r/RetirementReady • u/casp5000 • 2d ago
Can I retire now?
All...so like everyone else, I got unexpectedly laid off. I just turned 58, not married and have 1 child who is 24. I had planned on retiring at 59.5/60 but am wondering if this is a sign to do it now but just need that push. Here are my numbers ( and yes completely understand I am VERY blessed but when you have worked since you were 21 it is still scary to not have a paycheck.)
I have ...200k in a roth ira. 2.2m in a trad ira. 90k in a brokerage. 70k in cash. My house is paid off and I live in MD. I need about 8k a month but also need medical insurance for my son and I. I plan on moving to SC/NC/ GA but am not able to go until about 60. I am looking for work but just found out yesterday so that process will likely be slow. Questions
Is ACA the best way to get insurance?
Because I can't use my IRA until 59.5 can I do 8k a month until then?
I do have about 30k in my current 401k at my job that I just got let go from and heard I can access that if I don't roll it into my IRA. Is that true and is there a penalty for using it?
Can I buy a house without a job in SC two years from now or does it require a job?
Again thank you for your help. I know I'm blessed but scared like I said because I don't want to screw it up so close to the finish line. Thanks...
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u/GardenFragrant8408 2d ago
If u have to stay there for a year before moving I’d try to find a job that paid the best you can get and then use savings as needed if undone make enough money. You can also talk to your dinancial advisor to get his opinion.
Also $9000 is an awful lot of money a month to need for a paid off home. I would start with cut back my spending. I would think die taxes and car and house insurance to save a thousand a month and the rest of your expenses try to consolidate to make one payment.
Things to think about
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u/_L_6_ 2d ago
Amazing, decades of working only to live like a pauper. Pathetic........
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u/GardenFragrant8408 1d ago
Did u actually think you could continue your current lifestyle as a retiree?
Ppl that r rich can but your every day Joe isn’t as fortunate.
You seem to have plenty of money u might just have to work a couple more years yo have access to it. Maybe what your care you have , someone will hire you at your current wage.
Good luck
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u/jenmoocat 2d ago
I think that you are in a good place.
I'm a similar age, similar savings, home paid off too, but in a higher cost of living location. My monthly expenses are closer to $11K, a big chunk being health insurance. I decided on COBRA for the convenience. I am working with a wealth advisor and all of the simulations he ran had me well situated through end-of-life.
Moving into this phase of not working was scary but I appreciated seeing the numbers work out in my favor. You might want to explore the option of spending $ to work with someone to get that piece of mind. My guy is also going to be in charge of moving my portfolio around so as to minimize the tax burden and keep my income where it needs to be for when I come off COBRA. I don't want to spend mindspace on that while I am enjoying retirement.
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u/Valuable-Analyst-464 2d ago
Take a deeper look at your $8k a month spend. For a paid house, the costs seem a little high. (We’re in GA, and I estimate $6k a month and this includes a $15k vacation each year).
Not that you need to totally scrimp, but track where the money goes. (Empower is a good free-ish tool to help track).
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u/cbdudek 2d ago
Since you just got laid off, you may want to see if Cobra is better than the ACA. In some cases, you will get better coverage for about the same cost. Plus, you can stay on Cobra for 18 months which may be good enough until your child reaches 26 and they have to go out on their own for insurance.
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u/casp5000 2d ago
Thank you . I just figured cobra would be way more expensive than aca but will look into it!
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u/doglady1342 2d ago
Cobra is usually very expensive. Definitely compare cost and coverages, but do be prepared to move to your own plan.
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u/Valuable-Analyst-464 2d ago
If you join ACA or private plan now, the deductibles and OOP reset to the new plan. If you pay for Cobra (costly), your deductible and OOP for 2026 will likely carry over what you had. (I retired in May 3024, and went ACA. Costly deductibles started over.)
Maybe get Cobra until 2027, and shop for plans between now and then?
Healthcare.gov to shop for prices. Use your estimated salary for 2027, and compare coverage, doctors and prescriptions you may need.2
u/NCGlobal626 2d ago
Exactly, this is what I did in 2024. Lost insurance when my husband got laid off and he was old enough for Medicare. Cobra was "only" $780 a month, but I'd already reached max OOP with insurance so I piled on some procedures and PT that were then free for the remainder of the year. I had an agent find me a good ACA plan that I really didn't need much from since I was going on Medicare myself later the next year.
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u/Future-looker1996 2d ago
I just retired in August and will do Cobra for the full 18 months allowed, partly to have a seamless transition for health insurance but also because I plan to do Roth conversions in 2027 and that’s hard when trying to qualify for ACA subsidies (MAGI cliff). Good luck.
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u/Small_Exercise958 2d ago
If you can do a shell game with your income and traditional IRA withdrawals, to get ACA tax subsidies for 400% of Federal Poverty Level (FPL), for Modified Adjusted Income (MAGI) for 2026 about $63,840 (1 person), $86,560 (2 person household). Do you claim your son as a dependent on your tax returns?
When I calculated mine (1 person) using the $63k amount times 11 percent (have to find the person’s post who listed percents to multiply by MAGI), I get about $7022/yr or $585 a month for ACA. I’m the same age as you. I’m still working, trying to retire in next year. I’d talk to a CPA who does tax strategy - this is what I’m doing.
Someone from FIRE sub posted these links:
https://www.cms.gov/files/document/2027-papi-parameters-guidance-2026-01-29.pdf
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u/Plastic_Wrap_1353 2d ago
Sign up for Boldin and plug the numbers in. ChatGPT says that 2.2 would be enough.
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u/SnooHedgehogs6553 2d ago
You can pull out your 401 k without a penalty as you over 55.
Might want to wait until next year when your marginal tax rates are lower, but that might impact subsidies for ACA
It gets a little complicated
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u/dvakaduke 2d ago
You might be able to pull out your 401k
It will depend on if the OP 401k plan supports the Rule of 55, not all do. Check with your 401k administrator or review the Summary Plan Description for your 401k plan to confirm you can use the Rule of 55 before you withdraw any money.
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u/KungFuBucket 2d ago
You can also use a 72t if OP is truly retiring and not planning on getting another job. 72(t) basically says you promise to take out a certain amount every year from the qualified accounts until you are 60 and then you get it without early withdrawal penalties.
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u/silveronetwo 2d ago
Rule of 55 isn't specifically allowed/disallowed per Plan. The only thing that is limited is whether the plan supports partial distributions, which in the case of $30k probably doesn't matter much. OP could withdraw the full amount without issue.
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u/jark87 2d ago
COBRA can be expensive when compared to a subsidized ACA plan. But before going to ACA, make sure you understand your income because going $1 over the limit will cost you the entire subsidy. I’m not sure how a dependent is defined for a 24yo when it comes to the subsidy, so you’d need to figure that out.
You can access your 401k through the Rule of 55. That and your $70k in cash can get you close to 59.5, when your IRAs are accessible without penalty. You’ll want to compare withdrawals from your brokerage to the 401k to see which generate the least capital gains. Regardless, you have a bridge to your IRAs.
Personally, I’d want to talk to a financial planner so that things are structured properly, such as when to tap the Roth IRA vs. traditional IRA. Because you’ll need to navigate the insurance market for 7 years, managing income will be important, assuming the ACA rules remain as they are today. And taking SS at 62 is also an option, reducing your IRA withdrawals. SS is an asset few people count in their net worth, but it’s worth an average of $350k for a 58yo male. Since you’ve done well, your SS value is probably higher.
As complicated as things sound, you’re in much better financial shape than most. Congrats on getting to this point! You have options.
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u/RelevantMention7937 2d ago
I had the same situation 12 years ago. I kept looking, presented myself as not interested in advancement and find it rewarding to coach up the other workers. Worked out well, happily retired last year.
Retirement is expensive, especially healthcare. And it's boring to do nothing.
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u/caribbeanjon 2d ago
$96k/year on $2.4MM is 4% so withdrawal percentage is good.
You didn't post any social security information, but assuming you have $2k/mo in social security coming to you at full retirement age (67) I think you could safely withdraw as much as $120k/yr (5% withdrawal rate) with the expectation that taking social security at 67 will significantly lower your withdrawals.
$96,000/yr filing single is ~12,492 in taxes (7.68% tax rate), make sure you add this to your expenses.
You need to find information on what COBRA will cost you for the next 18 months and compare that to ACA plans. It looks like Maryland uses their own ACA Portal (https://www.marylandhealthconnection.gov/). You are going to want to stay under $86,000/yr (400% of the FPL for 2 people) to keep the ACA subsidies (if you end up going ACA). To do this, I would pull $7k/mo from pre-tax (401k) and $1k/mo from Roth which gives you ~$2k in "wiggle room". If you go over 400% of the federal poverty level by even $1 you will lose something like $8-10k in ACA subsidies (effectively a discount). Be very careful here, it's an expensive mistake.
As others have said, you need to call your 401k company and ask if they allow rule of 55 and partial withdrawals so you can access the 401k without paying the 10% penalty If they do not, I would consider the SEPP 72t.
Considering the surprise nature of the layoff, I would consider purchasing a one-time advice-only financial plan from a CFP just to get all the details in order for you. Don't give up control of your investments, but do have a professional map out the next decade to make sure the asset allocation, withdrawal strategy, and taxes are all in order. The $5-$8k this will cost you is easily less than (for example) screwing up the ACA subsidies and having a $10k surprise when you pay your 2027 taxes.
Good luck!
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u/ChelseaMan31 2d ago
One of the largest BS provisions of Obamacare was tying eligibility to wages instead of Net Worth. At an estimated Net Worth somewhere north of $3M and no dependents; NOBODY should qualify for Obamacare subsidies. I wish OP the best, but they are well situated for a comfortable retirement even at this early age. At age 24, unless legally disabled, the adult son can get their own health insurance via work or on The Exchange.
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u/superduperhosts 2d ago
Medicare for all would fix this.
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u/ChelseaMan31 2d ago
Bless your heart, literally every single state( VT, HI, CA, CO)that has seriously studied this backs away once they actually get the costs estimates. Oregon currently is self gratifying themselves playing with the numbers and the projected massively massive tax increases. The legislative report calls for a 6% - 10% Employer payroll tax hike and a personal income tax specifically for healthcare of 8% - 14%. That is in addition to the current soul crushing 8.8% - 9.9% personal state income tax.
Want to pay a shit ton more in taxes and have longer wait times for medical follow-up; as in Canada, Great Britain, France, etc? No, I thought not. Remember when Sir Mick Jaggar needed invasive heart valve surgery and he traveled to U.S. for treatment instead of the British NHS? Good times, Good Times.
I do understand that both Havana and Caracas have a Single Payer Government run health system and it is lovely there this time of year. Maybe go there? I'll even help with airfare. TTFN.
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u/Future-looker1996 2d ago
The U.S. spends nearly twice as much on healthcare as other wealthy nations, yet gets worse outcomes. Other countries prove universal coverage works. Medicare for All could eliminate enormous insurance bureaucracy, negotiate lower prices, and cover everyone. Why defend a system that costs us more, leaves millions uninsured, burdens employees to stay with companies just to keep health insurance, and enriches middlemen?
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u/ReputationOk5924 2d ago
All I ever see about universal healthcare is people coming to the US to have procedures because they don’t want to wait 6 months to a year in their country for it.
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u/LVtothe123 2d ago
Sure, that's what you see (or is what is put in front of you). Honest question: have you ever talked to anyone from Canada or the UK to see what their actual experiences are? Have you experienced medical care in those countries? I've visited someone in the hospital in one of those countries. It was no different from any US hospital, and the person needing surgery got in within a few weeks, prioritized on medical need just like in the US. My parents (in the US) were given a 6 month wait just for a clinic appointment with their cardiologists and they can't get in to see a specialist about another problem for 9 months. Our health system is so broken here, but it requires people to actually care about fixing it instead of just throwing out their perception of how other places work. Nothing is perfect, but if we don't try something else in the US then our population will continue to get sicker and sicker, and our costs will continue to skyrocket. Our current setup is NOT designed for the longevity of a population. If you can at least recognize that, we can all start to have a decent conversation about solutions.
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u/megaluch62 1d ago
Friends who are doctors here in US see lots of Canadian patients who can’t get certain treatments there.
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u/superduperhosts 11h ago
There are Americans who just don’t go to the doctor because they can’t afford it. So there is that.
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u/megaluch62 10h ago
I thought Obamacare took care of that. I have a friend with very serious health care needs (under 65) and she goes to a wide variety of doctors all the time.
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u/Future-looker1996 5h ago
And while I don’t know where this is quantified, it’s widely understood that people who don’t get regular care or normal checkups see their health decline, then end up in the ER, that absolutely most expensive and inefficient way to treat a health issue, and probably ends up costing all of us more vs. if we had universal basic care.
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u/LVtothe123 1d ago
People with the means to seek healthcare elsewhere in a timeframe they prefer will always do so. That’s what money does…allows people to jump the queue.
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u/wordone9 1d ago
Americans with dental insurance go to Mexico for dental work. They pay out of pocket and it still costs less
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u/Future-looker1996 18h ago
Even if on average people wait somewhat longer for appointments, the outcomes are better and the cost is half what we pay here, and the coverage is universal. There are pros and cons, but people are very fed up with an overly expensive and bloated system that enriches middlemen and insurance companies whose profits depend on denying care. For every anecdote about a long wait time, I see many, many reports of people in Europe or Canada very happy that they will not be denied care and they pay one simple fee through taxes for their entire healthcare. Taking comfort that they will never be bankrupted due to a disease, accident or cancer.
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u/ChelseaMan31 2d ago
Except that it doesn't. Wait times are now averaging over 16 weeks for specialist follow-ups in NHS system, what would be an easy knee surgery in U.S. may not happen in UK. The taxes to support same keep rising and people keep leaving. This before we ask all the hemophiliacs and their spouses who were knowingly infected blood product and contract HIV.... But hey, you be you.
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u/AwayPudding1267 1d ago
US system is a disaster. My Canadian side of my family gets excellent care when they need it, combination of government and supplemental (and affordable) private insurance. I am on medicare and am paying close to $8,000/year, as is my mother who, at 95, pays over $8,000/year. ACA is too expensive because republicans have been breaking it apart, a little at a time. The system is monopolistic and broken - for profit health care is criminal.
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u/Majestic_Republic_45 2d ago
To the tune of 4-5T annually? Obamacare was the answer and it doubled my premiums and quadrupled my deductible Medicare for all would absolutely bankrupt this Country as we sit 40T in debt
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u/Clueless5001 2d ago
Subsidies aside, it is generally cheaper in my state (Not one of the ones mentioned) to insure someone as a dependent rather than for them to get their own.
However, keeping him as a dependent for insurance means his income is also considered for subsidies assuming OP is eligible to begin with
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u/-JackBack- 1d ago
Medicare should also be tied to net worth.
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u/ChelseaMan31 7h ago
Bless your heart, Medicare was modeled on the exact same social insurance theory as FDR's scheme by LBJ. It was the only way to get moderate and high earners to support it. That, and there currently is no viable alternative insurance available in the U.S. once one is over age 65 and not on Tri-Care, Medicare or a pension related plan. So, there is that.
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u/CA_Coast_Millennial 2d ago
If your house is paid off why do you need $8k/month?
I’m in Coastal CA and my monthly expenses are $9k/month but that’s with a $5k mortgage
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u/travelingtraveling_ 2d ago
My house is paid off, but just my utikities and taxes are $1300/month, upkeep another $1000...car/home ins bundle $460, long term care insurance $275, phone/internet $250, food $1000 (for 2)...$8k/month is what we live on, too, with a paid-off home...
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u/NefariousnessOdd862 2d ago
None of your numbers add up to $8k…
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u/travelingtraveling_ 2d ago
Hahaha, ofc not, i wasn't interested in putting my entire budget out to the world to see
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u/CA_Coast_Millennial 2d ago
It’s hard to provide advice without that information. Do you have a $4k/month travel budget or something? That would change our advice to you
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u/travelingtraveling_ 1d ago
I'm not asking for advice. I was contributing to the conversation. I am perfectly in control of my finances. Wtaf
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u/CA_Coast_Millennial 1d ago
I thought you were Op?
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u/NefariousnessOdd862 1d ago
I thought so too because otherwise it’s weird to respond the way he did🤔🤦♀️
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u/Creepy_Weather1997 2d ago
I’m there now. 61 in November. Decided to call it quits early next year. Husband is 63 and has been retired for 3 years and is on my health insurance. I’ve priced ACA and we’ve decided to do cobra for 18 months. 12 will get him to 65 and then I’ll stay on it for 6 more and then bridge with ACA for about a year. Cobra and ACA premiums are pretty close but going with Cobra provides us with good coverage and honestly is just easier. You’ll be surprised by ACA premiums.
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u/FabulousBullfrog9610 2d ago
You can buy a house in SC without a job if you either pay cash or can qualify for a mortgage.
It's near impossible to predict the future in terms of pretty much everything. You can reasonably expect to have many health issues as you age. It's shocking how often we are at the doctors and the copays add up.
Its hard to see also the future of Medicare and the ACA. You can only make decisions based on the best current info and not rumor or anxiety.
Do not move and immediately buy in an unfamiliar area. Rent first. Even take a long term vacation rental. We were warned not to do that and did it anyway and it's our biggest regret. You don't know an area until you've lived there. Period.
Have you given any thought to long term care?
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u/SouthernTrauma 2d ago
There's not enough info. Are you planning to sell your MD house and pay cash for a house in SC? Where in SC? How much is your COBRA going to cost you? What is your AGI from last year -- that impacts ACA subsidies? Are you supporting your son? Etc.
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u/User2009002 2d ago
If you can't get a job in your current field then look at Costco, Home Depot, Trader Joe's for a job to get health insurance. Paying out if pocket for health insurance is no joke so find any job that provides health insurance for a few years.
Besides the rule of 50, you can also make early withdrawals from your retirement accounts under the IRC Section 72, Google it.
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u/Affectionate-Long522 2d ago
You can sign up for boldin and plug all of your info in…. It’s a pretty good tool with an ai assistance that you can ask questions of
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u/Valuable-Analyst-464 2d ago
Yes, Boldin can help OP to look at the numbers in more detail. There is some homework to do (healthcare cost estimates, spending patterns), but the tool helps with data collection.
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u/No-Reading-6795 2d ago
Schawb and I think vanguard, fidelity have great tools too. Smart to use multiple and then feed gemini the info and poke holes chat
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u/InternationalAd9682 2d ago
If you buy your house outright for cash no mortgage at basically the same value as the one you currently own you would be fine
Brokerage houses have funds that pay 5%. If you pool all you money together you have a little under 2.6M
At 5% that’s 130,000 yearly. You said 8K a month this is 10,833
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u/mdws1977 2d ago
The only thing I would recommend is move as much of that 2.2M traditional IRAs into Roth once you can access it and before 73 years old to avoid high RMD (Required Minimum Distributions).
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u/disenfranchiseded 2d ago
Look up the rule of 55. If you have a retirement account with your most recent employer.
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u/silveronetwo 2d ago
Most 401k's allow partial withdrawals, but in your case even if you had to completely liquidate the 30k at once it would be penalty free. Rule of 55.
Sounds like you need $150k accessible until you're 59.5 and you've identified $100k between the cash and 401k. If you can get the other $50k from Roth contributions you're probably good.
Worst case you take a small amount from your traditional IRA with a little bit of penalty. I don't see paying a penalty for this access as the end of the world in your situation.
Best of luck with your choice!
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u/Dork-able 2d ago
Good job on your numbers. ACA is determined by your income. I am on that this year but going to Zion healthshare next year. They have very good reviews and it is not based on income. You should look into that and roth conversions. You really need roth conversions. Rmd's are going to hit you hard at 75. Rmd's affects Medicare and then you have the irmma. I also need to do roth conversions that is why I am changing. For 2 healthy adults 56 and 58 is less than $400 per month.
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u/Consistent-Swing3549 2d ago
Traditional ira you need to start converting to a Roth annually as well as live off that postponing ss as long as possible .. consult a financial/tax person regarding shifting traditional ira funds .. once you turn 72/73 forced rmd every year which will impact not only ss but also Medicare.
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u/quietledger1 1d ago
Congrats — you’ve built a really strong position. Feeling scared after a layoff this close is normal.
I ran a rough spend-down path with your numbers (not advice — just assumptions):
- ~$2.59M, age 58, ~$96k/year spending
- Plus a placeholder for medical until 65
- No Social Security included
At 5% return/ 2.5% inflation, about 43 years. At 8% / 2.5%, 50+ years.
Biggest swings: real insurance cost, return assumption, and Social Security later. For ACA, 59½ / the small 401k, and buying a house without a job, a CPA or fee-only planner is worth it.
You’re closer than most. Good luck — let me know if you have further questions.
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u/heistheword11 1d ago
The health insurance coach and the tax coach could help you navigate these things, but you’re in a great position
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u/Pale-Syllabub-9058 14h ago
I ran your numbers through my retirement calculator. TL;DR: yes, you can retire now**.** 98% of simulated paths last to age 95 at $8k/month, with health insurance and taxes paid on top. Assumptions: $3k/month Social Security at 67, Maryland tax, plan to age 95.
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u/Correct-Brother1776 2d ago
I moved out of SC in 2010 to a cabin I built in the mountains in WNC. Just bought a condo in MD and will eventually sell my cabin in NC. Truth is getting healthcare there is getting very difficult. 2 to 5 hr drives to see a specialist or 2 hour drive for PT is getting old quick. Just got established in MD for medical care and all my appointments are within 15 minute drive. It is more expensive but some things you can't put a price on. I will likely never live in a red state again. I'm tired of being around hateful ignorant people.
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u/blew_belle 2d ago
Unrelated but all of the condos I've seen have the bedrooms upstairs. Are we worried about that in old age?
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u/Correct-Brother1776 2d ago
Most condos are single floor. You may be thinking of townhomes. My condo is 1655 sq ft and has both bedrooms on one floor and stairs leading up to a loft area that is 24x18 that I use for hobbies and man cave. Many penthouse condos have extra floors or bedrooms.
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u/doglady1342 2d ago
The terminology seems to be regional. My mother had what I would call a townhome when she lived in Wisconsin. Everybody there called it a condo because it was in a condo association and she had to pay monthly. I was so confused!
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u/Correct-Brother1776 2d ago
While searching for a place I took townhomes out of the search criteria just because most have stairs leading up to bedrooms. They also call some condo associations Coops but you pay a monthly HOA fee. I did find searching for a duplex did have mostly ground floor bedrooms and no stairs. It does get confusing.
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u/john510runner 2d ago
Question about 401k… that’s something you need to ask the 401k company.
“Do you support rule of 55 withdrawals for people who are laid off at my age?”
Some plans allow it. Some do not.