ,thinking of buying area of north florida near Georgia ,close to 1 million in assets,like oosik said leave the rat race,i will find something on the side that I would enjoy

 

[KennyG]

Medicare had some changes when Obamacare came in which mainly seemed to be designed to help fund the expanded coverage under Obamacare. However, it wasn't a lot. What most people who aren't on Medicare don't understand is that it isn't free and the coverage isn't so great. That's why most people need either an Advantage plan (like an HMO) or a Supplemental plan (like a BC/BS PPO plan). This will typically add about $4000 a year to the Medicare cost of $1500 to $2000 per year. Not a great bargain when you look at what you've paid in for the last 40 years or so.

If you retire before Medicare, you will go to the marketplace and pay something like 11,000 to 12,000 for one person for a relatively high deductible insurance package. It can be more or less with other coverage plans. Even if you wait until you are Medicare eligible, if your spouse is under 65 you will have that cost in addition to Medicare. The only way to game the system is to arrange your finances such that you can minimize income and get the Obamacare subsidy. That can reduce the Obamacare cost from $12k to $2k or $3k. However, you have to be able to live off assets and minimize (hide?) your income.

Health care is clearly the biggest issue to consider in retirement. Reduce costs? Not going to happen and I don't think I want it to. If you look critically at health care around the world, the only way to substantially reduce costs is to reduce care and lower the pay of the people who provide that care. I don't like the idea of being put on a waiting list to be cared for by minimum wage workers.

 

[coobie]

I will be selling my house and land central florida has become one big development ,very little debt land is payed off ,thinking of buying area of north florida near Georgia ,close to 1 million in assets,like oosik said leave the rat race,i will find something on the side that I would enjoy

1 million is NOT enough at age 50.Any health care benefits? Pension??

 

[goeduck]

I will be selling my house and land central florida has become one big development ,very little debt land is payed off ,thinking of buying area of north florida near Georgia ,close to 1 million in assets,like oosik said leave the rat race,i will find something on the side that I would enjoy

$1M in asssets before or after selling your land? If before, how much do you expect to get off of the sale? Sounds like you made a good inverstment in the land, good for you!

I agree that $1M total is not enough unless there is other income.

 

[MossRoad]

To clarify, my parents are on Medicare, but their retirement had a supplemental coverage that was to pay for additional things like prescriptions, dental and eye care. When Obamacare passed, they where dropped from this additional coverage that they had paid for. So now they have to pay Blue Cross for their additional coverage, which has a much higher deductible and doesn't cover a lot of their expenses. Dad has had cancer twice now, and both of them have hearing aids. For the medicine for my Dad's cancer, the original cost to them was $30,000 a month after their insurance paid their part. Eventually, after many hours or research and effort by my wife, who is a RN, they where able to get that down to $1,500 a month. Out of pocket cost for their hearing aids has been around $5,000 each. This was covered under their original supplemental plan that the retired under, but isn't covered by anything now. Dental has also been a huge expense, especially with my dad and his teeth falling out. It just keeps adding up and getting more expensive every year for them.

While this only applies to them, it has been very disappointing to realize that what they paid for and planned on wasn't allowed to happen.

Thanks for the details. Yikes! I've got to start reading up on the costs of supplemental. I'm 58. 65 isn't that far off.

 

[MossRoad]

1 million is NOT enough at age 50.Any health care benefits? Pension??

Boy, a million at 5% return is $50K per year in interest. That's more than I make annually. Way more. And I'm living a pretty comfortable life. I guess it's all in the eye of the beholder. :laughing:

 

[newbury]

I agree that $1M total is not enough unless there is other income.

Yup, when I was growing up in the 60's I wanted to be a millionaire.
When I bought my house in the '80's (for about $100K) I wanted to live in a million dollar house eventually.

BUT I thought I'd be moving to another house.

 

[Gary Fowler]

1 million is NOT enough at age 50.Any health care benefits? Pension??

One million $$ is barely enough to retire at 65 when medicare can cover much of your medical. You still will have the do-nut hole deductible to get over every Janbefore your supplement will pay more than about 20% of your drug cost.
I retired at 60 in fairly good health at the time and took a gamble on not having insurance till I was able to start my SS and medicare insurance. It paid off and I didn't have any health issues. NOW, I have insulin dependent diabetes and that sucks out a lot of my retirement income to pay for the insulin till I get my deductible taken care of.
This year Humana (that is who I decided on for my supplemental PPO plan) is going to start covering hearing aids and also a dental plan. Lucky me, wife and I both had over $2000 each in dental bills last year for which Medicare doesn't cover anything.

It boggles my mind to even think about how much one would need to retire completely at 50 without any kind of medical insurance being paid for. I suppose if you had a very good pension with medical then it would be much less but I would think at least $2-3 million in a 401K AND have all your home, land, a new car(s) etc.
paid for. Even then you would have to live a bit frugally.

 

[RalphVa]

You basically need the same amount that you were spending while working maybe less some expense for commuting to/from work.

Ralph