Free Tool
ACA Subsidy & Roth Conversion Calculator
See exactly how Roth conversions affect your ACA healthcare subsidies. Find your optimal conversion amount to maximize subsidies without crossing the 400% FPL cliff.
ACA Subsidy Calculator
Your Situation
Adjust the inputs below to see how your ACA subsidy changes.
Affects benchmark Silver plan pricing
Annual Income Sources
We use 85% as the taxable fraction (conservative for high income)
Include capital gain distributions from funds
Pre-ACA Deductions (Reduce MAGI)
2026 limits: $4,300 individual / $8,550 family
Estimated Annual ACA Subsidy
$7,582
Monthly: ~$632 · 357% FPL · Benchmark premium: $11,727/yr
MAGI vs. ACA Subsidy Cliff
Your MAGI: $55,850 ($6,750 below the cliff)
Base Income
$40,000
Your MAGI
$55,850
Cliff at
$62,600
Roth Conversion Sweet Spot
Max safe conversion: $26,700
Converting up to $26,700 keeps your MAGI just under the 400% FPL cliff ($62,600) and preserves your full subsidy.
Conversion Scenarios Compared
Convert $0
MAGI: $35,850
Subsidy: $10,593/yr
Convert $25,000
MAGI: $60,850
Subsidy: $6,724/yr
Convert $50,000
MAGI: $85,850
No subsidy (over cliff)
Convert $100,000
MAGI: $135,850
No subsidy (over cliff)
Highlighted scenario is closest to your current slider position.
Disclaimer: This calculator provides estimates based on 2026 tax parameters and national average benchmark plan costs. Results are approximations — actual ACA subsidies depend on your county-level benchmark plan, exact income sources, and household composition. Social Security taxability uses a simplified 85% rate. This tool is not tax advice. Consult a qualified CPA or financial planner for your specific situation.
How It Works
The ACA-Roth interaction, explained.
Your MAGI determines your subsidy
Modified AGI includes wages, Social Security (up to 85%), pension income, dividends, interest, rental income, and crucially, the full amount of any Roth conversion. MAGI is compared to the Federal Poverty Level (FPL) to calculate your subsidy.
Subsidies phase out as MAGI rises
Between 100% and 400% FPL, you're expected to pay a sliding percentage of your income toward health insurance premiums. The calculator shows what you'd pay versus the benchmark Silver plan cost, the difference is your subsidy.
The cliff is binary — one dollar matters
Cross 400% FPL by even $1 and you lose your entire subsidy. In 2026 that's roughly $62,600 for a single person. A Roth conversion that pushes you over the cliff could cost $8,000–$15,000+ in lost subsidies, often more than the tax benefit of the conversion.
IRMAA kicks in at 65
Once you're on Medicare, income above certain thresholds triggers Part B surcharges. Roth conversions done before 65 can affect your IRMAA bracket two years later, since Medicare uses a two-year lookback. The calculator shows your bracket once you enter age 65+.
What this calculator does well
- Instant visualization of MAGI vs. the 400% FPL cliff
- Real-time subsidy impact as you move the Roth slider
- Finds your maximum safe conversion amount
- Side-by-side scenario comparison at $0, $25K, $50K, $100K
- IRMAA bracket lookup for age 65+ planning
Known simplifications
- Benchmark premium uses national average, your state/county will differ
- Social Security taxability uses 85% flat rate (actual depends on provisional income)
- Does not model capital gains tax interaction
- Single-year calculation, does not project multi-year Roth ladders
- FPL values are 2026 approximations
Common Questions
ACA + Roth conversions, answered.
- How does a Roth conversion affect my ACA health insurance subsidy?
- A Roth conversion adds to your Modified Adjusted Gross Income (MAGI) for the year. ACA premium tax credits phase out as your MAGI rises, and disappear entirely once you cross 400% of the Federal Poverty Level, about $62,600 for a single person or $84,600 for a married couple in 2026. Every dollar of Roth conversion increases your MAGI and reduces your subsidy. The calculator above shows you exactly where your MAGI falls and how much subsidy you lose at each conversion amount.
- What is the ACA subsidy cliff and why does it matter?
- The ACA subsidy cliff is the income threshold at 400% of the Federal Poverty Level where premium tax credits end completely. Below the cliff, even small income reductions can increase your subsidy significantly. Above the cliff, you receive zero subsidy and must pay the full benchmark premium, often $8,000–$20,000+ per year for a couple. Unlike most phase-outs, the ACA cliff is binary: one dollar over the threshold costs you the entire subsidy. In 2026, the cliff is approximately $62,600 for single filers and $84,600 for married couples.
- What is IRMAA and does it affect early retirees?
- IRMAA (Income-Related Monthly Adjustment Amount) is a Medicare Part B surcharge for higher-income beneficiaries. It only applies once you are on Medicare at age 65, so it does not affect early retirees who are managing ACA subsidies before 65. However, Roth conversions done in your early retirement years can still trigger IRMAA after 65, Medicare looks at your income from two years prior. The calculator above shows your IRMAA bracket once you enter age 65 or older.
- What is the optimal Roth conversion amount to preserve my ACA subsidy?
- The optimal conversion is the largest amount you can convert while keeping your MAGI below the 400% FPL threshold. This depends on your other income sources (Social Security, dividends, rental income) and your filing status. The calculator shows you a 'Roth Conversion Sweet Spot', the maximum you can safely convert this year without crossing the subsidy cliff. In many cases, early retirees with low base income can convert $30,000–$60,000 per year while still receiving meaningful subsidies.
Go Deeper
Want comprehensive tax + healthcare optimization?
The calculator above handles the basics. FatFire members get coordinated multi-year Roth + ACA + IRMAA optimization, peer-reviewed healthcare provider comparisons, and vetted CPAs who specialize in early retirement decumulation.