Income vs premium subsidy

Terry Says

Withdrawals from a retirement account are treated as ordinary income. And that could impact the amount of your premium subsidy under the Affordable Care Act. You need to consider that impact — as well as the taxes (and 10 percent penalty if under age 59-1/2) for withdrawing from a retirement account. Typically, by the time people are required to withdraw (RMDs) they are on Social Security and won’t be penalized. Withdrawing early costs you future tax-deferred growth of your retirement account and impacts your income for tax purposes and qualifications for other benefits such as the premium subsidy.