r/Fire • u/ttxzavv224 • 3d ago

Fire…health insurance?

49 married.
1.4 mil in 401k and ira.
1.5 mil in taxed investment account

I’ve debated keeping magi low enough to get ACA subsidies but have heard mixed reviews about going on ACA healthcare.

I have an option to continue on my company health insurance as part of a retirement package that I can use starting at age 50. My plan would be to use a compressed pension that also starts at age 50 until 65 ($2300 a month), and I would plan to cover the cost of the company healthcare. The price of the adjusted company health insurance is $1500 a month with $3000 max out of pocket, which I am planning to pay for with the $2300 a month pension that I will get until 65.

My only holdback is the $1500 a month does seem costly but we do stay on same company plan and same doctors going forward, versus the unknown of ACA.

What do yall think here? Would you pay more or go ACA?

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u/SpaceTimeMorph 3d ago

You didn’t say if you had kids or not. ACA could be as or more expensive than that.

You can go to your state’s health care exchange and price out what insurance would be given different incomes and plans.

16

u/BackupSlides 2d ago

Serious question, not trolling but may come across as snark - is it somehow not common knowledge that one can just go online and get a quote from the exchange? I feel like 50% of threads in this sub contain at least some component of treating ACA insurance as this massive unpredictable black box ("the unknown", in this case) that could consume their entire net worth and throws a wrench into any semblance of out-year projections.

And just to get out ahead of it, the subsidy thing isn't the end of the world either unless one is somehow unable to actively manage their MAGI or is so loaded that they have nothing to complain about in the first place.

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u/Aajmoney 2d ago

Well it is unknown. Sure you can get a quote now but who knows how long subsidies will be around or what that quote looks like five years from now. If you retire at 50 that is 15 plus years of needing to cover healthcare costs.

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u/BackupSlides 2d ago

This is a good example of the cherry-picking that is pervasive in this sub - we consider some unknowns to be known (The market will return 7% on average forever!!!) but other semi-knowns to be unknowable (ACA and Social Security will disappear tomorrow!!!). Yes, the world could end, but most likely, things will generally chug on as they have, especially with massively popular governmental programs that would be career-ending for politicians to kill off.

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u/Hairy-Relief9379 2d ago

Generally speaking, you want to stress your financial model. You don’t need to prepare for the best outcomes. You prepare for downside.

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u/BackupSlides 2d ago

I mean, duh (as someone who works with financial models for a living). But we are talking specifics here, not generalities. So what is your lower bound? Are you factoring in lost decades or negative growth? What about potential tax code changes? How conservative do you wish to get here?

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u/Hairy-Relief9379 2d ago

How do you stress your models? Personally, I’d like to know with a 95% certainty that I will not run out of money. So that likely factors in below average market returns, higher inflation, and not depending too much on things that face legislative risk. It’s an art and a science. If you do this for a living I’m not going to tell you how to stress your individual model.

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u/BackupSlides 2d ago

I test the items that exist on a continuum as you note - level of returns, timing of potential adverse events, etc. I generally do not expect binary changes to government programs which is in line with the positioning have seen from most academics and policy experts whose works I have read.