My wife and I are still working and have fortunately hit our number, but will likely not exit for the next one to two years (a thread for another day
. We’re both in our mid- late 40’s and pay $1700 monthly for health insurance with a deductible of 10k. I’d obviously like to make the bleeding stop once we retire in a couple of years. Our only source of income before social security will be from our dividends from the taxable accounts which alone will put us close, but not quite to the ACA cliff plus any additional CGs. Hopefully the news tucked in the new stimulus plan to at least soften the cliff actually comes to fruition, but for now my concern is that CGs will ultimately put us out of range for any subsidies.
So.....my wife and I are getting ready to purchase a home and we’re going to sell shares of our index funds to pay for it. Our investment firm defaults to an 'average' cost basis which will likely not be very tax friendly so I was planning on using SpecID to hopefully lower the CG tax burden. However, I'm not sure if that's the best strategy as my primary concern when we stop working will be to keep our MAGI low enough to qualify for ACA subsidies therefore maybe we'd be better off taking the CG hit now while my MAGI matters less. I figure you can provide substantial insight as my knowledge base regarding withdrawal strategy is still quite small.
Also, if your recommendation is to use SpecID in order to select shares that I buy how does that physically work? I’ve never actually sold any shares. Do you pick shares bought at different time periods hence the older ones would have a higher CG since they’ve had more time to grow? Is it clearly labeled so that a novice such as myself can go in and manually do it? I talked to my accountant who wasn’t a great deal of help and I really try to steer clear of My investment firm’s advisor service.
Thanks in advance
. We’re both in our mid- late 40’s and pay $1700 monthly for health insurance with a deductible of 10k. I’d obviously like to make the bleeding stop once we retire in a couple of years. Our only source of income before social security will be from our dividends from the taxable accounts which alone will put us close, but not quite to the ACA cliff plus any additional CGs. Hopefully the news tucked in the new stimulus plan to at least soften the cliff actually comes to fruition, but for now my concern is that CGs will ultimately put us out of range for any subsidies. So.....my wife and I are getting ready to purchase a home and we’re going to sell shares of our index funds to pay for it. Our investment firm defaults to an 'average' cost basis which will likely not be very tax friendly so I was planning on using SpecID to hopefully lower the CG tax burden. However, I'm not sure if that's the best strategy as my primary concern when we stop working will be to keep our MAGI low enough to qualify for ACA subsidies therefore maybe we'd be better off taking the CG hit now while my MAGI matters less. I figure you can provide substantial insight as my knowledge base regarding withdrawal strategy is still quite small.
Also, if your recommendation is to use SpecID in order to select shares that I buy how does that physically work? I’ve never actually sold any shares. Do you pick shares bought at different time periods hence the older ones would have a higher CG since they’ve had more time to grow? Is it clearly labeled so that a novice such as myself can go in and manually do it? I talked to my accountant who wasn’t a great deal of help and I really try to steer clear of My investment firm’s advisor service.
Thanks in advance
