IRA Roth Conversion
Both my wife and I have Roth IRAs as well as traditional IRAs. I’m 80 and she is 75.
We are both taking RMDs each year.
Is there any advantage whether one or both of us does a Roth Conversion in 2018?
We make sure we stay within our current income tax bracket.
Thank you in advance for you input.
Permalink Submitted by Alan - IRA critic on Wed, 2018-03-28 22:57
This would take some careful analysis to determine how much if any you could convert at a marginal rate equal to or lower than your estimated future tax rates. Of course, each of you must complete your annual RMD before converting any additional amounts. That likely means the conversion rate would only be lower if you do not move into the next bracket, and perhaps not at all unless you have unusually high deductions. The fact that tax rates have been reduced starting this year may help. For some seniors, they also may want to factor in the tax rate of their intended benficiaries with respect to leaving them a TIRA vs a Roth IRA. That said, such beneficiaries may not be able to stretch an inherited Roth over their life expectancy if certain restricting legislation is passed.