how to lower MAGI in 2026 to prevent going over the cliff for ACA

[fireman0175]

Hello,

I am a on a pension and my COLA mid 2026 will send me over the cliff for the 400% of poverty level of my MAGI by about $600 thus costing me a 670% premium increase, yes that is correct.  

I have read whereas I could contribute more traditional IRA funds, but I am very confused as to how you remove then add back the contribution from AGI, etc.  I know that the 400% for 2 people is $84,600, so i would want to be below that final number.  

I would appreciate any suggestions on how I should proceed down that avenue.  Thanks!

[Bsch4477]

You can’t contribute to an IRA if you don’t have earned income. If you have any losses in stocks you could harvest them to reduce your income. 

[VolvoGirl]

There are several ways to calculate the MAGI for different things.   I don't know what the MAGI for ACA would include or get added back.  As far as taking investment losses.  That could only save you 3,000 max.   After you net the losses against any profits  you can only deduct up to 3,000 (1,500 MFS) per year.    

[fireman0175]

is a 1099-R from my state pension not considered earned income?  Thanks I was not aware of that.

[VolvoGirl]

No earned income is only from working on a W2 or a net profit on self employment income on schedule C.  

[AmeliesUncle]

Does your spouse have earned income (a W-2 or self-employment profit), which could qualify you for a Traditional IRA contribution?

Is your health insurance a High Deductible Health Plan (HDHP) that qualifies for a Health Savings Account (HSA), and you don't have any other kind of health insurance?  If you qualify to make an HSA contribution (which is why I asked those questions), that would also lower your income.