Hello ERE Community! Greetings from MI...

[Married2aSwabian]

Hello ERE Community and thanks to Jacob for starting and maintaining such a great blog and forum for so many years!

I’m 55 and looking to FIR in the next 3 years or so. I’ve left off the “E”, as late 50s doesn’t really qualify as early any longer.

As an INTJ Meyers Briggs personality type, I fit the mold of folks who follow and think about blogs like this one.

My wife and I recently celebrated our 30th anniversary - we’re happily married and have one son, who is a 22 Sr at U of M.

I’ve followed MMM for about five years (that blog seems to be losing participants) and ERE for about four years and read Jacob’s book in 2019.

With my wife’s help, and after moving to a smaller home with relatively low taxes, we’ve managed to get our monthly expenses down around $3000 / month for the three of us (obviously tuition, R&B are separate for our son).

I’ve worked in Germany for 4 years over my career and we met in Stuttgart. Germans from this area are known as Swabians and their mantra is Schafa, spara, Häußle baua = work, save and build your little house. Other Germans sometimes make fun of them because of their dialect and frugality. When it comes to getting our finances in order on the household expense side of the balance sheet, my wife has been irreplaceable! The mentality of re-evaluating wants vs needs on all purchases has really helped.

So, between her guidance in frugality, my decent income, DIY skills (including a passion for woodworking), interest in planning / investing and support from ERE, MMM and other sources we are getting close to retirement. Our net worth recently exceeded a million bucks, with no debt. About $650k of that is in (Vanguard) IRA and 401K, with the rest home equity and cash.

Initial questions I have are:

1. How are early retirees best managing healthcare insurance costs prior to being eligible for Medicare?

2. Anyone besides me worried that the market is overvalued (potential bubble forming)? Currently about 25% cash on our IRA and 401K, as I’ve attempted to navigate the markets this past year, while keeping some powder dry in anticipation of another downturn. Due to FOMO, I’ve started Dollar cost averaging back into Vanguard S&P 500 index fund on a monthly basis.

3. We let Vanguard provide their portfolio management service for an annual fee of 0.3% for our IRA for past 7 years. Anyone else here using that and if so, have you been happy with it? For me, the best part has been them preventing me from getting out of equities when volatility like last March happens.

Thanks!

[sky]

Welcome

If you can keep your expenses/income level down, you can get subsidized health insurance through the Affordable Care Act.

Equities are almost always a bubble, but they keep rising. I have always lost money betting against the US stock market. Even if there is a correction for a period of time, the bubble will reform and grow again.

I use Vanguard Target Retirement funds (and other similar funds from another company) for a large portion of my investments. I used to be really into trying to predict winners in the stock market, but found that I lack the information required to be successful. I also got tired of the whole business of selecting investments and now don't have to worry about it. I am sure they are doing a better job than I can. If they fail, I would probably have failed worse.

[7Wannabe5]

Welcome!

I am also in Michigan. I wanted to add that you also have to be careful about keeping your income high enough to qualify for Affordable Care Act subsidy. I am having to deal with some serious bureaucracy to fix this problem without taking a tax hit.

[Alphaville]

Welcome!

I am also in Michigan. I wanted to add that you also have to be careful about keeping your income high enough to qualify for Affordable Care Act subsidy. I am having to deal with some serious bureaucracy to fix this problem without taking a tax hit.

if you're in the low end of income don't they auto-move you to medicaid expansion?

[7Wannabe5]

Yeah, but Medicaid has clawback for assets, so you're actually better off with high deductible private coverage if you have assets. My problem is mostly just bureaucratic because they calculated based on one low income month.

[Sclass]

This is definitely a topic for an upcoming thread. I struggled to stay in my ACA bronze plan because I looked too poor on paper. I elected for normal insurance but due to my low AGI I got bumped into some bottom tier Medicaire system twice. I finally discovered some workarounds. Took me a couple of years to work out since living off long term cap gains and dividends isn’t one of the “income source” check boxes at my state’s ACA application web site.

[Alphaville]

when i was homesteading i got autobotted into medicaid expansion, but the thing was a joke: one month on/one month off, approved/booted, i think because our republican governor didn't wanna keep people on it, and the previous high deductible plans had disappeared so we couldn't find that option.

this was one big factor that made us want to get "jobs" with health benefits and stop worrying about being in legal limbo wrt coverage.

[Married2aSwabian]

Thanks, All!

@ 7Wannabe5, Thanks, I was wondering if Medicaid takes assets into consideration.

Guess we’ll see what changes (improvements??) to ACA are made in the coming years.

Our ultimate plan B is to go back to Germany for a while, but we want to reside in US long term.

Their taxes are high, but national healthcare system seems to work pretty well.

[horsewoman]

Nice username schöne Grüße an die Ehefrau!

Taxes in Germany are not so bad if you don't earn much. My husband and I both work part-time and can utilise the 4/4 model (Steuerklasse 4/4). We pay very little in the way of taxes but are both covered by our employers with full health care.
Honestly I could not imagine doing our semi-ERE thing in the US without a social net - but it is probably like the fish that are not aware of the water... I've never known anything else than the German system.

[Married2aSwabian]

@horsewoman, yes, it is complicated in both countries from our experience.
Seems like it’s possible to earn (and keep) more $ in the States, but you’d better be good at saving, investing and planning, otherwise you’re screwed! My father-in-law used to say that as long as you’re “young, healthy and active”, you’re better off in the US...just don’t get old or sick!
After living in Germany again from 2011-2013, two things we missed about Michigan were the room to spread out (less densely populated) and much more affordable housing.


Another question for the ERE community: how many of you have achieved your early retirement/ financial goals with a nuclear (strange term!) family and just one primary wage earner? That’s been our approach. It takes more time to get there, but worth the trade-offs. What do you think?