retirement costs after health care bill kicks in

[KTP]

EEinNJ - cool, I too am going back to school to get my EE degree.

The orginal point of this post was to examine how the healthcare bill may have made it easier to retire early. Sure, it hurts those who work and make a decent income, but at the same time perhaps we can game the system to our benefit by reducing our taxable income in early retirement such that our rich uncle pays for most of it.

not too worried about being bored in retirement.

[Joan.of.the.Arch]

Medicaid will still be a state administered program, which means you need to be a citizen of one state and that is the state in which you must get your medical care. If you need to see a doctor while tent camping the next state over, you will have to come home. If you wanted to live a summer in the Rockies, but your home state is North Carolina, don't trip on any rocks and break a bone while you are mountaineering. It really is not yet a nationalized healthcare program.

Besides that, I think Medicaid has always been not just income tested, but assests tested. Have you heard that that will change?

[KTP]

Oh, I didn't know medicaid was a state run program. I really will have to get up to speed on healthcare as we get closer to early retirement. I also didn't realize it was assets tested. So some old lady who has lived in her home for 70 years and makes $15,000 a year from SS might not qualify if her home happens to be worth $800,000 because of location? Or do they only look at certain assets, such as stocks and bonds?

I did find this: "Tax credits will be available to individuals and families with income between 133% and 400% of the poverty level (that's $19,378 to $58,280 for a couple)."

I haven't found a "healthcare calculator" to figure all of this out. I imagine everything is still getting worked on. Perhaps there will be a book out soon called "Maximizing your healthcare benifits in early retirement" or something.

Edit: Oh wow, I did not realize the tax credits would be so huge in 2014:

"The tax credits will be provided on a sliding scale. For example, a four-person family purchasing a $15,000 family insurance plan in 2014 with $60,000 in annual income would receive tax relief approximating $10,200. A similar family with annual income of $35,000 would receive tax relief approximating $13,600. "

So we would be a 2 person family with an annual income somewhere between 0 and $40,000 depending on how we took withdrawals. It *looks* like uncle is going to cover 80% or so of our insurance costs unless the tax credits are means based (it just says income in that article).

[disneysteve]

KTP, no offense intended, but I have a bit of a problem with someone planning an early retirement so that they can then go on welfare for healthcare. Why should I and my fellow taxpayers be supporting your decision to retire at age 45? Medicaid shouldn't be for people who choose not to work. It should be (if you think it should exist at all) for people who are unable to work or unable to earn enough to afford health insurance.

Retiring at 45 is a HUGE luxury and if you can afford it, go for it. I'm jealous. But if that plan hinges on requiring taxpayer supported healthcare, then I'd say you can't actually afford to do so. JMHO.

[KTP]

Oh well I wouldn't be taking money from you, it would be from the government.

It is kind of like taxing people who make more than 250,000 to give credits to those who make less...just a bit of wealth redistribution. you all voted for it, I just want to use it.

[tripods68]

The biggest problem those who retire early 50's, in this case 45, is to have "sufficient" fund retirement beyond 80 + years old. For those who can't, comes back to work. At $750K in retirement, isn't "sufficient" enough IMO.

[Joan.of.the.Arch]

[I]So some old lady who has lived in her home for 70 years and makes $15,000 a year from SS might not qualify if her home happens to be worth $800,000 because of location? Or do they only look at certain assets, such as stocks and bonds?

Well, to start with, the lady would probably have Medicare (that is what appears on your social security benefits statement, rather than Medicaid). She might additionally have Medicaid because of her low liquid assets. Medicaid might fill in for some things that Medicare will not cover. But even her house eventually might be used to re-pay Medicaid. I don't know the ins and outs of it, but many people who have lived all their lives in the middle class do end up losing their house (after death, or after death of their surviving spouse who lives in the house) to the state to re-pay what Medicaid covered when their private insurance runs out while they live in a nursing home.

But yeah, Medicaid is run by states, yet funded partly by the federal government, partly by the states. The terms vary from state to state, too. Some states have completely separate health insurance programs. California, Massachusettes, and Tennesee are among those that do.

[KTP]

The biggest problem those who retire early 50's, in this case 45, is to have "sufficient" fund retirement beyond 80 + years old. For those who can't, comes back to work. At $750K in retirement, isn't "sufficient" enough IMO.

There was some early confusion in my original post perhaps.

The $750K will be the low end estimate of the funds in our *taxable* accounts after selling the house.

In addition to that, we will have on the low end, around $600K in 401K/Roth/IRA accounts.


I was really being rather tongue-in-cheek with the idea of qualifying for Medicaid. I am pretty serious though about arranging our taxable income the best way possible, and if this results in the government providing us with a tax credit to be able to afford health care, I will not turn it down.

I am currently paying a bit more than the average joe, so I don't feel much guilt. We did not get a stimulous check, I am unable to get any deduction for my tuition because of income level, and we are having to do tricks to fund a Roth IRA, even though someone who makes just a little less can do it with no problem. Tax wise things will get much much worse in a couple of years when I enter the workforce as a EE, even if at a low end salary ($75K or so). For a few years until 45 we will enjoy all of the nice extra taxes they want to pile on the *rich* (married making more than $250,000/yr).

[jIM_Ohio]

If you qualify for medicaid, might as well go all out, get about 14k of earned income, avoid unearned income, and get another 3k back from the EIC too.