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Old 20-12-2018, 07:44   #31
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Re: Early 401K withdraw for ACA

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Originally Posted by denverd0n View Post
It's the internet. Discussions go off topic. That's what happens.


As to whether this is "gaming" the system or not, it's a legal way to reduce your taxes. Just like taking a deduction for mortgage interest payments, or charitable contributions. No difference at all. None of us set up the system, we just live with it. If you take ANY deductions to reduce your taxes, then you are "gaming" the system just as much as anyone else who follows the rules, and finds ways to reduce their taxes.

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Old 20-12-2018, 07:52   #32
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Re: Early 401K withdraw for ACA

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Originally Posted by denverd0n View Post
It's the internet. Discussions go off topic. That's what happens.


As to whether this is "gaming" the system or not, it's a legal way to reduce your taxes. Just like taking a deduction for mortgage interest payments, or charitable contributions. No difference at all. None of us set up the system, we just live with it. If you take ANY deductions to reduce your taxes, then you are "gaming" the system just as much as anyone else who follows the rules, and finds ways to reduce their taxes.
It’s not a “reduction” in taxes. It’s gaming “income” to profit from the IRS.

OP, how much did you pay you the IRS this year? -$19,000?

I’m well over $150k. I’m working, you’re sailing. I also partially own a business that spent $750,000 on employee health insurance. See my issue?

It may be legal but only because those who write laws are idiots. Moral? That’s a whole different question.

Deductions are not gaming the system. If you want to donate $1000 to save $300 in taxes, go right ahead. If you want to spend $10,000 in interest to save $3000 in taxes, go right ahead. There is a mortgage deduction because .gov tried to encourage home ownership. There’s a charitable deduction because .gov wants to encourage charitable donations.

If you pull out $20k in early withdrawal IRA simply to create $20k in income to get $21k free money from .gov, that is gaming the system. Completely different.

Atlas is gonna shrug some day and the producers are going to be blamed, not the leeches who destroyed the will of the producers.

Gimme gimme gimme gimme
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Old 20-12-2018, 12:06   #33
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Re: Early 401K withdraw for ACA

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OP, how much did you pay you the IRS this year? -$19,000?

Iím well over $150k. Iím working, youíre sailing. I also partially own a business that spent $750,000 on employee health insurance. See my issue?
I don't understand your question, try taking a breath and retyping.

Back 2 years ago when my wife's and my income put us in the top 10%, we paid our share of taxes. And we weren't even getting any Sch A deductions because unlike most 10%ers we lived in a small inexpensive house that I just paid off (but before I did it didn't even have enough interest to become more than the standard deduction).

If people are making $150k/yr and complaining that I did my time and are now cruising, while they are working, here's a hint at the "issue":

Your problem isn't me, it's you. Now get off the internet and go do some work
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Old 20-12-2018, 12:25   #34
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Re: Early 401K withdraw for ACA

How is Sailor Boy "gaming the system"? The rules are the rules. The laws are the laws. If his income is $20,000 no matter WHERE he gets it from, that's how the ACA calculates any subsidies.

When we had houses and cars and boats, our income was from my husband's 401K withdrawals. We had too much income so received no subsidies. Since then, we've sold the house and cars, only living on our boat and have lived off of the sale of those things. My husband now receives Social Security so THAT is our income for the ACA (we no longer need to withdraw from the 401K). We also now receive a large subsity. It's not gaming the system, it's how the system works.
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Old 20-12-2018, 12:33   #35
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Re: Early 401K withdraw for ACA

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Originally Posted by Hoosierdoc View Post
Itís not a ďreductionĒ in taxes. Itís gaming ďincomeĒ to profit from the IRS.

OP, how much did you pay you the IRS this year? -$19,000?

Iím well over $150k. Iím working, youíre sailing. I also partially own a business that spent $750,000 on employee health insurance. See my issue?

It may be legal but only because those who write laws are idiots. Moral? Thatís a whole different question.

Deductions are not gaming the system. If you want to donate $1000 to save $300 in taxes, go right ahead. If you want to spend $10,000 in interest to save $3000 in taxes, go right ahead. There is a mortgage deduction because .gov tried to encourage home ownership. Thereís a charitable deduction because .gov wants to encourage charitable donations.

If you pull out $20k in early withdrawal IRA simply to create $20k in income to get $21k free money from .gov, that is gaming the system. Completely different.

Atlas is gonna shrug some day and the producers are going to be blamed, not the leeches who destroyed the will of the producers.

Gimme gimme gimme gimme
Certainly completely different in your eyes. You are entitled to all your deductions which are just gov'n subsidies, it's other people who aren't.

You do realize what the SB's taking income from his IRA is doing, besides gaming the system as you put it, right? It is moving him from eligibilty for 100% gov'n funded no deductible Medicaid eligibility to a purchased, partially subsided, ACA health insurance policy with significant deductibles. So he is actually paying more out of pocket to get a more flexible policy.
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Old 20-12-2018, 12:42   #36
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Re: Early 401K withdraw for ACA

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Certainly completely different in your eyes. You are entitled to all your deductions which are just gov'n subsidies, it's other people who aren't.

You do realize what the SB's taking income from his IRA is doing, besides gaming the system as you put it, right? It is moving him from eligibilty for 100% gov'n funded no deductible Medicaid eligibility to a purchased, partially subsided, ACA health insurance policy with significant deductibles. So he is actually paying more out of pocket to get a more flexible policy.


Let whatever state heís fleecing give him Medicaid. He can fill out his asset sheets and then get free care in that state if he qualifies.

But thatís no fun to be tied to one state
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Old 20-12-2018, 12:54   #37
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Re: Early 401K withdraw for ACA

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Let whatever state heís fleecing give him Medicaid. He can fill out his asset sheets and then get free care in that state if he qualifies.

But thatís no fun to be tied to one state

And this is the bite. If you have assets you won't quality for Medicade. If you have any sort of medical condition and are not a part of an employer group or ACA insurance companies will laugh at you and reject the application (makes no difference if you have always had coverage--I'm not talking about trying to sneak in because you just got sick). I'm healthy but my wife is diabetic, and that is enough to make getting coverage outside of the ACA impossible. As for the sarcastic among you, I wonder how you would feel if you had someone to care for. I'm pretty sure you would whistle a different tune if it were you.



In other words, there IS NO INSURANCE, other than ACA, for people that have savings, have a health condition, and are not working (which aint' easy if you are sick). It's not a game, it is simply the world we live in.


Withdrawing money from 401K at 55 through equal payments is not a "trick." It is your money, and there are strict limitations to keep you from withdrawing too much, too fast. It is just an alternative to starting at 59 1/2, just like you can draw SS at 62; it may not be best for you in the long run, but it is not a trick nor is it gaming the system. It is a fair and legal way to manage your hard earned savings and to live your life. You pay tax on it, as you should, just not the penalty.
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Old 20-12-2018, 13:00   #38
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Re: Early 401K withdraw for ACA

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I don't understand your question, try taking a breath and retyping.

Back 2 years ago when my wife's and my income put us in the top 10%, we paid our share of taxes. And we weren't even getting any Sch A deductions because unlike most 10%ers we lived in a small inexpensive house that I just paid off (but before I did it didn't even have enough interest to become more than the standard deduction).

If people are making $150k/yr and complaining that I did my time and are now cruising, while they are working, here's a hint at the "issue":

Your problem isn't me, it's you. Now get off the internet and go do some work
How much federal tax did you pay in 2018?

You seriously donít feel like youíre scamming your neighbors do you?

Would you pull your boat up to a food pantry and fill it?

Nevermind, ignore list time. Zero interest in getting banned for calling a spade a spade
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Old 20-12-2018, 13:43   #39
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Re: Early 401K withdraw for ACA

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Originally Posted by Hoosierdoc View Post
Let whatever state heís fleecing give him Medicaid. He can fill out his asset sheets and then get free care in that state if he qualifies.

But thatís no fun to be tied to one state
Did that when I started cruising. Left from New Hampshire and it took 3 months for them to approve me for a plan only good in NH (I had been out of NH those 3 months cruising). That was just in time for the deadline for ACA plan selection come up. I switched my resistance to Florida, which didn't sign into the expanded medicare and got an ACA plan instead that I can change my primary care location as I move around.

And on my income taxes that year I got to pay 3 months of penalty for not having health insurance for 3 months while waiting for NH.

BTW - I'm not fleecing anyone.
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Old 20-12-2018, 13:46   #40
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Re: Early 401K withdraw for ACA

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Nevermind, ignore list time.
Hey I feel much better already
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Old 20-12-2018, 15:07   #41
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Re: Early 401K withdraw for ACA

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Old 20-12-2018, 15:22   #42
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Re: Early 401K withdraw for ACA

It's funny how butt hurt people get. Same people who unfriend on FB because someone slammed their "guy or gal" in DC.



Sailor you're not running the system. Your making the system work for you. I'm from CA, where people come in from other countries and I'm talking the people who come legally, then claim their sponsor can no longer care for them and jump on the system. Meanwhile they are still living with that sponsor and working under the table, usually for the sponsor. Now, their collecting US tax payer dollars having never worked in the US and working under the table. The sponsor doesn't have to employ anyone since they have the person working for less under the table which means they don't have to pay employment taxes for their employee. That's working the system.
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Old 20-12-2018, 15:26   #43
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Re: Early 401K withdraw for ACA

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Hey I feel much better already



Ha ha! He has already made mine. I have no use for the opinions of people like him. My first though was "do not feed the troll" but just like in the media, controversy sells and in the currency of online forums, that means clicks and comments.



Still, thanks for being open about how you mange the crazy systems that have been put in place. It's a great help.
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Old 20-12-2018, 15:29   #44
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Re: Early 401K withdraw for ACA

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Originally Posted by Hoosierdoc View Post
How much federal tax did you pay in 2018?

You seriously donít feel like youíre scamming your neighbors do you?

Would you pull your boat up to a food pantry and fill it?

Nevermind, ignore list time. Zero interest in getting banned for calling a spade a spade

You know I've not paid US income tax since 2011. If you make less then $10K, really $12K now per year, you don't even need to file taxes. If your retired as I am and only have SS income, you don't pay or file taxes either. Pretty sweet.



The system works the same for SB, as for me and for you and everyone else. What to not pay taxes either. All you have to do is sell the house(s), car(s), give the practice away, live 100 percent and cruise in a smaller sailboat and you too will not need to file taxes either. All above board and 100% legal.



I paid a TON of taxes while I was working, and even maxed out SS contributions for a number of years, as I'm sure SB did too.


So I do feel your pain. OK I use to anyway. I feel no guilt at all at not paying them now. Come to the dark side.....
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Old 20-12-2018, 15:35   #45
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Re: Early 401K withdraw for ACA

Especially now since the tax rates are so low. Back when my wife and I were working, we were paying 33% or more and now that bracket is 24%. That is a big saving right there to blow on boat stuff.

We probably worked the system for well over $300,000 in subsidies from our lavish employer paid healthcare (had free vision and dental too, plus $1000 a year to blow on exercise equipment) and our home mortgage deductions.

It would take someone quite a bit of time to equal that even with a $20,000 ACA subsidy for a few years.
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