Almost free health insurance for retired millionaires? (55, move, smart)
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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.
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..
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.
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.
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.
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