What would you do? Yes ANOTHER SS When to Take Question

[ShokWaveRider]

In December 2020 DW will be 62, I will be 67. DW's FRA is 67, Mine was 66.

Personal Info:

Currently we manage MAGI to get the highest possible subsidy for DW by limiting Taxable Ordinary income (Interest & Dividends). I am obviously on Medicare.

We have way more than enough NON Qualified funds to use without a tax burden to last as far as our budget is concerned for the forseeable future. We also have qualified tIRAs that we will not touch until RMD time, even then we most likely will net need them, but the law is the law.

All the so called smart money pundits advise taking DW's SS at 62, and mine at 70. OK I get that. But if we do take it, we will no longer be able to enjoy DW's ACA subsidy. Basically ALL her SS wil go to halthcare and possibly then some.

Currently we live off Interest and dividend income from our NON Qualified stash. We augment anything extra that we need by simply drawing down on the same NON qualified stash. This has been a very successful for the last 15 years or so.

But we cannot keep saving forever. I think that the following strategy will work for us.

1) Keep spending as normal from NON Qualified stash.
2) IF ACA (Big IF), remains the same in 2021, then Do Not Take DW's SS.
3) Take DW's SS Equivalent from our Non Qualified Stash as if we were taking her SS and put it in Checking, then spend it as normal. Perhaps be a little frivolous with it.
4) Assuming nothing changes with the ACA, keep doing the same till DW is 65 and eligible for Medicare.
5) If ACA is removed or changed for the worse, then all bets are off.


What do you all think?

 

[TheWizard]

Sounds about right to me...

 

[TheWizard]

Once both on Medicare, project your age 72+ AGI and then do Roth conversions in remaining pre-72 years to get AGI up close to what it will be later, with an eye to Medicare IRMAA...

 

[pb4uski]

....All the so called smart money pundits advise taking DW's SS at 62, and mine at 70. OK I get that. But if we do take it, we will no longer be able to enjoy DW's ACA subsidy. Basically ALL her SS wil go to halthcare and possibly then some. ...

The pundits don't consider ACA subsidies since so few people receive them.... I think it is best for you to defer DW's until she is on Medicare.

 

[ShokWaveRider]

The pundits don't consider ACA subsidies since so few people receive them.... I think it is best for you to defer DW's until she is on Medicare.

"So few" is relative, I am not sure I agree with your statement "So" few, so respectfully I will disagree. While those who receive subsidies are not documented in detail, as it varies by state. I do agree that the pundits tend not to take the ACA into account when recommending when to take SS. I also agree and thank you for your comment as to when DW should take hers.... as long as the ACA with it's appropriate subsidies is still an option.

Here are some numbers that are publicized. I just googled how many signed up for ACA in 2020, there are a lot of references to choose from, all appear in the same ballpark.

As for how many are covered under ObamaCare (ACA) in 2020?

“Over 20 million” is a rough estimate of how many are currently covered between all coverage provisions under the Affordable Care Act.

I would argue as to why would one use the ACA if one was not getting a subsidy. Estimate 50% get some form of subsidy. That would a 10m. That is not So Few.

 

[Dtail]

SWR - I think PB is referring to the relatively few folks who receive the subsidy because they are managing down their MAGI, not the folks who naturally have to live off the 25k for example.
I for one am delaying SS at least until 66 y.o. due to ACA subsidies and a lump sum pension at 65.

 

[pb4uski]

^^^ Yes, though in mid-2019 only 8.9m people were receiving ACA subsidies.... out of 328m people... so 2.7%.

But 8.9m is ALL people receiving ACA subsidies... the number of people old enough to be eligible for SS and ACA subsidies... essentially ages 62-65 would be a small percentage of the total... so perhaps 1m at most... miniscule in the whole scheme of things.

So SWR, I respectfully disagree.

As of mid-2019, there were 10.2 million people with effectuated coverage through the exchanges nationwide. Of those, 8.9 million – or 87 percent – were receiving premium subsidies.

Source: https://www.healthinsurance.org/obamacare/will-you-receive-an-obamacare-premium-subsidy/

In 2019, the United States had around 328.23 million inhabitants.

 

[RetireAge50]

Since SS is usually a coin flip decision the added ACA money makes it a clear choice to wait.

 

[rodi]

Since SS is usually a coin flip decision the added ACA money makes it a clear choice to wait.

This. The scale is tipped by the ACA subsidies.

 

[maestro]

Choices #2,4,5 are all perhaps indicative of your leaning to maintaining ACA? I would agree that keeping MAGI manageable to get the subsidies works very good, especially if you have Bucket #1 established. That's what I do, and love it. Haven't started SS yet, but plan do do so, if needed, in 3 years at 66. Enjoy the gifts we all have, while we have them. Peace.