Roth IRA Conversion
We have converted nearly all of our traditional IRAs to Roths and are trying to figure out if we should convert the remaining $43,000. We would pay the tax from a savings account. We are 68 and 69 years old and will both be collecting SS when we turn 70. Our annual taxable income is from our pensions, which total $25,000. At the 12% bracket we would be able to convert most the $43,000 before the end of this year and convert the rest next year when only one of us will begin collecting SS, which would come out to about $10,000 for next year.
Thank you for any advice you may have.
Permalink Submitted by Peter Karakondis on Wed, 2024-11-27 15:47
Thank you for the response. No, I did not reduce our gross pensions by our standard deduction. But I also did not mention that we did make withdrawals totaling maybe $5000 from our taxable Vanguard account. And we’ve been living very frugally.
By 2026 we will both be collecting SS with the annual total expected to be at least $56,000. I do expect that our AGI will include some portion of our SS benefit becoming taxable. From your reply, even though our RMDs will be low, it seems that finishing up with the Roth conversions by next year would make sense.
Thanks again for your help.