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It's no free ride under the FERS retirement plan either. The TSP 401k is 1/3 of your retirement portfolio. It is up to the employee to contribute or not. I averaged putting ~10 percent of my income into retirement for over 30 years. Also, government employees for what they gain in benefits, are offset when it comes to compensation compared to comparable jobs in the private sector. It's not all gravy working for the FEDS, but it does have its benefits
-WC
I agree.
In general, the federal plan (FERS) is basically 3 parts:
1) Small annuity (pension) about 1% of salary for each year of service
2) Thrift Savings Plan (TSP), the federal employee version of a 401K. Employer matches 5% max
3) Social Security (and FERS supplement until age 62 when SS takes over)
And it is getting worse.
Those hired before 2013 pay 0.8% of salary toward their annuity/pension.
Those hired in 2014 pay 3.1% of salary toward their annuity/pension.
Those hired in 2015 pay 4.4% of salary toward their annuity/pension.
Proposals in congress to increase it more.
And they also pay SS (6.2%) and medicare (1.45%) from their paycheck.
Retired at age 49 and was able to get by 8 yrs till A(?)CA showed up and excluded all my affordable options. Now... Several yrs from 65 and we are un-insured / un-insurable. If you are too rich for a subsidy, A(?)CA is not affordable in many rural regions (10x city premiums). So... We get sick?, we die. If you are on state aid, no issue. You will get great subsidy and care.
If we are well enough we will go on a medivacation, millions do this every yr.
There are also a couple 'medical sharing' plans in USA that keep you excluded from the A(?)CA fines. They are very cheap compared to insurance (which they are not). You probably want to avoid prison, their healthcare is not great.
Many countries will welcome you if you come with minimal investment of USD. Malaysia is actively courting USA early retirees. That option is not tolerated to be discussed on this forum (largely populated by fed and state 'pensioners', who all expect you are drinking their koolaid, too. Or at least you MUST!)
Stealth,
Agree with you that Malaysia is an interesting option, very inexpensive, decent infrastructure, cheap medical, great food. I looked into MM2H and would consider it if I just felt we couldn't make it in the USA. Other places that might work are Peru, Chile, Thailand, Phils.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by Tall Traveler
.... Other places that might work are Peru, Chile, Thailand, Phils.
Ecuador, and Columbia are on my list as well (I will do a Spanish immersion course when I go visit).
Italy and France get good reviews as retiree spots. We are headed to check out favorable Portugal in a few weeks. NW Spain is giving away deserted villages (Nice 'fixer' project for senior housing).
NZ is ok if you cash in and bring a bunch of USD (Exchange is very favorable at the moment). But... It is a long (expensive) way away to come to USA for funerals of friends and family.
USA would be a good choice if HC was available, as there are many locales to chose with favorable cost of living.
A(?)CA is short lived, USA HC needs more than a Bandaid, and from what I hear of US election campaign, the USA is 'rolling over-to play dead' and not about to support the revolution required to change things. (From HC to schools to political system).
I trust Medi-Share works out well for you, it covered brain surgery for a neice, last year; but they wouldn't take us. (Pre-existing conditions and terrible family health history).
$22,000 in annual premiums on a $20k out-of-pocket HC policy was too much for this early retiree, and I chose 'to 'self-insure'. I was quite able to handle BEFORE A(?)CA with $3600 policy and $12k OOP.
We COULD use one of the "A"CA plans. That would pretty much require us to use a HMO-type plan which means that we would need to change all of our doctors to about 10% of the doctors in the area and would require us to head to Tucson for many of our specialist visits.We would also be required in a good number of the plans to use one hospital that we very much dislike and for our primary care, use a local clinic. And since many of the "A"CA plans in Arizona are hemorrhaging money, we may be changing plans each year until we hit Medicare.
Arizona has Blue Cross Blue Shield insurance. BCBS is not an HMO plan and the provider network is multi-state which is good for anyone who snow-birds.
I retired at age 62 and first went to COBRA and now am on a BCBS plan out of Washington State. When I turn 65 this year I will keep BCBS supplemental coverage to Medicare.
You can go to the unaffordable Obamacare exchanges - for wife and I, about $1600/mo for a plan with a decent deductible. However, if you can manage to keep your taxable income low enough, you get a subsidy (still trying to figure out how to keep my taxable income low enough). We went with Medi Share for under $400/mo instead....we are assuming some risk so it's a bit of a gamble.
About the age, I think SS kicks in later but not Medicare....you sure about that?
So basically, you game the system to get the rest of us to subsidize you.
that is exactly how they set the plan up . by taxable income , not assets . they realize lots of americans can be house rich and cash poor or not have liquidity in investments so they left it income based only .
if they didn't want it that way they could have had net worth stipulations for subsidy along the lines of medicaid for LTC . .
heck if i can get what the gov't wants to give me without hiding assets and playing games and says you can have this if you do that , why not .
our whole system , whether tax or other wise is based on the fact your fair share of anything is based on how smart you are in using tools and laws given to you and left in place for you to use .
using those tools is not gaming the system if you are not doing anything under handed to get those benefits they left for you .
they know wealthy retirees will be retiring at 62 and need insurance coverage until medicare , and they also know many use cash early on that they set a side which generates little to no taxable income
Last edited by mathjak107; 04-12-2016 at 12:03 PM..
We have close friends who are dedicated democrats; they believe in social responsibility and that those with wealth and means should help those less fortunate through progressive taxes. But those same friends go to high priced accountants to optimize their tax situation and pay as little as possible. It is irony at its best. They don't feel guilty at all.
The lesson here is that the government needs to keep closing all those loop holes that allow people who want to be good socially responsible citizens but can't quite help themselves and use them anyway. It is just human nature to do that. And people wonder why we have a nanny state with a zillion laws.
Then there are those upper middle class individuals who game the system to get ACA subsidies, pay minimal taxes, etc. while criticizing the "true" low income individuals who receive government benefits or disability. But I don't have so much of a problem with those in their late 50's or early 60's who are on subsidies for a few years while waiting for Medicare. But some are retiring on subsidies ten years or twenty years before they are eligible for Medicare. And I recently learned that some younger early "retirees" with marketable degrees are paying very small amounts or even zero on their federal student loans, based on an artificially lowered income and family size, which are then forgiven in 20 years. And these are not small loans. There are too many loopholes.
Ecuador, and Columbia are on my list as well (I will do a Spanish immersion course when I go visit).
Italy and France get good reviews as retiree spots. We are headed to check out favorable Portugal in a few weeks. NW Spain is giving away deserted villages (Nice 'fixer' project for senior housing).
NZ is ok if you cash in and bring a bunch of USD (Exchange is very favorable at the moment). But... It is a long (expensive) way away to come to USA for funerals of friends and family.
USA would be a good choice if HC was available, as there are many locales to chose with favorable cost of living.
A(?)CA is short lived, USA HC needs more than a Bandaid, and from what I hear of US election campaign, the USA is 'rolling over-to play dead' and not about to support the revolution required to change things. (From HC to schools to political system).
I trust Medi-Share works out well for you, it covered brain surgery for a neice, last year; but they wouldn't take us. (Pre-existing conditions and terrible family health history).
$22,000 in annual premiums on a $20k out-of-pocket HC policy was too much for this early retiree, and I chose 'to 'self-insure'. I was quite able to handle BEFORE A(?)CA with $3600 policy and $12k OOP.
Yes, I've also heard good things about Portugal...Spain I can vouch for, you just have to get the visa to live there. You will learn Spanish while living there, we did that in Peru while I worked...I would recommend Arequipa, Peru. Good call on Columbia and Ecuador as additional possibilities. Best of Luck!
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I agree.
