Is there any reason keep a small TIRA when converting to Roth?
Would there be any drawbacks or disadvantages if all traditional IRAs of a taxpayer are converted to Roth? Would there be any reason to maintain a small traditional IRA if over 71.5 after making a conversion of the greater portion of the total value?
Permalink Submitted by Alan - IRA critic on Wed, 2017-11-15 23:07
Generally no disadvantage, if you assume that the tax rate for these conversions is not higher than TP would otherwise pay later on had they not converted. But assuming the tax rates are analyzed and managed, and TP just wonders whether they should convert every last dollar, I cannot think of any other disadvantage to not having any TIRAs. Simpler to not have RMDs, for beneficiaries to inherit a tax free Roth etc. Of course at 71, TP must complete the current year RMD (at least for the account being converted) before the conversion.