If You Received Your COVID-19 Vaccine, Expect Issues With V-Safe

Two days ago, I received my Moderna COVID-19 first of two vaccine injections.

Fortunately, there were few side effects.

In the documentation I received upon getting my injection, there was a sheet on the V-Safe After Vaccination Health Checker. Being the tech-oriented person I am, I duly registered on the site.

My experience with this tool has been awful – mostly in line with what I would expect with government-led tech efforts, and far worse than our convoluted experience in signing up for the ACA healthcare program.

V-Safe uses two-factor authentication (2FA) to ensure that I am who I say I am. This works very well with many other users of 2FA, but not with the government.

When you use 2FA, you provide your log in information, and then some other form of authentication. Google has an authenticator program. The Department of Veterans Affairs makes me pick a pre-selected picture from a panel of dozens of pictures.

However, most providers of 2FA will text you a code, which you must then enter to authenticate yourself.

This is what V-Safe uses.

Or, at least, this is what V-Safe tries to use.

I would go to the V-Safe website on my phone, and get to a screen where I was asked to input the verification code.

Oftentimes, the code would come hours later, and then multiple times, and rarely was that code still valid.

In theory, I am supposed to receive a daily survey starting on the day of my injection to track any reactions.

The first day came and went with no survey.

The second day came and almost went with no survey.

At 11:22 PM, long after I had gone to bed (#oldpersonindahouse), I received a text from V-Safe asking for me to check in.

I happened to wake up at about 3:30 AM and saw the text, so I clicked on the link.

Even if the text had been sent at, say, 1 PM, I was busy looking at properties to purchase in Johnson County, Texas, and would not have clicked on the link to take the survey until hours later.

So, a tech-savvy user can’t interact with V-Safe.

I can only imagine difficulties that the typical Phase 1 COVID-19 vaccine recipient would face in trying to keep the vaccine reaction tracker updated.

I’m no doctor, so I cannot give advice here, but I can certainly say that if you have any reactions to your COVID-19 vaccine, do not count on the V-Safe tracking system to be of any use to you.

I Got the COVID-19 Vaccine for Free, So I Am Donating the Cost to Buy Vaccines for Lower Income Countries

My wife and I have been very keenly interested in the impact of the COVID-19 pandemic on our lives. We’ve been following the science, because, after all, we’re much more inclined to believe what scientists such as Dr. Anthony Fauci have to say versus, say, politically motivated spokespeople.

After all, if Dr. Fauci is cited 221,323 times (as of my count on 1/19/2021), then people who are much better trained to understand science than I or a large number of politicians believe him, so should I.

Thus, as soon as we found out about it, my wife and I signed up at the Tarrant County, Texas COVID-19 registration site.

We figured that we’d just get in line, and when COVID-19 phase 3 people started getting vaccinated, we’d be early in the line.

I figured this would happen sometime between March and May of 2021.

Instead, on January 18, 2021, I received a call from the Tarrant County Public Health Department informing me that my vaccine appointment was scheduled for January 20, 2021.

I received the Moderna vaccine, and it went off without a hitch, aside from the rainy conditions in driving to the location to get vaccinated.

In the U.S., our vaccines are free. Elsewhere in the world, they are not.

I realize that I am very fortunate to have been born in the United States. I’m fortunate to be in a position to weather the storm, financially, that the COVID-19 pandemic has brought to us all.

Furthermore, in the U.S., we do not have to pay for our COVID-19 vaccines.

However, there are other, lower income countries in the world where they struggle to purchase vaccines for their citizens.

The cost of the Moderna vaccine I received is between $32 and $37.

Since I would have gladly paid that amount for my vaccine, I am making a donation of $37 for each dose I receive to GAVI, the vaccine alliance that runs the COVAX facility that aims to allow global equitable access to the COVID-19 vaccine.

Given that we would like to explore a FIRE vagabond life in the early years of our retirement, it’s in our best interests for the people in the places we’d like to visit to be vaccinated, too.

Hopefully, we can encourage others to, when they get their vaccines, contribute to buy vaccines for those who in lower income countries to help defeat the pandemic globally. After all, we’re all citizens of planet Earth, no matter where we were born or where we live.

I received my COVID-19 vaccine and contributed what I would have paid to the GAVI vaccine facility to buy vaccines in lower income countries. You can donate at https://www.gavi.org/donate.… Click To Tweet

Lessons Learned One Year Into Early Retirement

Resilience is accepting your new reality, even if it’s less good than the one you had before. You can fight it, you can do nothing but scream about what you’ve lost, or you can accept that and try to put together something that’s good.
–Elizabeth Edwards

12 1/2 months ago, my wife and I retired. I semi-retired, as I was (and still am) on several boards, but, otherwise, our lives went from the 8-5 grind (and way beyond the 8-5 as a co-founder of a startup private equity group) to the occasional board work and nothing else.

We had planned on doing some trips in 2020, to Poland, Machu Picchu, and China, as well as combining ski trips with one board I was on.

Then, as we all know, coronavirus affected everyone, and most of our plans got put on ice.

We were fortunate enough to be in a position where we could afford to hunker down and do nothing.

In fact, hunkering down and doing nothing was cheaper than normal life; our daily spending was down 51% from 2019. As I said in April, the pandemic was probably going to benefit early retirees, and, for us, that turned out to be financially true.

While I did think that there was a chance that the COVID-19 pandemic could turn into our generation’s Great Depression, for most people (and I realize that the bottom 25% percentile of the U.S. got hammered), this wasn’t true, because a) there was stimulus money (not saying it went to the right place, but it was there), and b) after about April, the markets started looking forward to a post-pandemic world.

We, like most investors, stayed the course in being invested in the market, and even threw moonshot money at some speculative investments, which paid off for us.

However, we thought that, on day one of retirement that we were renters for life. We hadn’t planned on a pandemic making isolation the safest action possible and a jarring change of ownership and management of the L2 Uptown, Dallas apartment complex that we lived in, causing us to decide to move.

Had the ownership and management change occurred outside of the pandemic, we would have moved to a different apartment complex. Had COVID hit and the previous management stayed in place, we would have continued hunkering down where we were.

But, both factors conspired to drive us to break our lease early and buy a house in a suburb of Fort Worth. Fortunately, there are no stairs that our now 14 year old dog has to climb up and down every time we take him out. Instead, he has his own yard to claim as his empire, and we back up to a park, so we have a nice nature area to look at and walk through on our dog walks. It’s nice, except when the coyotes are feeling frisky and decide to vocalize at 3 AM.

We also were less active in rebalancing our real estate portfolio than we normally are, with only 3 transactions in 2020. I suspect that will change in 2021, as we already have one accepted offer under our belts and continue to look at opportunities.

Given that 2020 was a year that was unlike any other, and, hopefully, starting in 2022 (which I hope will see the world vaccinated and COVID-19 relegated to an endemic status rather than a pandemic status), will be like no other in our lifetimes, is it possible to learn any early retirement lessons?

Here are a few.

You need time to decompress.

One of the investors in our private equity group told me, when we were talking about my then pending retirement, that he needed about 3 1/2 years of spending time with his kids, doing outdoor activities, and the like, before he got bored and went back to being more active on boards and something more closely resembling full-time work.

I get the need to decompress. I can still point to many days and wonder, as I’m going to bed, what I did all day.

Sometimes I read.

Sometimes I played games.

Sometimes I wrote.

Sometimes I looked for real estate deals.

Sometimes we watched our Netflix, Hulu, or Amazon Prime (#aff) queues (though, for example, we’re still only in season 3 of Monty Python’s Flying Circus).

Now that we’re starting into year 2, and there’s a vaccine on the horizon, I’m starting to get a little antsy and itchy.

We tentatively have travel planned in the latter half of 2021, assuming that we’re going to be vaccinated and that the data will show that those who are vaccinated are not a risk to spread COVID-19 to others (currently, the data is pretty iffy).

We also have a European trip and our rescheduled China trip on the docket for 2022. We’ll see what happens.

But, we did get a lot of outdoor time in. Since our dog has slowed down significantly as he’s moved from senior dog to geriatric dog, we really tried in the latter half of the year to do some outdoor, socially distanced activities of our own, like hiking and discovering Texas nature.

I’ve also been trying to learn Spanish through Duolingo, as I think that, when we start actively traveling, we’ll probably travel more to Central and South America due to its proximity to Texas. I can say that my 16,171 XP in Spanish so far means that… Yo no hablo Español muy bien, pero entiendo algo del idioma. I was fortunate that I still know enough German to be able to completely test out of Duolingo, but I still do quizzes to try to keep sharp.

That said, while we’re starting to get a little antsy to no longer live our isolated lives going to Costco and getting the occasional Kroger delivery, neither of us is antsy to get back to work, either.

You do need to find things to fill the time.

If you have infinite amounts of money, then you can hire people to do everything except that which truly interests you.

We are not in that position.

Even before the pandemic, we weren’t the type of people who went out to restaurants often. We do have a couple of our favorites (Malai Thai Kitchen, From Across the Pond, and Mariachi’s Dine-In) that we still try to support, but, mostly, since I read Tim Ferriss’s Four Hour Chef (#aff), we’ve cooked at home.

For my birthday, right before lockdown, I got a Ninja Foodi air fryer (#aff) and a SodaStream (#aff). That’s made it much simpler to stay at home and cook.

We have gotten into a rhythm for food: eggs late in the morning, and then a bigger, protein heavy meal in the late afternoon. We have a semi-rotation of what we cook, which makes shopping at Costco and Kroger easy; we’re typically in and out of Costco in under 30 minutes.

Where, in a non-pandemic world, we might be going out to restaurants a couple of times a week, seeing friends, doing brunches, we haven’t done that. The dog walks are much shorter now than they were even this time last year.

So, we have to fill in the time.

Pre-retirement, that was easy. It was work.

Now, particularly since we’re both through, for the most part, the decompression period, 2021 will certainly be about truly discovering ourselves and what else we want to do with our lives.

That’s not to say that I don’t often enjoy taking a moment, sitting there, and relishing the fact that I have absolutely nothing that I have to do. I do.

But, obsessing over COVID, vaccines, politics (from BLM to ludicrous claims of fraudulent elections) only fills up so much time, and those, too, will wane over time (hopefully, BLM because it’s been righted).

In effect, for us, 2020 was like a year on pause.

We didn’t lead the lives we thought that we would.

We didn’t spend like we thought we would.

So, we’re still a little uncertain about what our retirement lives will actually be like.

And we probably won’t know in 2021, either, as I suspect that at least half of 2021 will look a lot like March – December, 2020.

Thus, we will need to start to find other things that provide meaning and enjoyment until we are truly at a point where COVID is behind us.

We also, learned…

Stay the course on the financial plan.

We had a decent gameplan going into retirement on what to do with ourselves. When the markets crashed in March, we didn’t panic, and we didn’t pull out of the markets.

As a result, our patience paid off.

We don’t have crystal balls.

In fact, it’s very much the opposite. Aside from our moonshot, for our public market investments, we’re unabashed index fund ETF investors. We can’t create alpha in investing in the markets, and we hardly try.

It certainly leads to a much calmer approach to finances. We look about once a month, and that’s it.

I am much more active in our real estate investing, and somewhat active in our privately held company investments, but that’s a matter of choice. We’ll eventually get to the point where those investments liquidate and take up zero time.

That said, until we have a “real” year of retirement, likely 2022, we’ll still wonder how the plan will hold up.

For now, though, in a pandemic, we can continue to enjoy our lives and be glad that our spending is down because of these external constraints.

I admit, I don’t know how much I’m going to keep writing here. I think I’ve solved most of the intruguing (to me) questions that I wish to answer. Sure, we’ll come upon some random nugget here and there, and it’ll drive me to write. I actually wrote 83 articles in 2020. Some of them were my own way to work through uncertainty with COVID. Some were ideas that I had in the hopper already. Some where spur of the moment evaluations of questions that intrigued me. But, I cannot imagine that pace of writing on this website in 2021. Plus, if the revenues generated from the ads and affiliate links don’t pay for the hosting, then there’s no point in keeping the lights on. I know what I wrote. I saved it. I can always go back and reread it if I need to reference something.

I’m sure that once we start traveling, I’ll get back to writing, as much to diary as anything else. I love the expat travel blogs, like All Options Considered, Earth Vagabonds, and Senior Nomads (and I’m looking for others if anyone has ideas).

I may even write political things. My views of the world have changed over time, as I’ve gained awareness and perspective. Maybe I won’t. I’d like to keep Thanksgiving dinner cordial!

For those who have read me over the years, thanks for coming along and sharing. I’ve made some blog friends and Twitter friends whose interactions I enjoy and hope to continue. I do occasionally write 280 character or less blurbs on my Twitter account.

Enjoy your own journeys to FIRE!

Should Early Retirees Who Will Depend on Social Security Buy Life Insurance?

People always live forever when there is an annuity to be paid them.
–Jane Austen

When I had clients who wanted to retire before they were eligible for Social Security, I would create models based on claiming Social Security at the appropriate time, giving them a secondary source of income beyond their investments.

In theory, Social Security should replace some amount of income that had been generated by investments, allowing retirees to accumulate less before retiring.

Even the fabled William Bengen 4% safe withdrawal rate study never mentions Social Security as a source of income.

Maybe he was making a political statement.

If the clients were a married couple (which they almost always were), then there was some sort of dependence on both spouses’ Social Security earning power in the future.

The most prudent path is to assume that you won’t receive Social Security when the time comes. That way, it’s all bonus.

However, doing that may alter the balancing act in determining when to retire between safety and the ever diminishing number of days you have left on this earth to do something.

So, what if you’re contemplating early retirement and have enough to safely make it until you can both claim Social Security and bolster your income, but need both sets of Social Security in order to get to the promised land of FIRE?

Life Insurance for Social Security

One possible answer is to purchase a fully paid whole life insurance policy to make up for the loss of that future income when the spouse passes.

Let’s assume that you have a 45 year old couple. She’s going to make $1,500 in Social Security at age 70 and he’s going to make $1,000 in Social Security at age 70 (to learn about Social Security claiming strategies, check out Lesson 14 of my Winning With Money series).

According to immediateannuities.com, the cost for buying an annuity to replace her Social Security income is $138,984 and the cost to replace his income is $83,426. Comparatively, investing that money now in an annuity would generate $442/month for her and $266/month for him.

Why am I quoting a deferred annuity cost now as opposed to the cost of an immediate annuity for a 70 year old?

If the spouse passes the day after the life insurance policy is bound, then the surviving spouse can purchase the annuity now for the payments to kick in then. Of course, there are other options for what to do with the money, but that is the purpose of the life insurance policy.

To get a $100k fully paid life insurance policy on him, the cost, according to Local Life Agents Premium Quote Engine is between $23,572 and $29,486, assuming he is insurable and depending on his health.

For her, the cost to get $150k of life insurance would be between $30,219 and $37,708.50.

If you assume the cheapest insurance, then, for her, she would need an annual average compounded return of 6.31% to be able to pay for the future annuity. For him, the return would need to be 5.18%.

Both of those are under what an expected blended return on invested assets would be, but not terribly far off. If I were a) not retired, and b) advising a client in this situation, I wouldn’t have heartburn if the client wanted to choose this path.

Run your own numbers, or seek the advice of a CFP who specializes in early retirement to see what you think.

Why Whole Life Insurance?

As I discussed in Lesson 6: A Contract on Your Life, I’m a big fan of term life insurance in most situations.

So, why not get a 25 year term life plan here?

The idea behind life insurance, in most instances, is that it needs to match replacing income or paying off debts at some point in time. That’s why I like term life insurance laddering.

Here, you’re trying to protect a future income stream between the time the first spouse passes and the time the second spouse passes.

If spouse A passes 2 days after the 70th birthday, the Social Security payment stream ends. A term life insurance policy is useless at that point, if it expired on the 70th birthday.

Why Single Premium?

This one is more of a preference for preventing mistakes in the future than a financial benefit.

You can probably pay monthly payments and wind up better off financially.

However, it’s also possible that, as you age, you may suffer cognitive decline, and math skills are usually the first ones to decline with age. Simply put, you may start to forget to pay that bill, and then wind up having your policy cancelled.

There are also some permutations to play out with who passes first and estate plans.

Again, this should be a discussion between your CFP and a trusted insurance agent.

We never counted on Social Security in making our decision to FIRE. When you retire in your 40s, Social Security isn’t going to be massive anyway. We have three main buckets of costs that are variable (travel, food, and healthcare) and enough to cover both of us until a ripe old age. Therefore, if one passes, it doesn’t negatively impact income. So, while it was useful to go through this exercise to see how much it would cost us in life insurance, it wasn’t necessary, and we decided not to insure our Social Security payments.

How about you? Have you ever looked at insuring your Social Security payments? Let’s talk about it in the comments below!

Optimizing Your AGI to Maximize Obamacare Credits

When you aim for perfection, you discover it’s a moving target.
–Geoffrey Fisher

It’s coming upon the end of the year, and, if you are on the Affordable Care Act (ACA) healthcare plan, otherwise known as Obamacare, it’s time for you to start doing your end of year tax planning.

Why, you may ask me, must I do tax planning now if I don’t have to file my taxes until April 15?

The answer is that because there are a couple of tax planning moves that you need to make before the end of the year if you’re going to execute them.

Furthermore, there are a couple of MAGI targets that you’re going to want to keep in mind, because missing them can be VERY expensive.

Let’s take a look.

Obamacare and Your Wallet

The purpose of the Affordable Care Act was to make healthcare affordable for lower income Americans.

First, it created a public exchange where health insurance companies were supposed to compete for participants’ business, therefore, in theory, driving costs down. I’ll let it to you, Dear Reader (no TM), to determine the success of this leg of the Act.

The second was that it limited the amount of premiums that people within certain income ranges would have to pay in health insurance.

FPL % Annual Premium Cap
Under 100% No Cap
100% – 133% 2.06%
133% – 150% 3.09% – 4.12%
150% – 200% 4.12% – 6.49%
200% – 250% 6.49% – 8.29%
250% – 300% 8.29% – 9.78%
300% – 400% 9.78%
Over 400% No Cap

Source

In theory, if you make too much in Modified Adjusted Gross Income (MAGI) – which, for the purposes of this analysis, I’m going to assume is the same as AGI – then you don’t need subsidized healthcare. If you make too little in MAGI, then you should be eligible for Medicaid.

However, there are a lot of people, as we previously showed in ACA Subsidy Thresholds, Using Rental Real Estate for FIRE, and Why You May Need a Traditional IRA, sometimes, there’s very little correlation between take-home income, AGI, and net worth. For example, in the state of Texas, where we live, there is an income test as well as recipients needing one of the following categories to qualify:

  • Pregnant, or
  • Be responsible for a child 18 years of age or younger, or
  • Blind, or
  • Have a disability or a family member in your household with a disability.
  • Be 65 years of age or older.

Source

Given that we’re none of the above, if we’re below 100% of the Federal Poverty Level (FPL), we’re paying full freight for our health insurance, whether or not we get it on the healthcare.gov marketplace.

So, how much are FPL limits for a 2 person married filing jointly family?

FPL % $ Threshold
100% $17,240
133% $22,929
138% $23,791
150% $25,860
200% $34,480
250% $43,100
300% $51,720
400% $68,960

Note: these numbers are for the contiguous 48 states and DC. Alaska and Hawaii have different thresholds.

Source

As a married filing jointly couple, we want to make sure that our AGI is at least $17,240 and no more than $68,960.

The Total Costs of ACA and Your Taxes

To evaluate exactly how much the ACA influences your overall financial picture, I did an analysis of net impact to your wallet of different AGIs, ranging from $0 to $70,000 as a MFJ couple.

I also made the following assumptions:

  • The couple maxed out their retirement plan contributions (FIRE, yo) because they had some sort of source of earned income, such as a blog or board work
  • The couple chose the second cheapest Silver ACA plan, since that’s what the subsidy estimates are based off of
  • Aside from the Savers Credit, the couple qualified for no other tax credits, meaning that the tax due from the AGI was only reduced by the Savers Credit where applicable

What were the results?

If the image does not show up in your reader, you can click here to see the 2020 ACA tax analysis chart.

There are some interesting bend points to analyze:

  • 133% of FPL. Here is where the percentage of your income that can pay for premiums increases for the first time. So, now you’re compounding increasing income with higher percentages.
  • Savers Credit cliffs. There are bend points where you get less and less tax credit based on your AGI:

    Credit Rate Married Filing Jointly
    50% of your contribution AGI not more than $39,000
    20% of your contribution $39,001 – $42,500
    10% of your contribution $42,501 – $65,000
    0% of your contribution more than $65,000

    Source

    At first, I thought that the tax credit might be enough to offset the increase in premiums that you paid.

    However, let’s look at the difference between $17,240 and $17,241 in AGI.

    At $17,240 in AGI, you pay $355.14 in premiums and $1,724 in taxes.

    At $17,241 in AGI, you pay $355.16 in premiums and $1,724.10 in taxes – $0.08 more than you paid at $17,240.

    So, while the Savers Credit helps, it doesn’t change your target AGI.

  • 300% of FPL. Here is where you start paying a flat 9.78% of your income in premiums.
  • 400% of FPL. Above this, you no longer get subsidies.

If you’re concerned about doing your taxes correctly, I’ve used
TurboTax Online (#aff)
for several years, and, despite the complicated status of our taxes, have had no problems filing my taxes, saving us almost $1,000 compared to what we were paying our accountant when he prepared our taxes.

Triggers to Pull to Achieve Your Target

As you can see in this analysis, if you can hit it, your target AGI is $17,240. That’s 100% of the Federal Poverty Level, meaning that you maximize the value of the ACA subsidy while minimizing your taxes. This number is the same whether or not you qualify for the Savers Credit. The logic is the same as thinking that a mortgage interest deduction saves you money. It doesn’t. It just reduces the financial impact of the interest you’re paying for your mortgage.

So, assuming you have the ability to do this, how do you p-hack your AGI? Here are a couple of levers to pull:

  • Change Roth IRA/401k contributions to traditional contributions. For every dollar that you move from Roth to traditional, you’re lowering your AGI by a dollar. This is the one move you can make after December 31, but before April 16. If you want to pull one of the other levers on this list, you must do so by December 31.
  • Capital gains harvesting. If you need to raise your AGI, you could sell some winners and take the capital gains. You can immediately buy back the same securities at the same price (hopefully, assuming you’re quick enough and you do not have to pay trading fees), which will raise your basis in the future and your AGI this year.
  • Capital loss harvesting. Sell some losers (and make the L with your fingers and your forehead while you do so) to lower your AGI. Here, though you must be careful of the wash sale rules, which are:

    A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:

    1. Buy substantially identical stock or securities,
    2. Acquire substantially identical stock or securities in a fully taxable trade,
    3. Acquire a contract or option to buy substantially identical stock or securities, or
    4. Acquire substantially identical stock for your individual retirement arrangement (IRA) or Roth IRA.

  • Roth conversion. Take money from your traditional retirement account and convert it to a Roth. The amount that you convert will raise your AGI by the same amount, as it will be treated as ordinary income in that year, and you won’t have to pay taxes on it in the future (don’t forget your conversion 5 year rules.

Obviously, I’m a CFP, not a CPA, so this isn’t tax advice. Numbers provided are 2020 numbers for 2 person married filing jointly families. You will not be made more handsome or beautiful by reading this post. If you feel a lump in your throat upon reading this, it’s not a medical emergency; it’s how moved you’ve been by reading this beautiful prose, much like Ralphie’s teacher in A Christmas Story (#aff) upon reading his theme.

Has anyone tried to hit the magic AGI number to optimize Obamacare? Let’s talk about it in the comments below!