RE 'bridge' to Medicare: how did you decide?

[steveark]

There is no way you can qualify for subsidies for the next 4 years. It's small change anyway, I was right where you are now a few years back and took Cobra for 18 months and then bought private insurance. It's only 16K a year, that's nothing to you. My multimillionaire brother tried to hand the ACA. He couldn't do it. Just my opinion. Good luck!

 

[meleana]

Keep your income low enough to get full subsidies. If you can’t just keep it as low as you can and pay the premiums for a silver plan. Keep an eye on your other expenses. You’ve got plenty of money until you hit Medicare age and take SS.

 

[Choosehappy]

We’re in a similar situation as OP, although we don’t have the cash to live on until medicare. We are 7 years out. Most of our nest egg is tIRA 401K and a smaller amount is in after tax mutual funds. Has anyone considered taking advantage of the subsidies every other year by doubling up on monthly 401K distributions one year to live on the following year? We’d reinvest the ‘extra’ monthly distributions in order to maximize after tax returns.

 

[BubbaChris]

We’re closing in on 2 years of ACA coverage. Have you shopped coverage for your Zip Code? Locally our Silver plan has very low deductibles and max OOP.

We look at the $25K subsidy as a fair trade for the boundaries we have to work within. This is our first year of retirement and have mostly made it through the year without tIRA distributions or selling after tax investments. That’s changing right now and I feel like it’s the ultimate expression of ‘Adulting’

Best regards,
Chris

 

[winyaz]

Someone will post a spreadsheet link if you still want to optimize every last dollar.

I'm retiring year end and planning to purchase an ACA plan. Would be interested to see a spreadsheet on this. To get the maximum subsidy our income would be well under our annual expenses, which will become rather difficult to do, especially after a couple years.

 

[EastWest Gal]

We’re in a similar situation as OP, although we don’t have the cash to live on until medicare. We are 7 years out. Most of our nest egg is tIRA 401K and a smaller amount is in after tax mutual funds. Has anyone considered taking advantage of the subsidies every other year by doubling up on monthly 401K distributions one year to live on the following year? We’d reinvest the ‘extra’ monthly distributions in order to maximize after tax returns.

This is our plan, to cash out assets for living expenses every other year and keep our income below the cliff every other year. It cuts you insurance premiums almost in half overall when averaged out.

However, remember that this year and next there is no cliff. We will enter 2023 with enough cash reserves to not sell any assets that year, thus avoiding the ACA cliff. We both start Medicare in 2024.

If your after tax investments are in ETFs, it avoids the capital gains distributions surprise in December, which screws up lots of things like subsidies.

 

[ncbill]

I'm retiring year end and planning to purchase an ACA plan. Would be interested to see a spreadsheet on this. To get the maximum subsidy our income would be well under our annual expenses, which will become rather difficult to do, especially after a couple years.

Can't borrow against your home (cash-out refi, HELOC) or if you've got a hefty taxable portfolio, borrow, say, up to 25% against it at Interactive Brokers given their margin rates of around 1%?

Just until you're eligible for Medicare?

 

[winyaz]

Can't borrow against your home (cash-out refi, HELOC) or if you've got a hefty taxable portfolio, borrow, say, up to 25% against it at Interactive Brokers given their margin rates of around 1%?

Just until you're eligible for Medicare?

There is a lot to account for and I haven't had the time to really dig into it as I only recently found out how our income impacts not only the premium but the deductibles and out of pocket max which go up very quickly at all but the lowest levels of income. The first year or two should be easy enough but yes, will likely have to borrow or have a higher level of income before I'm eligible for Medicare.