I have two more questions concerning MAGI when calculating the cost for affordable care insurance. Will withdrawals from a Roth IRA or a Money Market account count as income? If either one doesn’t , would it be a good idea to start taking money out of my 403b account and put it in a savings account while I am still working? I plan to retire next year, when I am 66, and will need to buy my 58-year-old wife health insurance.
Don in PA
The Roth IRA withdrawal will be income. As for the Money Market, it would depend upon what kind of account it was – retirement, savings, etc. If the Money Market account is just savings – that is, taxed money that you set aside for a rainy day – then it would not show up as income, except for your interest earnings on it.
It may be a great idea to take more income this year, before you retire rather than next year when it will “count” for your wife’s health insurance subsidy. This would help you take less from your 403b and Roth, lowering your income and raising your subsidies. (Keep in mind, your subsidies in 2015 will be based upon your 2015 income; you need not factor in your 2014 income level.) There may be other considerations for your 403b and Roth withdrawals; you might want to consult an account or a financial planner.