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I’ve been doing a lot of reading on Roth conversions lately, and I’m seriously considering pulling the trigger on one this year. But before I make any moves, I wanted to get some feedback from those of you who have been through the process.
A little background: I’m in my mid-50s, still working, and in a relatively high tax bracket. I have a mix of retirement accounts – mostly in a traditional IRA and a 401(k). I also have some cash on hand to cover the tax hit if I go through with the conversion. My thinking is that tax rates could go up in the future, and I like the idea of locking in my tax bill now instead of worrying about it in retirement.
I’m looking for a financial advisor to help with this. I found one near me that people praised on reddit. They seem to cover mega backdoor roth conversions but I wanted to get some other points of reference first. I’ve also read this article on Roth conversions but I had some additional questions I’ve been mulling over:
I’d love to hear from folks who’ve done a Roth conversion – either all at once or in stages over time. Was it worth it in hindsight? Anything you wish you had done differently?
When converting, IRMAA limits are certainly one thing to consider when deciding how much to convert within a given tax year. I may have missed it here and elsewhere, but I don’t recall anyone mentioning the potential for the 3.8% NIIT kicking in at higher MAGI levels, $250,000 if MFJ for example. Am I incorrect that the NIIT would apply here should your conversions cause your total income hits the cliff?
My understanding is income from qualified plan distributions, including Roth conversions from a traditional IRA (which are taxed like plan distributions) are not subject to the NIIT. However, conversion income does count as part of your overall taxable income in determining if you are above the NIIT threshold ($250K MFJ, $200K single, $125K MFS). Also note that under current law the NIIT threshold amounts are not adjusted for inflation. So a Roth conversion can result in you being subject to the NIIT if you have other income of the type subject to NIIT (interest, dividends, etc.) and your Roth conversion pushes your AGI above the threshold amount for your filing status, but the actual Roth conversion income is not subject to the NIIT.
See Part III of IRS form 8960 and the related instructions for more detail.
I hope this helps.
Best, Bill
Thank you, Bill and Michael, for your responses. Indeed, the either/or/and scenario of the NIIT threshold for total income and realized investment earnings makes this interesting. It’s somewhat like watching out for the IRMAA limits two years out. We can estimate what they might be but as you mention, Michael, best to stay a few feet back from the edge even using this years current limits as a “worst case” scenario. Have a great day!
My earlier quick confirmation was all I had time for. I should have just waited for Bill to give this thorough answer.
Here’s an additional thought. Unless you’re really confident in what your total MAGI is going to be, an alternative is to target just under $230k, the 2024 income limit to be able to contribute to a Roth (married filing jointly). This way, if you’re a bit off and end up with higher MAGI than expected, you haven’t impacted NIIT. If you’re correct and see after completing your return that you stayed under $230k, you can still make a Roth contribution(s), assuming you had earned income.
You’re right, that’s another factor to consider.
I am married and a super saver. For me there are 3 reasons I make Roth conversions:
1. When RMDs kick in my retirement income will exceed my working income.
2. If one of us is a survivor they will pay tax based on a single filer using significantly higher tax rates.
3. Roth conversions reduce the overall portfolio withdrawal rate driven by RMDs increasing the probability of portfolio survival.
For me the benefits of Roth conversion are so overwhelming I don’t consider future changes in tax rates or worry about IRMAAs. Each year I do a Roth conversion up to the point my tax liability is reasonably affordable. I take an additional distribution to pay the additional tax.
Another Roth information source is the 2/29/2024 Bogleheads on Investing podcast where Rick Ferri interviews tax attorney Kaye Thomas. Mr. Thomas authored a book titled Go Roth which he updated through 6/30/2023 in his 2023 book. This 6th edition, except for 2024 and future year inflation factors, seems relevant to current Roth decision making. Of course tax laws can and do change.
You can find the podcast here-
https://podcasts.apple.com/us/podcast/episode-67-kaye-thomas-on-income-taxes-and-how-to/id1436401528?i=1000645884945
I have bought the Go Roth book and I am about half way through reading. Mr. Thomas writes in an reader enjoyable non technical style while providing useful information that I have already made use of. I recommend both the podcast and the book.
Best, Bill
thank you all. I’ll explore more with these feedback
I think your third question reflects a common misconception. The Roth IRA doesn’t have to grow enough to “catch up” because of the tax paid on the conversion; in fact, as long as the money withdrawn from the traditional IRA would be taxed at the same rate now with a Roth conversion, as it would be later without the conversion (i.e., no tax arbitrage), the Roth conversion will be ahead of not converting and that advantage will grow larger over time. That is true no matter how long a time interval between the conversion and withdrawal. This becomes clearer if you think of a traditional IRA as having two sub-accounts: one is your money, the other is the government’s (which it will claim when you withdraw both from the IRA).
Scenario 1 (Roth conversion now): Assume your share of the traditional IRA is amount A now and the government’s account is amount B. You convert both A+B to a Roth now, and pay the tax due with amount B(taxable) (equal to B but in your taxable account). A and B BOTH grow tax sheltered within the Roth IRA, say with a value after y years of n times the current amount. After y years, your tax-sheltered Roth account will grow to n(A+B) and you withdraw it and get to put it in your taxable account. You end up with n(A+B) in your taxable account.
Scenario 2 (no conversion): If you do not do a conversion now, A and B are in your tax-sheltered traditional IRA. You also start with amount B(taxable) in your taxable account, because you don’t need to send it to the government because you did not do a conversion. After y years A and B grow tax-sheltered within the traditional IRA to become nA and nB. You withdraw nA and nB, you put nA in your taxable account, and the government gets nB. But you also get to keep what B(taxable) grew to over the years. If you assume it grew to nB(taxable), then you end up with nA + nB(taxable) in your taxable account. If nB = nB(taxable), then it’s a wash: you end up with n(A+B) either way. But nB does NOT equal nB(taxable): nB(taxable) is less because it grew in a taxable account, not a tax-sheltered account. So you end up with less than nA + nB. The tax drag on B(taxable) is significant and increases over longer periods of time.
So the misconception that the Roth conversion has to “catch up” because of the tax paid on the conversion has it backward: the Roth IRA conversion is ahead over any time period (all other things being equal, of course). What a Roth IRA conversion does in effect is to move the money you use to pay tax on the conversion from the taxable account into the Roth account. That’s a good thing.
But the future is unpredictable, and all other things will never be equal. There are many other factors that can have an important influence on the decision. See the White Coat Investor’s take this week at:
https://www.whitecoatinvestor.com/roth-contribution-or-conversion/?utm_source=convertkit&utm_medium=email&utm_campaign=The%20White%20Coat%20Investor%20%E2%80%93%20Investing%20&%20Personal%20Finance%20for%20Doctors%20-%2016878320
I’ve read a few of the most recent posts. Lots of good advice. I have been doing Roth conversions for the last 5 years trying to minimize impact on IRMAA surcharges. First, I have sufficient income without taking RMDs. My intent is to reduce RMDs from my traditional IRA as one benefit of Roths is that you do not have to take RMDs. I am hoping that my children will benefit when they are drawing down my Roths without paying taxes. Don’t know your circumstances, so this might not apply. BTW, there is no bad advice in any posts. It’s all about preference and comfort. Best of luck to you.
“I am hoping that my children will benefit when they are drawing down my Roths without paying taxes.”
If you have a letter of instruction you might want to add the advice not to withdraw the money until the end of year ten. Unless the tax laws change they can receive another 10 years of tax free returns.
Lots of good questions! Definitely move out of California first ;-).
My experience is that people who are accumulating, including in IRAs, will likely pay higher taxes than they anticipate in retirement, so for the ones who can convert, converting to Roth sooner than later is likely better.
This also seems to remain true no matter how long we delay.
The one exception I ran into was a couple with no heirs, who plan to leave their money to charities. Since the charities will not incur taxes, I can’t figure out why they should convert rather than just take the RMD’s, and of course, they should probably make their RMD’s charitable contributions once they reach the allowable age for that.
BTW, I’m getting the “IRMAA” surcharges now, and they don’t seem like a big deal. There were a few other benefits I got earlier that I also should have forgone in order to do more converting sooner.
And for an inherited IRA, that’s not a conversion–just a switch to taxable investing with its lower taxes on capital gains and dividends instead of the higher rates on eventual IRA withdrawals. But it’s still usually a good idea if it applies.
Of course, you could just hold out for lower tax rates as well as down markets….Inflation? Spendflation? Don’t worry, be happy.
You have a good framework for decision making. The central issue, IMHO, is your third point. You need to be comfortable that you will do far better than just break even, however. You need to have a gut level confidence that your Roth will allow you to do much better than your current situation. The longer you wait, the less the math works, and the probabilities rise that your Roth may not catch up. You can plug in whatever you think is appropriate to calculate after-tax returns, but don’t ignore either inflation or the concepts of “present value”.
I will only comment on two other points. First, even though IRMAA feels unfair and can cause a financial bump, it should not be material to this analysis. Second, market timing will give you a great bump. If we hit a pothole in the market in 2025, you should take advantage of it. I am a great believer that markets will always come back, and eventually will recover all the ground that has been lost. If you convert during a downturn, your Roth will shine in the years that follow.
Good luck.
“I’d love to hear from folks who’ve done a Roth conversion…”
I retired at age 60 with 50% of tax-deferred in TIRA and 50% in Roth. I’ve done conversions every year for last 19 years and accounts are now with 90% in Roth and 10% in TIRA. My plan is to stop doing conversions when I have about 5% in TIRA and continue doing QCD’s to things I care about. The Roth accounts will be inherited by my two daughters after my wife and I both die so it is 100% equities. Each year I calculate the amount to convert by doing a dummy tax return and convert up to IRMMA limit. It has worked for me and the amount of time it takes to calculate the conversion gets easier with practice. I’ve helped others go through the process.
Remember to take into account: You must withdraw RMD before you can do the conversion and don’t pay the extra taxes from the converted amount or you’ve defeated the purpose but you can pay taxes from the RMD. Good luck and it’s good that you are formulating a future plan. I wouldn’t try to time the market in making the conversions. I just do mine in November when my tax situation starts to become clearer.
To clarify, you can use your cash (or from RMD) but don’t use TIRA to pay taxes for the conversion. Right?
I am not in the RMD phase, but want to understand “you can do the conversion and don’t pay the extra taxes.” Could you please clarify? I would think one would pay from his cash the taxes for the conversion and not from the TIRA. Is that what you mean?
Now that we are retired, at the direction of our financial planner (Thank you for guiding us for the last 15 years), we’ve started Roth conversions in coordination with funding our DAF. We’re planning to closely manage the benefits of Roth Conversions, funding our Donor Advised Fund – every other year to maximize the benefits of Itemized Deductions vs Standard Deduction and enjoy our grandkids! As others have shared, QCDs will be used to cover part of our RMDs when that time arrives. How you prioritize your legacy and future gifting may influence how aggressive you may want to convert to Roths.
Harry Sit, a fee-only advisor, has a nice blog post on how to run specific simulations on tax torpedo and IRMAA for your specific situation to help decide how much to convert and its consequences.
The financial planning software I use, Maxifi, also models Roth conversions taking into account the myriad of factors that affect the outcomes. All of the assumptions (future inflation, interest rates, tax rates, your longevity, etc.) can be varied by you, so you can test various scenarios of your choosing to see their effects. There are many variables so it’s an extremely complicated analysis that requires a sophisticated software program; there is no way individuals can model this well on their own. I find this very useful in making decisions about what to do. One example of how many factors go into this that did not occur to me but I learned about from researching Roth conversions, is that a conversion also effectively converts assets from your taxable account (the tax you pay on the conversion) to a Roth account, thus eliminating the tax drag on appreciation in the taxable account for that money. That’s an increase in your tax-sheltered assets, it’s not an insignificant effect especially over longer periods of time, and it’s beneficial no matter what the tax rates are in the future.
One thing is clear to me: tax rates do not have to increase in the future for partial Roth conversions to be advantageous. If they remain the same they are still beneficial in multiple ways, and conversions can be beneficial even with decreases in tax rates (such as from 24% to 22%).
What the Maxifi program is recommending to me, in two years of semi-retirement before claiming SS, is very high Roth conversions that would increase my taxes (including IRMAA, NIT) significantly. For now I’ve decided not to go as far as the program recommends, in part because of all the uncertainty about the future. But it’s thought-provoking and I’ll keep revisiting.
I agree. Mike Piper found the advantage gained by using taxable accounts to pay the tax incurred outweighed most other benefits/advantages of Roth conversions. William Perry mentioned Piper and linked his presentation on Roth conversions at the Bogleheads conference in the first comment on this post.
Haven’t done it, but I’m fairly certain that the tax implications are designed to be neutral. The one that I’m concerned about is a surviving spouse taking RMDs into single tax brackets (and deductions). Of course, that’s an unknown, so I think of it as hedging the liability by paying the tax today.
Market drops, sell offs are ideal times to make conversions to Roth’s. That because you’re taxed on the value of the transaction on the day it’s made. The worst thing to happen to us converters was the fed government taking away the recharacterization option years ago, where we could undo it for favorable market changes.
At age 84, I’m on a fifteen year mission to convert all of my seven figure Trad IRA to my Roth and am 98% there. Costly yes, and weighed all the pros and cons years ago. Never needed my RMDs, which helped me pay taxes, while buying into various income producing funds in the Roth, generating large amounts of tax free income each month. Paying the third level of IRMAA this year but it’s only for twelve months, then home free. As far as taxes go, Uncle Sam WILL get his, whether I pay it or my children pay it. They will love getting a tax free inheritance. And if by chance I live into my nineties, there should be a bunch more tax free money for the children. Jonathan advised not to do this awhile back, and may want to advise others more now, but I am supremely happy with where I’m at.
“Jonathan advised not to do this”? Not sure when that happened. I converted part of my traditional IRA to Roths with an eye to bequeathing the accounts to my kids. But I also wouldn’t convert everything because you always want some taxable income each year to take advantage of lower tax brackets. In addition, traditional IRA withdrawals can become tax-free if you end up with large medical deductions, which is another reason not to convert everything.
This topic has been endlessly discussed in a FB group, Financial Planning Education (formerly Taxes in Retirement). There is also another FB group Roth Conversions and Retirement. Finally, there is a Boldin FB (formerly New Retirement) and Boldin has a Roth Conversion calculator as does the software from Larry Kotlikoff. If you search the FB groups, you will not only find many real life examples, you will find links to helpful articles and information including the Mike Piper talk at Bogleheads last year. Mike’s blog obliviousinvestor also has some good stuff. Along my financial advisor, I finally did some Roth conversions last year. My general view is to consider Roth conversions and contributions but not to let the tax/IRMAA tail wag the dog. And also don’t forget that after tax brokerage funds along with Roth and pre tax retirement funds can be very valuable in retirement. Here is an interesting thread by Professor Edward McQuarrie: Why Roth conversions always pay off—if you can hold on long enough [Update 2/2025] – Bogleheads.org
Based on your current high income bracket indicating healthy disposable income, I recommend hiring a fee-only advisor who subscribes to the Income Lab software for its Roth conversion analysis tool. My advisor allowed me to use Income Lab on my own, with his advice and guidance as needed. Based on various relevant inputs (including current income, assets and asset location; assumed rates of return; SS and other retirement income sources; future tax rate changes, etc.), it will model expected income and income tax brackets throughout retirement, including the effect of IRMAA and NIIT (net investment income tax). Income Lab allows users to pick the tax bracket up to which you are comfortable performing Roth conversions, and then models the resulting income amounts and tax brackets for all future retirement years.
The Income Lab software was developed by Justin Fitzpatrick, an MIT PhD in Finance who also holds the CFA and CFP certifications. Justin also regularly speaks and is a recognized expert and “guru” in this field.
One other consideration rarely mentioned when considering Roth conversions is future charitable intent. For those who intend to donate a significant part of their RMDs as a QCD, or a significant amount of their tax-deferred accounts at death as an estate gift to charities, Roth conversions are not as advantageous as they would be otherwise — for the obvious reason that distributions to charities will never be taxed.
Do yourself a favor and get a financial planner who uses Income Lab. Or message me for the names of planners who allow “software-only” clients to use Income Lab and Personal Capital software programs for less than $500/year.
💯
I can’t recommend this comment, and especially Income Lab, highly enough.
I live in CA, too, and retired at 58. My wife retired a few years later leaving us with about 2 years between her company medical benefits going away and me starting Medicare at 65. And she still has several years to go before she’s 65.
This is important because unless you have an early retirement benefit that includes medical coverage, you will either go without until 65 or turn to the ACA marketplace to buy coverage. This can cost anywhere from $0-$1000/mo per person for a basic Bronze plan, or up to around $24,000/year per couple. The key variable in how much you pay is MAGI, which counts every dollar on your tax return the same whether it’s qualified dividends, social security, capital gains or anything else – like taxable income from ROTH conversions.
I purchased an individual license for IncomeLab a month ago and have been using it to model our retirement, including ROTH conversions. It does a brilliant job of this, taking account of IRMAA as well as State and Federal taxes, and shows you where your estimated break even is. You can run different scenarios for filling up to different tax brackets and IRMAA levels and compare them. It shows you impact of each on your lifetime total income and taxes paid, giving you a good idea at least directionally of what you should probably be aiming for. Brilliant.
The one thing it doesn’t do is calculate the effect the conversion has on your ACA premiums. If you don’t have anyone in your household that needs coverage, this is a non-issue. If you do, though, it’s an important consideration in terms of additional financial impact.
PS to @ostrichtcossaturn7593 – how does one “message” you? Would be great to connect.
Boldin seems to do the same calculations for $96 a year.
You may contact me using this profile’s email address. (For some reason posts from my phone use a different profile than those from my laptop.)
Tax rates could be a whole lot higher in the future. There’s also some peace of mind in having a bigger amount in a Roth. Personally, those factors mattered to me.
While I was working, I didn’t do Roth conversions because I was in a higher bracket, plus I would have triggered IRMAA for my husband. I retired two years ago and started doing Roth conversions to fill up the 12% bracket. I will continue to do Roth conversion until I take RMDs. I use the what-if function in Turbo Tax to get an estimate of how much I can convert before yearend. If the tax laws change in 2025, i.e., SS income is not taxed, then I can convert more @ 12%. While working, I creating a savings account to cover the tax on my future Roth conversions. Once I start RMDs, I’ll review my situation to see if it makes sense to continue my Roth conversions.
We’ve been hit by IRMAA surcharges twice when we sold some land. The first time we had to pay the surcharge (ouch!), but the second time we didn’t have to pay due to a life-changing event (I was laid off due to company’s pending bankruptcy).
I am married and when I realized how high the tax rate might be for the surviving spouse (single filing status the year after spouse passes), I decided Roth conversions were necessary despite the tax hit.
Strong analysis is wise before you do significant Roth conversions. In my opinion, it’s a no-brainer to do some, modest Roth conversions. The flexibility to withdraw some funds tax free for surprises, etc. is extremely valuable.
Roth conversions are best when taxes on the conversion are less than they would be in retirement. You are in your peak earning years, so now is not the right time.
You did not mention when you plan to retire or when your income will decline, but early in retirement is often the best time to do Roth conversions, especially before IRMAA (age 63) or RMDs (age 73).
I am 80 and did not do Roth conversions until a few years ago. I did them then because I had 90% of our savings in TIRAs. My TIRAs are now 14% and our Roth is 45%. I view our Roth as inheritance for our children and grandchildren. I paid IRMAA premiums at 2nd tier and marginal tax rate got up to 24%, but I was satisfied because taxes will likely never be this cheap again in my lifetime.
Great perspective to hear from someone who’s done it and can speak with some hindsight around the merit of their decision. Thank you. I am curious, though, about your (and others’) comment about taxes not likely to be this cheap again. What is it that makes you believe that’s true? If you look back in the last 50 years it seems to me that taxes have trended down despite big technology breakthroughs, step-function changes in productivity that those changes brought about, and increased national debt.
I am not an economist, but my thinking about rates being as low as they will get was based upon what I have heard money experts say and their reasoning.
We have some major social programs: Medicare, Medicaid and Social Security that have major funding issues. Medical expenses are rising much faster than overall inflation. Originally, more people paid into SS than were receiving benefits. We are living much longer now, so there are more people getting benefits than are paying into it. That is not sustainable without cutting benefits which no politician is willing to do. The national debt continues to climb. Time will tell whether the current administration can bring that under control.
The irony is that the Trump administration is talking about giving part of the DOGE savings back to the American people. That is the type of thinking that got us into this predicament. Politicians love to spend OUR money.
Hopefully, these thoughts are helpful.
William Perry’s suggestion below offers a good starting place. Then head over to the bogleheads.org forum for the deeeeeeeeeeep dive on strategies that impact Roth conversions. If you are willing to do some studying there, an advisor may not be necessary.
It sounds like retaining a fee only advisor is a good idea to get a wholistic view of all your factors. That being said I can’t see any reason not to at least maximize for available Roth CONTRIBUTIONS for 2024 by April 25th; and 2025.
The maximum contribution for 2024 is $8,000 for those 50 and older.
In 2024, the income limit for contributing to a Roth IRA is $146,000 for single filers and $230,000 for married couples filing jointly. For 2025 contributions that income limits increase to $165,00/$246,000.
And no matter how high your income is, you can use the backdoor Roth and pay no taxes if you don’t have a traditional IRA.
Despite being one of Humble Dollar’s Roth advocates, your situation of peak-career federal tax rates plus added California state taxes is perhaps not ideal for Roth contributions or conversions. In general, the tax advantage of Roths works out favorably in years when your tax rates are lower than average as indicated in the other posts. Most folks have a window for Roth conversions when their income declines between retirement and when required minimum distributions start, and of course, IRMAA becomes a factor after age 63. Roths would also work if you might move to a lower or zero tax state in retirement.
Here are articles outlining the IRMAA impacts to Roth conversions and moving to a lower tax state:
https://humbledollar.com/2023/04/that-28000000-tax/
https://humbledollar.com/2022/04/fleeing-the-taxman/
Another consideration for late career folks who have already accumulated several million dollars in their 401(k)s, 403(b)s and IRAs is that they may want to back off tax-deferred contributions beyond the free-money company match. The reason is that once tax-deferred accounts reach several million dollars, the eventual RMDs will likely push marginal tax rates toward the highest rates anyway (24% or into the 32+%) without continuing maximum or “make up” contributions – this is a good problem to have. In fact, the tax-deferred accounts will likely double in the typical 10-15-year period between retirement and RMD’s, and if married, you have to consider the large tax increases after the first spouse passes.
Here are a few articles about the tax impacts of concentrating savings within tax-deferred accounts:
https://humbledollar.com/2025/02/trouble-ahead/
https://humbledollar.com/2023/01/securing-lower-taxes/
https://humbledollar.com/2019/12/death-and-taxes/
Finally, there are other estate and lack of RMD advantages for Roths which I haven’t covered in this post, but they are embedded in some of the linked articles.
So many of your questions seem predicated on when you intend to retire. If you will have lower income in retirement, say before taking any SS, then waiting until retirement to convert would likely be far more cost efficient.
I considered doing Roth conversions in my 50’s, but decided against that as being too costly. With hindsight, I am not at all troubled by my decision. I should have contributed the maximum allowed amounts annually to my Roth account, but I’m not losing sleep about that either.
We are in a the same situation. Abut 25% of my retirement accounts are in Roth. I want to do conversions but I am in no way going to do them when my marginal tax bracket is 24-32%. I plan on retiring from full time work around aged 58. The next six years or so I plan to live off savings and keep my income low enough where it make sense to do chunks of conversions at a much lower rate than where we are today. I am not going to assume taxes will go up that drastically where I’d be paying this high rate in retirement. I think you want to speak to your advisor about when might be the optimal time for those conversions. The biggest factor for is having some control over the tax bite and to give me flexibility. For example I have 3 children and should I want to give them money to put a down payment on a house, I can withdraw from the Roth accounts without spiking my income so much that I create a mess in other places. Ultimately that approach may mean they pay taxes on their inheritance, but that’s OK with me as it is all about finding the balance that feels right and make financial sense for us. Good luck and it is fantastic planning to be thinking about these options. There was another post about the AARP tax calculator that you might find useful. I use it to create future scenarios on taxes and it gives me a good idea of when it is most optimum from a tax perspective.
For many people with IRA balances well over $1M, the question should be “how much of my traditional IRA to convert, when to start it, and how quickly to do it?”, rather than Roth or no Roth conversions.
My income is finally starting to drop as retirement stock grants wind down, so our effective tax rate is dropping this year. I’m planning to convert about $500k over six years by filling up a particular IRMAA income bracket. I’ve set aside cash in my taxable retirement savings to pay the tax bill for this. If market prices drop for a time, I may reconsider how much I convert or how quickly (more and more quickly if there’s a good bear market in stocks or bonds).
IRMAA isn’t a consideration if you’re doing conversions before the year when you turn age 63.
I’m less concerned about trying to forecast a breakeven point for conversions and more interested in just making our plans more resilient to future tax policy changes, both for us and our future heirs. I also know if we’re lucky enough to live into our 80s that more of our annuity income will become taxable, pushing us into a higher bracket with RMDs on a bigger trad, IRA balance. I also am mindful of what happens to a widow’s tax rates after their spouse dies, as they lose the joint filing brackets and joint standard deduction.
I recommend the video concerning Roth conversions from the most recent Bogleheads conference with Mike Piper, CPA titled Roth Conversion: a Deep Dive, with Mike Piper
https://boglecenter.net/2024conference/
Best, Bill
Bill, thanks for this recommendation. This is an excellent presentation by Mike Piper. Well worth the time.