How ACA Premium Subsidies Affect Retirement Tax Planning?

If you are planning to retire early and use a taxable brokerage account to bridge the gap until you can withdraw from your retirement accounts, it is important to be aware of how ACA premium subsidies can affect your tax planning.

ACA premium subsidies are available to individuals and families with incomes below certain levels. The amount of the subsidy is based on your income and family size. If you qualify for a subsidy, it will reduce the amount of money you have to pay for health insurance premiums.

However, if you have income that is too high, you may not qualify for a subsidy. In this case, you will have to pay the full cost of your health insurance premiums. This can be a significant expense, especially if you are on a fixed income.

If you are planning to retire early and use a taxable brokerage account to bridge the gap until you can withdraw from your retirement accounts, it is important to factor in the potential cost of health insurance premiums. If you do not qualify for a subsidy, you may want to consider delaying your retirement until you are eligible for Medicare.

The income limits for ACA premium subsidies vary depending on your family size. For 2024, the income limits are as follows:

For individuals: $54,360
For families of two: $73,240
For families of three: $92,120
For families of four: $111,000

If your income is above these limits, you will not qualify for a subsidy.

You can apply for ACA premium subsidies through the Health Insurance Marketplace. When you apply, you will need to provide information about your income, family size, and other factors. The Marketplace will then determine if you qualify for a subsidy and how much you will receive.

If you are eligible for a subsidy, it will be applied to your health insurance premiums. This will reduce the amount of money you have to pay for health insurance each month.

If you are planning to retire early and use a taxable brokerage account to bridge the gap until you can withdraw from your retirement accounts, it is important to be aware of how ACA premium subsidies can affect your tax planning. If you do not qualify for a subsidy, you may want to consider delaying your retirement until you are eligible for Medicare.