Thanks for the ideas, definitely something to consider. Interesting trade-off to avoid taxes and subsidy losses for the next few years, but you give up 180k in your Roth IRA (by spending two years of it now) that could have continued growing tax free for decades if you had spent the capital gains in the taxable acct instead.SaveSaveRetire,We use ACA plans. I don't worry about subsidies, but maybe I should? If I need to convert 90k from IRA to Roth, and realize 30k in capital gains on average I guess we could do more than that one year, then less the next. That could potentially push us out of subsidies one year but well into them the next instead of just barely above the subsidy threshold every year?
1) Why would you choose to forego the ACA subsidy and pay 10K extra if you don't have to? - I wouldn't pay 10k extra if I knew how not to. I'll assume this was a rhetorical question
2) For example, spending cash from MMF generates zero taxable income. - True
3) How much in the Roth IRA are contribution that you can withdraw tax free and penalty free? - Maybe 150k. We've never had workplace Roth accts so our contributions are whatever the 5 or 6k annual limit via backdoor contributions has added up to for a dozen years or so.
4) Spending Roth contribution generates zero taxable income too. - True
5) I would not generate additional capital gain and just use those spaces for Roth conversion. - So you suggest three years using mmkt funds, a year and a half using previous Roth contributions, then the 5th year before this year's conversion becomes available I would have 90k conversion and 60k in capital gains. So four good years with maximum health care subsidies, then the 5th year bite the bullet and realize a bunch of capital gains all at once. Then just leave the remaining taxable capital gains in the brokerage account indefinitely until I either need it (and pay the taxes at that point), give it to charity, or die...
KlangFool
Statistics: Posted by SaveSaveRetire — Sun Feb 16, 2025 11:04 pm