. This is to be the last year of enforced frugality since I intend to ensure my health insurance remains moderately priced. To do that, I have to limit my overall income to around $37K for the year (even tho I start Medicare next month), and for the YTD ending in June, I only grossed about $12,000 in taxable income for the 1st 6 months of the year(!) if my numbers are correct. That would be my monthly annuity and some dividends/cap gains from 3 of my mutual funds. Plus I also got some decently sized state and federal tax refunds earlier in the year so that was used for living expenses and kept in my checking account.
I haven't had to do any IRA distributions so far this year, but the 2nd half of the year would likely require a cash infusion. I hadn't planned on doing any home improvements this year, besides the heat pump hot water heater I did in January, since taking more distributions would boost my reportable income. But then after getting a garage door repair that put some holes in my garage ceiling, I knew I wanted to have that ceiling retaped and spackled. It's been an eyesore for years and needs attention, and those holes will allow entry for mice if I don't cover them.
So to cover this upcoming expense, I transferred most of what remained in an online money market acount so it would have no impact on my reportable income for the year. I think I'm paying $1600 for the garage ceiling redo.
I have been avoiding unnecessary purchases, but my checking account will eventually dwindle, so what I would like to do is direct my $12K IRA 5-year CD, which is maturing in September, to my checking account as a distribution when it's mature. I had wanted to do this in the prior 5-year CD term when it matured and was still with State Farm Bank, but trying to get the paperwork from Vanguard in a timely manner to do a transfer just didn't happen and I ran out of time, so I was stuck with ANOTHER 5-year term, and then State Farm became US Bank, or at least my CD became theirs.
I figure taking the distribution directly in my checking account will be much easier as I won't have to rely on Vanguard to do anything. So the $12k will be more than enough to cover my living expenses for the remainder of 2024 and still keep my income very low for the year. At least I think so. I just need to get thru August and another 2 weeks in September with about $4500 remaining in my checking account after paying for the garage ceiling and car/home insurance. It could be close. I also went ahead and stopped auto distributions of those Vanguard dividends/cap gains funds to my checking, becus that could push me a little beyond the income I want to be at, and it's hard to control income when each distribution is a different amount. So if I need more $$ toward year's end, I could do a small IRA distribution.
July 19th, 2024 at 05:44 pm 1721411044
If you have a Roth IRA, you could stop automatic reinvestment of some of the dividends and capital gains and take a distribution of those amounts tax-free. A distribution from your Roth IRA won't affect the ACA subsidy.
July 19th, 2024 at 08:42 pm 1721421723
July 20th, 2024 at 02:56 pm 1721487392
July 20th, 2024 at 08:24 pm 1721507068
July 22nd, 2024 at 03:59 pm 1721663996
I would like to keep my Roth funds intact for awhile since I see them more as a tool for minimizing my taxes each year. I can rely on traditional IRA monies up to the top of the 12% tax bracket (about $47,000), or whatever the lowest tax bracket is moving forward, and then top off as needed using either my taxable funds or Roth funds.
July 23rd, 2024 at 08:01 pm 1721764860