Do Retirement Account Withdrawals Affect ObamaCare?
Ads by +HealthNetwork
Due to my financial situation, I plan to withdraw money from my individual retirement account. I have Obamacare, and my annual income without the withdrawal is approximately $32,000. Will this $12,000 withdrawal affect the cost of my monthly ObamaCare fee? If so, do I need to report this to someone? If so, please provide department and phone number. On another note, I will marry the end of October and will then be on my new husband’s healthcare plan.
John Phillips
Doesn’t answer how to report your IRA withdrawal as income, considering Obamacare asks for proof of income on money you will make in the year ahead. How do you report when signing up for Obamacare, that you will be withdrawing money later on that year. No one will give you proof of how much taxable withdrawals will be used, until after you withdraw the money.
ObamaCareFacts.com
With the ACA you give your best estimates of taxable income. So if you know you will be making a taxable withdrawal, then you would report a good faith best estimate of the taxable amount.
Tonya
can I use my Retirement Medical Reimbursement account help pay for medical and prescription bills while since my insurance comes thru the ACA
Lynn
When I applied for health insurance through the Marketplace in 2016 my husband was not employed and I accurately stated our household income as 43k. Because he had bills to pay and no job my husband took several distributions from his 401k. He had 30% fed tax withheld on each distribution.He was 56 so we were aware of the penalty. However, when we got our taxes done for last year we are told we need to pay back every bit of the tax credit money because it inflated our income past the 43k. Is there any adjustment given that we withheld 30% in fed taxes for each distribution?
Please help. The amount due is over 14k and this is devastating. That was money we contributed to a 401k so why do we have to pay back money that was ours to begin with? Do we have any recourse?
Keith Keller
This just seems so unfair. I paid the tax on a hardship withdraw and then the money I needed for my wife’s illness is added onto my income which affects my gross income and thus the subsidy given so I could purchase insurance that I didn’t want in the first place but was forced to take!
paula van horn
What if we file jointly for taxes, but only 1 spouse has ObamaCare and other spouse is on disability SS. Can the SS spiuse use $$ in her name without tax credit benefits being affected? Spouse on disability has a Medicare Advantage program and pays monthly premium to Medicare from SS check.
Addie
If you are receiving Aid for health care do you have to pay it back?
Judy
I am 57. My job was outsourced to an H1B company (InfoSys) along with 200 other coworkers. I had to train my replacement. I had some very big bills to pay off and didn’t have the money to make the monthly payments. I also needed a new car (mine was on its last legs). Unfortunately, I had to take the money out of my measly 401K. It’s almost all gone now. Once I withdrew the money, I was thrown off Obamacare. Thank you America for screwing me twice.
Julie
God bless you!! Join the club!! We are one of the only countries on earth that does not have universal healthcare!! I believe it is high time for us to make the change!! It costs far more for the uninsured to rush to the ER every time they get really sick!! Then the taxpayers pick up the expensive bills for thousands of our citizens!!!
Donna
I am interested in moving part of a sep ira into a state/federal tax free bond fund. I will not be making any with drawls until I turn 70 in 8 years. Does the tax free income that accumulates in the account count towards MAGI or does it only count once I start to make with drawls from the account?
thank you
Nate
This is an old post, I’m aware, but this is NOT a good idea. It sounds to me like you are cutting off your nose just to spite your face, all in the name of taxes. What you’ve proposed to do is to pay taxes just so that you don’t have to pay taxes. The difference is, you’re wanting to pay all the taxes at once, and sooner rather than later. That’s the opposite of what most people try to do. Most would prefer to pay the taxes in small bites, and to delay doing so as long as possible. Doing it this way prevents you from jumping into the next tax bracket, and the deferred taxation means more money in the account that can grow for a longer period of time. You’re going to lose, what, maybe1/3rd of your account balance to State and Federal taxes if you do this? How many years in those tax free bonds will it take just to recover from that loss alone?
And if you insist on carrying through with this plan, for the love of Jesus, just convert it to a Roth. Then you’d be able to invest in practically anything you wanted, and it would be tax free.
Jim
I collect social security and a teacher pension for retirement income. I know my social security is included in MAGI, but is my teacher pension included in MAGI?
Scott
I make about 66,000 dollars a year off of ssdi and my retirement. I have a family of 4 including myself. If I withdraw 70,000 dollars from my 401K do I get dropped from my Silver Obama care plan? I took out a large loan from my 401K when I was on disability so my family could survive. I was finally approved for Social Security Disability and I retired.
Now I have to pay back the 50,000 dollar loan for my 401K withdrawal. I can’t afford to do that. My income for the year that I take the withdrawal would jump to 136,000 dollars based on this. Can I stay in the Obama Care plan and just pay a lot more or do I have to just search for insurance from a standard insurance company.
After the year that I pay off the loan my income would drop back to the 66,000 dollar level. At that point can I enroll again in Obama care? Would it be worth it?