Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Old 07-23-2014, 08:23 PM   #101
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
I was being a bit tongue in cheek but realistically we will probably have $900k in 401K, $200K in traditional IRA and $200K in Roth. If we deplete our taxable accounts due to medical bills, we would still have $1,300,000 in assets after bankruptcy. It would also take several years for the bills to chase you around enough that you even need to declare bankruptcy.

The better solution is to keep the subsidy and ACA and let everyone get access to affordable insurance.
__________________

__________________
Fermion is offline  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-24-2014, 06:40 AM   #102
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,446
Quote:
Originally Posted by modhatter View Post
So anyone planning leaving work for an early retirement counting on a subsidy to make it happen better have a contingency plan.
I think a "very safe" ER plan would include the possibility that there is no health care subsidy, period. Not because of any legal challenges, just because subsidies can go away for many reasons, for all health care, includeing Medicare, and healthcare expenses are critical components of future public spending.

Personally, I feel the likelihood of this happening is quite low, but greater than any of the efforts to further delay or deter the ACA.
__________________

__________________
MichaelB is offline  
Old 07-24-2014, 07:08 AM   #103
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,642
Quote:
Originally Posted by MichaelB View Post
I think a "very safe" ER plan would include the possibility that there is no health care subsidy, period. Not because of any legal challenges, just because subsidies can go away for many reasons, for all health care, includeing Medicare, and healthcare expenses are critical components of future public spending.

Personally, I feel the likelihood of this happening is quite low, but greater than any of the efforts to further delay or deter the ACA.
+1 always safer to leave a fudge factor in expense estimates. But while I have noted the immense impact if the DC Circuit's reasoning were to prevail I highly doubt that it will. SCOTUSBLOG has a pretty good piece on why the Supreme Court will probably eventually hear the case and why they will probably rule in favor of the Administration (too many parts to summarize).
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline  
Old 07-24-2014, 07:28 AM   #104
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
Quote:
Originally Posted by MichaelB View Post
I think a "very safe" ER plan would include the possibility that there is no health care subsidy, period. Not because of any legal challenges, just because subsidies can go away for many reasons, for all health care, includeing Medicare, and healthcare expenses are critical components of future public spending.
I agree. I think it is very likely that the eligibility for a subsidy will be modified so that multi-millionaires (like us) who are able to reduce their AGI without reducing their standard of living in order to qualify for a subsidy will no longer be able to do so.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline  
Old 07-24-2014, 07:33 AM   #105
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
Quote:
Originally Posted by FIRE'd@51 View Post
I agree. I think it is very likely that the eligibility for a subsidy will be modified so that multi-millionaires (like us) who are able to reduce their AGI without reducing their standard of living in order to qualify for a subsidy will no longer be able to do so.
What makes you think this? Do you have past examples where a tax credit was denied someone because of their assets and not their income?
__________________
Fermion is offline  
Old 07-24-2014, 07:50 AM   #106
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
Quote:
Originally Posted by Fermion View Post
What makes you think this? Do you have past examples where a tax credit was denied someone because of their assets and not their income?
There has been a fair amount of discussion in this thread about the "intent" of the law. IMHO, I don't think it was the "intent" of Congress to provide subsidized health insurance to those who could afford to purchase it without the subsidy.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline  
Old 07-24-2014, 07:56 AM   #107
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
Quote:
Originally Posted by FIRE'd@51 View Post
There has been a fair amount of discussion in this thread about the "intent" of the law. IMHO, I don't think it was the "intent" of Congress to provide subsidized health insurance to those who could afford to purchase it without the subsidy.
Ah. So what is your definition of afford?

Say I am making $20,000 right now at age 50 but I have a pension from a former job that will kick in at age 60, paying me $50,000 a year. Am I too rich for a subsidy? $20,000 is not much to live on and pay $10,000 in premiums and copays.

But maybe I have $1,000,000 in a IRA at age 50 and am making $20,000 a year. I plan to buy an annuity at age 60 with that $1,000,000. Am I too rich for a subsidy? Do you force me to cash in my IRA early to pay for health insurance? Why am I so different than the previous guy with a pension?

What if I live in California and have a house I bought for $200,000 years ago that is now worth $1,200,000. I make $20,000 a year. Do I have to sell my house to pay for insurance or do I get a subsidy?


Income based testing is so much easier to quantify.
__________________
Fermion is offline  
Old 07-24-2014, 08:14 AM   #108
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
Quote:
Originally Posted by Fermion View Post
Ah. So what is your definition of afford?

Say I am making $20,000 right now at age 50 but I have a pension from a former job that will kick in at age 60, paying me $50,000 a year. Am I too rich for a subsidy? $20,000 is not much to live on and pay $10,000 in premiums and copays.

But maybe I have $1,000,000 in a IRA at age 50 and am making $20,000 a year. I plan to buy an annuity at age 60 with that $1,000,000. Am I too rich for a subsidy? Do you force me to cash in my IRA early to pay for health insurance? Why am I so different than the previous guy with a pension?

What if I live in California and have a house I bought for $200,000 years ago that is now worth $1,200,000. I make $20,000 a year. Do I have to sell my house to pay for insurance or do I get a subsidy?


Income based testing is so much easier to quantify.
I don't want to start a political argument here (Porky?). All I'm trying to say is, if you have significant assets, and can't afford the insurance without a subsidy, maybe you are not quite ready to ER. I don't think it was the intent of Congress to make it easier to ER.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline  
Old 07-24-2014, 08:14 AM   #109
Thinks s/he gets paid by the post
nash031's Avatar
 
Join Date: Jun 2013
Location: Coronado
Posts: 1,486
Quote:
Originally Posted by Fermion View Post
Ah. So what is your definition of afford?

Say I am making $20,000 right now at age 50 but I have a pension from a former job that will kick in at age 60, paying me $50,000 a year. Am I too rich for a subsidy? $20,000 is not much to live on and pay $10,000 in premiums and copays.

But maybe I have $1,000,000 in a IRA at age 50 and am making $20,000 a year. I plan to buy an annuity at age 60 with that $1,000,000. Am I too rich for a subsidy? Do you force me to cash in my IRA early to pay for health insurance? Why am I so different than the previous guy with a pension?

What if I live in California and have a house I bought for $200,000 years ago that is now worth $1,200,000. I make $20,000 a year. Do I have to sell my house to pay for insurance or do I get a subsidy?


Income based testing is so much easier to quantify.
Got in a similar discussion with an acquaintance who proclaimed that no one yet had been able to give him a good reason why we shouldn't shift from a progressive income tax to a flat 1% "net worth" tax.

I just started by asking him how you determine "net worth" and went from there for about 20 minutes...

But I do think there's some momentum in this country to look at taxing assets...
__________________
"So we beat to our own drummer in the sun;
We ask for nobody's permission to run.
I just wanna live in a world like that;
Now I'm gonna live in a world like that!" - World Like That, O.A.R.
nash031 is offline  
Old 07-24-2014, 08:22 AM   #110
Recycles dryer sheets
 
Join Date: May 2013
Posts: 61
Quote:
Originally Posted by FIRE'd@51 View Post
There has been a fair amount of discussion in this thread about the "intent" of the law. IMHO, I don't think it was the "intent" of Congress to provide subsidized health insurance to those who could afford to purchase it without the subsidy.
We know Congress's intent in this instance. When the ACA was being drafted, asset and income tests for subsidies were discussed at length.

Congress did not include an asset test for ACA subsidy eligibility because of this country's 28 million small business (22 million of which are self-employed individuals (or couples) with no other employees). Add to those businesses about 2 million family farms.

Since so many of small businesses and family farms generate modest income, but own substantial illiquid assets, Congress decided not to test assets for ACA subsidy eligibility. So, if you receive a subsidy because your MAGI made you eligible despite sitting on $1mm or more of assets, thank your local small businesses and family farms.
__________________
footenote is offline  
Old 07-24-2014, 09:05 AM   #111
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,424
Quote:
Originally Posted by nash031 View Post
Got in a similar discussion with an acquaintance who proclaimed that no one yet had been able to give him a good reason why we shouldn't shift from a progressive income tax to a flat 1% "net worth" tax.

I just started by asking him how you determine "net worth" and went from there for about 20 minutes...

But I do think there's some momentum in this country to look at taxing assets...
I think there is a desire by some for an assets based tax since it will tax the other guy. I think it is unlikely that we will see a tax based on assets or net worth in my lifetime only because of definitional issues (that we sometimes debate here), measurement issues and fairness issues (in the case of "self-made" wealth, assets are a result of past income the income tax has already been applied and also the Sally Saver vs Sue Spender debate).
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline  
Old 07-24-2014, 09:18 AM   #112
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
If you think the pension haters are bad now, imagine how they are going to feel if you include 401K balances in a asset test but don't include present value of a future pension.

Asset testing fails out of the gate. Will never be used for ACA subsidy.
__________________
Fermion is offline  
Old 07-24-2014, 09:43 AM   #113
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,377
Quote:
Originally Posted by Fermion View Post
If you think the pension haters are bad now, imagine how they are going to feel if you include 401K balances in a asset test but don't include present value of a future pension.

Asset testing fails out of the gate. Will never be used for ACA subsidy.

In the totality of it all, I imagine high net worth individuals receiving subsidized healthcare is a flea bite of a problem. Knowing how efficient the government is, the cost of "making it right" whatever that is, would be more expensive than leaving it as is.


Sent from my iPad using Tapatalk
__________________
Mulligan is offline  
Old 07-24-2014, 09:48 AM   #114
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,642
Quote:
Originally Posted by Mulligan View Post
In the totality of it all, I imagine high net worth individuals receiving subsidized healthcare is a flea bite of a problem. Knowing how efficient the government is, the cost of "making it right" whatever that is, would be more expensive than leaving it as is.


Sent from my iPad using Tapatalk
+1
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline  
Old 07-24-2014, 09:55 AM   #115
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,377
Quote:
Originally Posted by donheff View Post
+1

I'm a little sour on the government efficiency thing today, Donheff. I bought a car a couple days ago, and it won't pass emissions test. Not because it is polluting, but because the codes haven't cleared from a previous repair. The solution? Drive needlessly for 2 days spewing emissions just so I can prove it is not in violation. I have 2 codes cleared now, so I have to continue driving another day or so needlessly through the backwoods to get a third one to clear...


Sent from my iPad using Tapatalk
__________________
Mulligan is offline  
Old 07-24-2014, 11:26 AM   #116
Thinks s/he gets paid by the post
 
Join Date: Nov 2009
Posts: 3,865
+1 to pb4uski, fermion, and mulligan @ not using assets. Where would you draw the line with regard to evaluating real estate, collectibles, and personal property/valuables?
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline  
Old 07-24-2014, 03:59 PM   #117
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by Mulligan View Post
In the totality of it all, I imagine high net worth individuals receiving subsidized healthcare is a flea bite of a problem. Knowing how efficient the government is, the cost of "making it right" whatever that is, would be more expensive than leaving it as is.
Unfortunately, the politics of things, human psychology, and good old regular "envy" will play a role in what we eventually do. It may not matter much to Ms Voter that the "rich" guy earned less in his lifetime than average (he just saved some of it), or that it will cost $1.50 in govt "effort" and increased public compliance costs to net $1 in increased taxes by taxing wealth/denying subsidies to those with low incomes but higher-than-average wealth.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now  
Old 07-24-2014, 08:02 PM   #118
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,265
Quote:
Originally Posted by Mulligan View Post
I'm a little sour on the government efficiency thing today, Donheff. I bought a car a couple days ago, and it won't pass emissions test. Not because it is polluting, but because the codes haven't cleared from a previous repair. The solution? Drive needlessly for 2 days spewing emissions just so I can prove it is not in violation. I have 2 codes cleared now, so I have to continue driving another day or so needlessly through the backwoods to get a third one to clear...


Sent from my iPad using Tapatalk
OK, this is a total sidetrack from the thread, so I hope to just pop in and out on this, but...

I'm one of the last people here you'd expect to defend government efficiency, but actually, those 'ready' codes make perfect sense. There really is no way to know that the repair did its thing until you accumulate some miles and various driving conditions. It might seem counter-intuitive in some cases, but on average it actually is the most efficient thing to do.

There, I defended the government bureaucracy. Put that in the record books!

Over and out - ERD50
__________________
ERD50 is offline  
ACA trouble. Appeals court rules subsidies illegal
Old 07-24-2014, 08:22 PM   #119
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,377
ACA trouble. Appeals court rules subsidies illegal

Quote:
Originally Posted by ERD50 View Post
OK, this is a total sidetrack from the thread, so I hope to just pop in and out on this, but...



I'm one of the last people here you'd expect to defend government efficiency, but actually, those 'ready' codes make perfect sense. There really is no way to know that the repair did its thing until you accumulate some miles and various driving conditions. It might seem counter-intuitive in some cases, but on average it actually is the most efficient thing to do.



There, I defended the government bureaucracy. Put that in the record books!



Over and out - ERD50

I'm sure you are right, ERD. But what frustrated me was the repair had nothing to do with the emissions. They pulled the computer and replaced it trying to correct a problem before I bought vehicle, but the problem was only an ignition switch. This threw everything off all unrelated to the current problem. To compound the problem I bought the vehicle out of state from a dealer in which no emissions test is needed. So they weren't looking at that as being a problem before I drove it back home.


Sent from my iPad using Tapatalk
__________________
Mulligan is offline  
Old 07-24-2014, 08:55 PM   #120
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,265
Quote:
Originally Posted by Mulligan View Post
I'm sure you are right, ERD. But what frustrated me was the repair had nothing to do with the emissions. They pulled the computer and replaced it trying to correct a problem before I bought vehicle, but the problem was only an ignition switch. This threw everything off all unrelated to the current problem.
Yes, even disconnecting the battery (for any reason) can reset the codes and require you to go through a driving cycle before it can pass. Maybe this should be held in non-volatile memory, but then again, I think they are trying to make it tamper-resistant, so maybe resetting everything when power is removed is a good plan.

Like I said, maybe it doesn't make sense in some specific cases like this, but when looking at the big picture, it probably does make sense overall. It really is difficult for large scale operations to deal with the exceptions, and that leaves it open to corruption as well.

Quote:
To compound the problem I bought the vehicle out of state from a dealer in which no emissions test is needed. So they weren't looking at that as being a problem before I drove it back home.
Well, that is a risk. I know when I went to purchase a used car, I used the Car-Fax report (or something like that?) and it included the emission test dates and results. Hindsight is 20/20, but I suppose you do need to be extra careful when purchasing out of state.

-ERD50
__________________

__________________
ERD50 is offline  
Closed Thread


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Tax Question: Downsizing vs. ACA Subsidies daylatedollarshort Health and Early Retirement 7 02-20-2014 07:01 PM
Website for ACA Options, Premiums, and Subsidies jflynn4 Health and Early Retirement 7 11-11-2013 03:52 PM
Federal Exchange - ACA subsidies in jeopardy shotgunner Health and Early Retirement 13 10-25-2013 10:30 PM
Poll: Who's going to try to get ACA subsidies by staying under the threshold? explanade FIRE and Money 200 04-24-2013 07:46 PM
Healthcare ACA subsidies appear to depend on multi-year income pixelville FIRE and Money 21 03-14-2013 10:01 PM

 

 
All times are GMT -6. The time now is 03:01 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.