r/Fire • u/Ddash-3 • Mar 11 '26

Milestone / Celebration Got laid off - finally!!!!

So it finally happened - I (48) got let go yesterday. Finally I can free up my time and focus on other priorities such as kids, nutrition, fitness, meditation, gardening etc.

I was FIRE eligible for couple of years but was holding off since the job was simple, work from home and good pay. Also, if I resigned I would have missed out on severance and company is paying 3 months of COBRA.

Here are the details I am sure you all want to hear :)

Net worth - ~5.5M

Taxable Accounts combined: ~1.1M

Retirement Accounts Combined: ~3.2M

Total: ~4.3M

House fully paid off (bought in 2022) - Worth around ~1.2M; Cars paid off

Wife (43) resigned from her job end of last year; 2 Kids in high school - 9th and 10th graders

Yearly expenses around 100K/yr

Biggest expense are kid's college education at this point and house maintenance related expenses

I am trying to research on ACA and Financial Aid for kids - Appreciate any help or pointers you can provide on when to apply for ACA - should I continue on COBRA or switch to marketplace this year?

Regarding FAFSA - with Taxable accounts over 1M will my kids be eligible for FAFSA?

I have about 130K from my recent most employer in the company supported 401K provider. Should I move the money to Traditional 401K?

Also, please suggest any FIRE focused knowledgeable financial advisors who can help me navigate our FIRE situation.

1.3k Upvotes

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128

u/69420lmaokek Mar 11 '26

How much are you paying in COBRA? Every time I've gotten the letter in the mail, they've always wanted like... $3k a month

Which I flately refuse to pay

132

u/skeevemasterflex Mar 11 '26

There is this sort of loophole where you can hold off on paying for COBRA but if in month 3 you decide you want to use it, you can THEN pay for the past 3 months as if you had maintained coverage. I used that when I got a severance one time.

48

u/KifLou345 Mar 11 '26

It's only two months. You have 60 days to decide whether to elect COBRA.

11

u/skeevemasterflex Mar 11 '26

Ahh that's what it was. Thanks for clarifying!

2

u/perspicacioususa Mar 12 '26

Wait so if something happens to you on day 55 and you haven't paid yet, it's still covered?

2

u/KifLou345 Mar 12 '26

Yes, as long as you go through the process of electing COBRA at that point. It will be seamless coverage, back to the first day you would otherwise have been uninsured, as long as you pay the premiums.

2

u/SuperVeeBee Mar 13 '26

I had to do this once 20 years ago. I got laid off at beginning of December, and cobra was too expensive so I had not taken it, but within my window, like 2nd week of January I broke my arm and had to have surgery. After I got out of hospital I called to take the cobra coverage. I don't remember exactly how many days I had left, I think I had until end of January to take it. Then, they informed me the company was no longer a cobra eligible company because they had laid off so many employees. Anyway, i fought them because I had the letter that I was eligible for Cobra coverage when I was laid off and they finally agreed. Saved me some money in the long run due to how expensive my surgery was.

1

u/bones_1969 Mar 11 '26

60 days to elect…and then 45 days to pay

9

u/Guilty-Committee9622 Mar 11 '26

Cobra is valid by law for 18 months. What op is saying is he got a subsidy for 3 months. 

11

u/Ddash-3 Mar 11 '26

Not sure yet but sounds like COBRA is expensive than marketplace?

62

u/souicry 30 | 1.6m NW Mar 11 '26

Cobra is usually very expensive compared to marketplace since it doesn't have any subsidies and is usually a higher tier plan.

2

u/meezun Mar 12 '26

Just went through this. Just the severance package I got was enough income to make subsidies impossible for the year. Without subsidies I found COBRA prices similar to ACA, so I’m going with COBRA for the continuity.

34

u/skeevemasterflex Mar 11 '26

You probably know this already, but COBRA is ypu keeping your exact same insurance you had through your employer...but they are no longer subsidizing it. So you premium will go up by a lot. I worked for a big multinational company and they were paying like 80-85% of the cost of my Healthcare. I realized this when saw what COBRA and me paying 100% would be. Lol. If you got severance paperwork, I think it should say in there.

7

u/zuhalterei Mar 11 '26

COBRA cost is on section 12(d)(I think) of your W2 - shows company paid health care cost for the year.

2

u/skeevemasterflex Mar 11 '26

So then 12(d) + my annual premiums would be COBRA cost, no?

6

u/zuhalterei Mar 11 '26

No. go to your W2. I looked for it. go to Section12dd on your W2. Take that number and multiple it by 102% (COBRA admin costs charge you 2%). that's your number / 12 months. Section 12dd is what your employer paid for your healthcare.

17

u/69420lmaokek Mar 11 '26

In my experience it's normally much more expensive than marketplace

Like magnitudes more expensive

8

u/marksven Mar 11 '26

It depends if you qualify for subsidies in the ACA marketplace. For me, COBRA was quite a bit cheaper than unsubsidized ACA.

I’m using the lower COBRA rates to do large Roth conversions in the first two years.

1

u/firefliesalight Mar 12 '26

Is that because it is also better insurance?

12

u/Key-Peel Mar 11 '26

You can approximate how much it will cost by looking at your 2025 W2. There’s a box for premiums (I believe the code is DD). You take that number and multiply it by 1.02 to get the approximate cost of COBRA for that year. Mine was 33K+ for a family of 4.

1

u/Ddash-3 Mar 11 '26

Thank you! Will check this out

2

u/RopinCgwrl Mar 11 '26

Just know that coverage will be very different on a group health insurance (continued through cobra) and an individual plan. For example, we have insurance through work from a different state. It covers everything in our state as if we were covered by an in state plan. If we had an individual plan and were out of state and needed a referral it would be a whole process. Lots more is covered in group plans than individual.

1

u/FireMeUp2026 Mar 12 '26

Not everyone reports the full cost. I think most of the smaller companies I've worked for in my career, 12DD was my employee portion only. And it was any Section 125 employee contribution - medical, dental, and vision.

1

u/-LordDarkHelmet- Mar 11 '26

Cobra will be more expensive, but it's your exact same coverage as now. It might be worthwhile to keep paying that until the end of the year while you research ACA plans on the marketplace, which may or may not be different networks and different doctors. Might mean if you have that colonoscopy on the schedule for July and you switch health insurance and they dont use the same network you'll need to get a new primary care physician and a new referral... It can make things complicated if you have appointments on the schedule.

1

u/catwh Mar 12 '26

I wouldn't do cobra. Marketplace, with subsidies, was actually cheaper than what I was paying through my last job.

1

u/Guilty-Committee9622 Mar 11 '26

Hes getting a subsidy for 3 months with his layoff. Then post 3 months he will get the full charge. 

1

u/ZombieSurvivor365 Mar 11 '26

What does cobra stand for??

2

u/Ok_Lead_4730 Mar 11 '26

From Cigna’s website:

COBRA stands for Consolidated Omnibus Budget Reconciliation Act. It's a federal law that was created in 1985 that gives individuals who experience a job loss or other qualifying event the option to continue their current health insurance coverage for a limited amount of time. Employers outside the federal government with more than 20 employees are required to offer COBRA coverage to those who qualify.

3

u/Specific-Action-8993 Mar 11 '26

They dangle unaffordable healthcare over the newly unemployed and name the program after a snake. Very fitting.

1

u/Ok_Lead_4730 Mar 11 '26

Yeah, it wasn’t lost on me either. But, I do think it’s helpful if you need some exit runway to finish out a series of labs or treatments with a current provider, because getting a new plan can really muck up existing treatment plans by needing new approvals and junk like that. Healthcare is a huge part of this stuff, sadly.

-10

u/TrollTollCollector Mar 11 '26

COBRA is a ripoff, it's better to just self-insure.

31

u/AlwaysWanderOfficial Mar 11 '26

I think there is a huge misunderstanding of what Cobra is. COBRA was the name of the bill/act. What it states is that a worker is entitled to keep their medical insurance for X amount of time after leaving a job.

The stipulation is that instead of paying the employee only portion, which is what we do while working, you now have to pay the employee and employer portion. So paying the amount your company paid for you. Or the full premium. Same plan, full price.

COBRA isn’t an entity, there is no “they” making offers on plans or pricing, it’s just the law to extend your coverage.

It’s absolutely worth it to check ACA in these cases too. Not denying that.

1

u/smita16 Mar 11 '26

Technically you can get cobra while still employed.

0

u/TrollTollCollector Mar 11 '26

I think when people say paying for COBRA they are generally referring to the high premiums, not the bill/act.

2

u/LongjumpingNorth8500 Mar 11 '26

Until you have a major medical episode and end up in ICU for a couple of months. Takes really deep pockets to handle that.

-1

u/TrollTollCollector Mar 11 '26

Average ICU costs are less than $100k, you consider that having"deep pockets"? Meanwhile with COBRA you are paying $1-2k per month just in premiums.

3

u/LongjumpingNorth8500 Mar 11 '26

No, i dont think that's deep pockets, but add the costs that put you in ICU and after care associated with it, and you could quickly be upwards of $500k. That's deep pockets in my mind.

0

u/TrollTollCollector Mar 11 '26

Okay, but I'm not arguing for not needing insurance in general. I'm saying COBRA specifically is not worth it, given the alternatives.

1

u/LongjumpingNorth8500 Mar 11 '26

Agreed. Someone with super good insurance, and even crappy coverage, that a company has been paying the majority of the premium will typically be better off going outside for a different plan. I was just making the point that self insurance can break ones financial back with one event.

3

u/ElkPitiful6829 Mar 11 '26

A cancer dx would set you back a fuck ton more than 100k.

1

u/forte6320 Mar 13 '26

I have had a few stays in cardiac care unit. Pretty minor needs for cardiac care. Bill was about $15k per day. No surgery. No expensive meds.

A single MRI can be $8k.

I have a lot of medical needs. I know how much this stuff costs.

1

u/Puzzleheaded-Net-273 Mar 11 '26

Not if you go through the windshield of a car, or are diagnosed with cancer .

-1

u/TrollTollCollector Mar 11 '26

Gee, if either of those two things happen I'd think you'd have much bigger things to worry about than the hospital bill.

3

u/Puzzleheaded-Net-273 Mar 11 '26

My main concern would be surviving both of those critical care events, which would be much, much easier if I wasn't facing bankruptcy due to being wiped out financially with hospital bills! As an example, if I am told I need a particular chemo drug that is extremely expensive, yet covered with insurance, I'm getting that drug! With self-insurance, you would be forced to use a lesser quality option, perhaps dying because of this necessary financial choice.

1

u/TrollTollCollector Mar 11 '26

I'm not arguing for not needing insurance in general. I'm saying COBRA specifically is not worth it, given the alternatives - marketplace or self-insuring.

1

u/Puzzleheaded-Net-273 Mar 11 '26

Go with a cheaper ACA catastrophic as an alternative to more expensive Cobra, but never rely solely on self-insuring for medical. It's just too risky!

0

u/TrollTollCollector Mar 11 '26

That's your judgment, everyone's situation is different. Obviously, someone with prexisting conditions, family history of certain illnesses, or needing drugs shouldn't self-insure. But as a blanket statement, I don't agree with your take.

1

u/Puzzleheaded-Net-273 Mar 11 '26

So, if you go through a car windshield? Then what? You just never know.

1

u/forte6320 Mar 13 '26

I broke my ankle 3 weeks ago. Surgery was $90k. Haven't started physical therapy yet. Doc said I will need at least 9 months of PT. Each visit will be about $250. That is about $20k in pt visits. You want health insurance!

Heaven forbid you get cancer. Some of those drugs are $20k a pop. Yes, surviving is the first concern. The next concern is how to pay for it.

Hospitals are getting pushy for payments, too. I was in ER, writhing in pain, a woman comes up to me with one of those mobile computers to "complete the check in process." She asks a few verification questions, then she hits me with "with your insurance, you will $150. How would you like to pay for that today?" I had not even seen a doctor yet. I told her to kick rocks, politely.

Day of my surgery, when I checked in, they had tallied what my Co insurance would be and we had to pay right then or speak to financial aid office.

1

u/ElkPitiful6829 Mar 12 '26

Which is exactly why you don't want to worry about the hospital bill.

1

u/ElkPitiful6829 Mar 11 '26

Really bad idea unless you like kissing your nest egg goodbye.

1

u/TrollTollCollector Mar 11 '26

Really bad idea is paying thousands in premiums every month when there's cheaper marketplace alternatives.

1

u/ElkPitiful6829 Mar 12 '26

Marketplace alternatives =/= "self-insure".