Withdrawal Strategies With Obamacare

[Moemg]

Quote:

Originally Posted by TromboneAl When our AGI is very low, we will receive large subsidies for our health care coverage. It seems that this alters the conventional tax-planning withdrawal strategies. For example, since we are currently withdrawing from after-tax accounts, our AGI last year was only $22,000. Most of that came from a Roth conversion. As a result, our (California exchange) health insurance premiums will only be $29 instead of $946 per month, a saving of $11,000 per year.

What kind of coverage do you get for $29.00 & is it widely accepted ?

[haha]

Quote:

Originally Posted by explanade What about the unrealized dividends and capital gains distributions from your taxable accounts?

Can you give an example of something that could be an "unrealized dividend".

Ha

[NoMoreJob]

Quote:

Originally Posted by Moemg What kind of coverage do you get for $29.00 & is it widely accepted ?

The coverage is the same, the difference between the $900+ and $29 is a federal tax credit.

[daylatedollarshort]

Quote:

Originally Posted by rec7 Thank You you have just answered one of my key questions I had about Obamacare.

I should clarify that the out of pocket maxes on the exchange charts are often lower than bronze for the silver through platinum plans, but for us not when we add back in the cost of the premiums as a component of the OOP max.

I think the bronze plan only becomes more expensive for us in a high medical expense year with more than one family member needing care, which for us is not normally the case. Plus we usually use alternative and traditional Asian medicine as much as possible, so we don't go to the doctor for most minor illnesses.

If we did start having high ongoing, multi-family member medical bills that we anticipated to last more than one year, then we would switch to a silver plan at the next open enrollment date.

[NoMoreJob]

Just FYI for those thinking about minimizing income....HSA contributions (to the limits allowed by law) DO reduce your ACA MAGI. I don't know about all exchanges but ours does include HSA qualified plans.

[FANOFJESUS]

Where can I find out of pocket maxes on a bronze plan?

[daylatedollarshort]

Quote:

Originally Posted by rec7 Where can I find out of pocket maxes on a bronze plan?

California has much of the plan information already posted on the state exchange site. If your does not, you can try the Kaiser calculator. It has rate information by state now.

[daylatedollarshort]

Quote:

Originally Posted by NoMoreJob Just FYI for those thinking about minimizing income....HSA contributions (to the limits allowed by law) DO reduce your ACA MAGI. I don't know about all exchanges but ours does include HSA qualified plans.

We have HSA plans available with Bronze plans, too. We never had an HSA before but from what I have read it appears you can use those for dental and vision expenses?

That would be another reason for us to go with the Bronze plan.

[NoMoreJob]

Quote:

Originally Posted by daylatedollarshort California has much of the plan information already posted on the state exchange site. If your does not, you can try the Kaiser calculator. It has rate information by state now.

However, if I'm not mistaken the Kaiser calculator is actually an 'estimator' and information provided is based on silver plans. It may give you a good ideal but I wouldn't count on it. Better to go to your state exchange when it's up IMO. I was able to find specific apporved plan information on our state's Insurance Commissioner's site but that may not be the case everywhere.

[foxfirev5]

Has anyone determined if Roth IRA distributions will count toward MAGI ?

[Alan]

Quote:

Originally Posted by explanade What about the unrealized dividends and capital gains distributions from your taxable accounts? Even if you don't redeem a dime out of those taxable accounts, every year, you have to pay taxes for the dividends and cap gains distributions. Those can certainly make your AGI or MAGI go above the limits, can't they?

MAGI only counts income, so unrealized gains are not included. Dividends paid and cap gains realized, plus cap gains distributions all count towards MAGI.

[NoMoreJob]

Quote:

Originally Posted by foxfirev5 Has anyone determined if Roth IRA distributions will count toward MAGI ?

According to this thread they do not...

http://www.early-retirement.org/foru...ies-63947.html

[Alan]

Quote:

Originally Posted by foxfirev5 Has anyone determined if Roth IRA distributions will count toward MAGI ?

They are tax free so don't count towards MAGI, however IRA to ROTH conversions are taxable and count towards MAGI, I believe.

[foxfirev5]

Thanks for the quick reply's. This strategy stuff is getting the best of me.

[NoMoreJob]

Quote:

Originally Posted by Alan They are tax free so don't count towards MAGI, however IRA to ROTH conversions are taxable and count towards MAGI, I believe.

Roth conversions are definitely included in MAGI.

[Alan]

Quote:

Originally Posted by NoMoreJob Roth conversions are definitely included in MAGI.

Thanks for the confirmation

[FANOFJESUS]

Quote:

Originally Posted by daylatedollarshort California has much of the plan information already posted on the state exchange site. If your does not, you can try the Kaiser calculator. It has rate information by state now.

Thanks that gives me a ballpark idea.

[MichaelB]

Here's a recent thread on MAGI and tips for keeping it low http://www.early-retirement.org/foru...aca-68035.html and here's a paper by KFF that explains actuarial level - how the "metal levels" (bronze, silver, etc") are designed and what the differences are among them regarding cost share and OOP. http://kaiserfamilyfoundation.files....13/01/8177.pdf

[Rustward]

Quote:

Originally Posted by haha Can you give an example of something that could be an "unrealized dividend". Ha

I was wondering the same myself.

[Fermion]

Quote:

Originally Posted by Rustward I was wondering the same myself.

I had one of those "unrealized dividends" in Nokia when they cut it to zero