I had a eureka moment a week ago. Nothing to do with the displacement of water in the bathtub, but just as significant.
A month or so ago I received my estimate of benefits from Social Security that comes every year a couple of months prior to my birthday. While I realize Social Security is in trouble and can't be counted on, the estimates of what I may receive as a supplement to my income upon retirement were encouraging. But I have always taken them with a grain of salt because I figured they were based on earning until retirement, the same amount that I do now. Based on my age and my industry, that's a pretty slim chance.
Playing around on the Social Security website one night, I was able to plug in my particulars, including a scenario that I lose my job and end up working for $10 an hour until I retire. I was surprised to see that the projected monthly payouts in that case were not significantly different than what was originally supplied to me. I even entered a scenario in which I didn't work another day in my life until collecting and was surprised to see that the results were not far off the $10/hour scenario.
Going to the Mutual of Omaha page and using their financial calculator, I was able to enter the amount of savings we hold, a projected monthly payout from our savings, and an expected return on our investments, which I entered as a very conservative 2%.
I was surprised and quite pleased to see that if my wife and I both quit work today, we could live a very comfortable 20 to 30 years, depending on our monthly withdrawals. Adding in different retirement age scenarios and the monthly income we would expect from Social Security, well, we could enjoy the lifetime retirement security usually reserved for New Jersey schoolteachers or retired federal GS-15 employees.
But while the teachers and federal hacks can retire in their mid 50s and enjoy healthcare for life, us working stiffs don't get so lucky. It was going to be hard to convince the wife to keep working in order to get the healthcare benefits until we could sign up for Medicare.
That is when it occurred to me. What could I get from Obamacare? I went to that site and discovered that silver level premiums for me and the wifey would run about $1100/month. And by balancing our monthly withdrawals between our traditional retirement accounts (401ks and IRAs) and regular savings and mutual fund accounts, we could show an income level on our income tax returns that would enable us to have about $950 of the Obamacare premium paid by the government.
That moment was a cross between William Wallace shouting "FREEDOM" at the top of his lungs and Dr Martin Luther King's "Free at last, free at last, thank God almighty, free at last" comment.
Financially, I am at peace. I no longer have to toil alongside the other 53% of the makers, when I can coast with my new brethren, the 47% of the takers.