So I have a pretty live scenario going on right now.
My target house in my retirement destination is $350,000. Mortgage would be $280,000. Probably buying it before the end of the year.
I either pay it off after my other house sells, going mortgage free.
Or
I leave the $280,000 invested, a combination of my existing portfolio and money form the sale of current house.
A passive, low turnover index funds will kick off 2.5%/year in dividends plus turnover gains, or an extra $7,000 per year.
Add that into a deferred comp payout I'll already be receiving in the $25,000/year range plus gains generated by a taxable portfolio in the $450,000 range. That alone puts MAGI in the $25,000 range. It gets a lot worse if I drop that $280,000 directly into a couple of REITs, or what I'll call real estate arbitrage. They kick off 6-7% fully taxable, or an extra $19,600/year, which I would turn around and be using to pay down the 4.5% mortgage. The subsidy starts dropping at $25,000 in income then really starts dropping between $40,000 and $62,000 before its gone completely. (Yeah, yeah, yeah, I know hold the REIT holdings into the IRAs and hold my small/mid cap index ETFs in the taxable account because they have the lowest yield)
This hurts more and more because the premiums are skyrocketing annually but staying below $62,000 in income for a couple provides a huge benefit. The specific state I'm looking at its almost a $10,000 difference in the cost of a silver plan because your insurance premium cost is capped. I plan on buying the house with a mortgage and seeing how the ACA shakes out through 2019, then if I need to I'll pay it down significantly at the end of 2019 I will. I plan on using COBRA for 2019 since my income will still be "high" due to the couple months of working and bonus season. I could also fall into side income that makes it a moot point, so who knows.
I also hate that its referred to as a "subsidy". Its really a cap in insurance cost. Paying $5,700/year for health insurance with a $14,000 out of pocket rider isn't exactly a free lunch. I'll leave the "why's" in this to the ACA debate. Heath-share isn't an option for us either due to a pre-existing condition.