Planning for Early Retirement Healthcare with Pensions.
My wife (41) and I (44) are both enrolled in a state pension plan. The goal is to retire in 16 years. I'm trying to figure out the best way to invest to help cover the years between retirement and Medicare kicking in.
Current situation:
~120k in a Roth IRA (mine, not maxed out yearly)
~110k in a 403b (wife's, same)
~65k in a traditional brokerage account
-Paid off house, 75k mortgage on a rental condo (comp sales around 250k), no other debts.
The pension website estimate shows around 81k/ year in today's dollars for both combined (100% joint life). There is a COLA, though it tends to not always keep up with inflation perfectly. That's just below the ACA subsidy cliff from what I can tell. SSA estimate is another 60k assuming we take at the same time (62 and 65).
I've learned that my wife's 403b has recently added a Roth option. My thought was to change all the future traditional 403b contributions into Roth, on the idea that pulling from it will not affect our reported income if healthcare subsidy income cliffs still exist in 16 years. Ideally we wouldn't need to pull from this Roth before SS kicks in, so it could also be a hedge against higher future tax rates (we'll likely live in 22% before and after retirement), a Widow's penalty, or inheritance for the kids.
Are there any thoughts on this? Am I missing something obvious? I don't need things to be perfectly optimized, just "good plan for 16 years of potential changes".