ACA costs
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imbatman
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Getting in under these limits is just another reason for me to try to maximize my investments in tax exempt munis (this and living in a high income tax state and locality).
That's NY. You won't get anything nearly that good of a deal in IL with $29K income.
I'm having trouble keeping my MAGI down with all these high interest rate CDs on top of the usual dividends & capital gains distributions. I'm too young for SS anyway, and I'm not taking anything from my retirement funds to minimize MAGI.
I hate to break it to you, tax exempt muni interest still counts against the ACA.
So do untaxed SS benefits.
imbatman
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ha well that was short lived!! Thanks GTK
Fermion
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Keep bonds in tax deferred and stocks in taxable, then you only have the dividends to add to your MAGI.
If you need more funds, pull from ACA if you have past medical expenses unclaimed, or pull from previous Roth contributions (tax free) or Roth conversions greater than 5 years (also tax free).
I mean, don't let the tax tail wag the dog here, but the above can help you stay in the ACA subsidy range.
If you need more funds, pull from ACA if you have past medical expenses unclaimed, or pull from previous Roth contributions (tax free) or Roth conversions greater than 5 years (also tax free).
I mean, don't let the tax tail wag the dog here, but the above can help you stay in the ACA subsidy range.
imbatman
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Good ideas but much less appealing with significant trade-offs....namely robbing my Roth from decades of tax-free growth......but perhaps still worth it if it will save 5 figures a year in otherwise unavailable insurance subsidies. I guess the math on this will depend on what happens 2026 and forward with the cliff (still slaving for the man here for at least a few more years).
Sounds like a First World Problem to me.
Even with income around $29K (just under 200% FPL) you get very good subsidies ($49 a month for the SLCSP premium) and Cost Sharing Reductions in IL.
While I agree with 'master the MAGI', implying that everyone can pay zero is not realistic.
GenXguy said:
Similar for me. The after-tax account has dividends and realized cap gains from the US Total and Developed Markets funds, and now that interest rates are higher than they have been in ten years, that income is added in. With two months w*rking, bonus, and 160 carry-over PTO hours our ability to manage MAGI is constrained this year. 2025 should be better.
Yes, yes, I know... a good problem to have.
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wearefinishedworking
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DH and I are living off income of $48,000 which gets us a gold plan for $108/mo. We have a large stash of cash to pull more as needed.
Fermion
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Another, more advanced strategy that is a tiny bit risky and very situational is to sell long dated covered calls on stock you own in taxable. If the calls are not deep in the money (I forget how deep they can be), you don't owe any tax on the premium you receive when you write (sell) the call, only when the call expires or the shares are called.
This would be for some reason if you HAD to have $30,000 this year but that would cause you to miss out on some decent amount of ACA subsidy of a level that is worthwhile to think about AND next year you either know you are going to have a higher than ACA income or you know for some reason you are going to have a really low income. Very situational but maybe useful.
So you had 1000 shares of Microsoft stock, and you sell this year 10 Jan 2025 $450 calls for $30 each (Microsoft is $415 right now so these are out of the money calls). Your account would immediately get $30,000 that you could spend right away, but you would not include this on 2024 taxes (unless for some reason they were called away early). This would go on 2025 taxes.
Like I said, an advanced strategy.
(This actually is making me feel a bit ill, as at one point I had 15,000 shares of Microsoft, but sold them for around $30)
This would be for some reason if you HAD to have $30,000 this year but that would cause you to miss out on some decent amount of ACA subsidy of a level that is worthwhile to think about AND next year you either know you are going to have a higher than ACA income or you know for some reason you are going to have a really low income. Very situational but maybe useful.
So you had 1000 shares of Microsoft stock, and you sell this year 10 Jan 2025 $450 calls for $30 each (Microsoft is $415 right now so these are out of the money calls). Your account would immediately get $30,000 that you could spend right away, but you would not include this on 2024 taxes (unless for some reason they were called away early). This would go on 2025 taxes.
Like I said, an advanced strategy.
(This actually is making me feel a bit ill, as at one point I had 15,000 shares of Microsoft, but sold them for around $30)
Did you catch that GenXguy and I are talking about the normal distributions on our taxable accounts? Managing that would require changing investments in the after-tax accounts - a possibility to be sure, but not as easy as 'realize income every other year or every third year'.
All true, but maybe a total re-exam of what is held would be beneficial in the big picture.
But you will note I was responding to your post that included a very low out of pocket. It's many times higher here for a $29K income, and jumps more than double that with a little more MAGI.
And the out of pocket is much higher for out of network.
None of the plans offered in NY have out of network at all. The Silver CSRs are the only way to get lower OOPs on the cheap short of going to Golds or Platinums.
Exactly. I'm not pulling anything out, it's all interest income, dividends, and capital gains distritributions. That strategies mentioned are not relevant to minimizing that income. Selling my investments would increase income, not reduce it.
Re-examing won't help for reasons I mentioned.
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Yes, but I was specifically talking about IL. I already know about silver plans - I have one.
But I'm just saying it's much more out of pocket here than your figures for NY for someone with a $29K income.And did you mean those plans have no out of network coverage, and you're stuck with the whole bill no matter how high?
They just changed the law here for it. The 250% FPLs or lower are $0 a month with a MOOP of $2K. The 200% FPLs and lower are MOOP $360.Yes, but I was specifically talking about IL. I already know about silver plans - I have one.
I know that the CSRs are higher in your area but they still should be reasonable.
I never had to go out of network so no bills. The networks are sufficient in my area.
I guess all in BRK.B is off the table then?
To put money in BRK.B, would require me to take some big capital gains by selling my dividend earning investments, which would generae a lot more income than the dividends themselves, like I was saying in a previous post. Or I would have to sell my CDs that are earning about 5%, for 1 to 5 years. And BRK.B is high at $407.11. It has jumped lately and is risky to invest new money in it with a recession on the horizon, if that's money coming from CDs with guaranteed 5% interest. Basically, interest rates really rising messed things up for me, and then I was forced to retire a year early.
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They are always sufficient until they're not. So, no out of network coverage?
They might be reasonable compared to paying the full price, but MOOP is $3000 in network for the best plan in the under 200% FPL, and $13,900 out of network, so both those figures are many times your $360 MOOP.
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