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Topics - theupperwestmike

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Taxes / Distributing an Inherited IRA as an early retiree
« on: September 26, 2022, 11:24:24 AM »

This year my spouse received an Inherited IRA from a parent of $250k. We are a family of two and use ACA and get health insurance subsidies based on our roughly $45k in total income in early retirement. With the Inherited IRA 10-Year Rule, we will need to take distributions of the full $250k by 2032. (We're dollar cost averaging it into broad market funds so would expect it to grow over those 10 years, too.) We still won't be on Medicare by that time so expect to still be using the ACA for healthcare.

Can you give us pointers on what factors to think about when deciding to take distributions? I have a feeling that neither adding $25k of income each year for 10 years nor taking the full tax hit of $250k in a single year are ideal. (But there's value in simplicity!)

What should we consider? What would you recommend?


Taxes / Spiked or smoooooth income for ACA?
« on: May 04, 2022, 01:26:28 PM »

Brilliant stuff as usual. I admire your creativity!

One of your moves got me thinking: your tax gain harvesting of $150k to ease the next few years of income for ACA (and other benefits). Assuming tax and ACA laws are unchanged, do you think you'll repeat something like that every few years - where you have one low/no ACA subsidy year followed by two or three generous subsidy years - or do you think that once you've run out of that full basis $150k, you will sell/convert a little each year going forward?

If not for your household situation, can you think of an early retiree household type where a spiked income pattern makes a lot of sense?

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