Speaking of wrong answers...No, wrong answer!Oh my goodness, thanks for the great links and information!![:beer]( "beer")
Really optimizing withdrawal is a big challenge, but I wonder if there aren't rules of thumb that would be good enough.
Here's a stab at one: "In low income years, do ROTH conversions up to the limit of the 12% tax bracket." Solid advice?![:confused]( "confused")
One thing that I take away from this is that every year is different, with new tax laws and exceptions.
The ACA limits of 400% FPL will be reached before the 12%.
A) Are you in an MEDICAID expansion state?
B) You probably want to aim to Roth convert between 250% to 400% of FPL. Just to be safe, probably 250% to 350% of FPL.
"One thing that I take away from this is that every year is different, with new tax laws and exceptions."
Not really true. The ACA limit is the one that you will hit before anything else.
It is not that complicated after you run through the numbers a few times. The difference is the ACA premium and subsidy amount will change. Hence, your sweet spot between 250% to 350% of FPL will change.
KlangFool
There is no ACA limit, nor an ACA subsidy limit at 400% FPL. There was, and may be in the future, but it does not exist now.
I find my best target is up to the top of 0% QDivs and LTCGs. Above that, until all QDivs are taxed, Roth conversions push QDivs into being taxed, so my marginal rate is 12% on the regular income + 15% on QDivs being taxed + 8% or more ACA subsidy loss. That's higher than what I'll have when I hit RMD age, because I'll no longer be dealing with ACA subsidies.
Statistics: Posted by Running Bum — Mon Nov 25, 2024 7:46 am — Replies 13 — Views 1126