1) if we live on only post-tax investment until 59.5, then our income is only based on ordinary dividends, correct?
ACA health care looks at your MAGI, which for most people will be the same as their adjusted gross income (AGI). This would include dividends, capital gains, Roth conversions, work income, income from rental properties, all sorts of things.
2) if we convert trad funds to roth funds, then we have to keep our ordinary dividends and conversion "income" below $80K to avoid capital gains tax, correct?
Capital gains brackets work similarly to regular income brackets. If you go over $80k taxable income with capital gains, the excess over that amount would be taxed at 15%, and whatever's below would still be taxed at 0%. Note that this $80k number is
taxable income (i.e. income after subtracting your standard or itemized deduction).
3) if we keep ~3 yrs of must-pay expenses in cash, we are in a better position to ride the waves with an aggressive investment portfolio, correct?
Sure.
4) Are we nuts to keep ~3 yrs of must-pay expenses in cash?
A lot of people use bonds for this purpose, as they can return a bit more than cash while being similarly stable in value. Cash isn't "nuts" though.
5) If we stay below the 4x poverty line (which staying below $80K "income" provides), health insurance should be significantly subsidized through ACA (location dependent, of course), correct?
Perhaps. Near 4x the poverty level you might find the subsidies to be rather small given your age, if they exist at all. It will depend on what the silver plans in your area cost. The second-cheapest one of these is what's used to calculate the subsidies. Between 3-4x the poverty level, if that plan costs less than roughly 10% of your income there won't be a subsidy. The lower your income, the more significant the subsidy will be.
Also be aware that in many states, the cutoff income level for Medicaid is significantly higher for kids than for adults. It's not necessarily a bad thing to be on Medicaid, but you should investigate where the line is in the area you plan to live, and whether people around there find the physician networks on Medicaid to be satisfactory. That will help inform your income planning.
6) What is the level of market drop at which we would want to turn a regular quarterly draw off and live off of the cash? For example, -2% doesn't seem frightening in a quarter but -10% does... is there a magic # here?
Different people will have different strategies here. I personally just have a target percentage of our portfolio per asset class, and sell whatever's above target to pay the bills. If stocks have gone up recently, my portfolio is probably a bit overweight in stocks compared to my targets, so I'll sell stocks that month. If stocks are doing poorly then bonds are probably above their target and I'll sell those instead.
