? About aca subsidy income qualification

[Yarnstormer]

I live in georgia. I am 54. I have an inherited IRA that would pay about $5000 next year that I am required to take. That amount increases each year.
I receive ss benefits widow caring for a child under the age of 16 for the next year and a half. My child receives a social security benefit due to her father passing. Would her benefit be considered as my income since it is under my control?
I am trying to determine if I would be eligible for aca subsidy #1 now, and #2 after the widow benefit runs out.

I also have a pretty sizable brokerage account, and more in non taxable account. not really sure what the brokerage income is as I don't spend it. Just keep paying taxes on it!

Does rental income count towards the subsidy calculation?

At present I think my income would be too high for her to be on medicaid.

I am employed with group health insurance, but circumstances might require taking a break to care for my child and spend more time with her. At my work plan they are raising the max out of pocket to $4000 each next year. Up from $1500. Ouch. Too many aca fees and rising costs are to blame. I can cobra but I cannot remain in the plan past that.

I would probably be "ok" but of course I would prefer to wait to early/partial retire as getting employment in my late 50s might be problematic. Or not. You never know. Wish I knew how the health care situation is going to play out. Wish I were better at frugal living! Tho I suppose I am looking at some of the retirement incomes on here.

I do have skills that would enable me to work from home if needed, but not if it's going to cancel out subsidies!




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[GTFan]

Your child may have to file a separate return (if above the filing threshold) that doesn't count against your income but for ACA purposes does count against your household income because she is a dependent. But see this link, you probably won't have to file unearned SS income for a child.

http://ccf.georgetown.edu/2015/02/04/getting-magi-right-social-security-income-count/

Your rental and IRA income, wages, dividends and capital gains from your brokerage account, interest etc. all counts. You'd have to see what plans you could qualify for and the subsidy using your estimated income for all of that for the year.

https://www.healthcare.gov/income-and-household-information/income/

www.healthsherpa.com is a good place to cost out ACA insurance - pretend you're losing your job and plug in your total income to see what a family of two can get. Don't be surprised if it costs more and has less coverage than your work insurance if your income is above 250% of the federal poverty level. Right now that's about $40k for a family of two.

 

[gauss]

If income is less than 250% of FPL be sure to look at Silver plans because additional limits to cost sharing will apply under these conditions.

-gauss

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[Yarnstormer]

Thanks for the replies. I'll probably end up selecting cobra because its very good ins and I hate to switch it up when she is in treatment.
I looked into peachcare for her but my present unearned income is too high...unless I can select an hsa plan for myself and lower it.

We will see...


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[brucethebroker]

Couple of ideas: Should you become self employed (while working from home), the business deductions count (including health insurance premiums for yourself and dependents) towards lowering your Modified Adjusted Gross Income. Also, IRA, SEP and HSA deductions do the same. A good tax accountant/CPA, that understands ACA, can help you through that jungle.

 

[Yarnstormer]

I do plan to become self employed and spoke with a former employer last week about doing some work for him.
I did not realize that health ins premiums were deductible if you are self employed. I won't be able to have a dedicated office in my house.
My goal is to earn enough to pay for the healthcare at first, and hopefully build my business over the next few years so I don't have to hit my nest egg until I'm comfy with it. Hopefully when the ss runs out I will be in good shape.
I will def speak with an accountant. If I could get her on peachcare, and me on a silver plan I think we would be ok. For now at least!

If I take over all of my former employers sub work I won't have to worry about affording insurance. Either way I'm kind of excited about the prospect. It's not retirement but I can work in my jammies, take a walk whenever I want and hang w my kid. That sound pretty great right now.



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[Sunset]

....
I also have a pretty sizable brokerage account, and more in non taxable account. not really sure what the brokerage income is as I don't spend it. Just keep paying taxes on it!

......

You should educate yourself on the brokerage account. As they could be costing you a lot in fee's.
Some charge 2% which does not sound like much right, but when you have $200,000 in there, they are costing $4,000 per year. Even when your account goes down or stays pretty flat, they take out their fee.

Generally, index funds are incredibly low cost, and you don't need a broker to use manage it for you.

 

[Yarnstormer]

I have about 60% in a low fee self managed account and the rest is in a managed account at a different institution. I have considered moving the managed brokerage but I honestly can't see that they are charging fees. What they DO charge is commissions! My advisor is not one to move things around much tho. He made his money when I became a customer and cashed out a sum to buy a house and of course commissions on whatever is reinvested.
I suppose I should flat out ask huh?

Ok not entirely true. There is $50 yearly fee for each ira.

It does well but like you say, if you look at the top holdings in an index fund there are a lot of the same companies.


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[jabbahop]

Also check what the expense ratio is on the funds the managed brokerage has you in? I used to work with a non-commissioned investment advisor and while I didn't pay her anything directly, she had me in funds that had expense ratios of over 1% vs under 0.1% in some vanguard funds now. She got a portion of that expense ratio.

 

[Yarnstormer]

Ok I will. I know I checked once and it was too high - also had a high turnover rate. I told him not to put any more in that fund (not that he does anything without asking first).
I think the rest is in individual stocks.

Much of the brokerage in the managed place is inherited. Takes a while to get used to shaking it up!


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