Retiring early? Ignoring this number could see you overpaying for health care every single

Core Insights - Health care is a primary concern for older adults and retirees, driven by both the uncertainty of medical conditions and the complexity of the American health care system [1][2] Group 1: Public Sentiment - Approximately 60% of adults are "very" or "somewhat" worried about affording health care services [2] - Many adults find it challenging to navigate the intricate public and private medical insurance systems in the U.S. [2] Group 2: Importance of MAGI - The modified adjusted gross income (MAGI) is a crucial metric for determining monthly premiums for health care, especially for retirees in their 50s and early 60s [3][4] - Under the Affordable Care Act (ACA), health care subsidies are primarily based on MAGI rather than actual cash income or spending [5] - Strategic planning around MAGI can potentially reduce monthly health care costs to $0 [5] Group 3: Income Sources and MAGI - MAGI includes wages, interest, capital gains, and withdrawals from traditional pre-tax retirement accounts, but excludes certain income sources like savings, tax-free securities interest, gifts, and Roth IRA withdrawals [6] - By strategically managing withdrawals from various income sources, individuals can maintain a lower MAGI while preserving their lifestyle [7]