ACA wants estimated income. I'll drop from $1M to $0.00 this year.

[Fermion]

Roth 5+ year old contributions/conversions and of course normal Roth withdrawals after 59.5 do not add to MAGI for ACA so you can live on those until Medicare.

 

[engineernerd]

Two helpful posts by thefinancebuff.com, one explaining how much the premium subsidies are and the other covering FPL (Federal Poverty Level) numbers:

2025 2026 ACA Health Insurance Premium Tax Credit Percentages

If you get health insurance from ACA, the government sets the percentages of income you are expected to contribute toward a benchmark policy.

thefinancebuff.com

2025 2026 2027 Federal Poverty Levels (FPL) for ACA Health Insurance

Compare your income with the Federal Poverty Level (FPL) to calculate the premium subsidy tax credit for health insuance under the Affordable Care Act.

thefinancebuff.com

And a quick search shows me that TN does not have its own Marketplace but does have free advice at "Get Covered Tennessee", homepage here: Affordable Health Coverage Assistance in Tennessee | GetCoveredTenn

Looks like you want to manage your MAGI to be below 400% FPL (if it were me, I would target 399% to make sure they don't round up and give you zero subsidy), but above 100% if you don't want to be pushed into Medicaid. In states like mine, that second number would be 138%, but thefinancebuff says TN is not a "Medicaid expansion state."

 

[Splash]

I've had to provide proof of income for ACA twice...1st year retired and this year when I submitted 2026 MAGI much lower than MAGI in 2024 and 2025. Both times I just submitted an explanation for the change in MAGI along with a calculation showing my MAGI estimate. This worked both times for me.

 

[EastWest Gal]

Call your state exchange or Healthcare.gov if your state doesn't have an exchange. The folks there were very helpful to me when I had to navigate similar issues.

Our state exchange required some proof of income, but then they overestimated the tax credits and I had to make an adjustment to avoid a penalty! Each state that has its own exchange handles it differently. For us, the sticking point was my husband's small self-employed musician income. He ended up making a four column spreadsheet-the place he was scheduled to play, the estimated income, and the estimated mileage expenses. He printed it out, signed and dated it, and we scanned the signed form that we made up, basically, and they accepted it.

You do not want zero income. You'll end up on Medicaid. And some states won't even allow you to sign up for Medicaid unless you're working. Look at your dividend and capital gains income. If that is too low, use your taxable portfolio to manipulate your income to generate some capital gains. That's what DS did last year when he was unemployed for over half the year. He sold some old ETFs I had gifted to him to "tax gain harvest", then bought VTI and other ETFs with lower expense ratios.

 

[pb4uski]

I didn't know there was a minimum but a roth conversion does sound like a fantastic way to meet it.

If your income is less than a certain amount you get put into Medicaid rather than ACA.

 

[Golden Mean]

I see a number of posts mentioning "proof" is needed.

I've been on ACA for 4 years. The first year they asked for an explanation, not "proof", of my next year's income. There were several choices in the "supply documentation" drop down. I chose something like "retirement/investment income" and supplied a reasonable explanation, as well as my best guess income amount, in a word/text doc. Was approved same day.

I would say, if you don't know (or know how to calculate/estimate) your next year's ACA MAGI, you'll want to get on that asap.

 

[Ivo Archer]

You’ll pay more when you fill out your taxes. They’ll take back some/all of the subsidy.

Unless you are in NY. They only claw back if you get subsidies ( >250%FPL). But estimated income < 250%FPL it is 100% funded and they do not generally check your returns if blips happen mid year.

 

[rmcelwee]

I still haven’t seen an answer as to who “they” are. Are you buying from healthcare.gov? A state exchange? Through a broker?

Sorry, I thought I answered that but I didn't. It was 4AM and I am sick so at least I have an excuse! I signed up for coverage on healthcare.gov

 

[rmcelwee]

Well, to start with, if your only income is $6,609 of pension, what do you live on? I presume that you have taxable account assets which generate interest and dividends and perhaps capital gain distributions, so that would be income as well, not just SS, pension and wages.

We've been retired for four years. During that time 95% of what we have lived off was a brokerage acct but we have also had 401K withdraws and a very small pension. We just play it by ear every year. I figure for 2026 and 2027 we will live off what is left from the brokerage sales that are sitting in a HYSA for the house build. We are WAY over budget but will still have money left. We are still nine days away from actually being on ACA but are already sick of it. We will now have an extra nuisance in our life. We were looking at buying a $75K tractor in 2026 but now have to consider how that affects our healthcare expenses. Ugh!

 

[RetiredHappy]

We've been retired for four years. During that time 95% of what we have lived off was a brokerage acct but we have also had 401K withdraws and a very small pension. We just play it by ear every year. I figure for 2026 and 2027 we will live off what is left from the brokerage sales that are sitting in a HYSA for the house build. We are WAY over budget but will still have money left. We are still nine days away from actually being on ACA but are already sick of it. We will now have an extra nuisance in our life. We were looking at buying a $75K tractor in 2026 but now have to consider how that affects our healthcare expenses. Ugh!

It is a nuisance when you have to manage your income to get subsidies.

 

[rmcelwee]

It is a nuisance when you have to manage your income to get subsidies.

Yes, very much so. I don't want the subsidies. I just want my insurance to go back down to what it was three weeks ago. I still have yet to figure out why my off market coverage jumped $12,000 a year and the on market coverage is $24,000 a year more but will come back to the same after subsidies. Very confusing.

 

[RetiredHappy]

Yes, very much so. I don't want the subsidies. I just want my insurance to go back down to what it was three weeks ago. I still have yet to figure out why my off market coverage jumped $12,000 a year and the on market coverage is $24,000 a year more but will come back to the same after subsidies. Very confusing.

I get no subsidies regardless and prefer my off-exchange plan because of better doctor network/acceptance.

 

[TickTock]

OP,

I suggest

1. Figure out how much 2026 ACA MAGI income you want.

2. You have a small pension. You have an after-tax brokerage account. What amount of interest/dividends/capital gains do you expect that account to generate in 2026? Add in any other assets that will generate taxable interest/dividends/capital gains. Total up that income.

3. Make up the difference with a 401(k) withdrawal (whether or not you do a Roth conversion with it).

------------------------------------------------------

For example, let's say you want $80k income.

Pension + interest/dividends/capital gains $30k.

Plan to withdraw $50k from 401(k).

Write down expected income from #2 and the sources, and that you plan on withdrawing $x from a 401(k). Send that to Healthcare.gov.

 

[pb4uski]

.... We will now have an extra nuisance in our life. We were looking at buying a $75K tractor in 2026 but now have to consider how that affects our healthcare expenses. Ugh!

OMG! What a dilemma!

$75k tractor, health insurance; $75k tractor, health insurance... what is one to do?

First world problem methinks.

Think of it as wealth insurance rather than health insurance.

 

[rmcelwee]

I get no subsidies regardless and prefer my off-exchange plan because of better doctor network/acceptance.

I paid $32,000/yr for the cheapest coverage for my off-exchange plan. That is not sustainable.

 

[rmcelwee]

Write down expected income from #2 and the sources, and that you plan on withdrawing $x from a 401(k). Send that to Healthcare.gov.

Yes, I think that is my plan. Thanks!