U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 09-18-2017, 05:27 PM
 
Location: Pueblo area
211 posts, read 121,475 times
Reputation: 473

Advertisements

Retired, million-dollar stock portfolio. At $50K in income from dividends a year, no subsidy, cheapest policy for 2018 looks to be $800 a month. Option 1: sell enough stocks to last a year, take tax lumps in 2017, keep 2018 dividends under $20K, get a $750 a month tax subsidy to pay for insurance.

I feel creepy that I can game the tax system by being able to move taxable income from year to year and pay next to nothing. When I was working, I couldn’t pull this stunt, so I paid plenty, including the Medicare surcharge in my one stock option glory year, so I do not feel that bad.

Any thoughts?
Reply With Quote Quick reply to this message

 
Old 09-18-2017, 05:42 PM
 
Location: Alexandria, VA
11,419 posts, read 20,262,801 times
Reputation: 16490
So you plan to live on very little money for a yr. just to game the health insurance system?
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 06:19 PM
 
Location: Pueblo area
211 posts, read 121,475 times
Reputation: 473
No, theory is to declare $100K income in 2017, then in 2018 declare $20K and get $750 month tax subsidy for health care.

Corporations have armies of accountants that do this. Now it is my turn. Still feels creepy.
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 06:20 PM
 
71,535 posts, read 71,712,424 times
Reputation: 49120
the laws say subsidies are based on magi NOT ASSETS . if you qualify you qualify . it is not gaming the system . those are the laws .

is it gaming the system when your fair share of taxes is the lowest amount you can legally get it down to using the tools and laws left in place ? not in my book .

the law says subsidies are income based . spending your own assets is not earned income . so in essence someone with 50k in earned income has even a higher income than that retiree who has to spend assets to create an income .

why is the person earning 50k on a job with a million bucks in assets any different ? why does the working person with 50k and a million in assets get a subsidy and it is not gaming the system but the retiree with no earned income , spending their assets to live is gaming the system ?

there is no logic in either being any different .


if you can use the laws and tools left in place to utilize what was put in place via good tax planning , more power to you.

had i had greater knowledge of retirement tax planning in advance of getting here i would have tried for a subsidy if i was eligible .

some people are just smarter about using the laws and tools available to them and some of us like myself learned to late .

Last edited by mathjak107; 09-18-2017 at 06:28 PM..
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 06:32 PM
 
29,775 posts, read 34,863,854 times
Reputation: 11705
This is just reality. Wealth and income are two different things. Wealth can be used to create income and income can be used to create wealth. We are usually the ones to create and control that process. A million in a tax sheltered fund owned by a person post age 59 1/2 can generate a lot of potential income that is neither claimed nor used. Rather it sits to create more wealth. A RMD withdrawal creates income and can then be reinvested to create more wealth in taxable accounts. It isn't gaming the system it is just knowing how money grows and the conditions that define it differently.

Capital gains in a after tax portfolio can be claimed as income or allowed to grow and produce more wealth or income. Our choice!

Reality is probably that if you have it you know how it works.
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 06:34 PM
 
Location: Florida
4,362 posts, read 3,698,498 times
Reputation: 4095
Quote:
Originally Posted by CatPeople View Post
Retired, million-dollar stock portfolio. At $50K in income from dividends a year, no subsidy, cheapest policy for 2018 looks to be $800 a month. Option 1: sell enough stocks to last a year, take tax lumps in 2017, keep 2018 dividends under $20K, get a $750 a month tax subsidy to pay for insurance.

I feel creepy that I can game the tax system by being able to move taxable income from year to year and pay next to nothing. When I was working, I couldn’t pull this stunt, so I paid plenty, including the Medicare surcharge in my one stock option glory year, so I do not feel that bad.

Any thoughts?
I think you are saying that you would get rid of the 50,000 in dividend income in order to qualify for the subsidy. To do that you would have to sell all the dividend paying stock this year. Then pay capital gains tax on the profit. And in 2018 lose out on the 50,000 in income. Rather expensive way to get a subsidy.
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 06:38 PM
 
29,775 posts, read 34,863,854 times
Reputation: 11705
Quote:
Originally Posted by rjm1cc View Post
I think you are saying that you would get rid of the 50,000 in dividend income in order to qualify for the subsidy. To do that you would have to sell all the dividend paying stock this year. Then pay capital gains tax on the profit. And in 2018 lose out on the 50,000 in income. Rather expensive way to get a subsidy.
They may be retired not 65 and not on Medicare so they are referring to a tax sheltered account that produces dividends that can be used as income if withdrawn or left untouched and reinvested.
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 06:49 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,560 posts, read 39,944,045 times
Reputation: 23694
You do what you gotta do to get by in USA HC.

Many of us have to leave USA to get HC pre age 65.~6 million / yr from USA have to go out of country for HC.

$1m is not a lot of dough, and hospital and Drs would love to get it all for themselves. And many do.

HC is a Mess in USA.

Follow the rules, do what makes sense for your situation and care needs.
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 07:22 PM
 
2,215 posts, read 743,219 times
Reputation: 1376
You're not gaming the system. That is the way the system is set up and smart people will use it to their advantage.
Reply With Quote Quick reply to this message
 
Old 09-18-2017, 07:27 PM
 
6,880 posts, read 7,278,655 times
Reputation: 9786
^^ Agreed.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top