2020 deferred compensation options
i am 70 1/2, still working. will not take rmd rest of year, doing some tira to roth conversion this week
will have 457 income all year. the deferred comp plan allows deductible as well as roth
should i contribute this year to deductible, and possibly convert to roth later?
OR, contribute to roth right away?
Permalink Submitted by Alan - IRA critic on Wed, 2020-04-22 20:02
Depends on what your marginal rate is this year compared to what you expect it to be after you retire when wages will cease, but RMDs and perhaps a pension will replace the wages. If your marginal rate is expected to be higher this year, then do pre contributions, if lower (perhaps because you will have a high pension or high 457b balance accumulated) then you would elect to make Roth contributions. If the taxable incomes are estimated to be roughly the same, then perhaps you split your contributions 50-50 between pre tax and Roth.
Permalink Submitted by arun parikh on Wed, 2020-04-22 22:08
thx alan. love your site, unparalleled accurate advice. keep up the good work 🙂