Roth IRA conversion

Submitted by Eun Sledz on Mon, 2018-03-12 02:22

I am 68, still working part time making $60,000, have 403B about $550,000, want to convert to Roth IRA, is it worth it to convert paying taxes upfront? have enough cash to cover tax, I wont need this money for retirement, have enough with SS and other income. If I convert, should I do over 3 years so my tax liability will be spread out ? Also if I convert in April, when the tax will do ? thank you so much



Submitted by Eun Sledz on Mon, 2018-03-12 02:26

I would greatly appreciate your reply !

Submitted by Alan - IRA critic on Mon, 2018-03-12 02:53

  • You should only convert if you expect your tax rate in retirement to be higher, or in some cases equal to your current rate. Often, to control your current rate you can only convert an incremental amount. For example, you might convert up to the top of your current bracket. SInce you may be working up to your first RMD year, you won’t have any low income years in which to convert higher amounts, and you are already receiving SS income. Therefore, it looks like you would probably be converting only small amounts, if at all.
  • Once you reach the year in which you turn 70.5, you will have to complete your RMD before converting any additional amounts. But your RMD is going to be far less than the 60k if you stop working, so you migth actually have a lower rate after your RMDs start unless you keep working as well.

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