Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
This is straight talk from the house with sort of
fine financial planner Tracy Aton.
Speaker 2 (00:04):
Right here. I'm thirteen ten WIBA, don't forget.
Speaker 1 (00:07):
Get to know more about Tracy and learn more about
Tracy and the team at t Anton Investment House all
online Tanton Investment House dot com. That's t A N
T O N investment House dot com.
Speaker 2 (00:18):
It's fun to say.
Speaker 1 (00:19):
It's even more enjoyable to swing by the website again
to get to know Tracy. Can listen back to this
also in previous shows podcasts get to know the team
as well. Also great opportunity to us get an appointment
online of course and start the conversation. T Anton Investment
House dot com. Dophe number six oh eight five zero one,
fifteen forty nine and that's six oh eight five zero one,
fifteen forty nine. And joining us this morning is certified
(00:41):
financial planner Tracy Anton.
Speaker 2 (00:43):
Tracy, how you doing this week?
Speaker 3 (00:45):
I'm doing great, Sean, how about you?
Speaker 1 (00:47):
I'm doing really good. It's always so great to see you,
and it's always fun to talk with you.
Speaker 2 (00:51):
And uh.
Speaker 1 (00:51):
I love the fact that I get a little preview
of each week's show and it gets me really excited
to see what we're going to talk about let's let's
let's tell everybody what what this week conversation is going
to revolve around.
Speaker 2 (01:01):
Tracy.
Speaker 4 (01:02):
Well, today we're going to focus on let's say you're
somebody who's done a great job saving and investing, and
you plan to retire before each sixty five, but you're
concerned about health insurance costs, and so today we're going
to talk about, you know, how can you take advantage
even if you've got a million or two or more
in your retirement accounts or net worth? You know, how
(01:25):
do you take advantage of the Affordable care ex subsidies
before age sixty five? So we'll talk about these strategies,
how they work, who's eligible, how that's determined, and even
how individuals with like I said, high net worth can
really qualify but taking keeping their taxable income low. So
we'll talk about these things as you know, some strategies
(01:47):
you can employ. We'll also talk about, you know, in
twenty twenty six, January twenty twenty six, it's an important
date because these rules might be changing.
Speaker 1 (01:56):
Oh that is well, so definitely going to want to
take notes and pay very very close attention. You think, Ah,
that's twenty twenty six. The new year, that's the way off.
It'll be here sooner than you think, so.
Speaker 3 (02:06):
Before you know it.
Speaker 1 (02:07):
Yes. Always, it's funny because we always talk like as
we're sitting here and it's a you know, great weather
we've had the past few days and you know, getting
into summer and spring, and we forget it's going.
Speaker 2 (02:16):
To be cold in no time and the new year
will be here. Yeah, so cracy, don't talk.
Speaker 3 (02:21):
Don't talk to you about that.
Speaker 2 (02:22):
I know, I don't even think about it. Yeah, let's
get in there too.
Speaker 1 (02:27):
Kind of what these Affordable Care Act these subsidies are
and how they how they can help well.
Speaker 4 (02:33):
Affordable Care Act subsidies are financial assistance programs designed to
reduce the monthly cost of health insurance premiums. These subsidies
make health insurance publish obviously more affordable, particularly for early
retiries or individuals without access to employer sponsored insurance.
Speaker 3 (02:48):
The amount of.
Speaker 4 (02:49):
Assistance you receive is basically based at pre primarily on
your income and household size, and for those who qualify,
the monthly premium for the Affordable Care Act coverage can
be substantially reduce, sometimes to just a few dollars per
month depending on the plan and selected income level.
Speaker 1 (03:08):
So we talked this morning with certified financial planner Tracy
Anton right here on thirteen ten WIBA. One of the
things we get to do, we get to talk with
Tracy each and every week, and I know sometimes we
get busy, sometimes we step out of the car, we
miss part of the program, or of course you want
to share the podcast with others, great opportunity. We head
on over to t Anton Investment House dot com to
listen back to this in previous shows podcast. You can
(03:28):
also get those on the iHeartRadio app. Your smart speaker
will play them as well. Just asked your smart speaker
to play straight Talk from the House with certified Financial
Planner Tracy Anton on iHeartRadio and Tracy then when we
talk about these subsidies and just a huge question, which
is how exactly do subsidies work well.
Speaker 4 (03:46):
The way to get the health insurance through the Affordable
Care Act is basically to sign up at healthcare dot
gov and then when you're applying, you estimate what your income.
Speaker 3 (03:55):
Will be for the year.
Speaker 4 (03:57):
So based on that estimate, you can get a DISCO
called an Advanced Premium Tax Credit and that basically lowers
your monthly insurance costs. So let's say, for example, if
your premium is say fifteen hundred a month, and your
income is low enough, you might be paying only three
hundred dollars a month. So and what happens if you're wrong? Right, So,
(04:17):
now at the end of the year, say your income
ends up being one hundred grand, not the fifty grand
you thought it would be going to be, you now
have to pay that amount back with.
Speaker 3 (04:27):
Your tax return.
Speaker 4 (04:28):
So you know, they do make the adjustments if your
income comes in too high. So again, when the Affordable
Care Act was first passed in twenty ten, the way
subsidies were calculated.
Speaker 3 (04:40):
Was much different.
Speaker 4 (04:41):
But during COVID and twenty twenty one, the rules changed
so that the amount of help people get is now
tied to the federal poverty level. So this change made
it easier for more people to qualify for financial help
by keeping their reported income low. So obviously it was
designed for people who were just didn't have enough income.
(05:01):
But you know, as any loophole or any tax strategy
would employ. You know, people that have high net works
are trying to show low income and YouTube youtwoe can
do this by just using different kinds of investment vehicles.
Speaker 3 (05:19):
So Sewan.
Speaker 4 (05:20):
There are many calculators online to help you figure out
just how much.
Speaker 3 (05:24):
Of a subsidy you might receive.
Speaker 4 (05:26):
One that I've used and I've found is on a
health insurance dot org, but there's many others out there,
and when you're using it, you know, you can kind
of play around with it. You can enter your household income,
which you know includes you, not just your taxable income.
So for example, if you're getting Social Security, your total
benefits count toward household income.
Speaker 3 (05:47):
Not just what was taxable.
Speaker 4 (05:48):
So you kind of have to know how to put
in some of the inputs, but you can kind of
play around with it and try to figure out, Okay,
you know, I'm trying to get a subsidy.
Speaker 3 (05:56):
How much of a subsidy can can I get?
Speaker 2 (05:58):
Now?
Speaker 4 (05:58):
If it's too low, you know, you don't qualify either
because it's medicaid. But most people, you know, there is
a range and you can qualify and it's it's you know,
it's kind of one of those cool tricks or strategies
that's out there that you can employ if you want
to retire before you qualify for Medicare, which is age
sixty five.
Speaker 1 (06:19):
It's pretty amazing as we work through this stuff too.
And you mentioned that website health insurance dot org and
you mentioned kind of tweaking the numbers a little bit,
and I know that that's for a lot of folks,
you know, something that they want to do. And of
course any opportunity you have to save your nest egg
and preserve your portfolio is definitely worth the worth exploring.
So how do we exactly calculate then income tracy when
(06:42):
it comes to this.
Speaker 4 (06:44):
Well, the subsidy eligibility is determined by your households modified
adjusted gross income and how that income compares to the
federal poverty level. So modified adjusted gross income encompasses not
only your wages and salaries, but includes things like gratuities
or tips, bonuses, capital gains, interest, and it also allows
for some you know, certain deductions as well. But if
(07:06):
you're modified just income basically falls within a qualifying range
generally between one hundred and four hundred percent of the
federal poverty level or even a little bit higher under
current rules, you can receive premium assistance even if you
have a high net worth. So household sizes also play
(07:27):
a significant role. So a larger household sean would have
a higher income limit to qualify. So here's an example
for twenty twenty five. For example, a two person household
income limits are somewhere between twenty thousand to eighty one thousand,
somewhere in that range. So you know, you can qualify
if your income hits between those ranges. And again one
(07:50):
person household is fifteen to sixty thousand, So you know,
I'll make a plug here for friends of mine at
the health insurance store. They do a great of just
you know, if you're wondering whether you're qualify or you
know that kind of details, you know, just give them
a call. They're they're great and they can also, you know,
help you determine, you know, which plan is better for you,
(08:13):
because people sometimes are analyzing do I stay on Cobra
or do I go to this? Oftentimes it's better to
go just to the marketplace.
Speaker 2 (08:22):
Did I think I've told you this years ago?
Speaker 1 (08:24):
I'd working in radio, let go and and like it
often happens, I'm like, oh, Cobra, I'll just go on
Cobra and oh my goodness. For people that don't know
health insurance can be very expensive, and I think a
lot of us are pretty blinded by the fact because
our employers are paying a good chunk of it, so
we never see that when you start seeing the numbers
(08:46):
for Cobra and you're like, oh, my gosh, how do
I ford? Yes, exactly exactly, Thank goodness for Cobra because
I got that stuff taking care of. So so it
is very very expensive and tracy. So when we look
at that, we, you know, kind of do that. How
do how do people show low income yet pay their
expenses and kind of live their current lifestyle? I see
numbers like fifteen thousand dollars or twenty thousand dollars and one,
(09:09):
how do you how do you do that?
Speaker 4 (09:10):
Yeah?
Speaker 3 (09:11):
How do you live in that?
Speaker 4 (09:12):
Yeah? Especially if you're on you know, one of the
coasters or something like that, you know.
Speaker 3 (09:16):
Even just us, And how do you live like that?
Speaker 4 (09:18):
Right? Well, one of the strategies is to take money
out of your bank account right or a brokerage account.
Since your principal payments are what they call your cost basis,
do not count as income, so capital gains do count
toward income for the calculation of the subsidy, and so
does tax for income from municipal bonds. So you have
to be careful, you know, how do you create when
(09:39):
you're plugging in these numbers on the calculator? What do
you include and what don't you include? But just so
you know, like, well how do I do that? How
do I keep my income low? Okay, well, don't you know,
don't take.
Speaker 3 (09:50):
All the dollars out of your IRA. If you need money,
you know.
Speaker 4 (09:54):
Take you could possibly take a portion. So we'll talk
a little later about why is it even ortant to
take a little Sometimes from your IRA, it's just to
use up the deduction. But in this case, you know,
one of the great ideas is, okay, I'm going to
live off of my bank account. That's why I always
tell you know, we did a show on brokerage accounts recently.
It's like, yeah, that's why brokerage accounts. One more good
(10:16):
reason to use brokerage accounts and have that in your
arsenal when you're about to retire, because you've got that option.
So it's pretty it's you know, brokerage accounts can come
in handy, especially when you're trying to qualify for a
subsidy because your original amount, you know, just take out
the basis and you might have some capital gains if
you're selling an investment, but again probably you can probably
(10:40):
massage the numbers right, you can figure out what assets
to sell that maybe having grown as much.
Speaker 2 (10:47):
It's interesting about having got you know.
Speaker 1 (10:49):
You think about like tools, for example, and you open
up a good toolbox, it's got a wide variety of
different tools for different applications. You don't want to open
up your toolbox and have like four screw drivers all
all fill up screw driver because that's not very useful.
As you as you talk about this though, and having
you know and why you know, for folks who have
been listening to this program over the years, they know
you talk about diversification. You talk about having different different
(11:11):
tools available and having that that full on toolbox. As
we talk about even things that folks may not have
thought about, like healthcare premium subsidies or healthcare subsidies, insurance subsidies,
those type of areas you know, with a strategy can
definitely be quite beneficial to you.
Speaker 2 (11:25):
We're talking this week, of course, we.
Speaker 1 (11:27):
Certified financial planner Tracing Anton about those health insurance subsidies.
We're going to talk about other ways to kind of
reduce reduce your your your your bottom line to to
really qualify for Subsetas we'll get those details from Tracy
and some other strategies. We'll do all of that in
just a moment. In the meantime, if you haven't had
a chance to head on over to the website, definitely
do that bookmarket Tanton investment House dot com. That's t
(11:49):
A N T O N investment House dot com. Of course,
the website you can learn more about Tracy and the
team at Tanton Investment House. You can also, of course
listen back to this in previous shows pots podcasts. Of course,
fee only fiduciary in their telephone number six oh eight
five zero one fifteen forty nine. That's six oh eight
five zero one fifteen forty nine to do our conversation
with certain fied financial planner Tracy Anton. We'll do that
(12:11):
next as straight Talk from the House continues right here
thirteen ten WI B A. This is straight Talk from
the House with certified financial planner Tracy Anton right here
(12:31):
on thirteen ten do w U I b A. Hope
you had a chance to head on over to the website.
If not, it's a great time to do just that.
The website Tanton investment House dot com. That's t A
N t O N investment House dot com Telpha number
six oh eight five zero one, fifteen forty nine. That's
six oh eight five zero one, fifteen forty nine. Talking
this week with Tracy about important strategies you can use
(12:52):
to reduce your income to qualify for lower health insurance premiums.
Really great information and that previous segment and doing you
can always listen back at t Anton investment House dot com. Uh,
let's let's talk about some strategies Tracy folks can use
to reduce there is it?
Speaker 4 (13:07):
Is it?
Speaker 2 (13:08):
Maggie, m A G. I how do we pronounce that?
Is that?
Speaker 3 (13:11):
I'm just saying I don't know. I use the words
because who knows that?
Speaker 2 (13:15):
Who wants to know?
Speaker 4 (13:18):
Say?
Speaker 3 (13:18):
Modified?
Speaker 4 (13:18):
It just a gross income, you know, and it's like, okay,
that's a mouthful, but it's basically your income is a
few deduction. Yeah, just kind of look it up right,
it's not you know, Yeah, accountants get really excited about this.
Speaker 3 (13:32):
I don't think it has to be that exciting. You
do have to, you know, you do have to care
about it. You have to get down to the nitty
gritty about it.
Speaker 4 (13:39):
But you know what things don't affect m A g I,
which is roth ira withdrawals. Qualified distributions from a roth
ira are not included in maybe you call it maggie,
which makes them an excellent source of tax rate income
during you know, early retirement, so you know, having money
(13:59):
and that's an awesome place to pull money from. Doesn't
show up on your taxes, so it's not going to
affect whether or not you can get a subsidy or not.
So health savings accounts is another great way. So money
contributed to an HSA is deductible, and withdrawals for qualified
medical expenses are tax free, so this lower is taxable
(14:20):
income while covering health care costs. And then you know,
you could delay receiving your Social Security. So social Security
benefits increase the longer you delay. We know that right
by about eight percent, and avoiding them early can help
you keep your MAGGIE lower in the years when you
are trying to qualify for subsidies, right, or maybe one
(14:41):
of you takes the you know, I'm always kind of
a proponent of maybe one of you taking your Social
Security and then the other person you know could wait because.
Speaker 3 (14:50):
You need money.
Speaker 4 (14:51):
You have to figure out how you're going to create
this income, right, and you can have some income. In fact,
you should have some income. So that's part of it
is this strategy is like possibly using.
Speaker 3 (15:02):
This but not that.
Speaker 4 (15:03):
Another idea is if you were older like this, I'm
talking mostly about people who retire before sixty five, but
if you have to take out qualified require minimum distributions,
like your age seventy three for example, you know, you
could do qualified charitable distributions. So I don't find a
(15:24):
lot of people doing that. They usually just go on
Medicare at age sixty five, but that could also be
a way fascinating.
Speaker 2 (15:31):
Yeah, and the.
Speaker 4 (15:31):
Reason why you do qualified charitable distributions has to do
more with you know, Medicare premiums and keeping your Medicare
premiums low.
Speaker 1 (15:38):
Oh interesting, that's It's always fascinating, is you know every
week when we get a chance to sit down and talk,
I obviously learn something new. And I think for this
this type of conversation, I think for a lot of folks.
I know we've touched on some of these these concepts
in the past, but kind of getting a little deeper
in them. I think for a lot of folks, your
ears are probably perking out, and it's a great day
to start that conversation with Tracy, of course, and learn
(16:00):
more online the website Tantoninvestment House dot com. Delph number
six oh eight five zero one, fifteen forty nine. That's
six oh eight five zero one, fifteen forty nine. The
website Tanton Investment House dot com. That's t E N
t O N investment House dot com. So Tracy, when
should we start thinking about these strategies.
Speaker 4 (16:19):
Well, it's important to think ahead, you know, when you
talk about retirement planning, especially if you're in your forties
or fifties and you're hoping to retire before age sixty five,
so you know, figure out how you might qualify for
the Affordable Care Act substies early on. It can make
a big difference in managing healthcare costs before Medicare kicks in.
So in fact, I often find like when people I
(16:42):
talked to them, all, are you planning on retiring earlier?
Speaker 3 (16:44):
What time you want to Usually their first.
Speaker 4 (16:46):
Response to me, Sean is is well, I don't know,
because of the health insurance costs. You know, that's their
first gut reaction, and so you know, I it's interesting
when we talk about it because I'll say, well, okay,
well let's take a look at the numbers, because it's
oftentimes not true. It's it's more of a mindset like
I can't possibly pay fifteen hundred dollars out of pocket,
(17:06):
which I agree sucks. But you know, oftentimes people put
like a stumbling block before they actually look at the numbers.
But if you could reduce that stumbling block from fifteen
hundred to three hundred, right, that would make it so
much easier to say, absolutely, I think I should be
able to retire early, you know, because even if you're
(17:28):
that's a significant savings you know, every month, you know,
and you multiply it by the number of years between
time you're retiring and aage sixty five, it's a big number.
Speaker 2 (17:38):
That is fascinating.
Speaker 1 (17:39):
So, Tracy, when we talk about some other ways, are
the other any other things to do when it comes
to ACA benefits that folks need to be aware of
or that they could be able to do well, I.
Speaker 4 (17:50):
Think again, you know, just touching on these one more
time probably makes a little sense. So, you know, using
a roth iray, it's a great way, but it's not
the only way. Health savings accounts are another great way.
So hsas can help cover the years before you reach
Medicare age since taking money out of it for qualified
medical expenses doesn't count as income. So for example, if
(18:12):
you're consistently, say you max out your HSA for ten years,
it can really set up. So in twenty twenty five,
individuals can contribute up to forty three hundred per year
and families can contribute eight thousand and five point fifty
a year, and if you're fifty five or older you
can put another one thousand dollars catch up. And maybe
one strategy you could employ would be suggesting is instead
(18:35):
of using your HSA right away, you know, pay for
the medical costs like prescriptions, and you know copays out
of pocket, and then let the HSA money.
Speaker 3 (18:44):
Grow by investing it. That's what I've done.
Speaker 4 (18:47):
As long as you save your receipts, you can later
take the money out of a HSA tax for you
to reimburse your income for those expenses.
Speaker 3 (18:55):
So this allows the.
Speaker 4 (18:56):
Account to grow and gives you more flexibility when planning
for planning for retirement income.
Speaker 2 (19:02):
What a great tool that is too.
Speaker 1 (19:03):
I know, we've in the past couple of years been
talking quite a bit about health savings accounts and what
a really good, really good tool and investment opportunity. I
think sometimes people are a little surprised that that's one
of the ways that they can be used, but what
a great opportunity there. So Tracy, let's kind of look forward,
what can what can we expect?
Speaker 2 (19:20):
Then moving forward?
Speaker 4 (19:21):
Well, planning ahead for health insurance and ACA bent subsidies
is essential, especially for those retiring in twenty twenty six
or later. So the new calculation for the Affordable Care
AC subsidies was only supposed to last for two years,
but it was extended through the end of twenty twenty five,
and we'll expire in twenty twenty six unless renewed by Congress.
So a lot of people are saying, well, they're going
(19:43):
to have to do that, but you know that's still unknown.
So if you won't turn sixty five until twenty twenty
six or later, it's important to understand that you could
be facing much higher premiums. And you know, it looks
like it's more like a cliff situation too. So if
you if your income goes above a certain amount, then
your premiums go way up, so you know, just be
(20:05):
just be aware of that.
Speaker 3 (20:06):
And I think to be continued.
Speaker 1 (20:08):
Tracy, as we kind of speaking of to be continued
kind of looking at a continuation of this kind of
pulling back a bit, let's kind of get like the
big takeaway. What's kind of the important takeaway from this discussion.
Speaker 4 (20:19):
Well, you know, we were talking about planning, how important
planning is, right, But I think on another level, a
lot of these shows we talk about options, so you know,
it's just really important in retirement. You know, obviously in
this example, keeping your income low can save you thousands
of dollars on health insurance by employing just some strategies
(20:42):
along the way to keep your assets in a number
of different vehicles or brokerage accounts. So you know, if
you have these options like a brokerage account or HSA
or roth IRA or all three, you know you have
some options instead of everything pre tax I. See a
lot of people that'll have the bulk of their dollars
pre tax I do, and so it's a matter of saying, Okay, hey,
(21:07):
what are our different options out there? And even if
I'm in a higher tax bracket, maybe I should be
doing Wroth contributions because that those dollars might help me
later if I'm going to retire early. So again, I
just think it's nice to have money in different kinds
of taxable accounts to help you take advantage of subsidies
(21:28):
or lower Medicare premiums, or you know, possibly lower tax
and Social Security. I mean, there's just a lot of
different ways. Even if your net worth is a million
or more, you can in this example, for example, you
can qualify for subsidies. So this all came about this
show because I was having some fun talking with one
(21:49):
of my clients and she said, you know, I'm expecting
a grandchild now. And this was a surprise, and you know,
it was really exciting just to kind of say, she's like,
I'm going to retire early. Then I anticipated great, you know.
So then it was okay, what does that look like.
He was already retired, and so she was sixty was
(22:10):
sixty three, and they needed an additional fifty thousand of
income from the Wrath iras.
Speaker 3 (22:16):
So that's what we did.
Speaker 4 (22:17):
We took it from the Wrath instead of taking it
from pre tax money. But then we also took twenty
thousand from his IRA. He had been doing that already,
but we kept that up because he was using up
his tax deduction. So in the end I was using
all this on my financial planning software to say, okay,
well what do the taxes look like? And then I
(22:37):
would go to the other healthcare subsidy calculator and say, okay,
well what does your subsidy look like? Now, you know
base changing the income levels so that we could play
around with what is the best option. So we came
up with, I think a great strategy of taking twenty
thousand from his IRA, using up the tax deduction. And
(22:58):
so in the end he had zero federal or they
had zero federal income tax even though they took out
money pre tax, they had zero income tax. So you
want to use up that those buckets, right, You want
to use up You don't just let that zero go away.
You want to make sure you're using it to the max. Right.
And then their health insurance went from fifteen hundred to
three hundred per month, so wow, and you know this
(23:19):
kind of plan for it. So then he was going
to go on Medicare at sixty five and then she'll,
you know, try.
Speaker 3 (23:26):
To qualify after that from sixty you know, sixty to
sixty two to sixty five.
Speaker 4 (23:31):
She'll have to try to qualify. So, you know, we'll
work on it year by year. But you can see
if someone was retiring at say fifty eight, and they
saved twelve hundred per month for seven years, that would
be a total savings of about one hundred grand. Wow.
Speaker 1 (23:47):
Yeah, this is something we should Maybe we should play
the show in reverse next time.
Speaker 3 (23:52):
I know, I said the best for last.
Speaker 1 (23:56):
By the end of this half hour, we'll tell you
how you can save one hundred could potentially say under.
Speaker 3 (24:00):
That that is amazing gimmick.
Speaker 4 (24:03):
Yeah, I know, yeah, you're right, it's like, how do
you save one hundred grand?
Speaker 3 (24:10):
You know, if you want to retire early? What what?
What are your techniques in?
Speaker 1 (24:14):
Pretty amazing great strategy. It is pretty amazing. And of
course Tracy would love to talk to you, love to
get to know you. If you miss any part of
the program as well, you can always listen back the website.
So much great information. Tanton investment House dot com. That's
t A N T O N investment House dot com.
Telph number six oh eight five zero one fifteen forty nine.
That's six oh eight five zero one fifteen forty nine. Tracy,
(24:35):
it is always great talking with you, always great seeing you. You
enjoyed this fantastic day.
Speaker 3 (24:40):
Thanks Sean.
Speaker 4 (24:40):
Take care,
This is straight talk from the house with sort of
fine financial planner Tracy Aton.
Speaker 2 (00:04):
Right here. I'm thirteen ten WIBA, don't forget.
Speaker 1 (00:07):
Get to know more about Tracy and learn more about
Tracy and the team at t Anton Investment House all
online Tanton Investment House dot com. That's t A N
T O N investment House dot com.
Speaker 2 (00:18):
It's fun to say.
Speaker 1 (00:19):
It's even more enjoyable to swing by the website again
to get to know Tracy. Can listen back to this
also in previous shows podcasts get to know the team
as well. Also great opportunity to us get an appointment
online of course and start the conversation. T Anton Investment
House dot com. Dophe number six oh eight five zero one,
fifteen forty nine and that's six oh eight five zero one,
fifteen forty nine. And joining us this morning is certified
(00:41):
financial planner Tracy Anton.
Speaker 2 (00:43):
Tracy, how you doing this week?
Speaker 3 (00:45):
I'm doing great, Sean, how about you?
Speaker 1 (00:47):
I'm doing really good. It's always so great to see you,
and it's always fun to talk with you.
Speaker 2 (00:51):
And uh.
Speaker 1 (00:51):
I love the fact that I get a little preview
of each week's show and it gets me really excited
to see what we're going to talk about let's let's
let's tell everybody what what this week conversation is going
to revolve around.
Speaker 2 (01:01):
Tracy.
Speaker 4 (01:02):
Well, today we're going to focus on let's say you're
somebody who's done a great job saving and investing, and
you plan to retire before each sixty five, but you're
concerned about health insurance costs, and so today we're going
to talk about, you know, how can you take advantage
even if you've got a million or two or more
in your retirement accounts or net worth? You know, how
(01:25):
do you take advantage of the Affordable care ex subsidies
before age sixty five? So we'll talk about these strategies,
how they work, who's eligible, how that's determined, and even
how individuals with like I said, high net worth can
really qualify but taking keeping their taxable income low. So
we'll talk about these things as you know, some strategies
(01:47):
you can employ. We'll also talk about, you know, in
twenty twenty six, January twenty twenty six, it's an important
date because these rules might be changing.
Speaker 1 (01:56):
Oh that is well, so definitely going to want to
take notes and pay very very close attention. You think, Ah,
that's twenty twenty six. The new year, that's the way off.
It'll be here sooner than you think, so.
Speaker 3 (02:06):
Before you know it.
Speaker 1 (02:07):
Yes. Always, it's funny because we always talk like as
we're sitting here and it's a you know, great weather
we've had the past few days and you know, getting
into summer and spring, and we forget it's going.
Speaker 2 (02:16):
To be cold in no time and the new year
will be here. Yeah, so cracy, don't talk.
Speaker 3 (02:21):
Don't talk to you about that.
Speaker 2 (02:22):
I know, I don't even think about it. Yeah, let's
get in there too.
Speaker 1 (02:27):
Kind of what these Affordable Care Act these subsidies are
and how they how they can help well.
Speaker 4 (02:33):
Affordable Care Act subsidies are financial assistance programs designed to
reduce the monthly cost of health insurance premiums. These subsidies
make health insurance publish obviously more affordable, particularly for early
retiries or individuals without access to employer sponsored insurance.
Speaker 3 (02:48):
The amount of.
Speaker 4 (02:49):
Assistance you receive is basically based at pre primarily on
your income and household size, and for those who qualify,
the monthly premium for the Affordable Care Act coverage can
be substantially reduce, sometimes to just a few dollars per
month depending on the plan and selected income level.
Speaker 1 (03:08):
So we talked this morning with certified financial planner Tracy
Anton right here on thirteen ten WIBA. One of the
things we get to do, we get to talk with
Tracy each and every week, and I know sometimes we
get busy, sometimes we step out of the car, we
miss part of the program, or of course you want
to share the podcast with others, great opportunity. We head
on over to t Anton Investment House dot com to
listen back to this in previous shows podcast. You can
(03:28):
also get those on the iHeartRadio app. Your smart speaker
will play them as well. Just asked your smart speaker
to play straight Talk from the House with certified Financial
Planner Tracy Anton on iHeartRadio and Tracy then when we
talk about these subsidies and just a huge question, which
is how exactly do subsidies work well.
Speaker 4 (03:46):
The way to get the health insurance through the Affordable
Care Act is basically to sign up at healthcare dot
gov and then when you're applying, you estimate what your income.
Speaker 3 (03:55):
Will be for the year.
Speaker 4 (03:57):
So based on that estimate, you can get a DISCO
called an Advanced Premium Tax Credit and that basically lowers
your monthly insurance costs. So let's say, for example, if
your premium is say fifteen hundred a month, and your
income is low enough, you might be paying only three
hundred dollars a month. So and what happens if you're wrong? Right, So,
(04:17):
now at the end of the year, say your income
ends up being one hundred grand, not the fifty grand
you thought it would be going to be, you now
have to pay that amount back with.
Speaker 3 (04:27):
Your tax return.
Speaker 4 (04:28):
So you know, they do make the adjustments if your
income comes in too high. So again, when the Affordable
Care Act was first passed in twenty ten, the way
subsidies were calculated.
Speaker 3 (04:40):
Was much different.
Speaker 4 (04:41):
But during COVID and twenty twenty one, the rules changed
so that the amount of help people get is now
tied to the federal poverty level. So this change made
it easier for more people to qualify for financial help
by keeping their reported income low. So obviously it was
designed for people who were just didn't have enough income.
(05:01):
But you know, as any loophole or any tax strategy
would employ. You know, people that have high net works
are trying to show low income and YouTube youtwoe can
do this by just using different kinds of investment vehicles.
Speaker 3 (05:19):
So Sewan.
Speaker 4 (05:20):
There are many calculators online to help you figure out
just how much.
Speaker 3 (05:24):
Of a subsidy you might receive.
Speaker 4 (05:26):
One that I've used and I've found is on a
health insurance dot org, but there's many others out there,
and when you're using it, you know, you can kind
of play around with it. You can enter your household income,
which you know includes you, not just your taxable income.
So for example, if you're getting Social Security, your total
benefits count toward household income.
Speaker 3 (05:47):
Not just what was taxable.
Speaker 4 (05:48):
So you kind of have to know how to put
in some of the inputs, but you can kind of
play around with it and try to figure out, Okay,
you know, I'm trying to get a subsidy.
Speaker 3 (05:56):
How much of a subsidy can can I get?
Speaker 2 (05:58):
Now?
Speaker 4 (05:58):
If it's too low, you know, you don't qualify either
because it's medicaid. But most people, you know, there is
a range and you can qualify and it's it's you know,
it's kind of one of those cool tricks or strategies
that's out there that you can employ if you want
to retire before you qualify for Medicare, which is age
sixty five.
Speaker 1 (06:19):
It's pretty amazing as we work through this stuff too.
And you mentioned that website health insurance dot org and
you mentioned kind of tweaking the numbers a little bit,
and I know that that's for a lot of folks,
you know, something that they want to do. And of
course any opportunity you have to save your nest egg
and preserve your portfolio is definitely worth the worth exploring.
So how do we exactly calculate then income tracy when
(06:42):
it comes to this.
Speaker 4 (06:44):
Well, the subsidy eligibility is determined by your households modified
adjusted gross income and how that income compares to the
federal poverty level. So modified adjusted gross income encompasses not
only your wages and salaries, but includes things like gratuities
or tips, bonuses, capital gains, interest, and it also allows
for some you know, certain deductions as well. But if
(07:06):
you're modified just income basically falls within a qualifying range
generally between one hundred and four hundred percent of the
federal poverty level or even a little bit higher under
current rules, you can receive premium assistance even if you
have a high net worth. So household sizes also play
(07:27):
a significant role. So a larger household sean would have
a higher income limit to qualify. So here's an example
for twenty twenty five. For example, a two person household
income limits are somewhere between twenty thousand to eighty one thousand,
somewhere in that range. So you know, you can qualify
if your income hits between those ranges. And again one
(07:50):
person household is fifteen to sixty thousand, So you know,
I'll make a plug here for friends of mine at
the health insurance store. They do a great of just
you know, if you're wondering whether you're qualify or you
know that kind of details, you know, just give them
a call. They're they're great and they can also, you know,
help you determine, you know, which plan is better for you,
(08:13):
because people sometimes are analyzing do I stay on Cobra
or do I go to this? Oftentimes it's better to
go just to the marketplace.
Speaker 2 (08:22):
Did I think I've told you this years ago?
Speaker 1 (08:24):
I'd working in radio, let go and and like it
often happens, I'm like, oh, Cobra, I'll just go on
Cobra and oh my goodness. For people that don't know
health insurance can be very expensive, and I think a
lot of us are pretty blinded by the fact because
our employers are paying a good chunk of it, so
we never see that when you start seeing the numbers
(08:46):
for Cobra and you're like, oh, my gosh, how do
I ford? Yes, exactly exactly, Thank goodness for Cobra because
I got that stuff taking care of. So so it
is very very expensive and tracy. So when we look
at that, we, you know, kind of do that. How
do how do people show low income yet pay their
expenses and kind of live their current lifestyle? I see
numbers like fifteen thousand dollars or twenty thousand dollars and one,
(09:09):
how do you how do you do that?
Speaker 4 (09:10):
Yeah?
Speaker 3 (09:11):
How do you live in that?
Speaker 4 (09:12):
Yeah? Especially if you're on you know, one of the
coasters or something like that, you know.
Speaker 3 (09:16):
Even just us, And how do you live like that?
Speaker 4 (09:18):
Right? Well, one of the strategies is to take money
out of your bank account right or a brokerage account.
Since your principal payments are what they call your cost basis,
do not count as income, so capital gains do count
toward income for the calculation of the subsidy, and so
does tax for income from municipal bonds. So you have
to be careful, you know, how do you create when
(09:39):
you're plugging in these numbers on the calculator? What do
you include and what don't you include? But just so
you know, like, well how do I do that? How
do I keep my income low? Okay, well, don't you know,
don't take.
Speaker 3 (09:50):
All the dollars out of your IRA. If you need money,
you know.
Speaker 4 (09:54):
Take you could possibly take a portion. So we'll talk
a little later about why is it even ortant to
take a little Sometimes from your IRA, it's just to
use up the deduction. But in this case, you know,
one of the great ideas is, okay, I'm going to
live off of my bank account. That's why I always
tell you know, we did a show on brokerage accounts recently.
It's like, yeah, that's why brokerage accounts. One more good
(10:16):
reason to use brokerage accounts and have that in your
arsenal when you're about to retire, because you've got that option.
So it's pretty it's you know, brokerage accounts can come
in handy, especially when you're trying to qualify for a
subsidy because your original amount, you know, just take out
the basis and you might have some capital gains if
you're selling an investment, but again probably you can probably
(10:40):
massage the numbers right, you can figure out what assets
to sell that maybe having grown as much.
Speaker 2 (10:47):
It's interesting about having got you know.
Speaker 1 (10:49):
You think about like tools, for example, and you open
up a good toolbox, it's got a wide variety of
different tools for different applications. You don't want to open
up your toolbox and have like four screw drivers all
all fill up screw driver because that's not very useful.
As you as you talk about this though, and having
you know and why you know, for folks who have
been listening to this program over the years, they know
you talk about diversification. You talk about having different different
(11:11):
tools available and having that that full on toolbox. As
we talk about even things that folks may not have
thought about, like healthcare premium subsidies or healthcare subsidies, insurance subsidies,
those type of areas you know, with a strategy can
definitely be quite beneficial to you.
Speaker 2 (11:25):
We're talking this week, of course, we.
Speaker 1 (11:27):
Certified financial planner Tracing Anton about those health insurance subsidies.
We're going to talk about other ways to kind of
reduce reduce your your your your bottom line to to
really qualify for Subsetas we'll get those details from Tracy
and some other strategies. We'll do all of that in
just a moment. In the meantime, if you haven't had
a chance to head on over to the website, definitely
do that bookmarket Tanton investment House dot com. That's t
(11:49):
A N T O N investment House dot com. Of course,
the website you can learn more about Tracy and the
team at Tanton Investment House. You can also, of course
listen back to this in previous shows pots podcasts. Of course,
fee only fiduciary in their telephone number six oh eight
five zero one fifteen forty nine. That's six oh eight
five zero one fifteen forty nine to do our conversation
with certain fied financial planner Tracy Anton. We'll do that
(12:11):
next as straight Talk from the House continues right here
thirteen ten WI B A. This is straight Talk from
the House with certified financial planner Tracy Anton right here
(12:31):
on thirteen ten do w U I b A. Hope
you had a chance to head on over to the website.
If not, it's a great time to do just that.
The website Tanton investment House dot com. That's t A
N t O N investment House dot com Telpha number
six oh eight five zero one, fifteen forty nine. That's
six oh eight five zero one, fifteen forty nine. Talking
this week with Tracy about important strategies you can use
(12:52):
to reduce your income to qualify for lower health insurance premiums.
Really great information and that previous segment and doing you
can always listen back at t Anton investment House dot com. Uh,
let's let's talk about some strategies Tracy folks can use
to reduce there is it?
Speaker 4 (13:07):
Is it?
Speaker 2 (13:08):
Maggie, m A G. I how do we pronounce that?
Is that?
Speaker 3 (13:11):
I'm just saying I don't know. I use the words
because who knows that?
Speaker 2 (13:15):
Who wants to know?
Speaker 4 (13:18):
Say?
Speaker 3 (13:18):
Modified?
Speaker 4 (13:18):
It just a gross income, you know, and it's like, okay,
that's a mouthful, but it's basically your income is a
few deduction. Yeah, just kind of look it up right,
it's not you know, Yeah, accountants get really excited about this.
Speaker 3 (13:32):
I don't think it has to be that exciting. You
do have to, you know, you do have to care
about it. You have to get down to the nitty
gritty about it.
Speaker 4 (13:39):
But you know what things don't affect m A g I,
which is roth ira withdrawals. Qualified distributions from a roth
ira are not included in maybe you call it maggie,
which makes them an excellent source of tax rate income
during you know, early retirement, so you know, having money
(13:59):
and that's an awesome place to pull money from. Doesn't
show up on your taxes, so it's not going to
affect whether or not you can get a subsidy or not.
So health savings accounts is another great way. So money
contributed to an HSA is deductible, and withdrawals for qualified
medical expenses are tax free, so this lower is taxable
(14:20):
income while covering health care costs. And then you know,
you could delay receiving your Social Security. So social Security
benefits increase the longer you delay. We know that right
by about eight percent, and avoiding them early can help
you keep your MAGGIE lower in the years when you
are trying to qualify for subsidies, right, or maybe one
(14:41):
of you takes the you know, I'm always kind of
a proponent of maybe one of you taking your Social
Security and then the other person you know could wait because.
Speaker 3 (14:50):
You need money.
Speaker 4 (14:51):
You have to figure out how you're going to create
this income, right, and you can have some income. In fact,
you should have some income. So that's part of it
is this strategy is like possibly using.
Speaker 3 (15:02):
This but not that.
Speaker 4 (15:03):
Another idea is if you were older like this, I'm
talking mostly about people who retire before sixty five, but
if you have to take out qualified require minimum distributions,
like your age seventy three for example, you know, you
could do qualified charitable distributions. So I don't find a
(15:24):
lot of people doing that. They usually just go on
Medicare at age sixty five, but that could also be
a way fascinating.
Speaker 2 (15:31):
Yeah, and the.
Speaker 4 (15:31):
Reason why you do qualified charitable distributions has to do
more with you know, Medicare premiums and keeping your Medicare
premiums low.
Speaker 1 (15:38):
Oh interesting, that's It's always fascinating, is you know every
week when we get a chance to sit down and talk,
I obviously learn something new. And I think for this
this type of conversation, I think for a lot of folks.
I know we've touched on some of these these concepts
in the past, but kind of getting a little deeper
in them. I think for a lot of folks, your
ears are probably perking out, and it's a great day
to start that conversation with Tracy, of course, and learn
(16:00):
more online the website Tantoninvestment House dot com. Delph number
six oh eight five zero one, fifteen forty nine. That's
six oh eight five zero one, fifteen forty nine. The
website Tanton Investment House dot com. That's t E N
t O N investment House dot com. So Tracy, when
should we start thinking about these strategies.
Speaker 4 (16:19):
Well, it's important to think ahead, you know, when you
talk about retirement planning, especially if you're in your forties
or fifties and you're hoping to retire before age sixty five,
so you know, figure out how you might qualify for
the Affordable Care Act substies early on. It can make
a big difference in managing healthcare costs before Medicare kicks in.
So in fact, I often find like when people I
(16:42):
talked to them, all, are you planning on retiring earlier?
Speaker 3 (16:44):
What time you want to Usually their first.
Speaker 4 (16:46):
Response to me, Sean is is well, I don't know,
because of the health insurance costs. You know, that's their
first gut reaction, and so you know, I it's interesting
when we talk about it because I'll say, well, okay,
well let's take a look at the numbers, because it's
oftentimes not true. It's it's more of a mindset like
I can't possibly pay fifteen hundred dollars out of pocket,
(17:06):
which I agree sucks. But you know, oftentimes people put
like a stumbling block before they actually look at the numbers.
But if you could reduce that stumbling block from fifteen
hundred to three hundred, right, that would make it so
much easier to say, absolutely, I think I should be
able to retire early, you know, because even if you're
(17:28):
that's a significant savings you know, every month, you know,
and you multiply it by the number of years between
time you're retiring and aage sixty five, it's a big number.
Speaker 2 (17:38):
That is fascinating.
Speaker 1 (17:39):
So, Tracy, when we talk about some other ways, are
the other any other things to do when it comes
to ACA benefits that folks need to be aware of
or that they could be able to do well, I.
Speaker 4 (17:50):
Think again, you know, just touching on these one more
time probably makes a little sense. So, you know, using
a roth iray, it's a great way, but it's not
the only way. Health savings accounts are another great way.
So hsas can help cover the years before you reach
Medicare age since taking money out of it for qualified
medical expenses doesn't count as income. So for example, if
(18:12):
you're consistently, say you max out your HSA for ten years,
it can really set up. So in twenty twenty five,
individuals can contribute up to forty three hundred per year
and families can contribute eight thousand and five point fifty
a year, and if you're fifty five or older you
can put another one thousand dollars catch up. And maybe
one strategy you could employ would be suggesting is instead
(18:35):
of using your HSA right away, you know, pay for
the medical costs like prescriptions, and you know copays out
of pocket, and then let the HSA money.
Speaker 3 (18:44):
Grow by investing it. That's what I've done.
Speaker 4 (18:47):
As long as you save your receipts, you can later
take the money out of a HSA tax for you
to reimburse your income for those expenses.
Speaker 3 (18:55):
So this allows the.
Speaker 4 (18:56):
Account to grow and gives you more flexibility when planning
for planning for retirement income.
Speaker 2 (19:02):
What a great tool that is too.
Speaker 1 (19:03):
I know, we've in the past couple of years been
talking quite a bit about health savings accounts and what
a really good, really good tool and investment opportunity. I
think sometimes people are a little surprised that that's one
of the ways that they can be used, but what
a great opportunity there. So Tracy, let's kind of look forward,
what can what can we expect?
Speaker 2 (19:20):
Then moving forward?
Speaker 4 (19:21):
Well, planning ahead for health insurance and ACA bent subsidies
is essential, especially for those retiring in twenty twenty six
or later. So the new calculation for the Affordable Care
AC subsidies was only supposed to last for two years,
but it was extended through the end of twenty twenty five,
and we'll expire in twenty twenty six unless renewed by Congress.
So a lot of people are saying, well, they're going
(19:43):
to have to do that, but you know that's still unknown.
So if you won't turn sixty five until twenty twenty
six or later, it's important to understand that you could
be facing much higher premiums. And you know, it looks
like it's more like a cliff situation too. So if
you if your income goes above a certain amount, then
your premiums go way up, so you know, just be
(20:05):
just be aware of that.
Speaker 3 (20:06):
And I think to be continued.
Speaker 1 (20:08):
Tracy, as we kind of speaking of to be continued
kind of looking at a continuation of this kind of
pulling back a bit, let's kind of get like the
big takeaway. What's kind of the important takeaway from this discussion.
Speaker 4 (20:19):
Well, you know, we were talking about planning, how important
planning is, right, But I think on another level, a
lot of these shows we talk about options, so you know,
it's just really important in retirement. You know, obviously in
this example, keeping your income low can save you thousands
of dollars on health insurance by employing just some strategies
(20:42):
along the way to keep your assets in a number
of different vehicles or brokerage accounts. So you know, if
you have these options like a brokerage account or HSA
or roth IRA or all three, you know you have
some options instead of everything pre tax I. See a
lot of people that'll have the bulk of their dollars
pre tax I do, and so it's a matter of saying, Okay, hey,
(21:07):
what are our different options out there? And even if
I'm in a higher tax bracket, maybe I should be
doing Wroth contributions because that those dollars might help me
later if I'm going to retire early. So again, I
just think it's nice to have money in different kinds
of taxable accounts to help you take advantage of subsidies
(21:28):
or lower Medicare premiums, or you know, possibly lower tax
and Social Security. I mean, there's just a lot of
different ways. Even if your net worth is a million
or more, you can in this example, for example, you
can qualify for subsidies. So this all came about this
show because I was having some fun talking with one
(21:49):
of my clients and she said, you know, I'm expecting
a grandchild now. And this was a surprise, and you know,
it was really exciting just to kind of say, she's like,
I'm going to retire early. Then I anticipated great, you know.
So then it was okay, what does that look like.
He was already retired, and so she was sixty was
(22:10):
sixty three, and they needed an additional fifty thousand of
income from the Wrath iras.
Speaker 3 (22:16):
So that's what we did.
Speaker 4 (22:17):
We took it from the Wrath instead of taking it
from pre tax money. But then we also took twenty
thousand from his IRA. He had been doing that already,
but we kept that up because he was using up
his tax deduction. So in the end I was using
all this on my financial planning software to say, okay,
well what do the taxes look like? And then I
(22:37):
would go to the other healthcare subsidy calculator and say, okay,
well what does your subsidy look like? Now, you know
base changing the income levels so that we could play
around with what is the best option. So we came
up with, I think a great strategy of taking twenty
thousand from his IRA, using up the tax deduction. And
(22:58):
so in the end he had zero federal or they
had zero federal income tax even though they took out
money pre tax, they had zero income tax. So you
want to use up that those buckets, right, You want
to use up You don't just let that zero go away.
You want to make sure you're using it to the max. Right.
And then their health insurance went from fifteen hundred to
three hundred per month, so wow, and you know this
(23:19):
kind of plan for it. So then he was going
to go on Medicare at sixty five and then she'll,
you know, try.
Speaker 3 (23:26):
To qualify after that from sixty you know, sixty to
sixty two to sixty five.
Speaker 4 (23:31):
She'll have to try to qualify. So, you know, we'll
work on it year by year. But you can see
if someone was retiring at say fifty eight, and they
saved twelve hundred per month for seven years, that would
be a total savings of about one hundred grand. Wow.
Speaker 1 (23:47):
Yeah, this is something we should Maybe we should play
the show in reverse next time.
Speaker 3 (23:52):
I know, I said the best for last.
Speaker 1 (23:56):
By the end of this half hour, we'll tell you
how you can save one hundred could potentially say under.
Speaker 3 (24:00):
That that is amazing gimmick.
Speaker 4 (24:03):
Yeah, I know, yeah, you're right, it's like, how do
you save one hundred grand?
Speaker 3 (24:10):
You know, if you want to retire early? What what?
What are your techniques in?
Speaker 1 (24:14):
Pretty amazing great strategy. It is pretty amazing. And of
course Tracy would love to talk to you, love to
get to know you. If you miss any part of
the program as well, you can always listen back the website.
So much great information. Tanton investment House dot com. That's
t A N T O N investment House dot com.
Telph number six oh eight five zero one fifteen forty nine.
That's six oh eight five zero one fifteen forty nine. Tracy,
(24:35):
it is always great talking with you, always great seeing you. You
enjoyed this fantastic day.
Speaker 3 (24:40):
Thanks Sean.
Speaker 4 (24:40):
Take care,
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!