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Originally Posted by meleana
Right now the interest and dividends on our money and a RMD on an inherited IRA will be at about $21,000 or less based on last year. So yes, Roth conversions would also help us get to the $24,000 mark or simply just withdrawing some money from our IRA’s.
But my concern is that they will not accept my letter of explanation on income for the subsidies or cost sharing for whatever stupid reason and I will be stuck with high premiums and no cost sharing until we file our taxes and having to lay out all that money, when I could have just stayed on my retiree medical plan and not deal with all this craziness.
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Although we live in Massachusetts I think our situation is similar to yours. My wife does most of the work on this but I think the figure we needed to stay under this year (2020) is 38K. My wife makes more than half of that working part time. This leaves about 17K or so that we needed to make sure we did not exceed. Of course dividends are considered taxable income and I wanted to sell some stock of which was nearly all long term gains which is also taxable income (I was uncomfortable having too much of this former company stock). Like you (if I am reading you correctly) we have to justify all of this which was a bit uncomfortable because I am recently retired therefore previous years incomes are in the neighborhood of 150K-180K. I was thinking that their perspective it would look pretty strange that our income is 15-20% of what it used to be.
There was some back and forth in the justification process but it was mostly misunderstandings. We ultimately were approved for our income estimate of 35-36K and are happy with our plan (around 200$ premium with low deductibles).
My problem will be pulling this off for another 5-6 years where my wife is only 59. I'll need to stretch my cash reserves out for a while. Probably mixing cash with IRA withdrawals and be careful to not exceed the "number" and, of course, not run out of cash.
Note: Financial advisers (IMO) should advise people to save a substantial amount of after tax savings as well as pre-tax so that they can play this game when the day draws near. I understand the advantage of saving pre-tax but there should be a balance. Pay now or pay later. Especially for those that may wish to retire "early". In this case, cash, really is king.