pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Did you do the calculations with and without subsidy I ask because when I do it the marginal tax rate is 25% and that is starting at me owing ZERO in taxes....
Basically I will owe more in income taxes at 15% marginal and get about 10% less in subsidy.... I also lose a few other small credits....
I had a relatively complex Excel spreadsheet that did a projection of our finances from now until age 100, including a simplified tax calculation for each year. I looked at two scenarios... keeping our income slightly below 400% FPL and getting the subsidy or doing Roth conversions to the top of the 15% bracket.
If I do Roth conversions my stay in the 25% tax bracket once SS and RMDs begin is relatively short whereas if I don't do Roth conversion I'm in the 25% tax bracket for a much longer time and that 10% difference in tax over all those years make a big difference. IIRC, our age 100 NW was 25% higher by forgoing ACA subsidies.
In our case, the fact that we are in good health and can get relatively affordable catastrophic health insurance (~$5,500/year for essentially bronze level coverage) did skew the result. If I limited our income to 400% FPL then our subsidized cost of a bronze plan is $4,500 a year ($9,650 gross premium), but since we can get essentially similar protection for $5,500/year unsubsidized the economic value of the subsidy is only $1,000 a year and to get the I would need to forgo roughly $40k of Roth conversions and forgo $6k of future tax savings (paying 10% now to avoid paying 25% later) so the $6k trumps $1k anyday.
While I didn't look at it I suspect even if we had a regular plan so the value of the subsidy was $5,150 it would have been a closer call but still favored the Roth conversion to the top of the 15% tax bracket.
Last edited: