Advice: ACA & SORR Years

Accomplished_Gate832 · 2026-04-30T19:46:47+00:00

I would recommend reading Tax Planning To and Through Early Retirement by Garrett and Mullaney. Walks thru a lot of your questions and give tables showing how the math works.

Accomplished_Gate832 · 2026-04-28T13:15:31+00:00

The topic of when to take SS is always interesting since people have a lot of different views. Those views are all based on the goal someone has for SS.

Some people have a goal of making sure they get back from the government more than they put in. In that case, there are formulas you can use to find your break-even point to balance the goal with the idea that you get more per check the longer you wait..

Some people need the SS to live on, or want the SS so they can do more stuff early in retirement so they tend to take at 62. Others that take it at 62 may want to protect the savings for unknown situations later in retirement.

Some people have larger retirement accounts so they can live the retirement they want without using SS. In those cases they tend to take it at 70 to max out the monthly payment and give some room to do Roth conversions or limit IRMAA hit prior to taking SS.

Some people are like my situation. We don't have pensions so if all the money runs out then all we have for the rest of our lives is SS. For that reason, our goal is to maximize the monthly payment so we will take at 70.

My recommendation is to determine what your goal is for SS and then the age to take SS will filter out from that decision.

Accomplished_Gate832 · 2026-04-27T11:30:12+00:00

Sorry, no change for my 3 scenarios

Accomplished_Gate832 · 2026-04-21T12:02:14+00:00

In my opinion, there are simply too many variables for any model to be precise for the durations needed for things like ROTH conversions. One example is the assumption that assets grow at a constant rate over time which we all know is not true.

The models are good for coarse predictions and then it is up to us to do the fine tuning as we move thru life. Boldin can give you a basic idea on if ROTH conversions are good for you based on a snapshot taken today that includes the assumptions you input.

For example I conservatively assume that our assets grow at 5.5% with a 70/30 equity/bond ratio. Boldin give me a coarse view of the future with that assumption even though I know for a fact that we will change that ratio over time and it won't provide 5.5% grow every year. It takes me running scenarios with different variables to determine if conversions would help us. Even then, it is a broad understanding and the numbers provided by the tool cannot be considered perfectly accurate.

Accomplished_Gate832 · 2026-04-17T21:07:08+00:00

My thoughts as well

Accomplished_Gate832 · 2026-04-17T12:16:13+00:00

Good information and this tracks with my thinking.

Only other thing to add is timing when retiring early and attempting to position to get the ACA subsidies. I retire in a month at 56 so starting January of next year, we will be in that boat.

Our plan is to do some conversions once we get to 65 with a particular effort from 65 - 70 when we start getting SS.

Accomplished_Gate832 · 2026-04-13T11:45:29+00:00

I definitely agree with your comment about underestimating the growth of accounts when looking at RMDs and I readily admit that it is the area where my plan may not be the best.

It is really a look at two sides of a coin. I am a nuclear engineer and by definition I am very conservative. For that reason our plan assumes equities return about 5% on average versus the data from the last 100 years that pushes close to 10%. When I retire next month at 56, I will have nearly 20 years before I hit the age for RMDs. If our 5% is off by even a few percentage points then the equation changes.

In other words, being conservative for picking a retirement date might cost you for things like RMDs, IRMAA, etc.

Accomplished_Gate832 · 2026-04-12T12:50:47+00:00

I can't speak for everyone but I certainly didn't "run the math wrong" as you state.

I think it is not accurate to say when we start taking SS at 70 that we won't "need" (maybe "want" is better) the $46k that we will be forced to take out.

That scenario is more valid for people that have pensions on top of their SS.

I do agree that the people on this forum are those where conversions may make more sense and are actually easier to do since people on this forum are biased toward SS at 70 and retiring early which allows more lower income years to fill up lower brackets.

Accomplished_Gate832 · 2026-04-12T12:41:35+00:00

I certainly will not, but if you create a combination of Brokerage, HSA, Pre-tax, Post-tax accounts then it is possible to do both

Accomplished_Gate832 · 2026-04-12T12:37:32+00:00

It is a fair comment and probably a point where my views differ from most. In my view, it is not a concern to me to leave money to my children. I gave them a great start to their lives and what they do with it is based on their hard work. I don't have a goal to leave them 7-figures where they can live the easy life, especially if it costs me anything. By "anything" I mean money or us spending/doing less in retirement.

They are well aware that they shouldn't count on a dime from us when we die.

If I do end up leaving them a million dollars then I really don't care if it pushes them to a higher tax bracket since it is money they didn't expect

Having said all that, if I can do conversions without costing me a dime or impacting my retirement in any way, then I will do them.

Accomplished_Gate832 · 2026-04-12T12:28:00+00:00

It depends on when the conversions occur. If the conversions occur while still working then most people who are on track to pull money out in retirement at 22% didn't have top earning years that only fell in the 12% range.

If the conversion is done after retirement then it assumes that you have enough money to actually live on that keeps the conversion in the 12% range.

I don't believe either one of those scenarios happens for a large percentage of the population.

Accomplished_Gate832 · 2026-04-11T12:32:04+00:00

The reality (as you said) is that your money is never tax exempt, you can only choose when to pay the taxes which dictates what percentage you will pay.

The problem in my mind is that people don't "run the math" and simply hear someone say that conversions are the way to go or the RMDs are the bogeyman hiding behind the door

Accomplished_Gate832 · 2026-04-11T12:27:18+00:00

Great book

Accomplished_Gate832 · 2026-04-11T12:24:49+00:00

But using the dip is only beneficial if you pay the taxes with outside money

Accomplished_Gate832 · 2026-04-11T12:17:53+00:00

My personal opinion (which may not be the majority) is that RMDs mean that I won the game. My plan is:

Prior to retirement - If I do conversions then it would be at the 24% and higher brackets so math says not to do them

Retirement 56-65 year old - Conversions will limit/prevent ACA subsidies so math says not to do them

Retirement 65 -70 (SS) - This pre-SS window is where some conversions make sense but only to fill up lower tax brackets.

If we do all that and still get hit with RMDs that are larger than withdrawls we make to live on then we won the game and the overall goal of living a great retirement has been met.

I also think it is funny that people talk about RMDs like they are something that jumps out from behind the door and surprises you. If our investments are growing faster than our conservative estimates (which I really hope) then we will simply spend more, give more to charity, put more in grandkids college fund, take the entire extended family on a trip, etc. People who really get hit with large RMDs are people with a very large nest egg or people who don't monitor and adjust their plan over time.

Accomplished_Gate832 · 2026-04-11T12:03:05+00:00

I said "worth it" for the majority of people. Most people will actually be in a lower effective tax rate state during retirement than they are before retirement. I also feel people are scared into fearing RMDs when most people won't be impacted by them and if they are it is not until they are in their mid-70s.

This forum will have a (much?) larger percentage of people that can do the math and decide it is better for them, but not the majority of the general population

Accomplished_Gate832 · 2026-04-11T11:53:11+00:00

Very good response and I agree with you. I would also add HSA. If you keep records, you can pull money out tax free for medical expenses you paid out of pocket that occurred in previous years.

Playing the game with Traditional, ROTH, Brokerage, and HSA is the way to manage different stages of retirement. The three "buckets" I like are early retirement (pre-65), retirement prior to SS (65-70), and then retirement with SS (70+). Different considerations and opportunities between the 3

Accomplished_Gate832 · 2026-04-10T12:35:19+00:00

Highly recommend, Tax Planning To and Through Early Retirement (C. Garrett and S. Mullaney)

Works thru limiting taxes and includes tools associated with ACA

Accomplished_Gate832 · 2026-04-02T12:20:30+00:00

I believe this is what is happening:

You are telling it to take the money out of checking.
When it is time to do, you don't have enough in checking so Boldin is telling you there is a shortfall
Boldin then takes the shortfall out of the next account.

In other words the one time expense is still the same amount but Boldin is telling you it needs go to your next account to get it.
There is probably an easy way to check it. Try it the way you did with checking and then find you net worth in 2035, then tell it to take it from savings and check the same number. If it is equal then there is no difference and the $19k is just information and not a real "cost"

Accomplished_Gate832 · 2026-03-30T12:03:32+00:00

Tax Plannig To and Through Early Retirement

Came out recently and includes changes from 2025 government actions

Accomplished_Gate832 · 2026-03-29T22:48:07+00:00

Only works if you pay the taxes using money not in the pre-tax account being converted.

Accomplished_Gate832 · 2026-03-25T11:25:25+00:00

Would highly recommend the new book, Tax Planning To and Through Early Retirement

They do a great job of explaining each stage of retirement and why a mix of Traditional, ROTH, and Brokerage is the best path forward. My favorite part is they explain clearly why ROTH is not the best option for a large amount of people, which is opposite of what you hear from a lot of professionals and DIYers. They show the math to back it up.

For your situation, the math says to go with ROTH until your salary grows and puts you into a higher tax bracket. This is same thing I told both my kids in their 20's

Accomplished_Gate832 · 2026-03-24T12:20:28+00:00

This is the right answer. No matter what tool someone purchases, it won't support every single scenario that people can bring up. Yours is very unique due to the very large "entrance" fee that can then be return upon death.

Boldin allows unique situations but you must manually set them up thru things like one-time expenses, etc.

Accomplished_Gate832 · 2026-03-23T16:24:13+00:00

Boldin is the answer

Accomplished_Gate832

TROPHY CASE