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Is there any "value" in having taxable income after you've started Medicare?
Old 05-19-2023, 08:29 AM   #1
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Is there any "value" in having taxable income after you've started Medicare?

Before Medicare, if you are using ACA insurance, you don't want your income too high, but you also don't want it too low (or else you aren't eligible for ACA).

I saw a comment about converting ALL IRA money to Roth and it got me wondering if there was any other value to having some taxable income besides ACA (i.e. after 65)?

Edit: It occurred to me that you at least want taxable income upto the standard deduction or you've lost some 0-taxrate income
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Old 05-19-2023, 08:47 AM   #2
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Right, up to the standard deduction for sure. I would also take LTCGs up to the point where they become taxed as well.
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Old 05-19-2023, 08:55 AM   #3
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You may get turned down for a loan or credit card with very low income. I always fudge my income number to be what my withdrawal plan says I can spend that year. If I hae untaxed qualified dividends, take some from a Roth, or sell funds with a high cost basis (very little cap gains), I include the full amount rather than the taxable income generated from the withdrawal or sales.
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Old 05-21-2023, 08:02 AM   #4
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If you manage your income to be in the 10% and 12% tax brackets then you get to keep and/or spend 88-90%.... what's the matter with that?

If you manage taxable income to pay no tax now, does that mean more tax later when RMD's bite or for your heirs?

One reason for not converting all of your traditional IRAs to Roth is so, that you have some money left in traditional IRAs to do qualified charitable distributions when you qualify to do that, effectively paying no tax on those charitable distributions versus having paid a tax if you Roth converted it earlier.
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