AUTHOR: Randy Dobkin on 7/18/2024 FIRST: baldscreen on 7/18/2024 | RECENT: Mark Eckman on 7/20/2024
Comments
Thanks Rick, so far I've been less than impressed with Boldin's Roth conversion planning, but hopefully it's been improved since I last tried, or soon will be.
Rick, thanks for prodding me to make copies of my tax calculation spreadsheet for significant years later in retirement. My 2040 copy captures my wife starting RMDs, one year after I do, and it shows us "graduating" to the 22% bracket. So I may need to rethink our Roth conversions. So far I've been doing the no-brainer converting up to the top of the 12% bracket. But I'm going to analyze whether bringing down the RMD by converting past the 12% bracket would bring us back down to 12% in 2040.
No, Rick's Roth conversion is likely all in the 12% marginal rate (unless it pushes some long term capital gains and/or qualified dividends into the 15% bracket, in which case the marginal rate would be 27%). Those are the last dollars being taxed. The conversion comes out ahead if the marginal rate at withdrawal is greater than the rate at conversion. The effective tax rate isn't useful for this type of tax planning.
You have an oxymoron (maximum required minimum distribution). I think you mean maximum distribution. Good strategy--I'm doing this for my mother-in-law.
Comments
Thanks Rick, so far I've been less than impressed with Boldin's Roth conversion planning, but hopefully it's been improved since I last tried, or soon will be.
Post: Traditional or Roth
Link to comment from August 31, 2026
Rick, thanks for prodding me to make copies of my tax calculation spreadsheet for significant years later in retirement. My 2040 copy captures my wife starting RMDs, one year after I do, and it shows us "graduating" to the 22% bracket. So I may need to rethink our Roth conversions. So far I've been doing the no-brainer converting up to the top of the 12% bracket. But I'm going to analyze whether bringing down the RMD by converting past the 12% bracket would bring us back down to 12% in 2040.
Post: Traditional or Roth
Link to comment from August 31, 2026
I'm not so sure anymore, now that Treasury is barring some journalists from the G20 finance meeting. WTF?
Post: Inflation Hedge
Link to comment from August 30, 2026
No, Rick's Roth conversion is likely all in the 12% marginal rate (unless it pushes some long term capital gains and/or qualified dividends into the 15% bracket, in which case the marginal rate would be 27%). Those are the last dollars being taxed. The conversion comes out ahead if the marginal rate at withdrawal is greater than the rate at conversion. The effective tax rate isn't useful for this type of tax planning.
Post: Traditional or Roth
Link to comment from August 30, 2026
Or 3.14% compounded.
Post: $40 Trillion of Debt
Link to comment from August 23, 2026
This way that extra distribution above the RMD will be tax-free to her heirs instead of taxed as ordinary income.
Post: If Retirement is Getting Close
Link to comment from August 22, 2026
You have an oxymoron (maximum required minimum distribution). I think you mean maximum distribution. Good strategy--I'm doing this for my mother-in-law.
Post: If Retirement is Getting Close
Link to comment from August 22, 2026
I would think most TIPS ladder investors are holding each TIPS to maturity, making volatility irrelevant.
Post: Feeling TIPSy?
Link to comment from August 22, 2026
No, you don't buy bonds if you think interest rates are going up. You buy them after interest rates have gone up.
Post: Federal debt
Link to comment from August 20, 2026
Of course it is
Post: Income taxes on retirees with Social Security
Link to comment from August 17, 2026