How to Get Health Insurance When You Retire Early
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- čas přidán 28. 11. 2018
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Our Rich Journey, How to Retire Early & Afford Healthcare (Less than $400/month for Family): Probably one of the biggest questions for early retirees is how can someone retire early and afford healthcare in the United States. In this video, we tackle this question by describing the Affordable Care Act and how it can be used to significantly reduce healthcare costs for early retirees.
You can use the Kaiser Family Foundation Health Insurance Marketplace Calculator to estimate your health insurance premiums/costs:
www.kff.org/interactive/subsi...
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#EarlyRetirement #FinancialIndependenceRetireEarly #FIRE - Jak na to + styl
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God Bless your beautiful family!! You helped me a lot in setting up my goals on the road to FIRE!
Alex from USA.
Come across your channel about 2 weeks & I been watching some old & new one. Love your channel, it have a lot of very helpful tip. Thank you so much for for all your explain & share. Thump up on all your great videos!!!!👍👍👍👍
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Great video. Thanks!
Great video! Very helpful since we are on the verge of this!
I should've KNOWN you two would be ON IT!!! I watched 3 other videos on this subject and this one sticks to basically one topic and has good info😎👍
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Excellent!
Nice video. In PA we only have two plans. The national plans pulled out. Either of the two plans available cost almost $2000/mo for two people. Your calculation would get us down to less than $1000/mo or $12k a year, but we would have to stay under $65k of income. Not sure I could live like that as our budget for expenses even with no mortgage and no extras like memberships, services, or expensive cars is $5000/mo or $60k a year. And we live in a low cost of living state/area. Maybe renting is a better option. Something for me to think about.
Thank you so much for providing this information in such a clear and understandable manner. My question - my understanding is that you live in Portugal. If you get healthcare from Portugal, does this does this qualify / satisfy the ACA requirement for obtaining medical coverage
Excellent Video!!
Thank you!
Great Video thanks.
Our pleasure! Thank you so much!
@ourrichjourney
What about medical insurance when living abroad? (Example contractor, so not employee). Suggestions?
Excellent information once again. I’m no where near FIRE yet, I’ll be interested to see how healthcare evolves over the next decade in the USA.
Thank you! Hopefully the options grow in the next 10 years. In doing our research we found that the availability of providers varied significantly by states due to their implementation approach of the ACA. This is a topic that you have to research thoroughly depending on your area of the US.
Excellent video! Thank you for explaining that so simply. Can’t wait for more on this series.
Thank you! Its a very complicated subject and we were hoping to dispel a lot of confusion around the subject. Glad you enjoyed it and thanks for watching!
The ACA penalty back in the day hit me right where it hurt. I got a job in February but insurance doesn’t apply until June. I had private insurance (Medicaid call center lady lied to me, long story) so I paid $370 x 2 months. Then canceled. That tax season I paid quite a lot for the penalty. 2%. That hurt.
I learned later Medicaid would’ve accepted me, as a new grad. But the call center lady got a commission for selling me a plan. Yeah….
Couple of questions, in today's low interest rates/returns and increased taxes do you think 4% is still a relevant figure? Secondly, why do you reside in Japan? If you are retired I would think there would be challenges as Americans living there due to language and cost of living. Finally, do you have recommendations for healthcare for expats like yourself? Really enjoy your videos.
Thanks so much you two. You're intuitive! Knowing there are tons of us out here who desperately desire to be independently wealthy and paying for insurance independent of jobs. Which can be a scary topic alone. Thank you so very much. Love your videos. This was super helpful and makes it not so scary to think about. There IS life after a 9 to 5 and the insurance they take out of the check.
YES! That is exactly why we had to make this video. To show that there are affordable options outside of employer provided plans. Thanks again for the love!
Appreciate your content. This is such an important factor when considering an early retirement option.
Looking forward to hearing more about this topic in the future guys. Thanks!
Our pleasure and thank you for watching!
Do you have a video that talks about getting medical insurance in Thailand?
Not yet. But we'll do one. Thanks for the great idea!
Healthcare is very expensive. I love having Obamacare when I did. Thank you for the tip! Medical tourism is a very interesting topic! Specially for dental work! 1 dental implant in Calif was 5k. I went to Peru, where they have excellent dentist and got it for 1.2k big difference! I pay for my flight visited the country for less the 5k. But now I'm following the travel hacking videos! Lol
OMG! We love medical tourism. Thanks for sharing!
I did the same! I went to Costa Rica and saved thousands on my three dental implants. On top of that I spent a couple of months in that beautiful country. And I’m planning to FIRE there, probably next year!
Also what constitutes investment income? If I have rental property am I going off gross rent or net income?
Another great video, guys. Thank you!
Thank you! Appreciate your support!!! :)
So should we go through one of those Obama cafe websites for health insurance if we are looking to move or travel long term abroad or get some kind of global health insurance? Not even sure where to look for that if necessary.
Enjoyed the video! I'm a little confused. My understanding is ACA subsidies go based on income. So you wouldn't be judged based on the 4% you withdraw that year but based on the portion of that money that is realized capital gain as well as dividends you received that year. If that 4% was all(100%) dividends then your edibility would be based on your 4% due to it being all income. If my understanding is correct then the subsidies you are able to get should be greater even for the family withdrawing $100,401 due to the majority of that money being assets.
Any taxable event is considered income. If you withdraw and it is taxable, it is income. Your income determines your eligibility for ACA.
Great video and good start to the very complicated topic of healthcare in early retirement. What supportive documentation needs to be submitted to prove income in early retirement that show eligibility for insurance subsidy?
To claim the subsidy you'll use an estimate of your income for upcoming year. For example, when you apply for 2019 insurance in December of 2018, you'll estimate your 2019 income. Then when you file taxes your estimate will be compared to make sure you actually qualified for the subsidy. If you over estimate you'll have to pay the subsidy back as a tax bill. So the documentation is your tax return (W2s, 1099, other income statements). Hope that helps. Thanks for the question!
Our Rich Journey - thank you. I did not know about this. Fantastic information.
Margot Tomasik - Glad you found it useful! Thanks for watching! :)
Can you explain also that subsidies received via ACA have to be paid back depending on income? was not mentioned in the video that I recall.
Thank you for the comment but we didnt get into that level of detail because paying back the subsidy is only required if someone were to underestimated their income. We're assuming that people are being accurate. However if someone were to underestimate their annual income and if they already benefited from subsidy then you are correct.....they'll have to pay them back to the IRS when they file their income taxes for the year.
That is not true. You only have to pay back portions of the subsidy if your income is higher than what you told the ACA it was going to be. The amount you have to pay back is based on what the difference is between what subsidy amount you received versus what subsidy you should have received due to your income being higher than what you told the ACA it was going to be.
Do you need life insurance if you’re on a FIRE journey? Do you guys have a video on that... please make one!
You really only need life insurance if you have dependents, who will be hurt financially if you die.
Great video! We're still in the workforce (at 40 yrs old) with employer sponsored health insurance, but we were curious on how the exchange works. You did a great job explaining it. Thanks!
Thank you!
How do they determine your income when qualify for aid? Do they look back from your income last year? For this year, if you plan to only withdraw income for a targeted amount, how do they know if you follow through?
Is income gross or net? Rental income with mortgages specifically.
Love your channel
Thank you!
Great video! So helpful!!
Thank you so much!
I’ve been watching so many of your videos and I love how you break things down. This one made me curious about how the savings/investments used to finance early retirement would impact taxable income. That could potentially have a big impact on something like subsidies through the ACA. If you haven’t done one yet, I’d love to see one about how you plan to manage your income stream using different sources over the course of retirement. Thanks!
First...THANK YOU! We're so grateful that you're been watching all our videos. Thank you..thank you...thank you!
You bring up an excellent point/topic. Controlling your taxable income in early retirement is certainly a subject we'll need address in an upcoming video. Thank you for the request.
Whitney, let's assume you have no job, pension or SS income. If you wish to get the max. ACA subsidy you'll need to "create" just enough income to qualify for the max. subsidy. You can do this easily if you have a traditional IRA or 401k simply by converting the amount needed into a Roth IRA. You'll pay income tax on the conversion but will save much more on healthcare premiums.
@@me-lg1yw Would it work the same if you just withdrew the minimum to qualify for the max? Of course, adding 10% penalty rate? Do most 401k's allow withdrawals before 59.5?
Should you invest in a Roth or traditional Ira when it comes to getting Obama care?
Good topic to cover is calculating MAGI which is what ACA bases tax credit off of, good episode
Thank you so much!
I retired at 62 and we limit our gross income to less than $89k up here in Alaska. That way we qualifiy for subisidize health insurance under Obamacare. Our subsidized Blue Cross Gold policy cost less than $1,000 per year. The same policy would cost over $27,000 per year unsubsidized. Thus by limiting our income, we saved over $75,000 in 3 years until medicare kicks in.
Awesome
Love your channel, thanks for all the great information.
You seem like really thoughtful people, so I'd be curious to hear how y'all have weighed the ethical implications of this strategy?
Splendid video! The 3 examples from the video really drove home some positive points as it relates to retiring early. The Federal Poverty Line chart @4:44 was an excellent addition. Wonder if the numbers change for FI folks retiring abroad. When is the "How to Retire Early and Minimize Taxes Abroad" video hitting the streets? Just kidding....Thanks much making the complex...seem so simple!
That video is coming soon...LOL! You are too funny :) Thank you!
As Australians we get universal health care and the price of private healthcare is heavily regulated. It's not a perfect system, but it works well :)
Except you get locked up if you will not accept the jab, or you disagree with your government.
@@bradkimpelthe fact you call a vaccine a jab is disturbing and alarming.
I have a 10 year plan to retire at 55. I am maxing out a Roth 401k so when I leave that job at 55 I can use part of those “non-taxable” funds to keep me deep in the poverty line on paper.... This is all speculating that the ACA will still exist as we know it in 10 years of course.?
Great video! As someone with a lot of genetic predispositions to things, my biggest fear about retiring early, or even taking a break between switching jobs is going even a second without healthcare. It baffles me that the American healthcare system is tied to employment which is why I’m seriously considering emigrating when I do retire. I know this video was awhile back, but I’d love to see more content about this in a future video :)
Thanks for watching this video! Not sure if you've seen our recent videos, but we recently retired and moved to Portugal! The healthcare system is amazing and incredibly affordable! We pay less than $2,000 a year for private healthcare here for our family of four! :)
Hello! I have a question. For people that would make more than the amount to be eligible for this option because of passive income from rental properties after retirement, what would be your recommendation for health insurance?
Your videos are very helpful, thanks for all you guys do!
Michelle
There are a couple of ways that you can lower your taxable income so that you're eligible for a tax credit. A one hour session with an accountant can cost as little as $30! You may also want to look into a High Deductible Health Plan with a Health Savings Account Option. This can help you to lower your taxable income. Also, believe it or not, short term medical insurance plans have come a LONG way. You can get a plan with premiums lower than $100/month. Additionally, you may be able to enroll in a plan for up to 36 months (even with certain pre-existing conditions).
Unfortunately, the more you earn from all sources the less subsidy, if any, you would qualify for.
On the upside, the more you make the more you can afford to pay for healthcare.
Is there a plan that covers early retired individuals that would reside in US and let’s say in Portugal 50/50. I have heard about international plans
Great question. We are going to Portugal this month and we plan on looking into this further. We'll let you know exactly what we find.
@@OurRichJourney I am also interested in living in Portugal part time; did you ever get any insight about Margot's question?
You tell your US health plan that you LIVE in the US. You don’t have to tell them that you TRAVEL to Portugal. Your (HMO) insurance should cover you worldwide for any Urgent or Emergent care (not planned care, preventive care, follow-up care). Look into it by looking at your Evidence of Coverage for Urgent and emergent care. If you get Urgent or Emergency care in Portugal, give your US address. Pay for your care and then submit a request to your US HMO for reimbursement.
@@barbiec4312 I'm pretty sure you're wrong here. US medical insurance most likely will not cover expenses outside the US.
Been doing this the last 8 years, retired at 54
But how do you show income if you are retired?
Thank you for clarifying things. Can you still contribute to an existing HSA while using this type of Medicare in early retirement?
Yes, you can contribute to an HSA as long as your plan has a high deductible, which it most likely would. This is not any type of medicare, though. That's a completely different option for those 65+.
Well none of these work for me. 32 years in law enforcement and got great pension, but very expensive health insurance. County give me 600 a month to pay for insurance, but the plans are super expensive. My plan for a family is 2400 a month with a 6000 deduction. Tried Obamacare but I make to much on my pension. Cobra was more then the plans and I would not get the 600 a month if I used Cobra. I do use an HSA to pay for medical stuff and write all the premiums off at end of year so its not so painful. Only choice till 65 is for me to get a job with benefits or just go without medical and use free clinic down the street. Aint America grand!
I am in that same boat. They just raised my retiree insurance to 1500 per month. That is half my retirement check. I am now looking for a job with health insurance. My retirement from LE at 55 lasted only 2 years. Trying to get hired as a 57-year-old
is not fun at all. They don't want me. They all want 30-year-olds.
Good video, but you failed to take into account that the insurance prices vary depending on what state one is a resident of. Some will pay much less with the subsidy, some a little more, so you should have disclosed this. The prices are not set in stone.
Thanks for the note. We presented the the national average costs per plan. But you're right. Depending on the State and the provider under the category of plans, prices can very. Check out the link in the notes to access the premium calculator we used. You can search by specific zip codes to get a more detailed estimate.
That's why we need Medicare for all who want it.
👍
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That's the 1 question no one is answering, thanks you!
I agree! There are also other options beyond the ACA - like medical tourism and medical sharing (to name a few)! :)
I qualify for Medicaid but not all states have Medicaid.
BUT .. it’s not the premiums it’s the deductibles!! You did not show those!! It’s not just the monthly insurance rate at all - It’s his much you spend per year on healthcare. These subsidies are paid for by all taxpayers directly to insurance companies - no mistake about that! The amount spent on healthcare continues to rise and the ACA really did little to nothing to make HC more affordable for people who are truly poor.
What happens when trump dismantle the ACA?
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Lol Obama care
Go whole food vegan to save on health cost.
im vegan and still have health problems, that is terrible advice. going vegan won't prevent everything
@@courtneymercier5841
No it's not,it is excellent advise.
@@courtneymercier5841
If America were whole food vegan,heart disease,cancer,medical errors,diabetes,obesity and auto immune diseases would be rare in this country.I said whole,not junk food vegans.
@@arnibah I also believe that going vegan, or significantly reducing animal products, would prevent a lot, but not everything. I am not a junk food vegan and I still have the same health problems I had before I was vegan, 3 years ago. Being vegan is not a replacement for healthcare and it's not a panacea
it is probably not wise to recommend something republicans are constantly trying to get rid of