Retire earlier or wealthier?
Posted: Sat Feb 09, 2013 5:34 pm
I'm wondering if people save more so they can be retire earlier or have a higher standard of living in retirement.
Investing Advice Inspired by Jack Bogle
https://www.bogleheads.org/forum/
It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.cinghiale wrote:I voted for spend and give more, though not beacuse it would be my preference. I liked "both."
However, a poll like this can bypass a sober truth: a nice 50% pop in net worth may not be the sole variable in finding oneself able and ready to retire. For me, making it to age 60 at work means that, once I retire, I can continue to participate in the group BC/BS program and pay the group rates I currently pay. That eclipses a calculation of my "number" or whether I have reached the promised land of "enough."
Now, if my employer lowered the qualification age to 55 for continuing in the group health plan, I would be joining the majority vote in this poll.
To pay low rates one needs to have a very low income. This excludes those with pensions and precludes Roth conversions.hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.
I'm not talking about low health insurance rates - but group rates rather than the current , probably 80% higher than group rates that individuals buying health insurance pay vs groups. It may well be good ( I hope ) for early retirees which was the original topic since it would seem to remove some of the "health care uncertainty" from the retire early equation.VictoriaF wrote:To pay low rates one needs to have a very low income. This excludes those with pensions and precludes Roth conversions.hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.
Victoria
You may be right. I was not paying much attention to the Affordable Care Act, because my situation is similar to cinghiale's. Once I qualify, my payments will be much lower than anything I would get with the ACA.hicabob wrote:I'm not talking about low health insurance rates - but group rates rather than the current , probably 80% higher than group rates that individuals buying health insurance pay vs groups. It may well be good ( I hope ) for early retirees which was the original topic since it would seem to remove some of the "health care uncertainty" from the retire early equation.VictoriaF wrote:To pay low rates one needs to have a very low income. This excludes those with pensions and precludes Roth conversions.hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.
Victoria
Any idea what qualifies as low income?VictoriaF wrote:To pay low rates one needs to have a very low income. This excludes those with pensions and precludes Roth conversions.hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.
Victoria
I don't know, because as I noted I will not be using the ACA, and thus I was not studying its details.pennstater2005 wrote:Any idea what qualifies as low income?VictoriaF wrote:To pay low rates one needs to have a very low income. This excludes those with pensions and precludes Roth conversions.hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.
Victoria
hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.cinghiale wrote:I voted for spend and give more, though not beacuse it would be my preference. I liked "both."
However, a poll like this can bypass a sober truth: a nice 50% pop in net worth may not be the sole variable in finding oneself able and ready to retire. For me, making it to age 60 at work means that, once I retire, I can continue to participate in the group BC/BS program and pay the group rates I currently pay. That eclipses a calculation of my "number" or whether I have reached the promised land of "enough."
Now, if my employer lowered the qualification age to 55 for continuing in the group health plan, I would be joining the majority vote in this poll.
It surely depends.JimInIllinois wrote:If you were 55 and your savings increased 50% overnight, would you...
I think the choice of response is the same either way. If you're behind a windfall could let you either not work until you're 70 or not move in with your kids.YDNAL wrote:It surely depends.JimInIllinois wrote:If you were 55 and your savings increased 50% overnight, would you...
- Does 50% increase in savings mean that much because you were close to target/goal to begin with?... or it doesn't.
- Unfortunately, many 55yo are not that close to meeting savings goals/objectives for retirement.
You either missed my point totally, Jim, or I wasnt sufficiently clear.JimInIllinois wrote:I think the choice of response is the same either way. If you're behind a windfall could let you either not work until you're 70 or not move in with your kids.YDNAL wrote:It surely depends.JimInIllinois wrote:If you were 55 and your savings increased 50% overnight, would you...
- Does 50% increase in savings mean that much because you were close to target/goal to begin with?... or it doesn't.
- Unfortunately, many 55yo are not that close to meeting savings goals/objectives for retirement.
I think the opportunities are exactly the same: work less or spend more. $50K isn't "retire now" money, but it's a year or two of living expenses so you can retire earlier than you otherwise could have or lifestyle enhancements (before or after retirement) if you don't.YDNAL wrote:You either missed my point totally, Jim, or I wasnt sufficiently clear.JimInIllinois wrote:I think the choice of response is the same either way. If you're behind a windfall could let you either not work until you're 70 or not move in with your kids.YDNAL wrote:It surely depends.JimInIllinois wrote:If you were 55 and your savings increased 50% overnight, would you...
- Does 50% increase in savings mean that much because you were close to target/goal to begin with?... or it doesn't.
- Unfortunately, many 55yo are not that close to meeting savings goals/objectives for retirement.
- A 55yo with $100K saved whose savings "increase 50% overnight" is not in position to be thinking retirement, etc.
- Relatively speaking, 50% is 50%, but $100K vs. $150K at 55yo is what it is.
This isn't a hypothetical for us; it happened last year. It occurred to my husband that he could retire and volunteer for a charity that we support. But his time as a volunteer isn't worth nearly as much to the cash strapped charity as the $ he can afford to give while he keeps working. So we increased our financial support.digit8 wrote:Definitely retire early. With my personality, that will probably morph into a new job, if only volunteering for charity pretty quickly- but I always liked the idea. I like it more as some of my senior co-workers reach the point where they could retire, but are delay it for whatever reason. The look of relief, of the weight off your shoulders when you can walk at any time....I like my job overall, but how could I not want to get to that point?
What??? Could you link to this please?livesoft wrote:We saw in an earlier thread that folks who kept working did not increase their standard of living because their taxes ate up all the gains that their wealth gave them. They would have been better off retiring earlier and would have maintained the same standard of living.
I would be thrilled to pay only $8495 in health care premiums, compared to the $12K I now pay annually.ascenzm wrote:hicabob wrote:It seems that under "the affordable care act" everyone will be able to pay "group rates" by 2014.cinghiale wrote:I voted for spend and give more, though not beacuse it would be my preference. I liked "both."
However, a poll like this can bypass a sober truth: a nice 50% pop in net worth may not be the sole variable in finding oneself able and ready to retire. For me, making it to age 60 at work means that, once I retire, I can continue to participate in the group BC/BS program and pay the group rates I currently pay. That eclipses a calculation of my "number" or whether I have reached the promised land of "enough."
Now, if my employer lowered the qualification age to 55 for continuing in the group health plan, I would be joining the majority vote in this poll.
No sure what you mean by group rates, but check out this on-line PPACA premium calculator.
http://healthreform.kff.org/subsidycalc ... ?source=QL
If you are single, 55 years old, live in a medium cost area and make $46,021 in 2014 dollars you get subsidized and pay $4372 in premiums (get a $4123 tax credit). Make one dollar more, $46,022, and you pay $8495 in premiums. That is not affordable for most people.
Mike
Not quite, Jim, $100K + $50K is not "retire earlier than you otherwise could.." The point is that a 50% increase in savings is relative.JimInIllinois wrote:I think the opportunities are exactly the same: work less or spend more. $50K isn't "retire now" money, but it's a year or two of living expenses so you can retire earlier than you otherwise could have or lifestyle enhancements (before or after retirement) if you don't.YDNAL wrote:You either missed my point totally, Jim, or I wasnt sufficiently clear.
- A 55yo with $100K saved whose savings "increase 50% overnight" is not in position to be thinking retirement, etc.
- Relatively speaking, 50% is 50%, but $100K vs. $150K at 55yo is what it is.
I suspect that most people have both a target retirement age and a target retirement lifestyle and would retire early if they could be sure of maintaining that lifestyle, but will reduce their lifestyle expectations to avoid working much past their target age.