I know this is probably a dumb question, but being pre-retirement, I am not used to think along those lines...
Let's take a family of two, semi-retired in their early 50s. With an ACA 'cliff' threshold of roughly $60k.
- Say they work part-time, enjoying semi-retirement, and making $20k a year each in regular (gross) wages. Oh, and no health plan coming with it.
- Say they have a nice egg nest of securities, and they take 4% out of it every year. Say this makes an additional revenue of $80k.
Now the trick is this $80k amount is actually made of two parts, regular capital where taxes have been already paid, and capital gains (taxable for sure).
If the capital gains are $10k, then the taxable income is $20+$20k+$10k, and this is under the threshold, hence subsidies and so on.
If the capital gains are $30k, then the taxable income is $20+$20k+$30k, and this is over the threshold, hence cliff effect and fat luck on subsidies/etc.
Did I get that right? In other words, the $60k threshold is about your taxable income, not your annual spend...
Let's take a family of two, semi-retired in their early 50s. With an ACA 'cliff' threshold of roughly $60k.
- Say they work part-time, enjoying semi-retirement, and making $20k a year each in regular (gross) wages. Oh, and no health plan coming with it.
- Say they have a nice egg nest of securities, and they take 4% out of it every year. Say this makes an additional revenue of $80k.
Now the trick is this $80k amount is actually made of two parts, regular capital where taxes have been already paid, and capital gains (taxable for sure).
If the capital gains are $10k, then the taxable income is $20+$20k+$10k, and this is under the threshold, hence subsidies and so on.
If the capital gains are $30k, then the taxable income is $20+$20k+$30k, and this is over the threshold, hence cliff effect and fat luck on subsidies/etc.
Did I get that right? In other words, the $60k threshold is about your taxable income, not your annual spend...
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