POLL: ACA subsidy as a % of investable assets

[bingybear]

As we get near year's end the number of threads on ACA and subsidies are increasing. Early in ER I wasted a couple years doing small roth conversions and not getting subsidies that I could easily qualified for. The last two years I have bypassed subsidies, but I've done roth conversions to the top of the 24% bracket.

Just comparing investable assets to subsidy is likely not enough info as the positioning of assets may cause some to have too much income. It is worth a try to see what we can learn

 

[rodi]

As a family of 4, the subsidy is worth doing smaller Roth conversion. I Roth convert up to near the edge of the ACA subsidy cliff.

 

[RunningBum]

I'm not sure what the purpose of the poll is, other than another chance for someone to tell me I shouldn't be getting a big subsidy.

Besides, a small % could indicate a small subsidy, or a large net worth.

I do agree with the notion I think I see in the first post, that for at least some of us you should either take the subsidy, or blow past it with Roth conversions or 0% cap gains.

 

[Dtail]

Oops, I voted 4% by error. Should be about 1%.

 

[MichaelB]

Oops, I voted 4% by error. Should be about 1%.

That can be changed if you wish.

 

[Dtail]

That can be changed if you wish.

Yes can you change it please, or am I able to change it?

 

[MichaelB]

Yes can you change it please, or am I able to change it?

I’ll do it. From what to what?

 

[Dtail]

I’ll do it. From what to what?

From 4% to 1%.
Thanks.

 

[MichaelB]

From 4% to 1%.
Thanks.

Done. Cheers ..

 

[bingybear]

I'm not sure what the purpose of the poll is, other than another chance for someone to tell me I shouldn't be getting a big subsidy.

Besides, a small % could indicate a small subsidy, or a large net worth.

I do agree with the notion I think I see in the first post, that for at least some of us you should either take the subsidy, or blow past it with Roth conversions or 0% cap gains.

It is not my intent to criticize people for taking a subsidy.. and yes I did the top post you referred to. My first two years of ER I roth converted up to the top of the 15% bracket. I should have done roth conversions just below the cliff. Last year and this year I'm roth converting up to the top of the 24% bracket... thus no subsidy. This has nothing to do with the ACA or subsidies.

And you are right that there are many variables that make it somewhat difficult to ascertain exact info. Family size varies, locations of funds vary (tax diversification), subsidy amounts vary...

When I'm done with the large roth conversions ... I may then look at subsidies.

 

[RunningBum]

It is not my intent to criticize people for taking a subsidy.. and yes I did the top post you referred to. My first two years of ER I roth converted up to the top of the 15% bracket. I should have done roth conversions just below the cliff. Last year and this year I'm roth converting up to the top of the 24% bracket... thus no subsidy. This has nothing to do with the ACA or subsidies.

And you are right that there are many variables that make it somewhat difficult to ascertain exact info. Family size varies, locations of funds vary (tax diversification), subsidy amounts vary...

When I'm done with the large roth conversions ... I may then look at subsidies.

I didn't mean you would criticize, but I heard this once elsewhere, and wouldn't be surprised if it comes up here too.

I'm going the opposite way from you, taking the subsidy when I can, then doing larger Roth conversions in years I can't, and then between 65-70, after I start Medicare and before RMDs+SS.

 

[GenXguy]

I'm not sure what the purpose of the poll is...

That's what I was thinking - pretty much pointless.

I don't have ACA insurance.

 

[bingybear]

I didn't mean you would criticize, but I heard this once elsewhere, and wouldn't be surprised if it comes up here too.

I'm going the opposite way from you, taking the subsidy when I can, then doing larger Roth conversions in years I can't, and then between 65-70, after I start Medicare and before RMDs+SS.

We are each doing what we see as best for our situations. From past conversations I think we have different things we are working on. Thus doing different things.

 

[ShokWaveRider]

That's what I was thinking - pretty much pointless.
I don't have ACA insurance.

Then the poll is of no interest or value to you. Why even Comment. The Poll is directed to those with ACA based Healthcare Coverage.

For us (Both Fully ER'd) and using the ACA (Now only for DW) we keep a taxable account with enough in it so that the amount of dividends earned meet just over the minimum needed to achieve the maximum subsidy, before requiring to go on Medicaid. As these funds are primarily invested in Fixed income it is relatively easy to manage.

We are usually a little bit over the minimums, but nothing really significant. We use whatever the minimums are (Plus ~$300) every year , then simply pay the difference, if any, at the end of the year in our tax return. We have done this since ACA inception. We do not touch our qualified funds, and do not need to as we simply withdraw from taxable when we need to "Blow that Dough".

If there comes a time that we need to generate some MAGI income to keep from falling into Medicaid territory, we will either Take SS or take a little from our IRAs. Although based on current calculations that will never happen till DW is eligible for Medicare, "Four More Years!".

 

[Aerides]

Not sure I totally understand the poll. Assuming you mean "subsidy" as the annual total you receive, not monthly? And then compare it to invest-able assets...ie, basically everything but your house?

So a "typical" ER might be something like $6k subsidy as a percentage of $2M - so that's .03% and therefore statistically teeny - is that the number you are looking for? The number aren't quite apples+apples, as one is a discount and perhaps might be viewed as income, whereas the other is more fixed. But anyway, once we know the numbers - what does that demonstrate?

 

[scrabbler1]

I answered the poll assuming I will get the subsidy in next year's tax return after I do a little TLH to slightly reduce my MAGI enough to offset the recently announced year-end cap gain distributions. I did not qualify for any APTC. As a % of my entire portfolio (taxable+IRA), it will be between 0.1% and 0.2%.

 

[ShokWaveRider]

So a "typical" ER might be something like $6k subsidy as a percentage of $2M - so that's .03% and therefore statistically teeny - is that the number you are looking for? The number aren't quite apples+apples, as one is a discount and perhaps might be viewed as income, whereas the other is more fixed. But anyway, once we know the numbers - what does that demonstrate?

Yes to me it makes perfect sense. If one has Investable assets of say $2m. and one gets $10k per year in subsidy. The result is 0.5%. NOW, everybody's subsidy and investable asset number will be different, so the result will be different. In other words, I am agreeing with your understanding above.

 

[RunningBum]

So a "typical" ER might be something like $6k subsidy as a percentage of $2M - so that's .03% and therefore statistically teeny - is that the number you are looking for? The number aren't quite apples+apples, as one is a discount and perhaps might be viewed as income, whereas the other is more fixed. But anyway, once we know the numbers - what does that demonstrate?

Yeah, that's what I wonder too.

Note that another ER might only get a $3K subsidy just because of different medical costs and 2nd lower silver plan in their area or whatever determines the subsidy, and they may have just $1M, so their number would be the same .03%. Did we learn anything from that, or any other number?

 

[Taxman59]

In 2019, it is 1.8%. for 2020, it will be 0.6%. This poll is interesting on the surface, but when you run the #s, it is apparent that there is little if anything to be gained by it.