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Old 04-27-2014, 08:52 AM   #1
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I am new to this forum and there seems to be a varitey of good information here. I am 62 y/o married and still working my wife is retired. No debt, $1.1M in IRA and 401K, my wife currently receives $760 a month of SS and my estimated benefit at 63 will be $2,100. I would like to retire at the end of this year but am a little hesitant. One of my concerns is health insurance for myself, my wife's will be covered under Medicare. I've looked at the affordable care act and shopped online for a policy. One of my questions is what amount do I report as income? If I put my income for 2014 (approx $80,000) the premiums will be too high. My projected taxable income for 2015 will be about $32,000 which will make my health care costs much more affordable. Other than that I should be OK. Our "needs budget" is around $45,000 per year.
The plan is to use our combined SS at about $33,000 and add $33,000 per year for three years from my savings ($100,000) and not touch our IRA and 401K ($1,000,000) for those three years and then go from there. I am still a bit nervous though. Thoughts or comments on the health insurance issue or comments inn general.

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Old 04-27-2014, 09:22 AM   #2
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Big fish welcome. Others will chime in here and suggest you plug your stats into firecalc. My suggestion would be to defer taking SS until at least FRA, drawing additional funds from your IRA/401K to cover your needs. Your SS benefit would be 24 percent greater. If you could wait until 70 it would be another 32percent greater. Also consider that you could file and suspend and your wife could claim 50 percent of yours which would be greater than hers.

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Old 04-27-2014, 10:05 PM   #3
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You look to be in good shape financially. For a married couple to both take SS early when they have other options like you do is often a bad decision. There are many posts on this forum about when is best to take SS.
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Old 04-28-2014, 12:30 AM   #4
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I actually have the same question about the ACA insurance. What income do we report? My income has been all over the place due to a large bonus in 2013, none in 2014, and will drop significantly with retirement next year. How does the ACA insurance approach income variations?
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Old 04-28-2014, 09:09 AM   #5
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You estimate your future income, mine dropped substantially from 2012 to 2014. I was only asked did my income change. I believe others were asked for more details. There are clawback provisions for tax breaks.
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Old 04-28-2014, 09:36 AM   #6
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The income for the ACA is MAGI - modified AGI. Basically your adjusted gross income with retirement contributions (IRA/401k) added back in.

Since you plan to use taxable money for the first few years when you retire - you should be in the subsidized range for the ACA.

As far as what you report - it varies whether your state has it's own exchange or if you are on the federal exchange. But if your income *is* lower but they want you to pay the higher premiums - you'll get a refund at tax-time the following year.

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