My wife and I have just reached RMD age this year and will be taking out low 6 figures in RMD’s starting in 2021. The funds are not needed at the moment. The new taxable income from RMD’s will mean I have to pay each year an additional $2000 or so in 3.8% Medicare investment income tax, an additional $3000 or so in Medicare premiums and will lose a $1500 state tax credit for long term care insurance premiums. The RMD income is taking us to near the top of our federal tax bracket.

The question is at this stage (and considering higher tax brackets that would be involved) should we do some Roth conversions each year , do fairly big conversions over the next few years, convert all of it at once and pay huge taxes for one year or leave the IRA’s and 401K alone letting the balances continue to grow in full – tax deferred- taking out only the RMD each year going forward ?

Should we not convert at all in case Ed’s idea( that since beneficiaries have to withdraw within 10 years and pay the tax that RMD’s should no longer be required under the law) actually comes to fruition at some point ? Difficult choices.

Thank you.

hoopsjs 12