Is your severance lump sum or serial? With my MC, since it was serial, I was able to stay on regular health insurance just like an active employee for the duration, as far as the IRS and anyone else was concerned I was still a W-2 receiver.
Then I went cobra once severance ended, and did that for almost 18 months before going on ACA. Either way with only 2 years to cover, you can't go wrong as long as you have coverage somewhere, even if you end up paying full freight.
My severance is lump sum --- I wish it could be otherwise but the FAQ the company provided is very specific about that. It will include one year of pay plus prorated bonus plus 40 days (8 weeks) of vacation I have saved up paid out, all in a lump sum. The total will be well more than $200k in additional pay.
My plan at this point is to open a donor advised fund to fund charitable contributions for years into the future (maybe $150k) plus maxxing out contributions to 529 plan for my two grandchildren (another $30k). That should shelter a significant amount of that additional income from taxes.
I currently have about $1.7 million in retirement accounts ($450k of which is Roth, the rest is tax-deferred), plus $1.3 million in non-retirement cash and securities, and another $500k in assets (most of which is my house which is paid off). The HRA that I will get is another $18k, but I don't have to pay taxes on that.
My idea would be to do Cobra for the final two months of the year (about $930 a month for medical and dental) funded from the HRA and then do ACA next year when my salary will be $0 and I should get most of it back as credits. I probably would not take Social Security until 70 (the social security web site indicates that I would receive $4069/month in 2020 dollars by waiting until then). I should be able to live off of non-retirement accounts until then. This should maximize the probability that I won't run out of money before I die, particularly since I generally live pretty frugally.
I am also considering doing a partial Roth conversion of $20k to $30k of my tax-deferred funds each year before I turn 70 to reduce RMDs at age 70 and to pay tax on the money while I would just be in 12% tax bracket.
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