Question: I am going off my work insurance at the end of the month and am on Cal SDI from an injury as my only current income. Should I withdraw at least $16100 from my IRA to qualify for Covered California? I do not qualify for Medical. I anticipate my AGI to be about $20,000 this year, including IRA withdrawals. Is it OK to withdraw it as a lump sum and is it OK to convert to ROTH?
Answer: Yes. If you withdraw money from your IRA it as taxed as income. That income will be included in your AGI. At $20k, for a one-person household, you will be eligible for Silver 87 coverage and cost-sharing reductions. Using some of that IRA income to fund a Roth IRA would be very smart if you don't need the money otherwise.