SNAP benefits available age >=60, <=200% FPL ($29K - 1 person house)

[jim555]

Apparently age 60 makes you "elderly" for SNAP.  Something called Broad-Based Categorical Eligibility (BBCE) in some states means SNAP eligibility for income at 200% FPL or lower (income can be lowered by medical expenses), with no asset test or work requirements.  This will get you a minimum $23 monthly benefit, possibly more if you do a budget of your expenses.  So what is the big deal, $23 doesn't seem worth the bother?  Well SNAP gets you other benefits and these can add up.  For example in my area the electric company will give you $40 a month off your electric bill if you have SNAP.  Amazon Prime is 50% off.  Automatic qualification for the Affordable Connectivity Program, $30 a month for Internet service.  A Lifeline cell phone.  Home Weatherization assistance.  LIHEAP for home heating costs.  Discounted admission to many museums.  You can get double up SNAP bucks through select Farmer's Markets, $23 becomes $46.  If you have children they qualify for free school meals.

States with a 200% FPL income limit:
California, Colorado, Connecticut, Delaware, DC, Florida, Hawaii, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New York, North Carolina, North Dakota, Oregon, Pennsylvania, Virginia, Washington, West Virginia, Wisconsin

The other states have lower income limits, see the chart at:  https://www.fns.usda.gov/snap/broad-based-categorical-eligibility

[CrustyBadger]

Interesting, I am looking at the SNAP guidelines for MD and they say that from your monthly income you can deduct certain things before calculating if your income if low enough.

https://dhs.maryland.gov/supplemental-nutrition-assistance-program/eligibility-rules/

Deductions:
After adding all of your household’s countable income, the case manager will subtract certain deductions.  The following deductions are allowed for all households:
a standard deduction;

20 percent of earned income;

actual costs of dependent care costs for children and disabled adults if this care is needed so that a household member can work, look for a job, or get training or education leading to a job;

legally owed and paid child-support payments;

shelter expenses and utility expenses;

medical expenses over $35 a month for household members who are age 60 or older or receiving certain disability payments.

I earn a decent salary, but my husband is disabled and needs a full-time home health aide. When we add up our mortgage payment plus the monthly cost of the home health aide, plus medical expenses... that monthly income is greatly reduced. I wonder what is comsidered "countable income" to start with?

(Edited to correct spelling errors)

[jim555]

The benefit amount is calculated based on your expenses, the minimum is $23 a month.  Medical expenses over $35 a month can lower your income. 

This is a guide on how they do budgeting.
https://hungersolutionsny.org/wp-content/uploads/2023/04/Budgeting-Prescreening-Guide-8_2_23.pdf

[Fru-Gal]

Very helpful. I have been wanting to get my utility bill lower again, had been on a low-income program in the past but recently just barely did not qualify. Will look into this!

[Sanitary Stache]

SNAP eligibility and benefit amount can be extremely difficult to determine on your own. I recommend applying and seeing what they tell you. It takes a while to get through the application so quick income changes are hard to capture.

Hopefully those states that already use snap to determine weatherizarion benefit eligibility carry that into the IRA programs.

[index]

OR you could work a few extra months and put away an extra 50k to up your FIRE budget by $2k and not take assistance meant for people who are actually struggling. Sometimes the optimization goes too far.

[jim555]

OR you could work a few extra months and put away an extra 50k to up your FIRE budget by $2k and not take assistance meant for people who are actually struggling. Sometimes the optimization goes too far.

If you meet the eligibility requirements it is meant for you.  Or they would have made it so you couldn't get it if it wasn't.

[Sanitary Stache]

OR you could work a few extra months and put away an extra 50k to up your FIRE budget by $2k and not take assistance meant for people who are actually struggling. Sometimes the optimization goes too far.

Who can work for a few extra months to put away 50k? Oh. Math says someone who nets $104/hour after taxes and expenses, so maybe someone who has an hourly rate of $165 with an effective tax rate of 23% or a yearly income of $343,200. So... the top 2% of earners. 

Considering the premise of the proposed alternative to SNAP benefits, I wonder what constitutes "actually struggling". I would think the the 200% FPL is well below the "actually struggling" mark if $343,200/year is considered the alternative or even attainable.

[index]

OR you could work a few extra months and put away an extra 50k to up your FIRE budget by $2k and not take assistance meant for people who are actually struggling. Sometimes the optimization goes too far.

Who can work for a few extra months to put away 50k? Oh. Math says someone who nets $104/hour after taxes and expenses, so maybe someone who has an hourly rate of $165 with an effective tax rate of 23% or a yearly income of $343,200. So... the top 2% of earners. 

Considering the premise of the proposed alternative to SNAP benefits, I wonder what constitutes "actually struggling". I would think the the 200% FPL is well below the "actually struggling" mark if $343,200/year is considered the alternative or even attainable.

For someone with a 750k stache assuming 9% returns and 17k of contributions; 6 months... I consider someone living off a 750k Stache to be not quite who SNAP is meant for. Heck, depending on your asset mix,  you could be living off 50k per year and qualify for SNAP. @jim555 I'm sure the government had productive early retirees who have 600k+ in assets in mind when seeing the program limits for SNAP. I'm sure the utility and cable cos who cut a deal to those recipients are on board as well.

[jim555]

OR you could work a few extra months and put away an extra 50k to up your FIRE budget by $2k and not take assistance meant for people who are actually struggling. Sometimes the optimization goes too far.

Who can work for a few extra months to put away 50k? Oh. Math says someone who nets $104/hour after taxes and expenses, so maybe someone who has an hourly rate of $165 with an effective tax rate of 23% or a yearly income of $343,200. So... the top 2% of earners. 

Considering the premise of the proposed alternative to SNAP benefits, I wonder what constitutes "actually struggling". I would think the the 200% FPL is well below the "actually struggling" mark if $343,200/year is considered the alternative or even attainable.

For someone with a 750k stache assuming 9% returns and 17k of contributions; 6 months... I consider someone living off a 750k Stache to be not quite who SNAP is meant for. Heck, depending on your asset mix,  you could be living off 50k per year and qualify for SNAP. @jim555 I'm sure the government had productive early retirees who have 600k+ in assets in mind when seeing the program limits for SNAP. I'm sure the utility and cable cos who cut a deal to those recipients are on board as well.

The law speaks for itself, no need to ponder the inner minds of the writers.  ACA has no income limit for subsidies, it clearly is not just for the poor, should people not take ACA subsidies as well?  You are projecting what you things should be into a law with very clear requirements.  Seems like more of a personal problem to me.  YOU don't have to take it if it bothers you.

[index]

OR you could work a few extra months and put away an extra 50k to up your FIRE budget by $2k and not take assistance meant for people who are actually struggling. Sometimes the optimization goes too far.

Who can work for a few extra months to put away 50k? Oh. Math says someone who nets $104/hour after taxes and expenses, so maybe someone who has an hourly rate of $165 with an effective tax rate of 23% or a yearly income of $343,200. So... the top 2% of earners. 

Considering the premise of the proposed alternative to SNAP benefits, I wonder what constitutes "actually struggling". I would think the the 200% FPL is well below the "actually struggling" mark if $343,200/year is considered the alternative or even attainable.

For someone with a 750k stache assuming 9% returns and 17k of contributions; 6 months... I consider someone living off a 750k Stache to be not quite who SNAP is meant for. Heck, depending on your asset mix,  you could be living off 50k per year and qualify for SNAP. @jim555 I'm sure the government had productive early retirees who have 600k+ in assets in mind when seeing the program limits for SNAP. I'm sure the utility and cable cos who cut a deal to those recipients are on board as well.

The law speaks for itself, no need to ponder the inner minds of the writers.  ACA has no income limit for subsidies, it clearly is not just for the poor, should people not take ACA subsidies as well?  You are projecting what you things should be into a law with very clear requirements.  Seems like more of a personal problem to me.  YOU don't have to take it if it bothers you.

You are not only using this for Supplemental Nutrition, but for handouts from Utilities, Cable Cos, and Amazon. I'm just pointing out if you are retiring early, you should have enough saved to take care of yourself without burdening others. I'm a share holder (owner) in the above companies and I don't want to give you a free handout. The income limits on ACA subsidies were suspended for covid, but are coming back 2025 a 4x the PL. I have spoken up in threads where people were artificially lowering their income to take advantage of ACA subsidies. FIRE will get a bad name if part of the game plan is go on public assistance. I mean, you do you, but I see this as no different from someone bragging they are reducing food costs by going to a different soup kitchen every night. There is frugal and there is cheap.   

[seattlecyclone]

You are not only using this for Supplemental Nutrition, but for handouts from Utilities, Cable Cos, and Amazon. I'm just pointing out if you are retiring early, you should have enough saved to take care of yourself without burdening others. I'm a share holder (owner) in the above companies and I don't want to give you a free handout. The income limits on ACA subsidies were suspended for covid, but are coming back 2025 a 4x the PL. I have spoken up in threads where people were artificially lowering their income to take advantage of ACA subsidies. FIRE will get a bad name if part of the game plan is go on public assistance. I mean, you do you, but I see this as no different from someone bragging they are reducing food costs by going to a different soup kitchen every night. There is frugal and there is cheap.   

We have a culture where accepting certain forms of public assistance (such as SNAP) is seen as a sort of moral failing that no self-respecting person would do if they have any other option, while other forms of public assistance (such as tax credits for homeownership) are seen as perfectly normal and respectable. You are perpetuating this culture. Why? What principled reason is there to say that people who qualify for assistance program A should decline it unless they would literally risk starvation or homelessness without it, while people who qualify for assistance program B should universally sign up guilt-free?

I happen to think these distinctions are harmful. There are plenty of folks who might qualify for SNAP, who might actually be able to meaningfully improve their lives with a hundred dollars a month in assistance with grocery payments (and related discounts on other essentials), but nevertheless don't take it because they fear the social stigma that would bring. I'd like to see less of that, and that starts with each of us deciding not to treat participation in these programs as immoral. Each of these programs has rules for who qualifies, and that should be the end of it. We don't do our neighbors any favors by trying to impose a higher set of unwritten rules and shaming those who qualify under the written rules but not the unwritten ones.

My moral rule for this is much simpler: it's wrong to lie about your financial situation to get on these programs. If you tell the truth, and you take the benefits you qualify for based on that truth, you get zero judgement from me.

[Sanitary Stache]

Hear him!

Well out @seattlecyclone

The forum has really kicked ass the past couple of days with these responses and many of the responses on the income inequality thread.

[JupiterGreen]

You are not only using this for Supplemental Nutrition, but for handouts from Utilities, Cable Cos, and Amazon. I'm just pointing out if you are retiring early, you should have enough saved to take care of yourself without burdening others. I'm a share holder (owner) in the above companies and I don't want to give you a free handout. The income limits on ACA subsidies were suspended for covid, but are coming back 2025 a 4x the PL. I have spoken up in threads where people were artificially lowering their income to take advantage of ACA subsidies. FIRE will get a bad name if part of the game plan is go on public assistance. I mean, you do you, but I see this as no different from someone bragging they are reducing food costs by going to a different soup kitchen every night. There is frugal and there is cheap.   

We have a culture where accepting certain forms of public assistance (such as SNAP) is seen as a sort of moral failing that no self-respecting person would do if they have any other option, while other forms of public assistance (such as tax credits for homeownership) are seen as perfectly normal and respectable. You are perpetuating this culture. Why? What principled reason is there to say that people who qualify for assistance program A should decline it unless they would literally risk starvation or homelessness without it, while people who qualify for assistance program B should universally sign up guilt-free?

I happen to think these distinctions are harmful. There are plenty of folks who might qualify for SNAP, who might actually be able to meaningfully improve their lives with a hundred dollars a month in assistance with grocery payments (and related discounts on other essentials), but nevertheless don't take it because they fear the social stigma that would bring. I'd like to see less of that, and that starts with each of us deciding not to treat participation in these programs as immoral. Each of these programs has rules for who qualifies, and that should be the end of it. We don't do our neighbors any favors by trying to impose a higher set of unwritten rules and shaming those who qualify under the written rules but not the unwritten ones.

My moral rule for this is much simpler: it's wrong to lie about your financial situation to get on these programs. If you tell the truth, and you take the benefits you qualify for based on that truth, you get zero judgement from me.

These are such great points. Reminds me of my childhood living in poverty but parents refused some social programs. It was nonsensical really, they accepted all the tax benefits, we had free school lunch, pell grants etc but gad forbid we get Snap or Wic etc. So instead of getting nutrients as growing children we just "starved" and didn't grow properly. It really is a very damaging way to frame it as entitlements and then add a layer of stigma to it. I won't elaborate on the US specific political and religious layers to all this, but it's part of the problem too.

[index]

You are not only using this for Supplemental Nutrition, but for handouts from Utilities, Cable Cos, and Amazon. I'm just pointing out if you are retiring early, you should have enough saved to take care of yourself without burdening others. I'm a share holder (owner) in the above companies and I don't want to give you a free handout. The income limits on ACA subsidies were suspended for covid, but are coming back 2025 a 4x the PL. I have spoken up in threads where people were artificially lowering their income to take advantage of ACA subsidies. FIRE will get a bad name if part of the game plan is go on public assistance. I mean, you do you, but I see this as no different from someone bragging they are reducing food costs by going to a different soup kitchen every night. There is frugal and there is cheap.   

We have a culture where accepting certain forms of public assistance (such as SNAP) is seen as a sort of moral failing that no self-respecting person would do if they have any other option, while other forms of public assistance (such as tax credits for homeownership) are seen as perfectly normal and respectable. You are perpetuating this culture. Why? What principled reason is there to say that people who qualify for assistance program A should decline it unless they would literally risk starvation or homelessness without it, while people who qualify for assistance program B should universally sign up guilt-free?



I happen to think these distinctions are harmful. There are plenty of folks who might qualify for SNAP, who might actually be able to meaningfully improve their lives with a hundred dollars a month in assistance with grocery payments (and related discounts on other essentials), but nevertheless don't take it because they fear the social stigma that would bring. I'd like to see less of that, and that starts with each of us deciding not to treat participation in these programs as immoral. Each of these programs has rules for who qualifies, and that should be the end of it. We don't do our neighbors any favors by trying to impose a higher set of unwritten rules and shaming those who qualify under the written rules but not the unwritten ones.

My moral rule for this is much simpler: it's wrong to lie about your financial situation to get on these programs. If you tell the truth, and you take the benefits you qualify for based on that truth, you get zero judgement from me.

These are such great points. Reminds me of my childhood living in poverty but parents refused some social programs. It was nonsensical really, they accepted all the tax benefits, we had free school lunch, pell grants etc but gad forbid we get Snap or Wic etc. So instead of getting nutrients as growing children we just "starved" and didn't grow properly. It really is a very damaging way to frame it as entitlements and then add a layer of stigma to it. I won't elaborate on the US specific political and religious layers to all this, but it's part of the problem too.

@seattlecyclone The government gives assistance to those struggling (programs above) and uses tax credits to incentivize desired behavior - buying houses, starting a business, buying an electric vehicle. Its apples and oranges.

There is a huge difference between removing the social stigma of using SNAP or WIC and using the programs as part of your FIRE plan. I am all for using the programs if you need help, but 100% against using the programs to optimize/save money if you decide to retire early. Get off your ass and work an extra 3-6-12 months and save enough to support your decision to leave the workforce. 

There have been threads complaining about the ACA cliff or advising how to qualify for certain programs like this thread. There has been advice like taking high income one year (lose eligibility) then supplement your income for the next x years when you are withdrawing right up to the limit.   

[Louise]

There is a huge difference between removing the social stigma of using SNAP or WIC and using the programs as part of your FIRE plan. I am all for using the programs if you need help, but 100% against using the programs to optimize/save money if you decide to retire early. Get off your ass and work an extra 3-6-12 months and save enough to support your decision to leave the workforce. 

There have been threads complaining about the ACA cliff or advising how to qualify for certain programs like this thread. There has been advice like taking high income one year (lose eligibility) then supplement your income for the next x years when you are withdrawing right up to the limit.

If they really wanted to curb this behavior, it wouldn't be hard to put in an asset test. Kind of like you do for college aid. You could easily just write in that 5% of your assets can be used instead of applying for SNAP, ACA subsidies, etc.

My guess is that it's such a small percentage of people using these programs that it's not worth the overhead to administer, but that also means it's not really a big issue in the scheme of things either.

I can tell you I had no qualms about taking the Saver's Credit before when we had a low income. Our Roth contributions were only possible because we had a paid off house.

[jim555]

If they really wanted to curb this behavior, it wouldn't be hard to put in an asset test. Kind of like you do for college aid. You could easily just write in that 5% of your assets can be used instead of applying for SNAP, ACA subsidies, etc.

SNAP does have asset tests and work requirements under age 60.  This is something that doesn't happen by accident, it is by design.  Many states do not want to create a poverty trap with an asset test for programs.

[Louise]

If they really wanted to curb this behavior, it wouldn't be hard to put in an asset test. Kind of like you do for college aid. You could easily just write in that 5% of your assets can be used instead of applying for SNAP, ACA subsidies, etc.

SNAP does have asset tests and work requirements under age 60.  This is something that doesn't happen by accident, it is by design.  Many states do not want to create a poverty trap with an asset test for programs.

In my state, there is no asset limit. Likewise, our projected retirement income (which I think is very generous!), will land our child on Medicaid.

[seattlecyclone]

@seattlecyclone The government gives assistance to those struggling (programs above) and uses tax credits to incentivize desired behavior - buying houses, starting a business, buying an electric vehicle. Its apples and oranges.

There's a reason SNAP is part of the farm bill. It's primarily a farm subsidy, implemented by creating an incentive program for people on tighter budgets to buy more expensive groceries than they would without the program. Not every incentive needs to be delivered via the tax code.

There is a huge difference between removing the social stigma of using SNAP or WIC and using the programs as part of your FIRE plan.

Is there? The stigma seems to be intertwined with this notion that the program should be used only in cases of dire need. That's exactly the viewpoint you're perpetuating here: that senior citizens in the FIRE movement shouldn't be in dire enough need to even consider signing up. Even if they do stretch their pennies at the grocery store without SNAP, it's their own fault for failing to work until they were millionaires, and they should reflect on their poor planning while enjoying their diet of white bread and water.

I am all for using the programs if you need help, but 100% against using the programs to optimize/save money if you decide to retire early. Get off your ass and work an extra 3-6-12 months and save enough to support your decision to leave the workforce.

Again, here we are with your opinion that retired senior citizens living on incomes <200% of the poverty line shouldn't take SNAP, that they should instead hop in their time machine and retire later. Meanwhile the government that designed that program thinks otherwise. These folks are designated "broad-based categorically eligible" (i.e. so very much eligible that they get to bypass some of the other eligibility requirements that may otherwise apply).

There have been threads complaining about the ACA cliff or advising how to qualify for certain programs like this thread. There has been advice like taking high income one year (lose eligibility) then supplement your income for the next x years when you are withdrawing right up to the limit.

Yep, arranging your affairs so as to maximize your wealth is a core principle of financial planning.

[Cassie]

As a former social worker there will always be people that can manage their income to take advantage of programs that probably weren’t designed for them. However, the vast majority of people that use social programs really need them.  I won’t lose any sleep over this. Personally once someone hits 60 it doesn’t bother me and neither do programs to feed children.

I personally think the ACA should have an asset test so that young people can’t retire early on a small amount and get huge subsidies but it’s legal. Rich people get all sorts of tax breaks that most don’t because they hire the best accountants to help them shelter their income and it’s legal. So like many things in life what’s considered fair is much different than what’s legal.

[index]

I am all for using the programs if you need help, but 100% against using the programs to optimize/save money if you decide to retire early. Get off your ass and work an extra 3-6-12 months and save enough to support your decision to leave the workforce.

Again, here we are with your opinion that retired senior citizens living on incomes <200% of the poverty line shouldn't take SNAP, that they should instead hop in their time machine and retire later. Meanwhile the government that designed that program thinks otherwise. These folks are designated "broad-based categorically eligible" (i.e. so very much eligible that they get to bypass some of the other eligibility requirements that may otherwise apply).

There have been threads complaining about the ACA cliff or advising how to qualify for certain programs like this thread. There has been advice like taking high income one year (lose eligibility) then supplement your income for the next x years when you are withdrawing right up to the limit.

Yep, arranging your affairs so as to maximize your wealth is a core principle of financial planning.

I see FIRE as a privilege of winning the ovarian lottery where you were born in a developed country with above average intellect. "Arranging affairs so as to maximize your wealth" sounds like using that above average intellect to game the system. If it was a "bigger" problem maybe they would asset test, but saying it doesn't really impact anyone is like refusing to vote or ignoring opportunities to be environmentally conscious with the attitude - what impact do I really have on the election or environment? Maybe an early retiree got the short end on sequence of returns risk or cut it a little too close and now needs help passed 60 - I'm fine with that. Don't base your plan on SNAP, Medicade, or ACA subsidies. Don't just sign up for assistance and get help on your cell phone, utilities, and etc. just because you qualify.

There is a huge difference between removing the social stigma of using SNAP or WIC and using the programs as part of your FIRE plan.

Is there? The stigma seems to be intertwined with this notion that the program should be used only in cases of dire need. That's exactly the viewpoint you're perpetuating here: that senior citizens in the FIRE movement shouldn't be in dire enough need to even consider signing up. Even if they do stretch their pennies at the grocery store without SNAP, it's their own fault for failing to work until they were millionaires, and they should reflect on their poor planning while enjoying their diet of white bread and water.

FIREarly seems to kind of negate all the senior citizens in the FIRE movement right? I'm all for the 67 year old on SS and 100k in the bank applying for SNAP. I'd bet the bottom quintile on this post-FIRE board have 600-700k and are living well off 20-30k per year. @jim555 is doing just fine, but found a way to optimize further! Maybe the "optimization" is going a little too far.

 

[jim555]

If you are 60 or older with income under 130% FPL the Commodity Supplemental Food Program (CSFP) packages can include cheese, milk, rice, pasta, cereal, canned vegetables, fruits, chicken or fish, and more.  A/K/A Government Cheese!  Now your van down by the river is complete.

[Ron Scott]

I think it’s at least reasonable to question whether someone who voluntarily chooses to stop working to support themselves (FIRE)—simply because they find not working more desirable than working—and structures their portfolio in a tax-efficient manner, is wrong to enroll in government programs designed for the unfortunate.

To argue angrily that those who FIRE are entitled to enjoy all of these taxpayer-funded programs and criticize those who differ as hypocrites is perfectly suited to our times (anger is gold, isn’t it?) but it seems over the top.

[FireLane]

You are not only using this for Supplemental Nutrition, but for handouts from Utilities, Cable Cos, and Amazon. I'm just pointing out if you are retiring early, you should have enough saved to take care of yourself without burdening others. I'm a share holder (owner) in the above companies and I don't want to give you a free handout. The income limits on ACA subsidies were suspended for covid, but are coming back 2025 a 4x the PL. I have spoken up in threads where people were artificially lowering their income to take advantage of ACA subsidies. FIRE will get a bad name if part of the game plan is go on public assistance. I mean, you do you, but I see this as no different from someone bragging they are reducing food costs by going to a different soup kitchen every night. There is frugal and there is cheap.   

We have a culture where accepting certain forms of public assistance (such as SNAP) is seen as a sort of moral failing that no self-respecting person would do if they have any other option, while other forms of public assistance (such as tax credits for homeownership) are seen as perfectly normal and respectable. You are perpetuating this culture. Why? What principled reason is there to say that people who qualify for assistance program A should decline it unless they would literally risk starvation or homelessness without it, while people who qualify for assistance program B should universally sign up guilt-free?

I happen to think these distinctions are harmful. There are plenty of folks who might qualify for SNAP, who might actually be able to meaningfully improve their lives with a hundred dollars a month in assistance with grocery payments (and related discounts on other essentials), but nevertheless don't take it because they fear the social stigma that would bring. I'd like to see less of that, and that starts with each of us deciding not to treat participation in these programs as immoral. Each of these programs has rules for who qualifies, and that should be the end of it. We don't do our neighbors any favors by trying to impose a higher set of unwritten rules and shaming those who qualify under the written rules but not the unwritten ones.

My moral rule for this is much simpler: it's wrong to lie about your financial situation to get on these programs. If you tell the truth, and you take the benefits you qualify for based on that truth, you get zero judgement from me.

I agree with this. It would be unwise to plan a FIRE so lean that you need benefit programs to survive. But if you qualify based on the rules, there's no shame in getting a benefit you're legally eligible for.

We don't judge middle-class people for taking the mortgage interest deduction, even though it's a regressive subsidy that helps the wealthy much more and incentivizes suburban sprawl and excessively large, wasteful houses. We don't judge senior citizens for taking Social Security or Medicare, even if they could afford to buy an annuity or get private insurance. We hardly even mention the ludicrously high thresholds on estate taxes and all the other tax-avoidance tricks that perpetuate generational inequality.

In a perfect world, no one would go hungry, be homeless, or go without medical care. There's a reason we don't live in that world, and it's not because of a tiny handful of FIRE folk signing up for programs they technically qualify for but don't strictly need. It's because we (collectively, as voters) don't make it a priority.

If enough of us demanded it, the government could pass a law ending hunger and child poverty tomorrow (we basically did, during the pandemic, and then allowed it to expire).

Maybe someday, that will happen. In the meantime, I don't think there's any harm in taking what the law says you're entitled to have.

[dividendman]

Billionaires use tax law, including real estate depreciation, carried interest provisions, corporate bankruptcy laws, offshoring (including moving corporate HQs, moving where income is "made" etc.), inflating asset prices, special tax provisions for various industries etc. (not to mention buying politicians and making new laws to benefit themselves - all legal) and that's A-OK.

A millionaire actually qualifies for some government assistance - within the law -  and index wants to call out the pitchforks due to the "burden" this is causing on society since they retired early. Gimme a break.

[jim555]

They give chump change anyway, $23.  What a joke.

[Dicey]

They give chump change anyway, $23.  What a joke.

That's the minimum, right? Plus it gives you access to other benefits?

Our regional Food Bank says $1 = 2 meals. 46 "free" meals makes a difference to someone who is struggling,

[iris lily]

OR you could work a few extra months and put away an extra 50k to up your FIRE budget by $2k and not take assistance meant for people who are actually struggling. Sometimes the optimization goes too far.

If you meet the eligibility requirements it is meant for you.  Or they would have made it so you couldn't get it if it wasn't.

I can assure you that someone with huge net worth from which a completely controllable low income is obtained is not the intended audience for SNAP benefits.

[index]

Billionaires use tax law, including real estate depreciation, carried interest provisions, corporate bankruptcy laws, offshoring (including moving corporate HQs, moving where income is "made" etc.), inflating asset prices, special tax provisions for various industries etc. (not to mention buying politicians and making new laws to benefit themselves - all legal) and that's A-OK.

A millionaire actually qualifies for some government assistance - within the law -  and index wants to call out the pitchforks due to the "burden" this is causing on society since they retired early. Gimme a break.

This sounds a lot like two wrongs makes a right. Its easy to point fingers and say - "the group over there is the problem." Sure there are billionaires who take advantage of tax schemes not available to the rest of us. There are 735 billionaires in the US meaning there are about 60x more members on this forum than billionaires and I think they get more than their fair share of finger pointing. Taking advantage of the tax system is a universal problem that should be called out. Hell, probably the biggest tax loophole I've seen that is exploited by the upper middle and upper class is using a hobby farm for farm subsidies - you can depreciate your 100k F150 lightning, barn, and claim any maintenance as a deduction against your non-farm related income as long as you have 5+ acres and a good accountant.

The billionaire over there, the engineer/nurse couple with a hobby farm and tax break, and the early retiree manipulating their income to qualify for subsidies and aid are all part of the problem. I heard Mitch McConnel say once the US shouldn't stop burning coal because China wasn't going to stop. It kind of sounds the same as I'm going to apply for SNAP to get:

Well SNAP gets you other benefits and these can add up.  For example in my area the electric company will give you $40 a month off your electric bill if you have SNAP.  Amazon Prime is 50% off.  Automatic qualification for the Affordable Connectivity Program, $30 a month for Internet service.  A Lifeline cell phone.  Home Weatherization assistance.  LIHEAP for home heating costs.  Discounted admission to many museums.  You can get double up SNAP bucks through select Farmer's Markets, $23 becomes $46.  If you have children they qualify for free school meals.

because XYZ billionaire is taking accelerated depreciation.

[dividendman]

Billionaires use tax law, including real estate depreciation, carried interest provisions, corporate bankruptcy laws, offshoring (including moving corporate HQs, moving where income is "made" etc.), inflating asset prices, special tax provisions for various industries etc. (not to mention buying politicians and making new laws to benefit themselves - all legal) and that's A-OK.

A millionaire actually qualifies for some government assistance - within the law -  and index wants to call out the pitchforks due to the "burden" this is causing on society since they retired early. Gimme a break.

This sounds a lot like two wrongs makes a right. Its easy to point fingers and say - "the group over there is the problem." Sure there are billionaires who take advantage of tax schemes not available to the rest of us. There are 735 billionaires in the US meaning there are about 60x more members on this forum than billionaires and I think they get more than their fair share of finger pointing. Taking advantage of the tax system is a universal problem that should be called out. Hell, probably the biggest tax loophole I've seen that is exploited by the upper middle and upper class is using a hobby farm for farm subsidies - you can depreciate your 100k F150 lightning, barn, and claim any maintenance as a deduction against your non-farm related income as long as you have 5+ acres and a good accountant.

The billionaire over there, the engineer/nurse couple with a hobby farm and tax break, and the early retiree manipulating their income to qualify for subsidies and aid are all part of the problem. I heard Mitch McConnel say once the US shouldn't stop burning coal because China wasn't going to stop. It kind of sounds the same as I'm going to apply for SNAP to get:

Well SNAP gets you other benefits and these can add up.  For example in my area the electric company will give you $40 a month off your electric bill if you have SNAP.  Amazon Prime is 50% off.  Automatic qualification for the Affordable Connectivity Program, $30 a month for Internet service.  A Lifeline cell phone.  Home Weatherization assistance.  LIHEAP for home heating costs.  Discounted admission to many museums.  You can get double up SNAP bucks through select Farmer's Markets, $23 becomes $46.  If you have children they qualify for free school meals.

because XYZ billionaire is taking accelerated depreciation.

I guess my point is these aren't "wrongs". We have to play by the rules that are in place, not the ones we wish existed.

[jimmyshutter]

In my area you can a discount for getting you cats/dogs spayed or neutered if you qualify for SNAP. What I don't understand is how people who can't afford to feed themselves can feed their animals.

[index]

Billionaires use tax law, including real estate depreciation, carried interest provisions, corporate bankruptcy laws, offshoring (including moving corporate HQs, moving where income is "made" etc.), inflating asset prices, special tax provisions for various industries etc. (not to mention buying politicians and making new laws to benefit themselves - all legal) and that's A-OK.

A millionaire actually qualifies for some government assistance - within the law -  and index wants to call out the pitchforks due to the "burden" this is causing on society since they retired early. Gimme a break.

This sounds a lot like two wrongs makes a right. Its easy to point fingers and say - "the group over there is the problem." Sure there are billionaires who take advantage of tax schemes not available to the rest of us. There are 735 billionaires in the US meaning there are about 60x more members on this forum than billionaires and I think they get more than their fair share of finger pointing. Taking advantage of the tax system is a universal problem that should be called out. Hell, probably the biggest tax loophole I've seen that is exploited by the upper middle and upper class is using a hobby farm for farm subsidies - you can depreciate your 100k F150 lightning, barn, and claim any maintenance as a deduction against your non-farm related income as long as you have 5+ acres and a good accountant.

The billionaire over there, the engineer/nurse couple with a hobby farm and tax break, and the early retiree manipulating their income to qualify for subsidies and aid are all part of the problem. I heard Mitch McConnel say once the US shouldn't stop burning coal because China wasn't going to stop. It kind of sounds the same as I'm going to apply for SNAP to get:

Well SNAP gets you other benefits and these can add up.  For example in my area the electric company will give you $40 a month off your electric bill if you have SNAP.  Amazon Prime is 50% off.  Automatic qualification for the Affordable Connectivity Program, $30 a month for Internet service.  A Lifeline cell phone.  Home Weatherization assistance.  LIHEAP for home heating costs.  Discounted admission to many museums.  You can get double up SNAP bucks through select Farmer's Markets, $23 becomes $46.  If you have children they qualify for free school meals.

because XYZ billionaire is taking accelerated depreciation.

I guess my point is these aren't "wrongs". We have to play by the rules that are in place, not the ones we wish existed.

I have a 2.5M Roth IRA and a 100k conversion ladder. Should I apply for SNAP and Medicade from ages 55-59 as I will have a MAGI of $0? I can probably get a free phone, $15 internet, 50% off my utilities and Amazon Prime. I should probably get my HVAC replaced too and take advantage of the IRA subsidies to get a free heat pump. I'll also qualify for a $40k 20/yr @1% loan loan to improve and modernize my home - new kitchen in the vacation home!

[jim555]

I have a 2.5M Roth IRA and a 100k conversion ladder. Should I apply for SNAP and Medicade from ages 55-59 as I will have a MAGI of $0? I can probably get a free phone, $15 internet, 50% off my utilities and Amazon Prime. I should probably get my HVAC replaced too and take advantage of the IRA subsidies to get a free heat pump. I'll also qualify for a $40k 20/yr @1% loan loan to improve and modernize my home - new kitchen in the vacation home!

You obviously have paid a ton of taxes in your life to get to a 2.5M Roth, so you are basically recovering what you already paid for.

[mm1970]

You are not only using this for Supplemental Nutrition, but for handouts from Utilities, Cable Cos, and Amazon. I'm just pointing out if you are retiring early, you should have enough saved to take care of yourself without burdening others. I'm a share holder (owner) in the above companies and I don't want to give you a free handout. The income limits on ACA subsidies were suspended for covid, but are coming back 2025 a 4x the PL. I have spoken up in threads where people were artificially lowering their income to take advantage of ACA subsidies. FIRE will get a bad name if part of the game plan is go on public assistance. I mean, you do you, but I see this as no different from someone bragging they are reducing food costs by going to a different soup kitchen every night. There is frugal and there is cheap.   

We have a culture where accepting certain forms of public assistance (such as SNAP) is seen as a sort of moral failing that no self-respecting person would do if they have any other option, while other forms of public assistance (such as tax credits for homeownership) are seen as perfectly normal and respectable. You are perpetuating this culture. Why? What principled reason is there to say that people who qualify for assistance program A should decline it unless they would literally risk starvation or homelessness without it, while people who qualify for assistance program B should universally sign up guilt-free?

I happen to think these distinctions are harmful. There are plenty of folks who might qualify for SNAP, who might actually be able to meaningfully improve their lives with a hundred dollars a month in assistance with grocery payments (and related discounts on other essentials), but nevertheless don't take it because they fear the social stigma that would bring. I'd like to see less of that, and that starts with each of us deciding not to treat participation in these programs as immoral. Each of these programs has rules for who qualifies, and that should be the end of it. We don't do our neighbors any favors by trying to impose a higher set of unwritten rules and shaming those who qualify under the written rules but not the unwritten ones.

My moral rule for this is much simpler: it's wrong to lie about your financial situation to get on these programs. If you tell the truth, and you take the benefits you qualify for based on that truth, you get zero judgement from me.

I agree with this. It would be unwise to plan a FIRE so lean that you need benefit programs to survive. But if you qualify based on the rules, there's no shame in getting a benefit you're legally eligible for.

We don't judge middle-class people for taking the mortgage interest deduction, even though it's a regressive subsidy that helps the wealthy much more and incentivizes suburban sprawl and excessively large, wasteful houses. We don't judge senior citizens for taking Social Security or Medicare, even if they could afford to buy an annuity or get private insurance. We hardly even mention the ludicrously high thresholds on estate taxes and all the other tax-avoidance tricks that perpetuate generational inequality.

In a perfect world, no one would go hungry, be homeless, or go without medical care. There's a reason we don't live in that world, and it's not because of a tiny handful of FIRE folk signing up for programs they technically qualify for but don't strictly need. It's because we (collectively, as voters) don't make it a priority.

If enough of us demanded it, the government could pass a law ending hunger and child poverty tomorrow (we basically did, during the pandemic, and then allowed it to expire).

Maybe someday, that will happen. In the meantime, I don't think there's any harm in taking what the law says you're entitled to have.

I mean, it's like the Pandemic EBT.  My friends and I were weirded out about it.  I think the 1st cards we got for our two kids totaled over $1000.  So, I used them, and donated $1000 to the food bank.

Here we are a few years later...we've gotten 4 EBT cards for each kid, and some Pandemic state or federal tax thingy card - a debit card with $1600 on it.  Long ago I just said "fuck it" and now I spend it.  They send the cards, I activate them, and I buy groceries with them.  Our income this year is gonna be prob right at $400k, if not a bit more.  If you don't want me to have the money, stop sending it to me.

[dividendman]

Billionaires use tax law, including real estate depreciation, carried interest provisions, corporate bankruptcy laws, offshoring (including moving corporate HQs, moving where income is "made" etc.), inflating asset prices, special tax provisions for various industries etc. (not to mention buying politicians and making new laws to benefit themselves - all legal) and that's A-OK.

A millionaire actually qualifies for some government assistance - within the law -  and index wants to call out the pitchforks due to the "burden" this is causing on society since they retired early. Gimme a break.

This sounds a lot like two wrongs makes a right. Its easy to point fingers and say - "the group over there is the problem." Sure there are billionaires who take advantage of tax schemes not available to the rest of us. There are 735 billionaires in the US meaning there are about 60x more members on this forum than billionaires and I think they get more than their fair share of finger pointing. Taking advantage of the tax system is a universal problem that should be called out. Hell, probably the biggest tax loophole I've seen that is exploited by the upper middle and upper class is using a hobby farm for farm subsidies - you can depreciate your 100k F150 lightning, barn, and claim any maintenance as a deduction against your non-farm related income as long as you have 5+ acres and a good accountant.

The billionaire over there, the engineer/nurse couple with a hobby farm and tax break, and the early retiree manipulating their income to qualify for subsidies and aid are all part of the problem. I heard Mitch McConnel say once the US shouldn't stop burning coal because China wasn't going to stop. It kind of sounds the same as I'm going to apply for SNAP to get:

Well SNAP gets you other benefits and these can add up.  For example in my area the electric company will give you $40 a month off your electric bill if you have SNAP.  Amazon Prime is 50% off.  Automatic qualification for the Affordable Connectivity Program, $30 a month for Internet service.  A Lifeline cell phone.  Home Weatherization assistance.  LIHEAP for home heating costs.  Discounted admission to many museums.  You can get double up SNAP bucks through select Farmer's Markets, $23 becomes $46.  If you have children they qualify for free school meals.

because XYZ billionaire is taking accelerated depreciation.

I guess my point is these aren't "wrongs". We have to play by the rules that are in place, not the ones we wish existed.

I have a 2.5M Roth IRA and a 100k conversion ladder. Should I apply for SNAP and Medicade from ages 55-59 as I will have a MAGI of $0? I can probably get a free phone, $15 internet, 50% off my utilities and Amazon Prime. I should probably get my HVAC replaced too and take advantage of the IRA subsidies to get a free heat pump. I'll also qualify for a $40k 20/yr @1% loan loan to improve and modernize my home - new kitchen in the vacation home!

Yes.

[Ron Scott]

I mean, it's like the Pandemic EBT.  My friends and I were weirded out about it.  I think the 1st cards we got for our two kids totaled over $1000.  So, I used them, and donated $1000 to the food bank.

Here we are a few years later...we've gotten 4 EBT cards for each kid, and some Pandemic state or federal tax thingy card - a debit card with $1600 on it.  Long ago I just said "fuck it" and now I spend it.  They send the cards, I activate them, and I buy groceries with them.  Our income this year is gonna be prob right at $400k, if not a bit more.  If you don't want me to have the money, stop sending it to me.

As obnoxious as today’s GOP can be, they seem to be right that the government is, at its core, stunningly incompetent.

I remember my mother (lifelong Dem) getting her Trump and Biden pandemic checks; asking me why they thought she needed the money since she spends about $80k a year and doesn’t lack; and proclaiming for the millionth time that the smart ones go into business while the dopes work for the government.

Similar in its ability to elicit eye rolls and shaking of heads is the constant Dem/Biden refrain about protecting those who make less than $400,000 from any federal tax increases (they’re the bottom 98.2% FWIW). 

Do these politicians have any idea what it’s like to actually listen to them in America these days.

GOP and Dems, LOL: Dumb and Dumber.

[jim555]

Just want to point out some other benefits of the sub 200% FPL income range at least in NY.  NY has $0 a month health plans for 200% FPL or lower called the Essential Plan.  NY is currently working on creating a $15 a month Essential Plan in the 200% FPL ($29,160) to 250% FPL ($36,450) range, the fine details are being worked out now, it was signed into law.  For those in the Medicare zone, the QI program pays for Part B premiums with income under 186% FPL ($27,118).  The NY QMB program was recently extended to match the 138% FPL level of MAGI Medicaid.  QMB pays for all Medicare out of pockets so no need for a Medicare supplement policy.  Having QI and QMB will also get you the Social Security Extra Help Part D low income subsidy.

[Sanitary Stache]

I have a 2.5M Roth IRA and a 100k conversion ladder. Should I apply for SNAP and Medicade from ages 55-59 as I will have a MAGI of $0? I can probably get a free phone, $15 internet, 50% off my utilities and Amazon Prime. I should probably get my HVAC replaced too and take advantage of the IRA subsidies to get a free heat pump. I'll also qualify for a $40k 20/yr @1% loan loan to improve and modernize my home - new kitchen in the vacation home!

Yes.

This is a clarifying hypothetical and I totally agree with dividendman. Where would you get the 1% loan a vacation home?

[cincystache]

It is such a gray area that @index is trying to make black and white. If you play within the rules I don't see a problem applying for assistance you are eligible for, especially if it does not prevent those less fortunate from applying for the same benefits. That extra benefit could give someone the breathing room to escape a toxic work environment or go do work (or volunteer for a cause) they care about instead of making big $ in a job they hate or that isn't providing any societal value (other than helping shareholder get richer). 

I see no problem with someone in their 40s or 50s leaving paid work with 75% of their FIRE goal and going on gov assistance to close that gap so they can afford to spend time with their aging parents, kids growing up too fast etc. There are plenty of gray areas where gov assistance can be for people that aren't on the brink of death. If a couple hundred dollars a month in assistance meant that one parent could stay home and spend time building a relationship with their children so they know they are loved and cared for that is worth more than an extra 50k in mom or dad's IRA account. Maybe 10 years later, that same parent re-enters the workforce refreshed and ready to contribute monetarily again. It shouldn't be all or nothing.

Society would be better off IMO if we helped people in more income classes than just the very top (with tax breaks and loopholes) and bottom (with welfare and a culture of stigmatizing anyone that takes benefits who isn't on the brink of disaster).

Have a heart for people who are slightly less fortunate than you, not just the ones who are extremely less fortunate than you.

[mm1970]

I mean, it's like the Pandemic EBT.  My friends and I were weirded out about it.  I think the 1st cards we got for our two kids totaled over $1000.  So, I used them, and donated $1000 to the food bank.

Here we are a few years later...we've gotten 4 EBT cards for each kid, and some Pandemic state or federal tax thingy card - a debit card with $1600 on it.  Long ago I just said "fuck it" and now I spend it.  They send the cards, I activate them, and I buy groceries with them.  Our income this year is gonna be prob right at $400k, if not a bit more.  If you don't want me to have the money, stop sending it to me.

As obnoxious as today’s GOP can be, they seem to be right that the government is, at its core, stunningly incompetent.

I remember my mother (lifelong Dem) getting her Trump and Biden pandemic checks; asking me why they thought she needed the money since she spends about $80k a year and doesn’t lack; and proclaiming for the millionth time that the smart ones go into business while the dopes work for the government.

Similar in its ability to elicit eye rolls and shaking of heads is the constant Dem/Biden refrain about protecting those who make less than $400,000 from any federal tax increases (they’re the bottom 98.2% FWIW). 

Do these politicians have any idea what it’s like to actually listen to them in America these days.

GOP and Dems, LOL: Dumb and Dumber.

Is it though? I'd imagine in this case that it's far easier and cheaper to just send a card to every kid in a particular school than it is to spend the time, money and manpower to figure out who needs it.

[jim555]

I doubt those who grandstand here that you "should be ashamed to take benefits" crowd sent back the $1,400 checks.  They are certainly taking Medicare and Social Security, if they are consistent they should self fund as these are just welfare programs for old people.  Any "earnings record" is a mere political fiction since inflows and outflows are politically determined and don't flow from a contractually designed business scheme.

You are not morally above anyone, you are just making bad planning decisions that will hurt you.

[Dicey]

I doubt those who grandstand here that you "should be ashamed to take benefits" crowd sent back the $1,400 checks.  They are certainly taking Medicare and Social Security, if they are consistent they should self fund as these are just welfare programs for old people.  Any "earnings record" is a mere political fiction since inflows and outflows are politically determined and don't flow from a contractually designed business scheme.

You are not morally above anyone, you are just making bad planning decisions that will hurt you.

Not arguing your general point, but you are dead wrong about Medicare and Social Security. Working people pay for those with every paycheck. These benefits  require a minimum of 40 quarters of contributions to qualify. There's no practical way to opt out of it. That's not welfare. If SS gave me the option of a tax break vs. a monthly check, I'd take it in a heartbeat.

During the pandemin, we only received one check from the Feds and one from our state. We donated the money to the Food Bank. We also never bothered to look into why we didn't receive any more checks (if there were income limits, we certainly fell below them). Not quite the same as refusing the checks, but has the same effect

IMO, there's a distinction to be made in this discussion. Working within the system is fine. Gaming the system becomes problematic. Example: DH and all his fellow retirees all collect a sweet Defined Benefits Pension. A retiree he knows hired a lawyer to press a disability claim after he retired and now collects his DBF and disability. Not sure how he managed to pull that off, but from an outsider's perspective, it sure seems like gaming the system.

[spartana]

I doubt those who grandstand here that you "should be ashamed to take benefits" crowd sent back the $1,400 checks.  They are certainly taking Medicare and Social Security, if they are consistent they should self fund as these are just welfare programs for old people.  Any "earnings record" is a mere political fiction since inflows and outflows are politically determined and don't flow from a contractually designed business scheme.

You are not morally above anyone, you are just making bad planning decisions that will hurt you.

Not arguing your general point, but you are dead wrong about Medicare and Social Security. Working people pay for those with every paycheck. These benefits  require a minimum of 40 quarters of contributions to qualify. There's no practical way to opt out of it. That's not welfare. If SS gave me the option of a tax break vs. a monthly check, I'd take it in a heartbeat.

During the pandemin, we only received one check from the Feds and one from our state. We donated the money to the Food Bank. We also never bothered to look into why we didn't receive any more checks (if there were income limits, we certainly fell below them). Not quite the same as refusing the checks, but has the same effect

IMO, there's a distinction to be made in this discussion. Working within the system is fine. Gaming the system becomes problematic. Example: DH and all his fellow retirees all collect a sweet Defined Benefits Pension. A retiree he knows hired a lawyer to press a disability claim after he retired and now collects his DBF and disability. Not sure how he managed to pull that off, but from an outsider's perspective, it sure seems like gaming the system.

This! SS and Medicare are earned benefits in the same way that a pension (private or government) you've payed into would be. You don't get it unless you've paid into those programs (or via a long marriage). I use the VA hospital for my mostly free healthcare and consider that an earned benefit based on my military service (and incurring a service connected disability) and I would not be entitled to that unless I served. The other programs (all of which I would be entitled to based on my income) I've chosen not to use myself as personally it doesn't feel right to me as a very early retiree who didn't have any costly or on going situations I couldn't easily fund myself. . However I'm not going to judge someone on taking any of the programs they qualify for. I sure would use the ACA if I didn't have access to the VA. However I did account for self funding my health insurance if needed pre-FIRE.

While I would like to see more qualifiers for various programs to eliminate  high income earners or those with high NW (not counting homes) I do understand it cost much more to do that then just to give the benefit to the few who wouldn't qualify if total income and assets were counted. 

[dividendman]

While I would like to see more qualifiers for various programs to eliminate  high income earners or those with high NW (not counting homes) I do understand it cost much more to do that then just to give the benefit to the few who wouldn't qualify if total income and assets were counted.

And that's the problem. Everyone wants their little carve out to be "moral" and not "'gaming" the system. So, not counting homes, as long as I take my $10M equity portfolio and buy some massive house I should qualify for SNAP because although I have high NW, it's all in the house!

So then I can happily take out lines of credit on my house and use those to live on.

There is no difference between modifying income for tax avoidance (like 401ks, tax loss harvesting, etc. - all smart) and modifying income to receive benefits (ACA subsidies and others - also smart).

The real way to resolve any issues of perceived gaming is to change the law.

But, in the meantime we can all pontificate on how the mortgage interest deduction and social security is moral and getting ACA subsidies (or whatever) by reducing income isn't.

[spartana]

While I would like to see more qualifiers for various programs to eliminate  high income earners or those with high NW (not counting homes) I do understand it cost much more to do that then just to give the benefit to the few who wouldn't qualify if total income and assets were counted.

And that's the problem. Everyone wants their little carve out to be "moral" and not "'gaming" the system. So, not counting homes, as long as I take my $10M equity portfolio and buy some massive house I should qualify for SNAP because although I have high NW, it's all in the house!

So then I can happily take out lines of credit on my house and use those to live on.

There is no difference between modifying income for tax avoidance (like 401ks, tax loss harvesting, etc. - all smart) and modifying income to receive benefits (ACA subsidies and others - also smart).

But, in the meantime we can all pontificate on how the mortgage interest deduction and social security is moral and getting ACA subsidies (or whatever) by reducing income isn't.

Well based on most asset tests a home, a vehicle (if needed) and x amount of dollars are generally allowed (although second homes, cars etc aren't and are counted). But yeah it's difficult. On one hand you have poor grandma living in the tiny run down house she bought for $20k in the 1960s thats now worth a million and drives a 30 year old Yugo and she is subsisting on rice and beans she can barely afford who may not be able to sell or move. Verses some 60 year old who buys a multimillion dollar new home and a $500k McClaren with all his other assets sheltered. Hard to tell the difference if their incomes look the same.

So do you count granny's house as an asset? Do you force granny to move so she can get a few buck for needed food or reduced expenses? Maybe she has loans on the house to pay medical expenses.  Do you force the other rich person to count their home? Do you force them to sell and move as part of liquidating their assets to qualify for some benefits? I certainly don't know the answer but I think if their were some kind if asset test fewer people who are "rich" wouldn't bother to sign up for the programs.

ETA: I know a 60 year FIREee who has tons of money in 401ks, tIRAs plus around $100k in bank CDs. She has a small pension of around $600/month and lives off that us her bank accts and some minimal work. She keeps her monthly earning under $1400. She is on Medicaid, EBT (food stamps), ACP, lifeline cell, and was just issued a section 8 housing voucher. All because she doesn't have to state her financial assets of close to a million - just her income. She could easily tap into her 401k and IRA or just live off savings until she reaches SS age. But she take what she can because it's set up that way. Im not judging her - others in her situation might not have it as easy - but if it some of those programs counted her financial assets she'd likely not qualify for some things.

[jim555]

CA is going the other way, next year asset tests are being removed for non-MAGI Medicaid.  Another opportunity for skillful planners.

[spartana]

CA is going the other way, next year asset tests are being removed for non-MAGI Medicaid.  Another opportunity for skillful planners.

I still think they plan to keep the rule of repaying any costs for care the state covered from your estate. But not sure. I'm in Calif and as a single childless person I plan to spend down my assets to cover any future medical/nursing home costs. Once that's gone I guess Medicaid will kick in.

[jim555]

CA is going the other way, next year asset tests are being removed for non-MAGI Medicaid.  Another opportunity for skillful planners.

I still think they plan to keep the rule of repaying any costs for care the state covered from your estate. But not sure. I'm in Calif and as a single childless person I plan to spend down my assets to cover any future medical/nursing home costs. Once that's gone I guess Medicaid will kick in.

They will try to recover from the estate after death.

[Sanitary Stache]

Asset tests are demoralizing and actively hurt people instead of helping. Think of someone who is able to build up a tiny handful of assets like a car or a house or a savings account only to see the benefits that gave them the room to save disappear and all those assets be used up until they are eligible for the assistance again.  how many times could a person ride that train?

The handful of near millionaires who choose to live on a low income and qualify for low income benefits in states with no asset tests aren’t a problem. They are following the rules and their states have recognized that the long term protection of wealth for small holders is just as important as the protection of wealth for the corporations and people (or are they the same thing?) at the very top.

One thing I have learned from this forum and from the 4% rule is that 1 million in invested assets is a small holding. A reasonably secure income and a lofty goal, but ultimately it is an amount that everyone should have (at least the $40,000 in 30 year income part) and is not an amount that should come with shame for taking advantage of government assistance to increase security and quality of life.

[Louise]

Asset tests are demoralizing and actively hurt people instead of helping. Think of someone who is able to build up a tiny handful of assets like a car or a house or a savings account only to see the benefits that gave them the room to save disappear and all those assets be used up until they are eligible for the assistance again.  how many times could a person ride that train?

The handful of near millionaires who choose to live on a low income and qualify for low income benefits in states with no asset tests aren’t a problem. They are following the rules and their states have recognized that the long term protection of wealth for small holders is just as important as the protection of wealth for the corporations and people (or are they the same thing?) at the very top.

One thing I have learned from this forum and from the 4% rule is that 1 million in invested assets is a small holding. A reasonably secure income and a lofty goal, but ultimately it is an amount that everyone should have (at least the $40,000 in 30 year income part) and is not an amount that should come with shame for taking advantage of government assistance to increase security and quality of life.

I agree about asset tests, especially for the average (SNAP, SSI, etc.) recipient. Where's the incentive to improve your situation? I also feel the same way about hard income cliffs. For instance, my state just introduced free state college tuition for those households making less than 80K, but that 80K is the absolute limit. It's stupid to think that a household making 79K gets a 15K/yr. benefit, but the household making 81K gets nothing.