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07-17-2010, 05:32 AM
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#1
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Full time employment: Posting here.
Join Date: Mar 2005
Location: Punta Gorda, FL
Posts: 828
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income sweet spot
Just wondering if anyone has looked into the future and figured out how they plan to show income with the health care subsidies, and possible new tax rates.
I know its best to show as little as possible, but are you going to take more one year and then show less the next? Thus possibly getting the health care subsidy one year and not the next?
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07-17-2010, 06:41 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 1,669
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 Quote:
Originally Posted by dm
Just wondering if anyone has looked into the future and figured out how they plan to show income with the health care subsidies, and possible new tax rates.
I know its best to show as little as possible, but are you going to take more one year and then show less the next? Thus possibly getting the health care subsidy one year and not the next?
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My plan is to manage income through ROTH conversion to the top of a tax bracket and that is it. Haven't decide to go to the top of 15% or 25% .... probably 25.
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07-17-2010, 07:41 AM
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#3
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
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Some analysis. But I am not sure what the tax situation will be after 2010... but it looks like there may be a bill coming.
No matter what it is... I am planning to roll money into Roth accounts over several years using the most tax efficient means available to me.
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07-17-2010, 07:53 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
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I think the sweet spot will be under 29k.
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07-17-2010, 08:00 AM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,139
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I moved a bunch of cap gains into 2010, and this will lower future income and maybe even avoid future AMT taxes. I don't expect to get any health care insurance subsidies, I'm just trying to stay well under $200K annual income in the future to avoid higher margin taxes.
Audrey
__________________
Retired since summer 1999.
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07-17-2010, 08:07 AM
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#6
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 6,258
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Quote:
Originally Posted by audreyh1
I'm just trying to stay well under $200K annual income...
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I can do that without even trying.
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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07-17-2010, 08:11 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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Audrey, that's a good problem to have. (heh)
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07-17-2010, 09:16 AM
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#8
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,139
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Quote:
Originally Posted by RonBoyd
I can do that without even trying.
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I'm not going to have to try either - don't get me wrong!
But I did have to take some steps this year to avoid future potential large cap gains.
Audrey
__________________
Retired since summer 1999.
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07-17-2010, 10:42 AM
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#9
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Shouldn't my income sweet spot be my 4% SWR? Or is it 3% SWR? Have we reached the final verdict on that?
Anyway, that's may be a bit too low, for me that is. The market is not cooperating. I am gonna do part-time w*rk a bit longer.
No, not MANY MORE YEARS like a certain person has wished ill on me... ;-) Just a few more years...
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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07-17-2010, 02:02 PM
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#10
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Hard to say. I'm far enough away that I am hedging my bets in many different types of income with different types of tax treatment with the goal of maximizing overall income such that means-tested income for things like SS and health insurance subsidies is as low as possible consistent with a reasonable standard of living.
The clear trend to means testing and increasing the progressivity of taxes (as I think will have to happen) makes working longer to build more and more wealth less attractive. I'm not willing to live on poverty-level income to maximize benefits, but neither am I going to go out of my way to work more years when half of the extra nest egg (or more) from that extra work will be lost to taxes and lost means-tested SS and health care subsidies and when retiring with fewer years of w*rk is still feasible.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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07-17-2010, 04:28 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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The final health care rules are so far out that I'm not thinking explicitly about them. But I am moving trad IRA to Roth so that I have a mix of tax positions which may give me flexibility when the time comes.
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