I'm talking about Medicaid — I don't know how it works in other states but in Pennsylvania, one way to qualify for Medicaid/Medical Assistance is by having a MAGI (modified adjusted gross income) below a certain threshold based on family size.[0] (It might only work this way for people with kids under age 21; I'm not sure.)
My husband pointed out that another option available with a solo 401k that is not often available via employer-sponsored plans is the ability to set up a Roth 401k. My understanding is this would allow for much higher Roth contributions compared to a Roth IRA.
Yeah, looks like there are resource restrictions if you don't have kids under 21.
Also a bit risky depending on your exit strategy and the assest recovery mechanism.
Not going lie either... this is generally the type of behavior that gives these programs a bad name and creates pushes for reforms - using them them to FIRE while maxing out the 401k. Most people are fine with assisting the needy through these types of programs. The support for these programs completely changes when given situations like this. Especially when knowing the over a third of the state budget is used for this program and that my own medical care is more expensive due to provider taxes to help cover it.
I meant Medicaid but I'm pretty sure marketplace eligibility is also determined by AGI so the same principle would apply. As long as you can keep your spending under the limit, you can put the rest of your income into tax-deferred accounts and still qualify (until your income is so high that you start running up against the contribution limits).
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Just curious, what is the state sponsored healthcare? Where I'm at, I'm only aware of Medicaid and CHIP.
I'm talking about Medicaid — I don't know how it works in other states but in Pennsylvania, one way to qualify for Medicaid/Medical Assistance is by having a MAGI (modified adjusted gross income) below a certain threshold based on family size.[0] (It might only work this way for people with kids under age 21; I'm not sure.)
My husband pointed out that another option available with a solo 401k that is not often available via employer-sponsored plans is the ability to set up a Roth 401k. My understanding is this would allow for much higher Roth contributions compared to a Roth IRA.
[0] https://www.dhs.pa.gov/Services/Assistance/Pages/MA-General-...
Yeah, looks like there are resource restrictions if you don't have kids under 21.
Also a bit risky depending on your exit strategy and the assest recovery mechanism.
Not going lie either... this is generally the type of behavior that gives these programs a bad name and creates pushes for reforms - using them them to FIRE while maxing out the 401k. Most people are fine with assisting the needy through these types of programs. The support for these programs completely changes when given situations like this. Especially when knowing the over a third of the state budget is used for this program and that my own medical care is more expensive due to provider taxes to help cover it.
Maybe they meant the offerings via the healthcare marketplace available in U.S. via healtcare.gov?
I meant Medicaid but I'm pretty sure marketplace eligibility is also determined by AGI so the same principle would apply. As long as you can keep your spending under the limit, you can put the rest of your income into tax-deferred accounts and still qualify (until your income is so high that you start running up against the contribution limits).
Ah, thanks!