Geld ist Freiheit
Recycles dryer sheets
- Joined
- Oct 28, 2015
- Messages
- 91
(Apologies for the rambling post)
Once again I seek the wisdom of the Oracles of ER.
Odds are high that I will be hanging it up this year. FireCalc green lights my plan with a withdrawal rate that can exceed my expenses by nearly 2:1.
Since I’ve made too much this year to do any real tax shelter/mitigation gyrations, I’m will probably run out the year stacking free cash to further feather the nest.
My question is with an eye towards next year. With a year’s worth or more is cash to live off of, my income will be essentially zero (there will be some dividends and interest but nothing to compare to previously earned income).
I plan to use COBRA for 2024 to cover healthcare. If I do some gains harvesting in ‘24, I can use that money to live off of in ‘25 and keep my income low in order to qualify for the ACA subsidies for when COBRA runs out. I can then gains harvest in ‘25 to prime to tax free cash in ‘26, re-qualify for subsidies, lather-rinse-repeat.
I’ll be 56 next year. My pension & MediCare start at 65 so I only have so many years to harvest and I’ve got more unrealized gains than I can shelter.
Using a conservative 4% growth rate for the 401k, RMDs are looking to be in the 6 figure range when they start.
Would it be better to use next year to do a Roth conversion (401k to Roth 401k) or do the gains harvesting to pave the way for more tax free cash going forward?
I’m sure I’m missing something so please feel free to set me straight.
Once again I seek the wisdom of the Oracles of ER.
Odds are high that I will be hanging it up this year. FireCalc green lights my plan with a withdrawal rate that can exceed my expenses by nearly 2:1.
Since I’ve made too much this year to do any real tax shelter/mitigation gyrations, I’m will probably run out the year stacking free cash to further feather the nest.
My question is with an eye towards next year. With a year’s worth or more is cash to live off of, my income will be essentially zero (there will be some dividends and interest but nothing to compare to previously earned income).
I plan to use COBRA for 2024 to cover healthcare. If I do some gains harvesting in ‘24, I can use that money to live off of in ‘25 and keep my income low in order to qualify for the ACA subsidies for when COBRA runs out. I can then gains harvest in ‘25 to prime to tax free cash in ‘26, re-qualify for subsidies, lather-rinse-repeat.
I’ll be 56 next year. My pension & MediCare start at 65 so I only have so many years to harvest and I’ve got more unrealized gains than I can shelter.
Using a conservative 4% growth rate for the 401k, RMDs are looking to be in the 6 figure range when they start.
Would it be better to use next year to do a Roth conversion (401k to Roth 401k) or do the gains harvesting to pave the way for more tax free cash going forward?
I’m sure I’m missing something so please feel free to set me straight.