Obamacare, the Thorn in the Roth Pipeline Strategy   Leave a comment

I’m going to keep this post short, because Harry Sit explains this quite well. Recall that a way to withdraw money before 59.5 from a Traditional 401k or IRA is to convert the funds to a Roth IRA. When you do this, the conversion amount gets reported as income for that tax year. The unfortunate problem with this approach in light of Obamacare is that if you buy health insurance from the marketplace and thereby could qualify to get a federal tax credit for health insurance, your, tax credit decreases with a rise in income. Hence, you could end up increasing your taxes more than you might initially expect. Check out Harry Sit’s post at The Finance Buff to read up on the details. Keep in mind he tends to use numbers for a married couple, not single people.


Posted January 20, 2015 by Fiby in Uncategorized

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