Welcome to How to Retire On Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice that you've heard hundreds of times. This show is all about the nitty gritty. As always, this is just a show, not financial advice, but you can text your questions to (913) 363-1234, and we'll feature them right here. David, what do we got today?

Hey, Mike. How does ACA, Affordable Care Act, subsidies going away affect retirement planning?

I think it affects your tax planning more than anything. So, yes, based on the time of this recording, there's no concrete evidence that the subsidies will stick around. I know they're in talks. Mhmm. That's kinda like saying to your son who says, hey.

I want an ice cream sandwich. And you don't say no. You say, I'll think about it.

Alright. So they're thinking about it, and January 1 will get here 2026, and then they may be gone.

So because I think health care planning and tax planning are somewhat synonymous, they affect each other, You may say, well, nothing's been passed, so I'm not gonna lower my taxes for the sake of subsidies. Instead, I'm just gonna focus on my IRA to Roth conversions. I'm gonna focus on my adjustments of the portfolio if there's a brokerage account. Just kind of get things in order so that in one year and two year and three years, whenever they come back, if they come back Mhmm. That you have the flexibility to then change your income planning and your tax planning in that year.

For example, let's say this year, next year, you're taking your income from an IRA.

Okay.

Taxes or your income, no problem. And then in two years from today, you're 64 years old. You're on Affordable Care Act because that's your only option, and subsidies are now there, but it's 200% of the federal poverty level. And you've got some brokerage funds. Maybe then in two years, so you're 64 years old.

Your income that year comes from your brokerage account. And because it only comes from your brokerage account, and maybe you've already taken Social Security, but you're gonna suspend it that year and delay it. You're gonna open up a window to only take income from your long term investments

Okay.

Under long term capital gains, and that you might pay, I don't know, very little in tax or zero in taxes that year, and qualify for all of the subsidies.

Okay.

Because health care subsidies, at least as they were, aren't dependent on how much money you've saved. It's what shows up on your ten forty.

As income. Right?

But you have to build a plan that can be dynamic enough to shift your income strategies and your tax consequences. And too many people don't think about that. And we're talking a lot of money, like 10,000 just in potential subsidies and tax efficiency and much more. So you want to have the right to adjust your income on an as needed basis. That's all the time we've got for the show today.

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