Lower Healthcare Premiums by $1,000+ per month with Roth Conversions? - Affordable Care Act Planning
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- เผยแพร่เมื่อ 24 ก.ค. 2024
- Health insurance in retirement is a common concern for many retirees. Especially those retiring before they qualify for Medicare.
Retiring before 65 gives you three options for health insurance:
1. Continuation from a previous employer (typically quite expensive)
2. Health Sharing Programs (some restrictions apply)
3. Affordable Care Act Insurance (can be affordable or expensive depending on variables)
ACA insurance is a great option for many retirees. At first look, however, this insurance can look expensive for those wanting to live on a reasonable income.
It is not uncommon to see initial premium estimates over $1,500 per month!
Yet, some retirees pay less than $500 per month in health insurance through the same program...
What's the difference? The second group of retirees knows how to earn an Affordable Care Act Subsidy.
It's a myth that you have to live off beans and rice in order to earn this subsidy. In fact, your income is uncapped if you know how to beat the healthcare system.
In this video, we teach you how to earn a subsidy and how to use Roth Conversions in order to create a tax-free base to withdraw from and earn a subsidy.
In this video we discuss:
✅ How to earn a healthcare subsidy when on Affordable Care Act health insurance
✅ An overview of the American Rescue Plan Act of 2021 and what it means for healthcare over the next two years
✅ How to avoid the Healthcare Subsidy Cliff with Roth Conversions
✅ How to earn an insurance subsidy with Roth Conversions
✅ and more...
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Always remember, "You Don't Need More Money; You Need a Better Plan"
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Safeguard Wealth Management is a Registered Investment Advisor in the State of WI. Safeguard Wealth Management is not an insurance provider. All content on TH-cam is for informational purposes only and should not be taken as personal advice for your situation. You can read more disclosures at www.safeguardinvest.com/fiduc...
Super helpful video for early retiaries like myself. Thanks
Been looking for some content on this. I've been making the move to a heavy Roth-IRA portfolio, to prepare for a MAGI of under 200% of the poverty line when I go part time in the next year or two. Thanks for this video. Well put together.
The unaffordable care act sucks, I am 64 , a year away from Medicare, and if I touch my IRA, I will lose 50 cents of subsidy for every dollar I take out, some applies to working part-time
Very good video. Great news; the ACA subsidy cliff has been eliminate through 2025 as a result of the Inflation Reduction Act.
Can you do a video like this for widows/single ages 50-64? Thanks!
Is there a "low income" end to qualify to get into the ACA? Or, is there a MINIMUM reportable income requirement?
thanks!
What about those of us who have lifetime health insurance?
all my funds are in roth so when we retire next year at 63 our ACA will be low i know we need a minimum income to qualify so will have about 30k in taxable income with SS only
A couple points: 1) If you are closer to FPL, cost sharing will be more substantial (reducing deductables & out of pocket maximums), so this is another advantage to keeping your ACA income lower. 2) If some sort of BBB bill passes, it will likely extend the ACA improvements past 2022. It's possible but not guarenteed this will happen in '22.
The 2022 inflation reduction act eliminated the ACA subsidy cliff for a few years.
One thing that wasn’t mentioned was that there is also a minimum income requirement for the ACA. If you make less than 100% of the federal poverty line, then you will be forced to apply for Medicaid and that is asset based. In some states like Florida they’ve actually raised the requirement to as much as 150% of the poverty line.
Great addition to the video
Yeah, Florida doesn’t have medigap
@@kimappreciateslife medigap has to do with Medicare. Nothing to do with the ACA.
@@kimappreciateslife and Florida DOES have medigap plans just like any other state.
Oops, I meant Florida has a coverage gap between Medicaid and the ACA because they won’t expand Medicaid
I thought you couldn’t use any Roth conversion amounts for 5 years from when the conversion takes place. Can you take Roth conversions out of your account whenever you want to?
Depends on your age. If you are over 59.5, then there is no 5 year rule for conversions.
Based on the title, I thought the narrative was going to be something like: If your expected MAGI is less than 100 percent of the federal poverty level, you can convert traditional IRA funds to Roth. Based on whether the original contributions were pre-tax or after-tax monies, some or all of the conversion will be taxable (as a distribution), and therefore increase your MAGI. If your MAGI is then between 100 percent and 400 percent of the FPL, you qualify for the ACA premium tax credit. Additionally, with the relatively new increased standard deductions, the conversion may ultimately be tax-free...plus you get the subsidy to boot. Do I understand that correctly?
What income would you actually be living off of in this scenario? Since you are doing a conversion and not a disbursement. If the income you live off of is taxable then it will slide you further up (or over) the cliff.
@@jimjam36695 Look at the slide at about 16:45. Basically cash/investments or home equity.
Early retirees pay heed, watch all these fine young gentlemen's videos for a. treasure trove of wisdom and insight.
Thank you so much David!
Watched this video twice. Won't Roth conversions from a traditional IRA, plus any other income you have push you out of the subsidy? You obviously can't use the Roth conversion monies to live off for 5 years. Maybe I'm not getting the jist of this video.
He is not recommending to convert while you are on ACA, but to convert while you are still working and under your employer's health insurance, That way, once you retire and go on ACA, you can use the Roth funds from your previous conversions to pay for your living expenses without reporting it as income and therefore staying under the ACA limit for subsidies.
Can you please slow down for us accounting challenged folks.
Thank you for the feedback, we will try to in the future
As usual singles get screwed.
what?