Living in Philippines

Well, it is complex but easily achievable with planning prior to FIRE.

  • 10 years prior to retirement you have to start segregating your money so that you can control your MAGI (taxable income) in retirement prior to reaching 65 (Medicare age).

  • Then you control your income (pulling some money from savings, some from brokerage, creating a Roth Ladder).

  • Then you keep your income at a level where you get the best subsidies, your MAGI, noting this is around $20K for a single person.

Here is all the complex details:

So my FIRE number was $1.5M (I actually worked longer and got higher) and my actual spend was $25K/yr without healthcare costs. Noting that I had a paid off house (easy to keep spending at that level when you have no mortgage). So for 20 years, I only needed $100K in cash, in theory to always get near free healthcare. I also live in a very competitive health market, so my options were better on MOOP than required by law.

Now note, as you can see in the graphs this scales by family size, a family of 4 can have nearly $40K in income.

Finally, remember this is MAGI, so I take Roth contributions tax free that don't count toward it and long term gains is only on the gains (say I have a $5K cost basis that grew by 400% in the 20 years, so the last year, when I pull out $20K, only $15K is in the MAGI, so I could still roll over up to $5K in my Roth ladder, allowing the full $25K withdraw from my assets.

Finally, this is based on each annual, so you can also late in a year decide you need money and take a huge amount out (think $40K in long term capital gains that is tax free), while you will pay a higher premium that year, you can pick a year you have no out of pocket medical.

I planned on $20K/yr in medical costs, but I'm sure going to take advantage of the program while I can. If the markets do average/above average I'll have some years I probably don't benefit, but if they do below average the subsidy game will assure 100% success vs 95% on the firecalc tools.

But back to my original point. In all by 11 states, once you drop below FPL you get free medicaid. 40 states (Wisconsin is the only state that didn't take medicaid expansion but already had a Badgercare program that wasn't asset based). So in those other 40 states ACA and Medicaid have no asset test, you qualify solely based on income. So while there are some gaps, the FEAR that USA doesn't have healthcare is a myth, anyone that is reasonable intelligent and pursues one of the options won't get bankrupted by medical.

/r/ExpatFIRE Thread Parent