Wife (53) and I (58) meet with our financial planner today.

Hello, this is now closed as OP shared an update via comment - https://www.reddit.com/r/retirement/comments/1crqvwp/comment/l455d6b/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button 

Have a good day!

You do have to get the insurance thing figured out before you pull the trigger. I don't know what company you work for, but you can only pay for cobra coverage for a limited time. You will have 7 years until you qualify for medicare. Your wife will have to pay for health insurance for 12 years before she qualifies for medicare. You will want to know what your out of pocket costs are going to be and not assume that you will be covered until medicare.

I retired at 60 and my wife was also nervous but has gotten better. I didn't realize that she did not want to draw down any principle - only live on her SS and income from non-IRA investments. This total was about 1/3 of my income prior to retirement & I think she was stressed about us living on that. But we're fine and she is less stressed as we go.

My wife is on Medicare and I am on insurance through ACA. I'm on a Pacific Source $7k deductible plan with some subsidy towards the premium. I pay $450 per mo. To get the subsidy, we had to watch our MAGI and find a few ways to actually reduce income. Without the subsidy,I think the plan is $900 per mo. Your $2k monthly will cover the premiums but you may want to include more for any deductible. We took premium and added max-out-of-pocket for yearly budget - you never know.

Good Luck

You might ask about expected RMD and, if needed, to plan some conversions to reduce that, which depends on where you are in taxes and the size of the 401K.

Ask them how much they are charging you and make sure they are a fiduciary 😁. I find that financial planners charge way too much for what they do. Not telling you what to do just make sure you quantify how much you are paying them whether or not you make any money!

Taxes...know those implications ahead of time and have a plan to withdrawal from accounts to minimize taxes. Factor in inflation too.

The health insurance budget looks appropriate and will fluctuate. We've had a few dental surprises and helped the kids with big medical expenses a few times so that bumped it up considerably some months.

There is the financial part, and then the what will I do with my day part..so that may be concerning your wife? We have separate hobbies but have friends who do a lot of retirement hobbies together, so each couple has to work out what works best for them.

We track our spend and conservative investments monthly and then put on a spreadsheet to review together at end of each month. After 5 years, it has been interesting to compare the years. We've changed auto insurance when we noticed it creeping up, for instance. Same with cable..cut it and started streaming as we had the ridiculous price creep.

Work longer. Trust me. It sounds good to retire but many people wished they had kept working longer. Retire when you can get full SS.

If you have dental insurance now, get whatever work you need done now. Same with glasses.

Congratulations. Be sure to check the ACA in your area...I was surprised how inexpensive it is if you can significantly reduce your "income". I'm not retired yet (5-8 years), but am building up some cash reserves (especially with these rates) so I can draw down less from retirement accounts to help reduce medical expenses.

You don’t mention your financial situation. Obviously your employment income stops. How do you plan to replace it? Will your investments provide sufficient cash flow. What happens if your wife loses her job or becomes unable to work? On the flip side what do you plan to do with yourself while wife works? And as you seem to understand your medical is an issue until you turn 65. I am a retired financial advisor and I had many clients who retired young. Those that were financially prepared all did well. Those who were planning to scrape by on the change in their sofa cushions almost all went back to work, many in substantially lower income positions as it’s harder to get a job for older people.

We’re 51 and 59 retired. We have an ACA plan that runs about $1500/mo combined. It’s definitely our biggest expense.

If your company is covering your health insurance for six years after 2025 until you reach Medicare that’s unusual. If true - you’re fortunate.

COBRA is an 18-month extension. I’m on month 12 with six months left, then on ACA for 4 more months until Medicare. Pay $1,000 a month now for COBRA.

Like you, we went to our financial planner and our calculators and spreadsheets looked great. Once you see it on paper, it makes your decision slightly easier, in my view.

I say “go for it” because life is short. Enjoy life as much as you can.

Company will not cover. You will be on healthcare.gov. Much of that is co-insurance and not insurance as you know it. Are you taking into account inflation?

Does your 401k suck?  If not, why would you roll it over? Say you have an accident and somehow injure someone and get sued.  If assets stay in 401k, that money can’t be reached.  If you roll it over, it very well could be.

When we were getting close to retirement our financial adviser said "well, it looks like you can have XX dollars a month in today's dollars and that will last you until 95" We looked at him and said "Is that enough?". Without missing a beat he said "You tell me".

It was then that we figured out we needed some sort of budget. Luckily we had been using quicken for years, so we could export into excel and run some pivots.

I remember when my dad retired he said "You'll spend the first 2 or 3 years tracking everything, then you'll figure out it's all working out and let it go". That's exactly what happened to us too.

How much is the expense ratios if you keep your $ in your 401k vs rolling to an Ira that the FP administers?

Keep the taxable income low, and ACA can be near free.

Don’t buy into health insurance FUD.

Too many of my friends are spending their best years working because they are afraid of health care. I had an older coworker who finally retired, then died 2 years later of pancreatic cancer.

That was my wake up call. The month I reached age 59, I put in my notice.

Definitely ride that COBRA until you figure it out. At 18 months of COBRA, the optimal time to terminate the job is July or August, to give you a buffer to get enrolled in ACA the December of the following year.

Note that initial ACA enrollment really really wants you to enroll in Medicaid when you tell the truth in the Q&A about your taxable income. My first full year of retirement I was under COBRA and my taxable income was zero. State rejected me for Medicaid twice in 25 page letters that I didn’t care to read.

Third time I just lied about my income (put down $100K), and finally got to the ACA plan selection screen.

The second open enrollment year of ACA was easier as there were no more questions about my income.

In my experience, $2K per month for ACA health insurance is more than enough.

Engineer your MAGI to hit the sweet spot and get a chunk of your premiums refunded at tax time. Remember if your MAGi is too low, no ACA tax credit. MAGI too high, no tax credit.

If you find in December that your MAGI will be too low, to get the highest ACA tax credit, do Roth conversions.

If your MAGI is so high that you cannot get ACA tax credits and there is nothing you can do about it, then that is a good problem to have. It means you can easily afford health insurance.

In December 2023 I used https://www.gocurrycracker.com/aca-premium-calculator/ to try to hit my MAGI sweet spot. Then did some Roth conversions. The result was a federal tax refund of $7500, offset by a $900 state tax payment triggered by the Roth conversions. Perhaps I could have had a higher refund, but converting pretax IRA to forever tax free Roth has its own reward.

My premiums for my wife and I were $24000 for silver PPO in 2023. My wife asked me to get a cheaper plan for 2024 since she barely went to doctors in 2023. I obliged and we pay now pay $12,000 in premiums for a bronze HMO plan. And I plan to have the IRS refund most of those.

Even though most ACA plans carry a high deductible and out of pocket maximum, the value these plans bring even for casual users of health care is the negotiated rates. A $1200 bill from Labcorp gets reduced to under $100, and the insurer does not pay a dime. Works for me.

Really need to calculate that health care cost until you qualify for Medicare.  We originally budgeted approx $1300 per month until one of us turned 65.  Fortunately we qualified for Obamacare so our out of pocket was greatly reduced.  If I draw SSI I probably won’t qualify for Obamacare any longer.  You have to have your financial planner really pencil this out for the next 10-12 years!

Make sure you open an HSA now if you don’t have one for both you and your wife if she’s retiring. Choose the aca plan with the lowest premium generally. Most everything beyond basic is out of pocket because of deductibles. An hsa is great for taxes and you can choose investment funds. ACA is a wild card because there may be changes to it year to year - for example, during Covid the income penalty limits were waived.

We have a good financial planner (fiduciary) and accountant. Make sure your financial planners knows tax planning well.

I would nail down whether retiree health benefits are available at your company and all of the specifics. Then get quotes for ACA plans. I know a couple in our city that pay $1450 for their ACA plan. We are fortunate to have retiree health benefits for about $760 per month, but would have gone with an ACA plan if we didn’t have the retiree health plan. Both husband and I worked full time during our entire marriage other than short maternity leaves and retired within a year of each other. If you have to go with ACA, have another meeting with the financial planner to get strategies etc. I’m so glad we retired when we did at about 56 and 60.

Reality is wive's deserve to be nervous as they will likely outlive you by a decade or so. Painful unspoken undercurrent so plan accordingly.

You don't need to guess on healthcare. You can run the calculations on healthcare.gov right now. Play around with the income numbers a bit to see how it impacts your premium. $2,000 a month seems high for two people. I'm paying about $450/mo for a family of four (silver plan).

You already wrote that you have budgeted for healthcare. One thing you need to have is a very detailed budget for all annual expenses. Your planner will need to know how much you anticipate spending. You might want to make a must-have and want-have budget. Good luck!

I am probably stating the obvious - If you have been tracking your true spending with a detailed budget and have confidence in your estimates for how much you will need annually as you grow older then bravo. If not, make sure you take the steps to understand your true current spending and future needs. It can be illuminating and can increase or decrease your confidence in meeting the plan.

Companies can pull health coverage with literally no notice. My mom had it from Dow Jones and I didn't think it would last as Murdoch took over but it did and even medigap for medicare was intact, and she had backup insurance from my dad. Me, company cancelled retiree healthcare more than a decade ago. And yes 2k a month budgeted...

Do you have long term care insurance or a plan for that. Can easily be your biggest expense in retirement. My mom had a stroke and lived in assisted living for almost 10 years.

Ensure you have a good understanding of your budget so FA can do a proper forecast model.

That removes a lot of the anxiety as FA won't be working with "typical scenarios" but with your particular scenario.

The more information you put into the model, the better.

Wife gets nervous. Probably as much about me disrupting her routine as finances haha.

When my father-in-law retired, he decided to rearrange the kitchen. It did not go over well.

Medical is the crazy unknown. My sister and husband retired early and seemed quite prepared until 3 years before he was to get Medicare? He was diagnosed with multiple myeloma. They did have a catastrophic plan in place but his treatment was almost 2 million the first year and they had take a loan on their Napa valley home to start paying or he’d die. Eventually they got things sorted and reimbursements started rolling in then Medicare kicked in, but these are things you have to think about. What could the worst case scenario be? Nobody ever thinks their insurance would not cover catastrophic medical, but yea, insurance companies are in the business of making money. And will let you die if you don’t have the knowledge of how to work the nightmare that is American healthcare.

I have no advice, but want to welcome you to the club. My wife and I retired 14 years ago at age 59. We've never looked back or missed working for a day. We are fortunate enough to be able to live off investment income and even are able to upgrade to business class when we fly over an ocean. Like your wife, we were nervous at first, but after two years we had become comfortable with the situation. All the best to you.

Have you built your retirement budget? I took our existing budget, removed kid and retirement expenses and then added in the stuff we want to do. That got us to the magic number we need per month. The magic number is what our advisor needed to tell us if we were fully funded. Is healthcare coming out of your monthly income or being paid separately. Will you do long term care ins?

I'd ask your FA if they can model out your expected withdrawals, costs, and cash-flow / net-worth through for the next 6-7 years. That was really helpful for my wife's comfort and to have them confirm that "yep, you have enough to retire and spend $xx/annually".

Not a suggestion on your question, but a bit of unsolicited advice based on a comment you included in your post -- when you actually retire, if you hope to remain married to your spouse, the absolute WORST thing you can do is decide that you can, "Finally help them get organized and running things the right way."

Doesn't matter if they have a business or a job or what, recognize that they have effectively managed their own domain during all the years that you've been together and they have been doing whatever they do, whether it is be a stay-at-home partner, run a business, work from home or whatever. The are probably competent at it and, unless you are specifically asked to help, don't come in and try to take over. Do not set out to upend their world and "improve" things, regardless of how much better they might be in your eyes.

Things that might appear to be helpful and are not:

1. Cleaning up the desktop on their computer or pointing out that the way they open a document takes X mouseclicks and if they'd only do it YOUR way it is ever so much more efficient.

2. Organizing the kitchen pantry. We don't really need all those spices, do we? And look at how many have expired dates. Why do you put those pans all the way over there? Shouldn't these dishes go closer to the microwave? Instead, if you'd put the . . . . You get the point.

3. Showing them the "right" way to vacuum / load the dishwasher / park the car / open and sort the mail / etc.

4. Interrupting their morning routine of coffee, paper, radio THEN we interact for the day. SSSHHHH! You have gone out the door at 6:00 a.m. for the last X years. After that, I sit and do my morning ritual. Don't talk, we don't do conversation until after 9:00.

5. Hanging around when their friend stops by for coffee / a beer / whatever. That may be the way they process the changes going on in their lives. Leave space for that so that they can grouse about you. Yes, even the most loving spouse is going to complain about something at times. It's healthy.

Get a hobby. Go to the library. Read a book - in another room, and without coming to check on them. Clean out that old paperwork and determine what needs to be kept and what can be shredded. Take the car to be serviced, and WAIT while they are working on it. Get a walking buddy. Take those accordion lessons you've always wanted.

Do pick up the slack and take on a larger share of the household chores. Even if their life has been to stay at home, they deserve to "retire", too, and with you underfoot all the time, that burden may increase. Gender roles are ridiculous - there's just "work", and we all have to do it whether it is to fold the laundry, sweep the kitchen, blow off the driveway or scrub the bathrooms. Actively look to see if there ought to be a re-allocation of labor on the home front.

Your significant other likely is somewhat apprehensive, regardless of how much they may be looking forward to your retirement. It carries the potential of significantly changing the dynamic of your relationship and their life. Approach that together with an open mind, rather than thinking that your way is the only "right" way to do something. Recognize that they love you, but more likely than not you have many years of being apart during the day. Too much "togetherness" can be smothering, at least until everyone adjust.

Unsolicited, so it's worth what you paid for it. But worth considering.

65 year old here. Retired at 58. Budgeting $2000 per month for health insurance now is fine but note that will be at least $2600 per month in today dollars by the time you're 64.

What are their underlying assumptions for inflation and rate of return after taxes.

i spread sheet my retirement plans so many times thinking that I had all of my projected expenditures covered. what I forgot to budget for was grandkids. If you don't already have any, please be advised that they can be expensive, and you should budget money for them.

Why do you think the company will cover your insurance until you hit Medicare age?

Bring all you expenses fixed, semi fixed, discretionary.

If you can, read the New York Times article "These Couples Survived a Lot. Then Came Retirement."

If you can't get it DM me and I will gift you the article. May 5, 2024 (updated May 6th).

What kind of planner do you have. Chartered, CFP, robo? Creds matter. I've had 3 so far.

My mistakes: I didn’t budget enough for healthcare, still worry about long term care, didn’t account for inflation on my non-COLA pension, didn’t look at what RMDs would do to us 15 years in, and should have began doing Roth Conversions since day one of retirement to mitigate RMD impact. We’re pretty affluent, so we’ve been able to do what we want without problem, but my plan could have been better!

since your main concern is fear of the unknown, ask your financial planner "after we pull the trigger on retirement, what levers do we have left to respond to unexpected financial challenges?"

examples of levers that came to mind for me were: - move to a lower cost of living area - move to a smaller house - change asset mix (risk vs reward) - change planned starting date for social security - reduce certain amenities (travel, country club, etc.) - go back to work

Some of these aren't desirable but the point of the exercise is just to identify possibilities.

You and your financial planner will probably identify a different set. And it can inspire some confidence to know you still have several control points after you cut the cord.

Keep the taxable income low, and ACA can be near free.

Be sure to sketch out the change to income streams if 1) you die at different times and 2) she dies at different times.

You can’t just guess about healthcare you need the numbers

My wife and I were able to pay full cost for employee coverage at our ex employers. Not cheap but much better than ACA and better coverage. I’m on Medicare now, discuss IRMAA and RMPs with the planner. You may want to doomed Roth conversions. Good luck

We went through the ACA for insurance until we were Medicare eligible

Be sure you have true accounting of your expected expenses. Budget everything: entertainment, travel, pets, health insurance, bills, etc. I know ours both wanted to know how much we expected to have going out every month, as well as occasional big expenses for trips, etc

Congratulations on getting out!

Plan on a Medicare supplement policy. Part B pays 80% of usual and customary, which is always at least a year behind current prices. Also, you are young enough. Look into long-term care insurance. Nursing homes in your old age can bankrupt you.

I’d ask advisor how much they’re charging you and then have them justify that cost.

Remember that your health costs will be more than just the insurance. We (early 60s x 2) spend at least 7-8K on top of insurance. A lot of stuff happens in your 60s. Cataracts? The fancier implants aren’t covered, and cost a few k. Develop hypertension, diabetes or high cholesterol? The pills and tests add up. And then there’s cancer. The costs are so high, even after insurance. The upcoming prostate biopsy is going to cost us 2500 out of pocket; there are three methods, and insurance only pays for the oldest and least accurate. They also didn’t cover the MRI (“not necessary without a diagnosis of cancer”) that found two nasty looking tumors—hence the biopsy.

TLDR: set aside a goodly amount for out of pocket healthcare expenses. You’ll eventually need it.

Can you and your wife describe your plans and goals for the future in a concise and coherent way? Are you on the same page? If not, the. The planner will have a hard time..

Budget, budget. BE aware of lifestyle creep during retirement.

I know this is too late for the meeting earlier today, but likely there will be a follow up meeting.

Ask the planner about asset allocation if you retire early. Mine suggested from 90/10 to 60/40. I chose 70/30 for tIRA and 80/20 for Roth.

Discuss the drawdown strategy and general rules for selling brokerage (or use whatever sources of income) until you hit 59.5.

ACA - I just went through the process and I would recommend a broker. DIY approach was a PITA. My state’s plans are so similar, but wildly priced. Chronic meds was my main point, and I really did not get full/real details until I signed up and ordered. A broker works for you, paid by insurance (flat fees) and can help pick/choose right plan. Akin to buying a car; saleswoman does it every day, whereas I do it once a decade.

WTF, why does this all have to be so crazy complicated!?!?

I mean, good advice everywhere here. We are reasonably smart and clearly everybody here is wicked smart. It seems so wrong that only the smartest ppl can successfully navigate these waters. Most of our friends are financially ignorant. They will work until pushing 70

we are similar ages and currently using Cobra (1,500/month).... next yr will have to switch to healthcare exchange - estimating $2,000/month.... so your number sounds good.

My spouse and I have bought our own health insurance for 900$ /month for both. Non-smokers good health .....

I retired last September. Medical was a big consideration for us. I'm 61 wife 63. Wife has medical issues. We went through healthcare.gov (ACA) and picked a plan which aligned with our preferred providers.

In our case we had plans that aligned with one of two major providers chains in our area. So we are in network with only one chain and zero coverage (except for emergencies) if we go out of network.

The plan we chose was with Blue Cross and a max out of pocket for each of us of $9450. I don't have any medical issues so we've spent $9450 this year and nothing else, other than the monthly premium which is around $200.

If we had gone the COBRA route it was $2000 per month, so $24,000 per year. So picking a plan through healthcare.gov was a no-brainer.

I have to say we're happy with our plan. Yes, we spend more than my previous company healthcare we had through UHC. But, my wife has had two hospitalizations earlier this year (she's doing much better now) so we maxed out early. Now we pay zero for any checkups and medications she needs for the rest of the year.

As far as medications go, the ACA has a smaller subset of approved medications. The insurance company will consider those not on the list as non covered and you will pay the full cost. Unless you have your doctor fill out an exception request. We did that for one of my wife's meds and they covered it vs the $600 per month it would have cost us. (This also wouldn't have counted towards our yearly out of pocket.)

TLDR summary. Try healthcare.gov ACA plans. Check which plan covers your providers, check whether medications are covered, weigh the monthly premium cost vs the max out of pocket. All options are generally much less money per year than COBRA, even if you hit max out of pocket.

Only retire if you WANT to retire; it’s the best advice I can think of. That said, I think you want to figure out what you’re going to do all day.

Healthcare is an important topic

My planner asked about LTCI—which I already have in place. 

Healthcare until 65. Think about how to make your retirement assets as liquid as possible in case one of you needs long term care. Talk about tax avoidance strategies.

Working in our 30s my best man and I tried to get into the pre retirement planning classes . We were told you need to be 57 or older. Our stance was there isn’t any planning at that point just trying to maintain your investments .

Do you know how much your financial planner is charging you? That's the very first question you should ask.

I'm 75 years old, been retired for 10 years, single female. I'll tell you what my mother told me when she was retired in Florida many years ago. You don't need as much money as you think you need. or as much as they tell you that you need. What I did before I retired was make sure I was debt free (no mortgate, no car payment) and that I could meet my current monthly expenses in retirement. I can tell you that two years ago I sold my little townhouse, moved closer to my daughter and now rent. a nice little condo near the beach. I earn more in investment income than I earned when I was working and that doesn't include my SS. As for insurance.Obama Care is very affordable. My granddaughter has it. Best of luck to you.

Financial planners are a scam.

Healthcare = ACA baby.

We are 56. My wife hasn't worked in over a decade, and I have taken the last two 2.5 years off. We have been doing small backdoor Roth conversions since we are just living off of savings. Married filling jointly from our standard deduction with some depreciation (from a rental property and minimize any profits), we can transfer about $35k tax free to a Roth and up to almost $90k at 12% federally. We're only doing the $35k so it's tax free free and minimizes our income (ACA is based on that). Taking the time off, my wife and I only cook at home, save money, eat way healthier, no stress, and walk/hike almost every day (usually about 3.5-5 miles with 700ft elevation gain). We have no other health issues so we do an HSA because it's cheap but pays for our vaccinations, annual check up, colonoscopy, etc. The punchline is that we pay $0.86 / month for us both.

I’m in my soft guy era so it’s all on my wife to figure out. Drizzle

Thanks for all the feedback and comments. Had a great meeting with my financial planner. As far as ACA if we had to go that route - my SERP annuity is too much to qualify for any subsidy. I do anticipate my company will cover until Medicare as there is a precedent for someone in my position with my years of service (35).

Good news is Monte Carlo simulation was 100% for our scenario so we are good to go if I choose to retire. Again thanks for your comments.

I would look to see if it’s too late/expensive for long-term care insurance. We took ours out 20 years ago and the rates were low because of our age then. With skilled nursing home care running $12-18k a month in my area, without it our investments and income would rapidly evaporate.