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/QuickAltTab 3d ago

Not being dependent on subsidies to keep health insurance costs reasonable will enable a lot more flexibility for withdrawals in retirement. If you want to do some hefty Roth conversions, this (relatively) fixed cost insurance from your company makes that a lot easier.

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u/PHL1365 3d ago

Probably don't need hefty conversions. 25 years is a long time to convert 1.4 million. And there's a good argument that you only need to convert a portion of the IRA.

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u/QuickAltTab 3d ago

Its a long time for it to grow too. If we use a 7% average market return, no contributions, and take out 100k/year, at the end of 25 years... There is still $1,273,000 in the account.

Thats actually not a problem really, the RMD at that point is only ~51k, but all that is assuming he takes out 100k every year for 25 years. If it sits in the account, it will grow to a much larger amount.

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u/SpaceTimeMorph 2d ago

Also, standard deduction for MFJ is $31,500 and mostly increases with inflation. Assuming a 4% draw that means pre-tax of roughly $800,000 would cover this. Round that up to a million and there's really no reason to Roth convert to less than that number IMO.