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Old 06-28-2019, 07:10 AM
 
1,738 posts, read 623,095 times
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The reason why I want to convert my entire SEP IRA to Roth now (at the age of 59 to 61), even while getting into the 24% bracket, rather than spread over 10 years trying to somehow stay in the 12% bracket, is: (1) the dividends that Roth earns over 10 years are not taxable, ever, and even if my mutual funds in the IRA don't do very well, their value will surely increase over 24% in 10 years, to more than compensate for the tax. (2) tax brackets may (and likely will) change unfavorably in the future - it makes sense to me to deal with Roth conversion while a relatively large chunk of money can be converted with taxes still under 25% for all of it, and (3) I want to get the Roth conversion over with as soon as possible (I actually don't particularly like dealing with money or thinking about it).
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Old 06-28-2019, 01:43 PM
 
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I don't have the cash to do such conversions, so no I don't think it would make any difference for me. ( I have emergency fund cash - but I'd never use that to pay for conversions.)
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Old 06-28-2019, 08:18 PM
 
1,738 posts, read 623,095 times
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Quote:
Originally Posted by ChessieMom View Post
I don't have the cash to do such conversions, so no I don't think it would make any difference for me. ( I have emergency fund cash - but I'd never use that to pay for conversions.)

I don't know much about investing, and generally try to avoid doing things I don't know how to do (such as investing). My retirement is largely based on progressively increasing layers of annuities, but I do have an IRA in mutual funds managed by T.Rowe Price. Since I do not need any more annuities, and have some savings beyond what I need for emergencies, and am not going to be investing these savings into anything, the best use for these savings for me is to pay taxes on Roth conversion. If the money grows tax-free inside Roth by about 4% per year, that growth will replace the tax paid on Roth conversion in about 5 years.
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