Hi all:
I'm planning ahead.
In the middle of the year of next year, (Lord willin' and the creek don't rise!), I will turn 65 and thus be on Medicare for the second half of calendar year 2025. I will NOT be on Social Security as I am deferring that to age 70.
For the first half of 2025, I will be on ACA/Obamacare, as I have been for the past few years. Like others, I have legally managed my MAGI in order to qualify for substantial Premium Tax Credits (PTC) and also Cost-Sharing Reductions (CSR). (Indeed, given my assets, I sometimes feel a bit guilty but that's another topic.)
I haven't quite decided what permutation of Medicare to go on for the second half of 2025 (though I'm leaning to traditional Medicare + Plan G Supplement).
In any case:
1) Am I correct in thinking that I will have two deductibles for 2025? If so, it seems that I would have an incentive to defer as many medical expenses as possible until the second half of the year. Correct?
2) Am I correct in thinking that I have to maintain the low MAGI for the entire calendar year in order to maximize PTC? (CSR is not reclaimable as I understand it.) e.g. I can't have a low MAGI for the first half of the year when on ACA and then zoom up to the top of the 12% bracket for the second half of the year when on Medicare without having to reconcile the PTC on my 2025 1040. Correct?
3) Are there any other considerations I should be considering in order to financially/medically optimize the transition year?
FWIW, I'm wanting to do some Roth conversions and also recognize some taxable income as soon as I am able. I'd like to do some of this in 2025, but I'm thinking that won't be possible and that I'll have to wait until January 2026 (when the tax brackets are scheduled to rise).
Thank you for your help.
JohnDoh
I'm planning ahead.
In the middle of the year of next year, (Lord willin' and the creek don't rise!), I will turn 65 and thus be on Medicare for the second half of calendar year 2025. I will NOT be on Social Security as I am deferring that to age 70.
For the first half of 2025, I will be on ACA/Obamacare, as I have been for the past few years. Like others, I have legally managed my MAGI in order to qualify for substantial Premium Tax Credits (PTC) and also Cost-Sharing Reductions (CSR). (Indeed, given my assets, I sometimes feel a bit guilty but that's another topic.)
I haven't quite decided what permutation of Medicare to go on for the second half of 2025 (though I'm leaning to traditional Medicare + Plan G Supplement).
In any case:
1) Am I correct in thinking that I will have two deductibles for 2025? If so, it seems that I would have an incentive to defer as many medical expenses as possible until the second half of the year. Correct?
2) Am I correct in thinking that I have to maintain the low MAGI for the entire calendar year in order to maximize PTC? (CSR is not reclaimable as I understand it.) e.g. I can't have a low MAGI for the first half of the year when on ACA and then zoom up to the top of the 12% bracket for the second half of the year when on Medicare without having to reconcile the PTC on my 2025 1040. Correct?
3) Are there any other considerations I should be considering in order to financially/medically optimize the transition year?
FWIW, I'm wanting to do some Roth conversions and also recognize some taxable income as soon as I am able. I'd like to do some of this in 2025, but I'm thinking that won't be possible and that I'll have to wait until January 2026 (when the tax brackets are scheduled to rise).
Thank you for your help.
JohnDoh
Statistics: Posted by JohnDoh — Tue Jul 23, 2024 7:44 am — Replies 0 — Views 3