TIRA and Roth IRA
66 year old taxpayer has both a TIRA and Roth IRA (opened about 10 years ago). He does not count on either to fund his retirement as he has ample resources elsewhere for that.
Should he regularly move money from the TIRA to the Roth and pay the taxes OR wait for the RMDs to kick in a few years (I believe in about 6)?
What factors should he consider in making this decision?
Thanks
Permalink Submitted by Alan - IRA critic on Wed, 2023-04-19 15:59
Conversions before RMD are advised if they can be done at a lower marginal rate than expected in the future if no conversions were done. They should generally not be done if the current marginal rate is higher than expected. Some of this depends on where the taxpayer falls in the current bracket and how much future RMDs would affect that bracket. Taxation of SS benefits also factors into this. Many people who are delaying claiming SS can convert incremental amounts in years before they claim SS to take advantage of the lower current rates. If the current and future marginal rates are the same, a more detailed projection is needed to determine if conversions are beneficial.