You plan to retire in 4-5 years at age 59-1/2. All of your accounts will be available to withdraw from without penalty at age 59-1/2. So I don’t see the need to “construct [a] bridge account” as per your thread topic. Rather it appears you need a withdrawal strategy from your portfolio during early retirement.
In early retirement, it is not uncommon to withdraw from Taxable especially when trying to manage MAGI to qualify for ACA premium tax credits. But I don’t see the need (with the limited info posted) to sell your Taxable equity and recognize capital gains over the next 4 years in order to hold tax-inefficient fixed income like SGOV in Taxable as of your retirement date and for the 18 months you are on COBRA.
I do think it makes sense to keep forecasting your retirement income and expenses by year as you may need to do a large withdrawal in the year or two prior to starting ACA coverage in order to avoid going over the ACA cliff for the 3/4.5 years that you and spouse will need it. Other sources of cash without increasing AGI may include: (1) your 300k in Roth, (2) your emergency fund, and (3) borrowing under a HELOC.
Do you know your annual spend in retirement for everything including in income taxes, healthcare and periodic large expenses such as a new roof or car? Have you done any projections by year of income and expenses through at least age 75 (start of RMDs)? I started with this and then looked at withdrawals by year from various account types to fund the spending gap. The ACA subsidies are worth $30k/yr to spouse/me so I am prioritizing managing ACA MAGI which means I have been withdrawing from Taxable (Roth is my backup). It will be easier once we are on Medicare as AGI allowed before reaching the first IRMAA tier is much higher than 400% of FPL for ACA purposes.
We also oversaved for retirement. This was good because ACA healthcare costs have increased more than forecasted. So having a cushion of $x over 25x is much less stressful in case there is a year where healthcare increases are higher than expected or your ACA MAGI unexpectedly exceeds the ACA cliff.
In early retirement, it is not uncommon to withdraw from Taxable especially when trying to manage MAGI to qualify for ACA premium tax credits. But I don’t see the need (with the limited info posted) to sell your Taxable equity and recognize capital gains over the next 4 years in order to hold tax-inefficient fixed income like SGOV in Taxable as of your retirement date and for the 18 months you are on COBRA.
I do think it makes sense to keep forecasting your retirement income and expenses by year as you may need to do a large withdrawal in the year or two prior to starting ACA coverage in order to avoid going over the ACA cliff for the 3/4.5 years that you and spouse will need it. Other sources of cash without increasing AGI may include: (1) your 300k in Roth, (2) your emergency fund, and (3) borrowing under a HELOC.
Do you know your annual spend in retirement for everything including in income taxes, healthcare and periodic large expenses such as a new roof or car? Have you done any projections by year of income and expenses through at least age 75 (start of RMDs)? I started with this and then looked at withdrawals by year from various account types to fund the spending gap. The ACA subsidies are worth $30k/yr to spouse/me so I am prioritizing managing ACA MAGI which means I have been withdrawing from Taxable (Roth is my backup). It will be easier once we are on Medicare as AGI allowed before reaching the first IRMAA tier is much higher than 400% of FPL for ACA purposes.
We also oversaved for retirement. This was good because ACA healthcare costs have increased more than forecasted. So having a cushion of $x over 25x is much less stressful in case there is a year where healthcare increases are higher than expected or your ACA MAGI unexpectedly exceeds the ACA cliff.
Statistics: Posted by HomeStretch — Fri Sep 12, 2025 12:06 pm — Replies 12 — Views 1501