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Old 10-28-2017, 08:24 PM
 
6,884 posts, read 7,281,254 times
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-- If you have 500K or more in a Trad IRA -- what's the smallest amount you would think is worth converting from the Trad IRA to a Roth IRA?
100K or less, worth doing?

(IF brackets were to remain the same)
I'm in the 15% tax bracket now, and will likely be in the 25% bracket once RMD's kick in.

Would you 'convert' some money -- even if you could only convert about 100k say between the ages of 60 and 70?

1) I'm only 57 now, so who even knows what brackets might be in 10 years (but that's why we try to plan, right?)
2) Between 60 and 70, I'll only have about a 10K leeway to top off my 15% bracket.

Worth doing?

Or if I can only move about 100K, just leave in the Trad IRA. (and keep life simple in the mean time)

Thanks
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Old 10-28-2017, 08:40 PM
 
Location: MMU->ABE->ATL->ASH
9,127 posts, read 17,141,418 times
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I would covert as much as you can now up to the top of your 15% bracket. Each year for as long as you can.
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Old 10-28-2017, 08:48 PM
 
Location: Florida
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Up to 15%. Yes
Ok for some 25%.
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Old 10-28-2017, 09:00 PM
 
Location: Florida -
8,764 posts, read 10,843,052 times
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Quote:
Originally Posted by flyonpa View Post
I would covert as much as you can now up to the top of your 15% bracket. Each year for as long as you can.
Many suggest this as a good way to reduce your eventual RMD's at 70-1/2. It makes sense and looking back, I wonder if I should have followed the approach --- although a 15-percent bracket has never been an option.
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Old 10-29-2017, 07:38 AM
 
Location: South Jersey
69 posts, read 52,216 times
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I am converting for the next 5 years (while I'm in the 15% tax bracket) and plan to use the Roth money as an emergency fund, rather than have to take it out of my tIRA as income. It should also reduce RMDs when I have to start taking them.
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Old 10-29-2017, 11:06 AM
 
Location: NYC
2,910 posts, read 1,588,036 times
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Unless I'm figuring wrong or everyone else here is living an extremely low cost lifestyle, I need the max 15% draw from an IRA just to be able to live modestly for a year & that's with no healthcare issues yet. Any Roth conversion would immediately push me to 25% bracket.
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Old 10-29-2017, 11:14 AM
 
71,568 posts, read 71,730,589 times
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That has always been our problem living in a high cost of living area .
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Old 10-29-2017, 12:41 PM
 
Location: Saint Johns, FL
1,192 posts, read 942,423 times
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Quote:
Originally Posted by selhars View Post
-- If you have 500K or more in a Trad IRA -- what's the smallest amount you would think is worth converting from the Trad IRA to a Roth IRA?
100K or less, worth doing?

(IF brackets were to remain the same)
I'm in the 15% tax bracket now, and will likely be in the 25% bracket once RMD's kick in.

Would you 'convert' some money -- even if you could only convert about 100k say between the ages of 60 and 70?

1) I'm only 57 now, so who even knows what brackets might be in 10 years (but that's why we try to plan, right?)
2) Between 60 and 70, I'll only have about a 10K leeway to top off my 15% bracket.

Worth doing?

Or if I can only move about 100K, just leave in the Trad IRA. (and keep life simple in the mean time)

Thanks
Absolutely worth doing.
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Old 10-29-2017, 12:44 PM
 
Location: Atlanta
110 posts, read 50,259 times
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Shouldn't the amount of social security that will be taxed be taken into consideration if doing the Roth conversions?
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Old 10-29-2017, 12:47 PM
 
10,060 posts, read 4,662,763 times
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Quote:
Originally Posted by Hefe View Post
Unless I'm figuring wrong or everyone else here is living an extremely low cost lifestyle, I need the max 15% draw from an IRA just to be able to live modestly for a year & that's with no healthcare issues yet. Any Roth conversion would immediately push me to 25% bracket.
Did you earn the money while in the 25% bracket? It wouldn't matter if you paid into that bracket now since the math isn't different.

If you earned it while in the 15% bracket, why were you putting it into traditional while in a low bracket to start with?
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