New Solo Roth 401K vs Existing Roth IRA, vs ??? Advice?

[CRLLS]

I am looking for advice. Background: I am 63, DW is 64. I am currently semi-retired, self-employed working for a small company averaging about 20 -30 hour per month. I expect that this may last as long as I want it to, but it may end tomorrow, you never know. I have no contract. I am currently planning on 3 more years or maybe more. I am paid on average $40K on a 1099-misc and we file a 1040 tax form, no company has been formally setup. DW stopped working last March. Our expenses are ~$50K per year, so we are pulling some $ from our savings to fill the difference until we reach SS FRA (or later). Depleting cash, instead of IRA/401K assets, has been our plan in order to maximize our ACA subsidies and minimize current taxes. Fidelity RIP, i-ORP, other planners, even using a basic 3% WR from pre-tax accounts, tell us we are comfortably set for our next phase in life at a higher spending rate than our accumulation years, even if the PT-job ended tomorrow. Years of LBYM has served us well, not only by building wealth but by creating an expectation of lifestyle that can be continued into our later years without degradation.

I have been working this self-employed job for the last 3 years and not contributed to any retirement savings, thinking that using that income for living expenses was better than tapping into our pre-tax savings. Having cash in the bank was our plan as we are trying to delay SS for as long as possible, at least to FRA. Now, as we are approaching this milestone, I can see we can convert some cash into some retirement savings. SO here is the question, Can I take some money from our cash position and contribute to an existing Roth IRA’s? (yes?) The reason I ask that is, If I setup a new Solo Roth 401K, I would have to wait 5 years before I can withdraw without penalty (I think yes here too?). Can I do either of those without affecting our ACA subsidy? (I think so) Can we also contribute to my DW existing Roth IRA too? (not too sure about this one). Or maybe I should just keep things as they are

As you can tell, we really like having flexibility in our plans. If there is a need in the next year or two, to tap into retirement savings, we don’t want to pay any penalties or affect the ACA subsidy.

[CRLLS]

I am surprised. No advice? I must have a lot of errors in my thinking. I really would like some help.

[N02L84ER]

There are no penalties on withdrawals of contributions regardless of your age or the age of the Roth.

[GreenER]

It is my understanding that if you create a new Roth you would need to hold off five years on any gains but the principal can be withdrawn without penalty at any time.

[Senator]

You should be able to contribute to a Roth for both you and your wife. 6500 x 2 = $13,000.

Maybe you have a 5-year limit, maybe not. Any contributions can be taken tax free, growth must sit 5 years.

Convert $100 from a tIRA now to start the 5-year clock. Do not wait.

https://www.kitces.com/blog/understa...d-conversions/

[CRLLS]

NO2L84ER, Senator and GreenER, Thanks. That confirms most of what I thought. I wasn't sure if I could contribute to an older Roth IRA now that I am self-employed. I thought maybe the two sources of income required 2 different Roth IRA's. I guess that I can just add to the older one. Since that one was opened over 5 yrs ago, there would be no penalty on withdrawals for contributions or gains if situations change and I need to tap into that. And there is no need to do a conversion. Sort of a Win-Win for me in all fronts.