Today on Good Morning Northland, our financial expert, Barry Bigelow, shares key insights on the importance of income level when it comes to qualifying for subsidized health insurance. According to Barry, “The lower your income, the more of a subsidy or premium tax credit you receive toward your health insurance premiums.”

For retirees, keeping your income level within eligibility limits for subsidies requires some strategic planning. “The easiest ways are to withdraw from a Roth IRA with qualified withdrawals, or utilize savings in the bank. Saving prior to retirement is crucial,” Barry explains.

Barry gives a practical example: “Let’s say you’re a single retiree with $4,000 a month in bills. Add another $1,000 for unsubsidized health insurance, and you’re looking at $75,000–$78,000 in income per year. But if you structure your income properly, using non-taxable sources like a Roth IRA, you could reduce your taxable income from the 60s to below 30. This could cut your health insurance premiums in half.”

While this strategy can be a game changer, Barry stresses the importance of planning ahead. “This is easiest to do when you’re in your 20s—start building that Roth IRA now. If you wait until your 40s or 50s, it gets trickier,” he warns. The key is to be proactive and start building non-taxable income sources early in your career.

Got financial questions of your own? Send them our way—whether by email or Facebook message— Barry is here to help us make informed decisions for a more secure future.