Assume someone retires around age 50-55, with assets in a mix of taxable accounts, Roth accounts and tax deferred accounts. If person has to pay health care premiums, my understanding is these would be considered "pre-tax" items- the premiums lower taxable income. I am curious how this works on three levels.
1) Assume a 72(t) is used to fund the early retirement including health care premiums, and some taxes are paid from the 72t. Is the entire 72t withdraw for the year taxable? Then at income tax time some of this is "returned" to tax payer because the health care premium lowered taxable income?
2) can the health care premiums get paid from a rollover IRA, prior to age 50, without tax or penalty (because the payments are for healthcare).
3) Is it better, worse, or indifferent to use monies in a taxable account to pay the health care premiums. There is a part of my mind suggesting the rollover IRA has never been taxed, and the health care premiums are not taxed, so that is best use of money. But if the tax return is where the tax savings is actually seen, might be a moot point where the premiums for health care are paid out of.
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