What did we miss? Post in the comments below if you've got thoughts on important expenses to consider that others might forget to include in their budget.
2.5 years post FI. Surprise costs were months of physical therapy and sports massage when transitioning from corporate office life to super-active and fit hikers and swimmers in our late 40s. In the same vein, we had only corporate clothes and little recreational clothes or sporting gear when we retired. The clothes we had to buy twice as we each lost 40 lbs during the transition. Unexpected savings were going from two automobiles to one, and that one does not get driven much unless it is raining or snowing as we tend to walk and bike when we are at home.
Excellent topic and discussion. I'm set to retire in April at 62. Although not retiring particularly early, I still give lots of thought to possible unexpected expenses. My planning includes budgeting for a new car in a couple of years, two years of assisted care in my 90s, and an annual travel fund until 80, when the fund drops in half until 85 (assuming my desire and ability to travel last that long). I've also inflated my expenses a bit in the plan modeling to include a bit of cushion, as you guys discussed. If necessary, I could easily redirect travel spending to unexpected needs. Most importantly, I expect to meet regularly with my financial advisor to review and update the plan. Having an AUM advisor is costly over the long term, but I know what that cost is and how it affects my assets. Also, for me, the peace of mind a knowledgeable advisor provides is priceless.
Thanks for the kind words and your comment, Robert. It sounds like you're thinking about a lot of the same matters but doing a better job at putting some rules in place. Your point about electing to work with a knowledgeable AUM advisor is an excellent one. They aren't for everyone for sure, but if you're eyes wide open and see the benefit in your own situation, it's our position that it's a reasonable decision. If you haven't seen it, Jason went through this decision making process as well: part 1: ua-cam.com/video/amcukbKwDxs/v-deo.html part 2: ua-cam.com/video/1O01BAnHPwA/v-deo.html
@@TwoSidesOfFI Thanks for the links! I appreciate how Jason learned enough from his AUM experience to become confident and go out on his own. I hope to do the same now that I'm retiring this year. I had a bad experience with my first advisor that led me to part ways last year after seven years. I wasn't t prepared to take over at that time, so I hired a new advisor that so far is working out well. But I still hope to follow Jason's path and "graduate" one day as well. Cheers!
@@robertdavila1451 You're welcome! I absolutely benefitted from great advisors and was sure to say that not only on the show but also to them when I was ending my relationship with their firm. I'm glad to hear that your current advisor is working out well! I'm certain you'll determine what is best for you when the time is right. -Jason
Great show. I have learned so much from the two of you... Thank you for putting these videos together... One question. Just like Fritz has 3 buckets for retirement, do you think its wise to have 3 buckets, or 3 separate categories for your budget ? 1: Fixed Expenses .. 2: Variable Expenses... 3. Emergency Fund to cover anything else... For example, pay for a new roof, new car, unexpected medical bills out of the Emergency Fund.
Thanks! So glad you’re finding value in our content. For us, higher level grouping in budgets is largely just helpful in talking about our expenses. They aren’t truly rigid spending categories. Check out our recent budget episode: Retiring With $2M: Here's How We'd Spend It ua-cam.com/video/mzR98CkGZok/v-deo.html
This year, I decided to select from ACA a Bronze subsized High Deductible Plan (HDHP) that has a health savings account (HSA) and a prescription drug plan. Plus, I am using Direct Primary Care as "gap" insurance which cost me $100 a month. I get 24x7 direct access to my doctor and other benefits. Based on my needs, the combined option above is cheaper than going with an ACA Silver or Gold plan.
I love this topic. I'm coasting to FI for another 5 years or so, and am in the process of reviewing my projected budget for the future. One big budget item I factor into my plans is transportation. More specifically to me, how many vehicles I expect to purchase in my final decades of life. I'm guessing two. :)
Great discussion guys. I have been in the healthcare for over 35 years. My personal advice to you is get the best coverage possible. I see many people that have excellent employer sponsored benefits that still have difficulty paying for healthcare related costs (non covered care, out of network costs, prescription drugs that are not on your plan formulary, etc..). I also encourage everyone to get their preventive services (usually $0 copay) , including things like mammograms, colonoscopy, vaccines to mention a few. I would also check your international coverage (things like air transport back to the USA, emergency services coverage) since you are considering part time international housing.
One other thing i forgot to ask Jason, since you live in an earthquake prone area, do you purchase earthquake insurance? I have the same issue here in the Bay area, i used to purchase it but stopped about 5 years ago because the premiums are astronomical.
Thanks! Glad you liked the ep. Having sufficient coverage *and* carrying out all preventative care is great guidance for sure. I agree 100%! I do not purchase earthquake insurance. I've thought a lot about this over the years I lived in CA (particularly in the Bay Area when I was *on* the fault). But like many, in the end I've decided not to opt for it.
Every individual and family are so different. I retired at 56 after raising a family of 4. My peak net worth at that time was about almost a million, but only 40% of that was in equities. To me the biggest factor is being debt-free. And flexible, those two things. What you spoke actually happened in our life. Our youngest is 25, autistic, and will live with us until we're gone. I'm about a year-and-a-half away from claiming social security at age 62 and have been living on savings since age 56. Our boy gets SSI which isn't much. When I start claiming my social security, a few months later the wife will be claiming. They will adjust our son to disabled adult child. So our income will come from a various set of streams. I'll probably pull around 4% from the IRAs. I also get about 4% in staking rewards from Cardano. My house is fully paid for and we can downsize if necessary. Our state allows us to earn money for caring for our son. So we basically have a part-time job doing what we would be doing anyway. All the weddings and college education's are behind us now. We actually have more disposable income now and going forward then when I was working. The boy of course is on State Medicaid but my wife and I use one of those sharing ministry organizations. That's worked out great for us.
Your comment hit home for me. We have/had a very similar situation and made so many plans based on our son’s needs now and in the future. Tragically, our sweet, precious son died suddenly (cardiac arrest) this past Sunday. Nothing is permanent and our plans will change, of course, once we can inch past our shock and devastation. If your son allows - ours was a sensory seeker - hug him a little tighter. ❤
@@tobirates916 We are so very sorry for your loss. It's impossible for us to understand what your family has gone through. May you find comfort in the company of family and friends. Best wishes to you.
Love your show. I get so much useful info and hope out of it. So had child with cancer when she was 9. 5 years of heavy treatment. Had to curtail saving for retirement in favor of medical bills. 22 years later she is all grown up with a beautiful daughter. Her and her family moved back in with us a year after i retired at 60, due to their having health issues. Now need a bigger house. Budgeting is a bit off now lol. All good wouldn't change a thing. Life goes on and you figure the money out as you go.
I calculated the "sinking fund for large purchases" monthly amount to determine how much over my "typical" expenses I need to plan for in retirement. This is an important exercise to show that I actually need more in retirement income than I think!
🙏 thanks both - travel is the budget I most worry about. Our current thoughts range from a couple of long haul breaks a year to 6 months travelling a year depending on how we feel at the time! I don’t want to over do it and work for too long, but also don’t want to retire and then think I haven’t allocated enough and by then it’s too late.
@Laura Atwood Hi Laura sounds lovely, I’m looking to keep my home and travel at the same time - our house is small and doesn’t cost too much to maintain. We live in Wales and the weather is nice in the summer so staying at home is no issue, but the winter is when I’ll be looking to sunnier climates. Don’t think I would ever be fully nomadic, I love travelling but enjoy home comforts to come back to, and my garden 😊. I think the only true way to decide what’s right for me is to transition into the lifestyle before fully retiring so i can try to gauge what’s right and see how much I can afford! Just can’t wait to get to FI to start testing! Wishing you lots of luck on your journey - hope it all works out for you 🙏
@Laura Atwood This is one of the reasons why I bought a condo. When the time comes, I will be able to travel for lengths at a time and do not have to worry about lawn care, mail, burglars, & etc.
We support our 3 children - one of whom is working below a true living wage, another in college, youngest still in high school. I budget a monthly "regular expense" value that includes their basic costs of food, car insurance, mobile phone, entertainment subscriptions, and healthcare. In my year-over-year projections to age 95 I do *not* reduce this monthly value even though it's certain that all kids will move along eventually. This is one way that I plan conservatively rather than assume that there will be major reductions in cost at such and such a date.
We really enjoy your discussions. We usually listen on the podcast so we just saw that Eric's FI date has now changed to 2025 with a question mark. It keeps getting knocked into the future. We reached our FI number in late 2021. My wife Elaine retired that year but I've pushed my RE date back several times for different reasons. First it was pandemic rules limiting travel and then it was the big hit our portfolio took by mid-2022. We've got me now pretty much locked in for a spring 2023 RE date. The math says that our $ will be fine but it still makes me a bit nervous. Time has me more worried than the side of the equation. I can always make more money but I can not get time back once the day is done. Keep sharing these great conversations. Thanks
Thanks! For more on Eric's current status be sure to check out this recent episode: ua-cam.com/video/MpYrlX9mFT0/v-deo.html You're thinking about the right "life math" for sure, and something we also consider often. We think you summed it up well! Thanks for your support and best wishes to you and your wife.
Just had my youngest graduate from a state college in AZ, luckily she got a job and with 3 room mates lives on her own - realistically theres a 50/50 chance they will have to move back in with you after graduation. Re: college, $200k is about the floor for a 4 yr degree and the kids can stay on your plan until 26, whilst in college they can get campus insurance for a price. DO PLAN for something happening to your student during their 4 yrs, I'd set aside a couple grand for an emergency room visit or two...
Yeah, Medicare age is still a few years away for me, but its a convoluted mess and became a quest of mine. Advantage Plans are a restricted HMO-PPO whereby the insurance carrier is the decider of care and costs. On the face of it, they look 'cheap', but I personally wouldn't get any of them. For myself, I am thinking of Supplement Plan G-HD (high deductable) It covers everything Plan G does (the most coverage available now), but there is a (currently) ~ $3,000 deductable a year, which isn't really bad compared to the deductible on Advantage Plans. Plus, for this year, the monthly premium is like $40 in my locale -- this is on top of the Part B monthly deductable -- Plus Dental/Hearing/Vision and Part D, prescriptions. Now, Medicare here is the primary payer, so you only get the leftover of what they didn't cover, so you'd have to have a really signifigant issue to hit that limit. And year, Yearly income plays in to it. Medicare does a 2 yr lookback to see reported earnings. If you get whacked with RMDs in your 70s, That can massiviely increase your monthly Part B premium! Also, there. is no spouse/family plan, it's all individual. Sigh.
You've hit on some important considerations, Pete. We touched on some in our first of the two healthcare episodes but not all of these. For sure there is an awful lot to consider with our current options. Here's to hoping that improves someday! Best wishes to you
RMDs: • the original SECURE Act, which was enacted in 2019, extended the age at which you must start taking RMDs from 70½ to 72. • There's a two-step process under the SECURE 2.0 Act for increasing in the age when RMDs become necessary. Step 1: Beginning in 2023, the age to start taking RMDs jumps from 72 to 73. Step 2: Beginning in 2033, it creeps up again to 75.
Quick note to express my gratitude for the time and effort you both put into the content. I am an avid listener(watcher) and have even introduced your content to a couple of friends of mine, who similarly enjoy. My question relates to children. I realise you have touched on children/FI a number of times on your podcast/s. The point I didnt catch and am struggling with: How to ensure that the kids understand that there is a significant amount of hard work to be done prior to reaching the point of FI. I am wanting to make sure that my children (9&11) dont see me as someone who is just giving up on active work, but has sacrificed over time to be able to get to the point of being able to make the choice. Anyway - any thoughts you both have/reading you have seen would be greatly appreciated.
Thank you! We appreciate your support. Your question is an important one. For both of us, demonstrating that idea is probably the easiest way. Our kids have seen that our successes have come as the result of hard work, deliberate planning, and constant learning and growth. In addition, as they've neared adulthood, it's become increasingly easier - and important - to talk with them about our goals and decisions we've made to get here. That's not to say your average teen can take all that in and fully comprehend it on their first hearing. But like most things relating to parenting, it's a journey, and one in which the success rate increases over time :) As you no doubt know, our kids see/hear and comprehend a lot more than we give them credit for! Best wishes to you
My son (30 years old) was in a car accident recently in which it will take 8 - 12 months to fully recover. He had a total of five surgeries at Trauma hospital, his hip and his right leg which had about an inch of bone loss on his Tibia and Fibula. From the accident through the surgeries $250,000 and we aren't done. PT and OT in March. If not for having health insurance he would of been paying for a very long time.
i remember hearing about a 3% of cost of house maintenance fund? somewhere to start.....also depending on how old the house is (or like me. apartment so not needed :)
Latecomer to your podcast. Where does taxes ( income from IRAs, or capital gain on taxable accounts, and real estate taxes for homeowners fit into your budgets? I see mortgage but no line item for taxes… did you fold it into your mortgage line item?
Jason here - Welcome! Great question. And taxes are such an individual question as they vary so much based upon your individual circumstances. For me, income taxes are sufficiently low at present that I don't explicitly budget for them. But if Eric continues some form of earning post-RE from his business, he'll absolutely be budgeting for those taxes. As for real estate, I have property taxes in escrow so they are part of my mortgage budget line item. And while some increases to those may come over time, it's not as challenging in CA as in other states given legislation in place.
@@TwoSidesOfFI I just saw this comment so I can tell you since I use both...NewRetirement has many more levers to turn, allows you to set your monthly expenses but what I dont like is it asks YOU to set the expected returns. Maxifi uses deterministic planning where it solves for you what your discretionary income should be (without labeling any of the buckets like travel, health ins. etc) based on a conservative return generated from the 30 yr Treasury rate and inflation based on 30 year TIPS as well as letting you input your predicted housing costs. The program then generates a discretionary income that is smoothed over your whole lifetime with the idea that no one really likes to change their spending rate over time much at all so it ensures it doesn't change that much over time
Great episode guys. Thanks for sharing. Regarding the 4% rule of thumb discussion…I’ve been thinking about this quite a bit recently as I approach retirement in July. In my retirement plan I model withdrawals based on my projected spend, which is not really much different than what we are spending currently plus extra for travel, heathcare, and unexpected expenses. I bump this up every year by an estimated inflation rate that is really just an (hopefully) educated guess based on historic inflation rates. In reality, however, our personal inflation rate -our increase in spending year-over-year the past five years - has been relatively flat. In fact, our 2022 spending was down 2%-3% from 2021. Therefore I think my modeling is on the conservative side, which provides me some comfort. Make sense?
Thanks, David! Sounds like you've got a thoughtful plan that is giving you confidence and that's pretty important for sure. You're in the home stretch!
I think my biggest unknown around costs for my kids is my legacy plan. Do I design my plan and spend during retirement in order to leave them a certain sum of money? How much? Or should I give them periodic gifts during my retirement when it could really help them?
Jason here - What a great question, David. I've got something plugged into the SWR Toolbox for now but I know that may not be the final answer. This topic definitely requires plenty of thought and of course the answer may change over time
Hi for what it’s worth I would give to your kids whilst you are still here to see the good that comes from it, also receiving money whilst you are still young can really transform a life and give extra years of happiness.
When our kids were in college, it seemed like the lifestyle expenses were as much as the tuition. Wedding costs are high, before during and after "the big day". Hobby tools can add up. Travel and eating out are more expensive today than in years past.
John F. Kennedy Airport has the longest civilian runway on the East Coast of the United States. Although some lists put it just below Harry Reid in terms of length, a recent reconstruction made JFK Airport’s longest runway even longer. As of 2011, the revamped Bay Runway is 14,572 feet long-that’s nearly 3 miles. 😛
Thanks for the info! That's what I learned too in researching this episode :) I put a link in the show notes with what is allegedly the current top list -J
Just retired at the end of 2022 and signed up for a Bronze w/ HSA. Oddly, it was only possible to get the tax credit by waiting until Jan 2023, and the insurance starts February 1. So theoretically I can retroactively do COBRA, but I certainly don't want to. So we're exposed for a month. It's a risk estimate for a pool of two - hard to do - because it's lumpy and unpredictable like Jason says. "Be healthy and be lucky" is the risky behavior. Also, sock away the max in the HSA because if you have a "bad" year then you can cover the full deductible. Side note, I paid the first insurance premium with a credit card - so at least I get points ! lol.
There is standard healthcare and then long term healthcare. What if you or your spouse in the future has a stroke or Alzheimer's and needs 24 hour care? Or do you assume you'll just get old and have a quick death some day? I always ask people who don't think about long term healthcare what if the worse thing happens and you live to be 100? As for home expenses, I think most underestimate how much it costs to live in a house. Look over a 10-20 year period and you'll see how much you spend (upkeep, maintenance, furniture, appliances, carpeting/flooring, roof, upgrades, etc.). We went ahead and did all of our major upgrades in just the past 2 years so outside of appliances, don't expect any major household expenses for a while. But 20 years from now, maybe we'll tire of our bathrooms and kitchen and want to upgrade again. Hate to be stuck in a house for 30-40 years and not be able to ever do any upgrades.
As Warren Buffett say’s depreciation is a real expense. So…as part of your FIRE budget you should calculate the depreciation of your current capital assets (house, cars, boat, motorcycle etc) and include that as a line item on your annual budget. It doesn’t have to be funded separately but it should be included when calculating your SWR.
These assets certainly belong on the balance sheet and are indeed a part of net worth. We're not sure you get your meaning with respect to SWR though. Only assets that are up for liquidation i.e. are to be spent, should be part of the total portfolio value against which withdrawal rate is determined. Naturally, someone anticipating selling their primary residence at FI should definitely consider the value of this asset (less any mortgage to be repaid at sale) part of their portfolio since they'll be turning it into cash. But otherwise? This is not typically how the math is done.
Sorry, my point was to include depreciation in the numerator of your SWR calculation not the denominator. i.e. depreciation should be considered an annual expense in your FIRE budget.
My boyfriend has 2 adult daughters at home. They are 25 and 27. Southern CA. Both are college educated. One works full time. The other one barely works after moving back home after having a full time job in NY. Honestly they seem to just be taking advantage of the situation with no plans to move out. He doesn’t charge them any rent. Not sure when this would end. Beware being too generous in letting adult children move back home when they don’t have a plan.
been there, done that. Kids are not stupid when they realize that the parents will continue to support them. But, the support just delays their maturity and emotional development.
Even with very good health insurance, brand name prescription drugs are a big budget buster if a generic version is available. This matters bc generic prescription drugs don't always work as well as brand name ones.
Mental healthcare costs are nearly always either out of network or just totally not covered. Some caregivers don't even take insurance, and matching a patient to a caregiver is really not a financial equation anyway. As plans go; ACA plans in my state are all managed care (HMO style, typical nightmare) and have no out of state coverage for a kid in college, or a specialist just over the state border if you have a serious crisis. So we went with COBRA for 18 months and this year we started on a costly private plan. My healthcare costs between these two factors are a full-on gross salary for some people. I did NOT count on this in RE but here it is.
Have you seen the new academic safe withdrawal research that removes some survivorship bias by including new international data that found a 2.6% withdrawal rate? The Rational Reminder podcast interviewed the researcher a couple of weeks ago and I'm surprised more FIRE shows haven't talked about it. Jason's comment about long-term data and the bogleheads reminded me of it, it would be fun to hear your thoughts on it!
Jason here - I have! It was an interesting discussion. It’s been some time now but the key take home for me was about considering the 4% rule from a global perspective. It works well most often in the US and one other country that I can’t recall. From ERNs calculator and others, all cohorts to date can draw higher. I do agree that a blind 4% rule even in the US is much too aggressive for me. I’m withdrawing below 3% but particularly in current conditions, even considering CAPE-adjusted, I can go quite a bit higher if needed. All that said, as always RR brings great research and discussion to the table!
Hi David, which are you looking for? If you mean relating to budget - stay tuned! We've got a specific episode on that coming up soon. As for some other spreadsheets we've shared previously, check out the Where to Live series (part 1: ua-cam.com/video/CoD8Pgbo3EE/v-deo.html) and Rebalancing Tool (ua-cam.com/video/PiXNzkS7LrY/v-deo.html) for a few of these.
I cannot understand how anyone can get any Aca subsidy , especially as a single person. Just basic living expenses are higher than the $54k/yr MAGI limit unless I live super lean. After tax that’s less than $4k a month. Am I misunderstanding something ?Anyone have tips?
@@christinewallace9251 I thought about that but then that cash is out of the market and I am potentially missing out on more gains than I’d save by qualifying. Can’t really win.
Jason here - More people being covered can make it easier for sure (my family is three people). But you're right, not everyone will be able to qualify for the same (or any) subsidy. It's also true that there are ways to lower your MAGI, which can help. Common ones include HSA and IRA contributions and student loan interest: www.healthcare.gov/reporting-deductions/ While we do maintain a two-year cash position (covered in other episodes), this has no impact on how my wife + I generate income nor how we meet my expenses + financial obligations. The income we realize from all sources: dividends + distributed capital gains, portfolio sales that generate gains, and our "fun job" income, is below the MAGI limit for our family. That's why we are eligible for ACA premium tax credits.
Indeed, any selling in a down market doesn’t feel great. But this is where a diverse portfolio and rebalancing comes in. I talked about this in a recent episode where I was mostly selling bonds. Yes they were down too, but nowhere near as much as stocks. Felt a little better about that. -Jason ua-cam.com/video/eteraaI_GEA/v-deo.html
@@TwoSidesOfFI definitely considering it. Healthcare costs are just outrageous in the states even for those who are well ensured. Plus, I think my FI dollars can go further in a place like Mexico.
Thank goodness i don’t live in the USA - i literally don’t have to pay any attention to large scale healthcare costs - the out of pocket healthcare expenses in my country are in no way material. Ok i may have to wait for non-urgent care but otherwise i simply don’t have to think about it. No wonder your F.I.R.E numbers are so much higher.
If converting retirement assets to Roth or spending them down prior to RMDs works for you, all the better! We’ve all got to do what works for our situation.
@@TwoSidesOfFI This is the second level which brings control back to the individual - the planning to convert or spend down before RMDs hit. Great if this planning occurs, not so great if no planning was done. Good thing now is if RMDs increases to 75 as recently broadcasted, a lot of us have yet another opportunity to help ourselves
I'm bothered by the fact that this guy retired early, with a mortgage, and then lowered his income so that I have to work and subsidize his medical insurance. That's called welfare. he probably gets, or could get food assistance and other assistance based on income. If you retire early, you should be able to afford it on your own, not exploit a system on the backs of others. Maybe some people are ok with this, but I have moral objections to it.
He’s not exploiting. If you don’t like the rules, change your vote. As long as our current admin is in control, it doesn’t pay to make money. I don’t like the rules either, but need to use them to the advantage of my family with no moral qualms
Jason (“this guy”) here - to be sure, I don’t receive welfare nor food assistance. Our family’s annual income is merely low enough under our current system to qualify for healthcare premium subsidization. This is a common approach for people prior to Medicare eligibility. I still pay out of pocket costs for all care up to the (high) deductibles. Honestly, I’d prefer to pay higher taxes and offer free medical care for all Americans, as I believe it’s a basic human right - as nearly all countries do. But this is the system we have and I am merely employing it as designed. I’d suggest there is an opportunity to go after bigger targets first, like stock trading by elected representatives or billionaires paying no income taxes at all.
The rules are the rules. Your logic would exclude tax efficiency strategies which usually are a large part of retirement planning and execution. If bothered un subscribe and don't watch this channel.
What did we miss? Post in the comments below if you've got thoughts on important expenses to consider that others might forget to include in their budget.
2.5 years post FI. Surprise costs were months of physical therapy and sports massage when transitioning from corporate office life to super-active and fit hikers and swimmers in our late 40s. In the same vein, we had only corporate clothes and little recreational clothes or sporting gear when we retired. The clothes we had to buy twice as we each lost 40 lbs during the transition. Unexpected savings were going from two automobiles to one, and that one does not get driven much unless it is raining or snowing as we tend to walk and bike when we are at home.
Thanks so much for sharing, Jolene. Wishing you the best for good health and in all things.
40lb ? Respect.
This is my favorite finance related podcast & UA-cam channel. Having the pre & post FI views are insightful entertaining & incredibly relevant.
Thank you so much! We truly appreciate your support. We’d love a podcast review if you’ve not left one before.
Excellent topic and discussion. I'm set to retire in April at 62. Although not retiring particularly early, I still give lots of thought to possible unexpected expenses. My planning includes budgeting for a new car in a couple of years, two years of assisted care in my 90s, and an annual travel fund until 80, when the fund drops in half until 85 (assuming my desire and ability to travel last that long). I've also inflated my expenses a bit in the plan modeling to include a bit of cushion, as you guys discussed. If necessary, I could easily redirect travel spending to unexpected needs. Most importantly, I expect to meet regularly with my financial advisor to review and update the plan. Having an AUM advisor is costly over the long term, but I know what that cost is and how it affects my assets. Also, for me, the peace of mind a knowledgeable advisor provides is priceless.
Thanks for the kind words and your comment, Robert. It sounds like you're thinking about a lot of the same matters but doing a better job at putting some rules in place. Your point about electing to work with a knowledgeable AUM advisor is an excellent one. They aren't for everyone for sure, but if you're eyes wide open and see the benefit in your own situation, it's our position that it's a reasonable decision. If you haven't seen it, Jason went through this decision making process as well:
part 1: ua-cam.com/video/amcukbKwDxs/v-deo.html
part 2: ua-cam.com/video/1O01BAnHPwA/v-deo.html
@@TwoSidesOfFI Thanks for the links! I appreciate how Jason learned enough from his AUM experience to become confident and go out on his own. I hope to do the same now that I'm retiring this year. I had a bad experience with my first advisor that led me to part ways last year after seven years. I wasn't t prepared to take over at that time, so I hired a new advisor that so far is working out well. But I still hope to follow Jason's path and "graduate" one day as well. Cheers!
@@robertdavila1451 You're welcome! I absolutely benefitted from great advisors and was sure to say that not only on the show but also to them when I was ending my relationship with their firm. I'm glad to hear that your current advisor is working out well! I'm certain you'll determine what is best for you when the time is right. -Jason
Great show. I have learned so much from the two of you... Thank you for putting these videos together... One question. Just like Fritz has 3 buckets for retirement, do you think its wise to have 3 buckets, or 3 separate categories for your budget ?
1: Fixed Expenses .. 2: Variable Expenses... 3. Emergency Fund to cover anything else... For example, pay for a new roof, new car, unexpected medical bills out of the Emergency Fund.
Thanks! So glad you’re finding value in our content. For us, higher level grouping in budgets is largely just helpful in talking about our expenses. They aren’t truly rigid spending categories. Check out our recent budget episode:
Retiring With $2M: Here's How We'd Spend It
ua-cam.com/video/mzR98CkGZok/v-deo.html
This year, I decided to select from ACA a Bronze subsized High Deductible Plan (HDHP) that has a health savings account (HSA) and a prescription drug plan.
Plus, I am using Direct Primary Care as "gap" insurance which cost me $100 a month. I get 24x7 direct access to my doctor and other benefits.
Based on my needs, the combined option above is cheaper than going with an ACA Silver or Gold plan.
Thanks for sharing! We haven't heard of that option before. Glad to learn it's working well for you
I love this topic. I'm coasting to FI for another 5 years or so, and am in the process of reviewing my projected budget for the future. One big budget item I factor into my plans is transportation. More specifically to me, how many vehicles I expect to purchase in my final decades of life. I'm guessing two. :)
Thanks for sharing, Roberto! Glad you liked the ep
Excellent discussion guys, always enjoy the genuine interactions between two friends. Great Job.
Thanks, James!
Just love to see you guys talking/planning/sharing ideas as friends and giggling. Cool stuff! Thanks.
Thanks! We are indeed rather silly at times and are glad others are willing to put up with us
Great discussion guys. I have been in the healthcare for over 35 years. My personal advice to you is get the best coverage possible. I see many people that have excellent employer sponsored benefits that still have difficulty paying for healthcare related costs (non covered care, out of network costs, prescription drugs that are not on your plan formulary, etc..). I also encourage everyone to get their preventive services (usually $0 copay) , including things like mammograms, colonoscopy, vaccines to mention a few. I would also check your international coverage (things like air transport back to the USA, emergency services coverage) since you are considering part time international housing.
One other thing i forgot to ask Jason, since you live in an earthquake prone area, do you purchase earthquake insurance? I have the same issue here in the Bay area, i used to purchase it but stopped about 5 years ago because the premiums are astronomical.
Very good tips! What is your opinion about long term disability insurance?
Thanks! Glad you liked the ep. Having sufficient coverage *and* carrying out all preventative care is great guidance for sure. I agree 100%! I do not purchase earthquake insurance. I've thought a lot about this over the years I lived in CA (particularly in the Bay Area when I was *on* the fault). But like many, in the end I've decided not to opt for it.
Every individual and family are so different. I retired at 56 after raising a family of 4. My peak net worth at that time was about almost a million, but only 40% of that was in equities.
To me the biggest factor is being debt-free. And flexible, those two things. What you spoke actually happened in our life.
Our youngest is 25, autistic, and will live with us until we're gone. I'm about a year-and-a-half away from claiming social security at age 62 and have been living on savings since age 56. Our boy gets SSI which isn't much. When I start claiming my social security, a few months later the wife will be claiming. They will adjust our son to disabled adult child. So our income will come from a various set of streams.
I'll probably pull around 4% from the IRAs. I also get about 4% in staking rewards from Cardano. My house is fully paid for and we can downsize if necessary.
Our state allows us to earn money for caring for our son. So we basically have a part-time job doing what we would be doing anyway.
All the weddings and college education's are behind us now. We actually have more disposable income now and going forward then when I was working.
The boy of course is on State Medicaid but my wife and I use one of those sharing ministry organizations. That's worked out great for us.
Thanks so much for sharing your story, Jfhelwig. Best wishes to you and your family.
Your comment hit home for me. We have/had a very similar situation and made so many plans based on our son’s needs now and in the future. Tragically, our sweet, precious son died suddenly (cardiac arrest) this past Sunday. Nothing is permanent and our plans will change, of course, once we can inch past our shock and devastation. If your son allows - ours was a sensory seeker - hug him a little tighter. ❤
@@tobirates916 heartbroken for you friend
@@tobirates916 We are so very sorry for your loss. It's impossible for us to understand what your family has gone through. May you find comfort in the company of family and friends. Best wishes to you.
Love your show. I get so much useful info and hope out of it. So had child with cancer when she was 9. 5 years of heavy treatment. Had to curtail saving for retirement in favor of medical bills. 22 years later she is all grown up with a beautiful daughter. Her and her family moved back in with us a year after i retired at 60, due to their having health issues. Now need a bigger house. Budgeting is a bit off now lol. All good wouldn't change a thing. Life goes on and you figure the money out as you go.
I calculated the "sinking fund for large purchases" monthly amount to determine how much over my "typical" expenses I need to plan for in retirement. This is an important exercise to show that I actually need more in retirement income than I think!
These are such valuable exercises, aren’t they? Best wishes to you, Kim
🙏 thanks both - travel is the budget I most worry about. Our current thoughts range from a couple of long haul breaks a year to 6 months travelling a year depending on how we feel at the time! I don’t want to over do it and work for too long, but also don’t want to retire and then think I haven’t allocated enough and by then it’s too late.
Yep, you've hit the nail on the head! Our wants are truly worth thinking through carefully.
@Laura Atwood Hi Laura sounds lovely, I’m looking to keep my home and travel at the same time - our house is small and doesn’t cost too much to maintain. We live in Wales and the weather is nice in the summer so staying at home is no issue, but the winter is when I’ll be looking to sunnier climates. Don’t think I would ever be fully nomadic, I love travelling but enjoy home comforts to come back to, and my garden 😊. I think the only true way to decide what’s right for me is to transition into the lifestyle before fully retiring so i can try to gauge what’s right and see how much I can afford! Just can’t wait to get to FI to start testing! Wishing you lots of luck on your journey - hope it all works out for you 🙏
@Laura Atwood This is one of the reasons why I bought a condo. When the time comes, I will be able to travel for lengths at a time and do not have to worry about lawn care, mail, burglars, & etc.
We support our 3 children - one of whom is working below a true living wage, another in college, youngest still in high school. I budget a monthly "regular expense" value that includes their basic costs of food, car insurance, mobile phone, entertainment subscriptions, and healthcare. In my year-over-year projections to age 95 I do *not* reduce this monthly value even though it's certain that all kids will move along eventually. This is one way that I plan conservatively rather than assume that there will be major reductions in cost at such and such a date.
Really appreciate you guys doing this channel. Really enjoy listening. Keep up the good work and content production!
Thanks for your support!
We really enjoy your discussions. We usually listen on the podcast so we just saw that Eric's FI date has now changed to 2025 with a question mark. It keeps getting knocked into the future. We reached our FI number in late 2021. My wife Elaine retired that year but I've pushed my RE date back several times for different reasons. First it was pandemic rules limiting travel and then it was the big hit our portfolio took by mid-2022. We've got me now pretty much locked in for a spring 2023 RE date. The math says that our $ will be fine but it still makes me a bit nervous. Time has me more worried than the side of the equation. I can always make more money but I can not get time back once the day is done. Keep sharing these great conversations. Thanks
Thanks! For more on Eric's current status be sure to check out this recent episode: ua-cam.com/video/MpYrlX9mFT0/v-deo.html
You're thinking about the right "life math" for sure, and something we also consider often. We think you summed it up well! Thanks for your support and best wishes to you and your wife.
Just had my youngest graduate from a state college in AZ, luckily she got a job and with 3 room mates lives on her own - realistically theres a 50/50 chance they will have to move back in with you after graduation. Re: college, $200k is about the floor for a 4 yr degree and the kids can stay on your plan until 26, whilst in college they can get campus insurance for a price. DO PLAN for something happening to your student during their 4 yrs, I'd set aside a couple grand for an emergency room visit or two...
Yeah, Medicare age is still a few years away for me, but its a convoluted mess and became a quest of mine. Advantage Plans are a restricted HMO-PPO whereby the insurance carrier is the decider of care and costs. On the face of it, they look 'cheap', but I personally wouldn't get any of them. For myself, I am thinking of Supplement Plan G-HD (high deductable) It covers everything Plan G does (the most coverage available now), but there is a (currently) ~ $3,000 deductable a year, which isn't really bad compared to the deductible on Advantage Plans. Plus, for this year, the monthly premium is like $40 in my locale -- this is on top of the Part B monthly deductable -- Plus Dental/Hearing/Vision and Part D, prescriptions. Now, Medicare here is the primary payer, so you only get the leftover of what they didn't cover, so you'd have to have a really signifigant issue to hit that limit. And year, Yearly income plays in to it. Medicare does a 2 yr lookback to see reported earnings. If you get whacked with RMDs in your 70s, That can massiviely increase your monthly Part B premium! Also, there. is no spouse/family plan, it's all individual. Sigh.
You've hit on some important considerations, Pete. We touched on some in our first of the two healthcare episodes but not all of these. For sure there is an awful lot to consider with our current options. Here's to hoping that improves someday! Best wishes to you
RMDs:
• the original SECURE Act, which was enacted in 2019, extended the age at which you must start taking RMDs from 70½ to 72.
• There's a two-step process under the SECURE 2.0 Act for increasing in the age when RMDs become necessary.
Step 1: Beginning in 2023, the age to start taking RMDs jumps from 72 to 73.
Step 2: Beginning in 2033, it creeps up again to 75.
Very true, Tom. Thanks for the summary. We only covered the second part of the RMD changes in the show notes for simplicity.
Great conversation on a very relevant topic, thanks for sharing
For me, so far so good, fist year plan vs budget is all well and fine 🤓👍
Thanks, Enrique! Glad to hear it. Any big lessons learned along the way so far?
Quick note to express my gratitude for the time and effort you both put into the content. I am an avid listener(watcher) and have even introduced your content to a couple of friends of mine, who similarly enjoy. My question relates to children. I realise you have touched on children/FI a number of times on your podcast/s. The point I didnt catch and am struggling with: How to ensure that the kids understand that there is a significant amount of hard work to be done prior to reaching the point of FI. I am wanting to make sure that my children (9&11) dont see me as someone who is just giving up on active work, but has sacrificed over time to be able to get to the point of being able to make the choice. Anyway - any thoughts you both have/reading you have seen would be greatly appreciated.
Thank you! We appreciate your support. Your question is an important one. For both of us, demonstrating that idea is probably the easiest way. Our kids have seen that our successes have come as the result of hard work, deliberate planning, and constant learning and growth. In addition, as they've neared adulthood, it's become increasingly easier - and important - to talk with them about our goals and decisions we've made to get here. That's not to say your average teen can take all that in and fully comprehend it on their first hearing. But like most things relating to parenting, it's a journey, and one in which the success rate increases over time :) As you no doubt know, our kids see/hear and comprehend a lot more than we give them credit for! Best wishes to you
@@TwoSidesOfFI thanks for the response. Cheers
Yes! Backpacking gear is not cheap. Buy quality is the best advice I can give.
Very true on both counts, Matthew
My son (30 years old) was in a car accident recently in which it will take 8 - 12 months to fully recover.
He had a total of five surgeries at Trauma hospital, his hip and his right leg which had about an inch of bone loss on his Tibia and Fibula. From the accident through the surgeries $250,000 and we aren't done. PT and OT in March. If not for having health insurance he would of been paying for a very long time.
Very sorry to learn of your son's accident, Robert. We wish him a full and as fast a recovery as possible.
i remember hearing about a 3% of cost of house maintenance fund? somewhere to start.....also depending on how old the house is (or like me. apartment so not needed :)
We’ve heard this rule of thumb too. And your point is an excellent one about a key benefit of renting!
Latecomer to your podcast. Where does taxes ( income from IRAs, or capital gain on taxable accounts, and real estate taxes for homeowners fit into your budgets? I see mortgage but no line item for taxes… did you fold it into your mortgage line item?
Jason here - Welcome! Great question. And taxes are such an individual question as they vary so much based upon your individual circumstances. For me, income taxes are sufficiently low at present that I don't explicitly budget for them. But if Eric continues some form of earning post-RE from his business, he'll absolutely be budgeting for those taxes. As for real estate, I have property taxes in escrow so they are part of my mortgage budget line item. And while some increases to those may come over time, it's not as challenging in CA as in other states given legislation in place.
Enjoying your program. I used Maxifi Planner to get a good idea on planning withdrawls and post 65 medicare expenses...mind blown!!
Thanks! How does it compare to offerings like NewRetirement.com, if you're familiar with them
@@TwoSidesOfFI I just saw this comment so I can tell you since I use both...NewRetirement has many more levers to turn, allows you to set your monthly expenses but what I dont like is it asks YOU to set the expected returns. Maxifi uses deterministic planning where it solves for you what your discretionary income should be (without labeling any of the buckets like travel, health ins. etc) based on a conservative return generated from the 30 yr Treasury rate and inflation based on 30 year TIPS as well as letting you input your predicted housing costs. The program then generates a discretionary income that is smoothed over your whole lifetime with the idea that no one really likes to change their spending rate over time much at all so it ensures it doesn't change that much over time
Great discussion guys….. as always
Great episode guys. Thanks for sharing. Regarding the 4% rule of thumb discussion…I’ve been thinking about this quite a bit recently as I approach retirement in July. In my retirement plan I model withdrawals based on my projected spend, which is not really much different than what we are spending currently plus extra for travel, heathcare, and unexpected expenses. I bump this up every year by an estimated inflation rate that is really just an (hopefully) educated guess based on historic inflation rates. In reality, however, our personal inflation rate -our increase in spending year-over-year the past five years - has been relatively flat. In fact, our 2022 spending was down 2%-3% from 2021. Therefore I think my modeling is on the conservative side, which provides me some comfort. Make sense?
Thanks, David! Sounds like you've got a thoughtful plan that is giving you confidence and that's pretty important for sure. You're in the home stretch!
I think my biggest unknown around costs for my kids is my legacy plan. Do I design my plan and spend during retirement in order to leave them a certain sum of money? How much? Or should I give them periodic gifts during my retirement when it could really help them?
Jason here - What a great question, David. I've got something plugged into the SWR Toolbox for now but I know that may not be the final answer. This topic definitely requires plenty of thought and of course the answer may change over time
When in doubt, consider doing both. Just make sure you don't become a burden to your children, though.
Hi for what it’s worth I would give to your kids whilst you are still here to see the good that comes from it, also receiving money whilst you are still young can really transform a life and give extra years of happiness.
When our kids were in college, it seemed like the lifestyle expenses were as much as the tuition. Wedding costs are high, before during and after "the big day". Hobby tools can add up. Travel and eating out are more expensive today than in years past.
All true! It’s definitely essential to ensure we think about all these important expenses
John F. Kennedy Airport has the longest civilian runway on the East Coast of the United States. Although some lists put it just below Harry Reid in terms of length, a recent reconstruction made JFK Airport’s longest runway even longer. As of 2011, the revamped Bay Runway is 14,572 feet long-that’s nearly 3 miles. 😛
Thanks for the info! That's what I learned too in researching this episode :) I put a link in the show notes with what is allegedly the current top list -J
Just retired at the end of 2022 and signed up for a Bronze w/ HSA. Oddly, it was only possible to get the tax credit by waiting until Jan 2023, and the insurance starts February 1. So theoretically I can retroactively do COBRA, but I certainly don't want to. So we're exposed for a month. It's a risk estimate for a pool of two - hard to do - because it's lumpy and unpredictable like Jason says. "Be healthy and be lucky" is the risky behavior. Also, sock away the max in the HSA because if you have a "bad" year then you can cover the full deductible. Side note, I paid the first insurance premium with a credit card - so at least I get points ! lol.
is there an airport in Bangor? I have been to the Portland Jetport, but not Bangor.
Indeed there is! Quite a bit smaller than the Portland Jetport but you can fly direct to some decent hubs from Bangor.
There is standard healthcare and then long term healthcare. What if you or your spouse in the future has a stroke or Alzheimer's and needs 24 hour care? Or do you assume you'll just get old and have a quick death some day? I always ask people who don't think about long term healthcare what if the worse thing happens and you live to be 100?
As for home expenses, I think most underestimate how much it costs to live in a house. Look over a 10-20 year period and you'll see how much you spend (upkeep, maintenance, furniture, appliances, carpeting/flooring, roof, upgrades, etc.). We went ahead and did all of our major upgrades in just the past 2 years so outside of appliances, don't expect any major household expenses for a while. But 20 years from now, maybe we'll tire of our bathrooms and kitchen and want to upgrade again. Hate to be stuck in a house for 30-40 years and not be able to ever do any upgrades.
As Warren Buffett say’s depreciation is a real expense. So…as part of your FIRE budget you should calculate the depreciation of your current capital assets (house, cars, boat, motorcycle etc) and include that as a line item on your annual budget. It doesn’t have to be funded separately but it should be included when calculating your SWR.
These assets certainly belong on the balance sheet and are indeed a part of net worth. We're not sure you get your meaning with respect to SWR though. Only assets that are up for liquidation i.e. are to be spent, should be part of the total portfolio value against which withdrawal rate is determined. Naturally, someone anticipating selling their primary residence at FI should definitely consider the value of this asset (less any mortgage to be repaid at sale) part of their portfolio since they'll be turning it into cash. But otherwise? This is not typically how the math is done.
Sorry, my point was to include depreciation in the numerator of your SWR calculation not the denominator. i.e. depreciation should be considered an annual expense in your FIRE budget.
Great video.
Thanks!
I like the light and dark video surroundings, is that a representation of pre and post FI? 😂
Ah, I’m not so clever :) I had crazy varying light levels that day thanks to some heavy clouds followed by full sun! -Jason
My boyfriend has 2 adult daughters at home. They are 25 and 27. Southern CA. Both are college educated. One works full time. The other one barely works after moving back home after having a full time job in NY. Honestly they seem to just be taking advantage of the situation with no plans to move out. He doesn’t charge them any rent. Not sure when this would end. Beware being too generous in letting adult children move back home when they don’t have a plan.
Yep, definitely gotta decide what is best for your own situation and establish boundaries and good communication.
been there, done that. Kids are not stupid when they realize that the parents will continue to support them. But, the support just delays their maturity and emotional development.
Even with very good health insurance, brand name prescription drugs are a big budget buster if a generic version is available. This matters bc generic prescription drugs don't always work as well as brand name ones.
Very true
Mental healthcare costs are nearly always either out of network or just totally not covered. Some caregivers don't even take insurance, and matching a patient to a caregiver is really not a financial equation anyway. As plans go; ACA plans in my state are all managed care (HMO style, typical nightmare) and have no out of state coverage for a kid in college, or a specialist just over the state border if you have a serious crisis. So we went with COBRA for 18 months and this year we started on a costly private plan. My healthcare costs between these two factors are a full-on gross salary for some people. I did NOT count on this in RE but here it is.
Yep. A lot of providers are not on our silver plan; especially true for mental health visits.
Have you seen the new academic safe withdrawal research that removes some survivorship bias by including new international data that found a 2.6% withdrawal rate? The Rational Reminder podcast interviewed the researcher a couple of weeks ago and I'm surprised more FIRE shows haven't talked about it. Jason's comment about long-term data and the bogleheads reminded me of it, it would be fun to hear your thoughts on it!
Jason here - I have! It was an interesting discussion. It’s been some time now but the key take home for me was about considering the 4% rule from a global perspective. It works well most often in the US and one other country that I can’t recall. From ERNs calculator and others, all cohorts to date can draw higher. I do agree that a blind 4% rule even in the US is much too aggressive for me. I’m withdrawing below 3% but particularly in current conditions, even considering CAPE-adjusted, I can go quite a bit higher if needed. All that said, as always RR brings great research and discussion to the table!
Are any of your spreadsheets available for download?
Hi David, which are you looking for? If you mean relating to budget - stay tuned! We've got a specific episode on that coming up soon. As for some other spreadsheets we've shared previously, check out the Where to Live series (part 1: ua-cam.com/video/CoD8Pgbo3EE/v-deo.html) and Rebalancing Tool (ua-cam.com/video/PiXNzkS7LrY/v-deo.html) for a few of these.
I cannot understand how anyone can get any Aca subsidy , especially as a single person. Just basic living expenses are higher than the $54k/yr MAGI limit unless I live super lean. After tax that’s less than $4k a month. Am I misunderstanding something ?Anyone have tips?
Yes, you have to have cash saved to live on to “manage” your income. Without that, hard to qualify.
@@christinewallace9251 I thought about that but then that cash is out of the market and I am potentially missing out on more gains than I’d save by qualifying. Can’t really win.
Jason here - More people being covered can make it easier for sure (my family is three people). But you're right, not everyone will be able to qualify for the same (or any) subsidy. It's also true that there are ways to lower your MAGI, which can help. Common ones include HSA and IRA contributions and student loan interest: www.healthcare.gov/reporting-deductions/
While we do maintain a two-year cash position (covered in other episodes), this has no impact on how my wife + I generate income nor how we meet my expenses + financial obligations. The income we realize from all sources: dividends + distributed capital gains, portfolio sales that generate gains, and our "fun job" income, is below the MAGI limit for our family. That's why we are eligible for ACA premium tax credits.
Ultra light backpacking...team z packs or team hyper light? Looking for an expensive hobby, take up scuba diving. It is under water backpacking.
Ha! I’ve never heard that analogy before but it’s so true. -J
This is why everyone needs to sit down with a fee-based Financial Planner before they retire.
It's definitely not a bad idea to consider. Did you see our earlier episode on our experience?
ua-cam.com/video/DJVsWygaDnY/v-deo.html
40% property tax increase in one year?! Yikes!!! Thank you Howard Jarvis, LONG LIVE PROP 13!!!!!
I must admit I'm pretty happy knowing that can't happen here! -Jason
The pain comes in when you have to sell stock in a down Market. You are now selling twice the amount of stock to get that same cash.
Indeed, any selling in a down market doesn’t feel great. But this is where a diverse portfolio and rebalancing comes in. I talked about this in a recent episode where I was mostly selling bonds. Yes they were down too, but nowhere near as much as stocks. Felt a little better about that. -Jason
ua-cam.com/video/eteraaI_GEA/v-deo.html
One healthcare solution is to live part time in a free or cheaper healthcare country. Mexico, for example. Or Canada.
Very true! Is what you're doing or what your plan is?
@@TwoSidesOfFI definitely considering it. Healthcare costs are just outrageous in the states even for those who are well ensured. Plus, I think my FI dollars can go further in a place like Mexico.
Thank goodness i don’t live in the USA - i literally don’t have to pay any attention to large scale healthcare costs - the out of pocket healthcare expenses in my country are in no way material. Ok i may have to wait for non-urgent care but otherwise i simply don’t have to think about it. No wonder your F.I.R.E numbers are so much higher.
No one is happy about the costs of healthcare in the US.
I think DON'T retire into RMDs? This is immediately passing control to the government.
If converting retirement assets to Roth or spending them down prior to RMDs works for you, all the better! We’ve all got to do what works for our situation.
@@TwoSidesOfFI This is the second level which brings control back to the individual - the planning to convert or spend down before RMDs hit. Great if this planning occurs, not so great if no planning was done.
Good thing now is if RMDs increases to 75 as recently broadcasted, a lot of us have yet another opportunity to help ourselves
I'm bothered by the fact that this guy retired early, with a mortgage, and then lowered his income so that I have to work and subsidize his medical insurance. That's called welfare. he probably gets, or could get food assistance and other assistance based on income. If you retire early, you should be able to afford it on your own, not exploit a system on the backs of others. Maybe some people are ok with this, but I have moral objections to it.
He’s not exploiting. If you don’t like the rules, change your vote. As long as our current admin is in control, it doesn’t pay to make money. I don’t like the rules either, but need to use them to the advantage of my family with no moral qualms
Jason (“this guy”) here - to be sure, I don’t receive welfare nor food assistance. Our family’s annual income is merely low enough under our current system to qualify for healthcare premium subsidization. This is a common approach for people prior to Medicare eligibility. I still pay out of pocket costs for all care up to the (high) deductibles. Honestly, I’d prefer to pay higher taxes and offer free medical care for all Americans, as I believe it’s a basic human right - as nearly all countries do. But this is the system we have and I am merely employing it as designed. I’d suggest there is an opportunity to go after bigger targets first, like stock trading by elected representatives or billionaires paying no income taxes at all.
The rules are the rules. Your logic would exclude tax efficiency strategies which usually are a large part of retirement planning and execution. If bothered un subscribe and don't watch this channel.