income sweet spot

[dm]

Just wondering if anyone has looked into the future and figured out how they plan to show income with the health care subsidies, and possible new tax rates.

I know its best to show as little as possible, but are you going to take more one year and then show less the next? Thus possibly getting the health care subsidy one year and not the next?

 

[jebmke]

Just wondering if anyone has looked into the future and figured out how they plan to show income with the health care subsidies, and possible new tax rates.

I know its best to show as little as possible, but are you going to take more one year and then show less the next? Thus possibly getting the health care subsidy one year and not the next?

My plan is to manage income through ROTH conversion to the top of a tax bracket and that is it. Haven't decide to go to the top of 15% or 25% .... probably 25.

 

[chinaco]

Some analysis. But I am not sure what the tax situation will be after 2010... but it looks like there may be a bill coming.

No matter what it is... I am planning to roll money into Roth accounts over several years using the most tax efficient means available to me.

 

[FANOFJESUS]

I think the sweet spot will be under 29k.

 

[audreyh1]

I moved a bunch of cap gains into 2010, and this will lower future income and maybe even avoid future AMT taxes. I don't expect to get any health care insurance subsidies, I'm just trying to stay well under $200K annual income in the future to avoid higher margin taxes.

Audrey

 

[RonBoyd]

I'm just trying to stay well under $200K annual income...

I can do that without even trying.

 

[73ss454]

Audrey, that's a good problem to have. (heh)

 

[audreyh1]

I can do that without even trying.

I'm not going to have to try either - don't get me wrong!

But I did have to take some steps this year to avoid future potential large cap gains.

Audrey

 

[NW-Bound]

Shouldn't my income sweet spot be my 4% SWR? Or is it 3% SWR? Have we reached the final verdict on that?

Anyway, that's may be a bit too low, for me that is. The market is not cooperating. I am gonna do part-time w*rk a bit longer.

No, not MANY MORE YEARS like a certain person has wished ill on me... ;-) Just a few more years...

 

[ziggy29]

Hard to say. I'm far enough away that I am hedging my bets in many different types of income with different types of tax treatment with the goal of maximizing overall income such that means-tested income for things like SS and health insurance subsidies is as low as possible consistent with a reasonable standard of living.

The clear trend to means testing and increasing the progressivity of taxes (as I think will have to happen) makes working longer to build more and more wealth less attractive. I'm not willing to live on poverty-level income to maximize benefits, but neither am I going to go out of my way to work more years when half of the extra nest egg (or more) from that extra work will be lost to taxes and lost means-tested SS and health care subsidies and when retiring with fewer years of w*rk is still feasible.

 

[Independent]

The final health care rules are so far out that I'm not thinking explicitly about them. But I am moving trad IRA to Roth so that I have a mix of tax positions which may give me flexibility when the time comes.