This week’s money thoughts
November 22, 2023
It’s Covered California Open Enrollment time. We don’t need it next year but we may in the future, so I looked up what a Covered California Gold plan for the four of us would cost and what we’d get for that money. They only showed a premium price for a minute, which was very annoying, but it looked to be just a shade under $2000 a month. That buys a family of four:
$17,400: Out-of-Pocket Maximum
$0: Medical Deductible
$0: Pharmacy Deductible
$35: Doctor Visits
$65: Specialist Visits
$35: Mental Health Outpatient Visits and Services
$250: Ambulance Trip
$350: Emergency Room Visit
$35: Urgent Care Visit
$75: X-rays and Diagnostic Imaging
Imaging $75 (CT/PET scans, MRIs)
Hospital Facility Fee $330 per day, up to 5 days
Free Preventive Care: annual checkups, immunizations, screenings.
Pediatric Care: Free vision care and preventive dental care for children.
Pharmacy: No drug deductible. Your plan helps cover prescriptions from the get-go.
Eye Exam: Free, One Per Year
Glasses: Free, One Pair Per Year
Dental Cleanings: Free, Once Every 6 Months
I do wonder if there are any hidden fees or restrictions that I’d only discover after going through the process. We probably should do it a few times between now and whenever we will be likely to need it so we have a better idea of what is going to be needed.
~~~~~
I realized I hadn’t visited Joe Udo in a while, losing Twitter links to posts and my general schedule has reduced my blog reading. I had thoughts on a few posts.
From “How Early Retirement Impacts Social Security Benefits“:
First, you need 40 credits to be eligible for Social Security. You can earn up to 4 credits each year. Almost all Americans earn enough income to earn these 40 credits over their working life.
The benefit (Primary Insurance Amount or PIA) is calculated from your average indexed monthly earnings (AIME.) This takes your highest 35 earning years and averages them out to a monthly earning. Once you have the AIME, then the benefit is calculated with the following formula*.
A) 90 percent of the first $1,115 of his/her average indexed monthly earnings, plus
B) 32 percent of his/her AIME over $1,115 to $6,721, plus
C) 15 percent of his/her average indexed monthly earnings over $6,721.
40 credits ✅
Highest 35 earning years? Not there yet. I’ve been working since I was 17 so that’s only about 24 earning years. A quarter of them were low wages. Four years of working multiple piecemeal jobs during college, another four working an entry level job. My first post-grad salary was $23,000. I doubled it by the time I left (after a grueling four years with abusive bosses). Anyway my AIME today would be composed of 24 earning + 11 non-earning years. It’s just as well that I doubt we’ll be able to retire in less than 10 years. Maybe I’ll run some calculations just for fun. But then again…
Social Security is a bit uncertain for my generation because the program will start to run out of money in 2033.
The state of politics being what it is today makes me think SS will crash and burn and a whole lot of people will be plunged into poverty. A number of my own relatives are entirely reliant on SS for their income and while some of them can rely on their adult children to help if needed, that’s not true of all of them. We certainly can’t rely on it.
From “Fatfire is boring“:
IMO, life is too easy for FatFIRE retirees. They don’t have to struggle at all. That makes life boring. Sure, travel and getting new hobbies are on every retiree’s to-do list. However, those will only keep you interested for so long. There is no challenge. You need challenging goals to keep life interesting. People are happiest when they’re pursuing happiness, right?
FatFIRE retirees are high achievers. They won’t be happy with a relaxing lifestyle.
I believe you can recover from being a high achiever. I have. 🙂 Though I have many more interests than I have time, money, or energy, so I guess even without achievement, I’d be hardpressed to be truly bored.
From “Are You Living Your Ideal Life?”
My 2030 ideal life is very different than my life today. But we’ll be in a different stage of life then. At this point, we have a child living at home. My current life is almost ideal for this stage.
When I was an engineer, I was stressed out and unhappy. I quit so I could spend more time with our son. It worked out very well and life is great today. I work a bit, cook, take my son to various activities, repair the house, and deal with the rentals. I’m busy, but I’m not stressed out. It doesn’t get better than this at this stage of life. We’ll look back on this period fondly someday.
My conclusion is the ideal life will change as you go through different stages of life. It’s good to dream about the future, but you need to be happy today as well.
I agree that for right now, my current life is as ideal as it can be for this stage given our real life limitations. I get therapy, I garden a little, I have a reliable life partner whose company I still enjoy. I love the dog and kids even if they make me bananas sometimes. If I could subtract work from the equation without disturbing anything else, including income, that’d be even more ideal but I’m sure something else would slid into place as an irritant or difficulty (the world. The world supplies frustration in spades). We keep trying to do our best and that looks different from one day to the next.
Our ideal lives will change ten years from now and fifteen years from now, and so on. And, of course, the work leg of this current ideal life may not last long depending on shifts that might or might not happen. That’s always been a risk. I hate that part.
Have you ever held an ideal (for being labor) job? How long did that last? What’s your ideal life right now?
I’m about 10 years older than you and just started erasing my lowest-earning years 2 years ago. It’s very satisfying to see the $800 that teenaged me earned replaced by the salary I earned as a full-bore adult. I have 6 more years of 4-figure earnings I’d like to erase, but time will tell.
I had my year off work but it was too disjointed with travel (nice problem to have!) to figure out what my time not-working would really be like. I admit it, I got bored, but that won’t stop me from retiring when I get there. I won’t be FATFire but I hope to be … fine.
I’ve had plenty of jobs that are good for many reasons – good coworkers, manageable workload, etc. I’ve been lucky or smart to enforce work/life balance. I don’t think any job has ever been ideal but none were terrible. I’ll take that!
Do they actually drop the earliest low earning years off the record completely or does it just get dropped off the calculation? I should get a copy of my record to date just for posterity, if the former.
I hope that JustFineFIRE is our jam.
I think I’ve only had one truly good job in all the ways.
You can use a combination of ssa.tools and your social security earnings to get an estimate of various scenarios, assuming the benefits remain the same. I once calculated that an extra X years of working wasn’t as impactful as it might seem due to “bend points”. I calculated this about 4 years ago: “My estimated social security payment will increase by about $1.2k/year for each year I work in the next 5 years, then about $800/year for 5 years, then $600/year for 10 years.. then less than that.” It varies, of course, and it does add up, but it helps to put real numbers on each year worked.
My current job is my ideal for a lot of reasons, and it has been about 6 years now.
2k/month for health insurance is so much, but an improvement over past options I think!
One of these days, I’m going to feel motivated enough to run those calculations, I’ll be interested in what it suggests… IF SSA still has money by then. That’s one thing holding me back from trying. I’m not sure that the government is capable of getting anything done before social security is broken entirely and that’s worrying too.
I got the sense your current job is ticking off most or all of your biggest needs, that’s great!
Yeah a financial planning friend said I should plan on $1k/month per person last year and that’s still my mental baseline.