2018 Capital Gain Dist will affect my ACA costs

[DAYDREAMER]

I also think any work bonus paid in 2018 would qualify as earned income. How will it be reported to you - a W2?

Our work bonuses or profit sharing were reported on a W2 along with regular wages, etc. We paid FICA on it.

They are reported in "wages/income" on w2. I edited my post above saying that I already have a large portion of our retirement savings in 401k's and Ira's that we can't touch for another 5 years. We will be doing Roth conversions starting next year maxing to the 12%income bracket, and I need to sharpen the pencil to see if we need to convert to the 22% bracket to avoid MRD's. (Trying not to boast as to offend many here!!)

 

[Texas Proud]

I'm not sure I understand what you are saying. The subsidies have no connection to the premiums for ACA plans that unsubsidized people pay. What the above says is that the subsidies are coming from taxes we pay (where else would they come from?). People who receive the subsidy don't actually see any of that money - it goes directly to the ACA insurer. If they don't have a fully subsidy, they pay the difference.

Not saying that this was done by everybody, but I did not get the subsidy paid to the insurer... I paid the full freight and got mine back as a tax refund...


I was being more immoral as I was paying with my CC so I could get my 1.5% cash back rebate...

 

[pb4uski]

They are reported in "wages/income" on w2. I edited my post above saying that I already have a large portion of our retirement savings in 401k's and Ira's that we can't touch for another 5 years. We will be doing Roth conversions starting next year maxing to the 12%income bracket, and I need to sharpen the pencil to see if we need to convert to the 22% bracket to avoid MRD's. (Trying not to boast as to offend many here!!)

I wouldn't be so quick to do Roth conversions to avoid RMDs... one does Roth conversions where the taxes paid are below or at the marginal tax rate that you expect to ultimately be in.

IOW, it would be suboptimal to pay 22% now to "avoid RMDs" if even with RMDs you would be in the 12% tax bracket (which is up to $101,400 in 2018).

 

[pb4uski]

Interesting question, I honestly don't know. Maybe a better way to call it is "profit sharing"

Due to having a large portion of our retirement savings in a 401k that we can't touch for another 5 years, I'm not sure I want to tie up any more money in Pretax ira's.

But... if the choice were between no IRA contribution and going over the cliff or an IRA contribution and not going over the cliff then it would be an easy decision for me.

Besides, you were the one that was looking for ways to reduce MAGI, were you not?

 

[DAYDREAMER]

I wouldn't be so quick to do Roth conversions to avoid RMDs... one does Roth conversions where the taxes paid are below or at the marginal tax rate that you expect to ultimately be in.

IOW, it would be suboptimal to pay 22% now to "avoid RMDs" if even with RMDs you would be in the 12% tax bracket (which is up to $101,400 in 2018).

Agree 100%, however, I'orp is showing to max out to the 22% level which to this day, I'm still trying to figure out why.

 

[Texas Proud]

Agree 100%, however, I'orp is showing to max out to the 22% level which to this day, I'm still trying to figure out why.

Does it take into account the ACA credit? I would be maxing out conversion if not for the credit... but with the credit it makes no sense...


I think I will have a few years between 65 and 70 when I am only paying for DW and one kid to convert...

 

[ivinsfan]

Not saying that this was done by everybody, but I did not get the subsidy paid to the insurer... I paid the full freight and got mine back as a tax refund...


I was being more immoral as I was paying with my CC so I could get my 1.5% cash back rebate...

You paid money to the insurer and the in turn the government paid you the money they would have paid the insurer...same result and came from the same source ...guess you are smarter then everyone else.
Q

 

[DAYDREAMER]

Does it take into account the ACA credit? I would be maxing out conversion if not for the credit... but with the credit it makes no sense...


I think I will have a few years between 65 and 70 when I am only paying for DW and one kid to convert...

No, I think IORP is taking our pensions starting at age 55 into account. We won't be taking ACA from 2019 on. My wife starts her pension January 2019, and I start mine may 2020. After both pensions, we will only be able to covert approx $30k/yr and fill the 12% bracket. I think that's why IORP has us converting to the 22% bracket

 

[RunningBum]

How about an HSA contribution, if you have HSA-eligible health insurance. That'd be better than an IRA contribution.

 

[DAYDREAMER]

How about an HSA contribution, if you have HSA-eligible health insurance. That'd be better than an IRA contribution.

I'm not up to speed very well for HSA, but both wife and I are healthy, and will be starting very good fully paid employer retiree health care starting January 2019

 

[ivinsfan]

I'm not up to speed very well for HSA, but both wife and I are very healthy, and will be starting very good fully paid employer paid retiree health care starting January 2019

And now you come with the money quote that you have retiree health starting in 2019...but for 2108 you want to buy, sell and turn yourself in a magician to get that cheaper healthcare and keep your position in the market so you don't lose money there either... this is absolutely not the spirt of ACA, it might be legal.. yet you don't understand people who don't agree with your attitude.

 

[DAYDREAMER]

Here is our full Equation:
I'm 53
Wife 54
Savings/cd's $180k
Wellesley $580k (after tax investments)
Combined 401k's 1.3 million
House paid in full
Retiree health care for both starting Jan 2019
$2800/month pension starting 2019
$1900/month pension starting 2020
Social security $3200/month starting 2034
Social security $3200/month starting 2035

Yearly expenses $48k after taxes which includes fun money.
Take the info as boasting if you want!. I'm proud of it!

 

[DAYDREAMER]

And now you come with the money quote that you have retiree health starting in 2019...but for 2108 you want to buy, sell and turn yourself in a magician to get that cheaper healthcare and keep your position in the market so you don't lose money there either... this is absolutely not the spirt of ACA, it might be legal.. yet you don't understand people who don't agree with your attitude.

Ivinfan, you need to stop reading this thread. You are getting wadded up waaaaaaay too tight! Also, not once have I asked anyone to agree with me!

 

[Mulligan]

I think pre-ACA there was a limit too. Ridiculous limit such as $1 million limit like one of my employer’s plan had.

I had an individual plan Pre ACA BCBS plan that had the premiums “escalate” from $62 to $78 in 5 years,HSA compatible, $5k deductible, with robust network and $7 million lifetime benefits. Now three years later I have a forced on me ACA plan month, $458 a month, $7500 deductible, narrow network, non HSA...Oh but I have unlimited lifetime benes I guess....Yipee!

 

[RunningBum]

I'm not up to speed very well for HSA, but both wife and I are healthy, and will be starting very good fully paid employer retiree health care starting January 2019

The point is you can deduct it from your income in 2018, and use it for any medical expense reimbursement in any year, including Medicare insurance premiums, or so I've heard. Worst case you can withdraw it like a tIRA after 65, but surely you'll have some medical expenses in your lifetime. If you have an HSA eligible policy it is definitely a wise move to make an HSA contribution.

 

[Fedup]

I had an individual plan Pre ACA BCBS plan that had the premiums “escalate” from $62 to $78 in 5 years,HSA compatible, $5k deductible, with robust network and $7 million lifetime benefits. Now three years later I have a forced on me ACA plan month, $458 a month, $7500 deductible, narrow network, non HSA...Oh but I have unlimited lifetime benes I guess....Yipee!

That’s awful. At least $7 million is better than $1 million. I tried not to get sick when my limit was $1 million.

 

[ivinsfan]

Ivinfan, you need to stop reading this thread. You are getting wadded up waaaaaaay too tight!

You know there are always two sides to every discussion, in fact you are doing way more table pounding and mocking then I am... you might not want to agree with everyone posting here but at least listen to them respectfully if you can..

1st world problems...

 

[ivinsfan]

I had an individual plan Pre ACA BCBS plan that had the premiums “escalate” from $62 to $78 in 5 years,HSA compatible, $5k deductible, with robust network and $7 million lifetime benefits. Now three years later I have a forced on me ACA plan month, $458 a month, $7500 deductible, narrow network, non HSA...Oh but I have unlimited lifetime benes I guess....Yipee!

For everyone doing income manipulation there are many like you that see the dark side, but the freebie folks don't seem it get that.. and no, I am not saying people shouldn't follow the rules for ACA income, but if you are going to be blatant and manipulative with your income you might think about keeping it on the down low instead of asking for a primer guide to free HI..

 

[DAYDREAMER]

For everyone doing income manipulation there are many like you that see the dark side, but the freebie folks don't seem it get that.. and no, I am not saying people shouldn't follow the rules for ACA income, but if you are going to be blatant and manipulative with your income you might think about keeping it on the down low instead of asking for a primer guide to free HI..

Ivansfan, what is your health care situation? Are you paying health care in full out of pocket? Employer paying it for you? Please reveal your situation.

 

[ivinsfan]

Ivansfan, what is your health care situation? Are you paying health care in full out of pocket? Employer paying it for you? Please reveal your situation.

I'm on Medicare since you said please. Before that self-employed family business...had employee/owner policy that started having less coverage and costing more money every year. Some people in this country couldn't afford any HI without ACA assistance and I'm in those people's corner.

 

[ivinsfan]

That’s awful. At least $7 million is better than $1 million. I tried not to get sick when my limit was $1 million.

One million doesn't very far in today's HI climate...not much coverage.

 

[DAYDREAMER]

I'm on Medicare since you said please. Before that self-employed family business...had employee/owner policy that started having less coverage and costing more money every year. Some people in this country couldn't afford any HI without ACA assistance and I'm in those people's corner.

The only way I would say you are practicing what you preach is if you were capable of recieving ACA subsidy, but decided to forgo it and pay in full just because of your moral high ground. Otherwise, what I am seeing is very strong jealousy, and riding on what you consider high morals. Sorry pal. You really aren't there to make the call

 

[Fedup]

One million doesn't very far in today's HI climate...not much coverage.

This is a health plan from one big employer back in 2008/2009 time frame. I know it’s not much then, probably worst now.

 

[ivinsfan]

The only way I would say you are practicing what you preach is if you were capable of recieving ACA subsidy, but decided to forgo it and pay in full just because of your moral high ground. Otherwise, what I am seeing is very strong jealousy, and riding on what you consider high morals. Sorry pal. You really aren't there to make the call

Man you don't understand one thing I've been saying....jealousy huh, you might want to work a little on your reading comprehension, and I'm not your pal...

 

[ivinsfan]

This is a health plan from one big employer back in 2008/2009 time frame. I know it’s not much then, probably worst now.

I'm pretty sure my DH hit over 600k with 2 cardiac surgeries...