New RMD and Periodic Roth Conversions Strategy
Taxpayer is 64 years old and has two IRA accounts.
First is Roth IRA which was opened by contribution well over 5 years ago (All funds qualified).
Second is TIRA.
Taxpayer has be making regular periodic Roth conversions each January for several years to slowly build up the Roth account.
In recent “Slott Report” it is discussed that Congress may change RMD to 75 from current 72.
How should this change (if it happens) taxpayers’ strategy, if at all? Increase/decrease periodic amounts. Or amounts remain the same.
Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2021-05-13 19:36
It should not affect conversion strategy. Delaying RMDs only makes your TIRA larger, and therefore the RMDs are larger when they do begin. However, delay in the start of RMDs will result in more years to convert without having to distribute your RMD first. Note that in proposed bill, RMDs do not start at 75 until 2032.