Health insurance subsidy based on income
Having a hard time getting a definitive answer on this. Please help. My husband is retiring early at age 60 and we are purchasing our health insurance through healthcare.gov. We live in Illinois . We want to know if money withdrawals from our Roth IRA will count as income that will affect the subsidy we receive. We know that it is not considered taxable income or MAGI on our tax return, but want to make sure it won’t affect our subsidy . I would really appreciate a straight answer on this. Thank you
Terry Says
A non-taxable Roth withdrawal is not counted as income for the calculation of MAGI (modified adjust gross income) for the purposes of determining ACA subsidies.
BUT FIRST it seems that you are going about your planning in all the wrong way!!
The whole idea of a Roth is to let it continue to grow tax-free until much later in retirement.
By that point you’d be on Medicare, and the withdrawals from a ROTH do NOT impact Medicare Part B and D premiums the way withdrawals from a traditional IRA do.
Why on earth would you give up all that tax free growth to cover your living expenses just because you retired early?! I think you need to see a financial planner who is a FIDUCIARY — for at least one planning session — to avoid making an expensive mistake.
Check the box top right of my website to learn about Wealthramp.com — or here, use this link to the spot on my site.
