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The problem is that social welfare programs (and the ACA is just that - if you're getting a subsidy) have become income based, not asset based. So someone who earns 120K/year, has no net worth, and lives paycheck to paycheck supporting a family in a city with high cost of living (which is why he's earning that 120K/year), is paying to subsidize someone who has significant assets, but lower income. It's flat out wrong. People should have to liquidate their assets to support themselves before they can benefit from social welfare programs.
But this is how the law is written, so you can legally do it. It's not ethical, but it's legal. Nothing to stop you from doing it.
AT&T, Verizon and Ford pay 5% in dividends. Not guaranteed, stocks go up and down, but they are not going bankrupt tomorrow.
spending a 5% dividend is still part of your total draw and 5% has a high risk over 30 years of failing . in fact it would not have lasted almost 1/2 of all the 30 year periods since 1871 .
5% as a draw from a portfolio or 5% from a dividend are the same effect on success rates .
FIRECalc looked at the 117 possible 30 year periods in the available data, starting with a portfolio of $1,000,000 and spending your specified amounts each year thereafter.
Here is how your portfolio would have fared in each of the 117 cycles. The lowest and highest portfolio balance at the end of your retirement was $-1,227,732 to $3,226,422, with an average at the end of $474,649. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 50 cycles failed, for a success rate of 57.3%.
Last edited by mathjak107; 09-19-2017 at 04:44 PM..
You're very noble...while the tax law is written as it is written and can be followed in such a way that you (collective you) maximize your own benefit, some do wonder that they are "getting away" with something they could afford to a greater degree than others who don't have the benefit of having certain investments.
Of course, nice guys finish last. I do believe that "Behind every great fortune lies a great crime.". No one qualifies as having a great fortune here on c-d I suppose...and the word crime sounds much worse than everyday unethical behavior, so no worries.
This Nice Guy didn't finish last and brought an nice little relay team to the finish line along with him.
I was one of those rare creatures who was never scared of working hard - and so have done everything from construction/remodeling to owning a nice sized retail/import/distribution biz to running a top web site(s).
Started saving about 1982 and was putting money away until last year - AND, was never afraid of investing in equities.
I never made big money. But the story of the turtle and the hare is very real....moreso if one never gets divorced and doesn't run scared when the market tanks.
In any case, I am very much for "means testing" and "inheritance taxes" and all that other stuff which makes sure we have enough to fund our society and civilization.
I get it...about being selfish and taking all you can from the tax man. On the other hand, that must be weighed against the duties of a citizen. Some people feel they are doing them when they join the infantry....I feel like I am doing them when I pay my fair share.
There are LOTS of things I could do to reduce my tax burden. But, IMHO, too much of the money ends up going to the accountant as compared to what I save. When I work out the various scenarios it's just not worthwhile to me (filing in multiple states, for example, since I have a nice photography biz and spend time elsewhere).....
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by parentologist
The problem is that social welfare programs (and the ACA is just that - if you're getting a subsidy) ...
But this is how the law is written, so you can legally do it. It's not ethical, but it's legal. Nothing to stop you from doing it.
Option 2:
Give us BACK the plans we were able to buy BEFORE ACA... $300 / month (no longer available) vs $2200/ month AFTER A*(?)CA. (no longer affordable, so many of us are now WITHOUT HC, where before at least we were covered, (Catastrophic) but at our own risk. )
It is not like the coverage OR the care is any better (all is more expensive and with less available services) More restrictions / controls on clients and providers. Net gain = Negative
Give us BACK the plans we were able to buy BEFORE ACA... $300 / month (no longer available) vs $2200/ month AFTER A*(?)CA. (no longer affordable, so many of us are now WITHOUT HC, where before at least we were covered, (Catastrophic) but at our own risk. )
It is not like the coverage OR the care is any better (all is more expensive and with less available services) More restrictions / controls on clients and providers. Net gain = Negative
This is one of the reasons I feel no guilt taking advantage of this system....my pre-ACA premiums were about 250/month. Went to about 600/month the year ACA came in. If "the system" has no problem doing this to me, I have no problem jumping through loopholes they left for me....
I'm just doing my part to hasten the demise of a totally screwed up system...:-)
Give us BACK the plans we were able to buy BEFORE ACA... $300 / month (no longer available) vs $2200/ month AFTER A*(?)CA. (no longer affordable, so many of us are now WITHOUT HC, where before at least we were covered, (Catastrophic) but at our own risk. )
It is not like the coverage OR the care is any better (all is more expensive and with less available services) More restrictions / controls on clients and providers. Net gain = Negative
But Obama promised you that if you liked your health care plan you could keep it?
Not sure of your filing status or deductions, but you may want to calculate how much tax you pay under your proposed scenario vs. just keeping your income level relatively flat. Then see if you really have a benefit by getting $750/mo subsidy for one year. You may be better off finding a happy medium to manage your income just below the subsidy levels so you get a subsidy for both years (sell off assets and look at tax loss harvesting).
the aca plans suck!!!!!! with no subsidy and cost sharing the deductibles and out of pockets are thousands .
i am so glad my silver plan ends in a few weeks and i go on medicare and a supplement . it is the worst coverage i ever had . they are now the 2nd company i had to fail financially .
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 don't see it as gaming the system. It's allowed by law so I would use it. Stop feeling guilty. Way I see it (when I retire) is I paid taxes into the system for 50 years. (People tend to conveniently forget that part when they pass judgement) And I paid a whole lot of money in the last 45 of those 50 years so I'm going to use whatever advantages I can get.
You don't have to intentionally live on nothing. You could have $500,000 in a checking account and live off that which is not income. Now just generate $25K of real "income" and you qualify for Obamacare subsidies.
The qualification for Obamacare is income based, not wealth based.
Again if you have it personally you understand the various ways to use assets.
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