Conversion of Traditional IRA to Roth IRA by 73-year-old

Submitted by Peter Hamerslag on Wed, 2020-03-04 21:27

I am 73 so have been taking RMDs for a few years. I am interested in converting some of my Traditional IRA to my Roth IRA. I don’t need RMD funds for living expenses and would like to preserve as much as possible for my descendants. I am retired and don’t have any earned income.

I ordinarily take my RMD in mid to late December.

What are the rules, including time frames, and what do I need to be careful of?

Additionally, any suggestions or advice are welcome.
Thanks.



Submitted by Alan - IRA critic on Thu, 2020-03-05 02:33

  • You must complete your RMD before doing any conversions, although if you own multiple IRAs and want to convert before your entire RMD is completed, there are ways to do that. If you own just one IRA, you must complete the RMD before doing any conversions.
  • As for your beneficiaries, whether they inherit a TIRA or a Roth IRA can matter depending on their marginal tax rates compared to yours. For example, if you convert the taxes are paid by you and your rate and if their tax rate in lower they might be better off inheriting more even though their RMDs will be taxable. And vice versa – if your beneficiaries are well off and their tax rate is higher than yours, they are better off inheriting a Roth IRA. Finally, there are more complex timing issues if you include QCDs into the mix.

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