What is Modified Adjusted Gross Income to my retirement?

In researching the affect of the Affordable Care Act  (ACA) on my IRA's, I found it had more to do with the affect on my affording health care policies if retiring early.

If I retired before becoming eligible for Medicare, I would need some type of insurance.  Those available would be COBRA (available for 18 months), private insurance, or those on the healthcare exchange.  The private insurance policy or COBRA premiums would be extremely high due to the risk pool having people in an older age group and probably with more health problems.
The best option would probably be the healthcare exchange which has subsidies available for those under a certain income level.  Now here comes the Modified Adjusted Gross (MAGI) income.  In determining the  MAGI the ACA  begins with the Adjusted Gross Income (AGI) and adds back the following credits one might be allowed on their tax form:

·         Deductions for IRA contributions.

·         Deductions for student loan interest or tuition.

·         Excluded foreign income.

·         Interest from EE(employee) savings bonds used to pay higher education expenses.

·         Employer-paid adoption expenses.

For most people, MAGI is the same as AGI. (Rinck, 2013)

The only one from above that might affect many of us is the deduction for an IRA contribution.  One suggestion is to convert to a Roth IRA even though the money is taxed.The distribution from a Roth does not count in the MAGI (Davidson, 2013).

Keep in mind that social security does count in the MAGI.  Taking the social security early such as at age 62 might be postponed.  Wow!  Everything is revolving around healthcare and where I get my money.  I feel that  my healthcare source and cost is determining all other decisions.   The MAGI is important and could cut my premiums greatly.  I am glad I now know what that is now.  The headlines I read yesterday must have been more of a political ploy but healthcare is going to control a large portion of how we fund retirement.  I guess control is the label.

Davidson, l. (2013).  retrieved from

http://www.forbes.com/sites/financialfinesse/2013/05/30/what-obamacare-means-for-early-retirees-next-year/

Rinck,A. (2013) ".Health Care Reform :  Adjusted Gross Income vs Modified Adjusted Gross Income" retrieved from

http://www.zanebenefits.com/blog/bid/256075/Health-Care-Reform-Adjusted-Gross-Income-VS-Modified-AGI