Trad. IRA Conversion to Roth Using RMD

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nickfrank
Posts: 26
Joined: Tue Feb 23, 2010 1:39 pm

Trad. IRA Conversion to Roth Using RMD

Post by nickfrank »

I'm 72 and taking RMD's. Instead of investing in a taxable account can I (convert) to a ROTH. I am still working and do contribute to a ROTH every year. This conversion would allow me to exceed the $6500 limit. I do pay tax on the RMD and have converted in past years before I was 70.5. Since I am withdrawing from the IRA anyway and paying taxes how is it different than my prior conversions?
pshonore
Posts: 6871
Joined: Sun Jun 28, 2009 2:21 pm

Re: TRAD. IRA CONVERSION TO ROTH USING RMD

Post by pshonore »

An RMD cannot be converted but since you have earned income you can still contrIbute up to $6500 to the Roth. And you can convert as much as you want of whats left after the RMD.
DSInvestor
Posts: 11362
Joined: Sat Oct 04, 2008 11:42 am

Re: TRAD. IRA CONVERSION TO ROTH USING RMD

Post by DSInvestor »

I agree with pshonore. Your RMD cannot be converted to Roth IRA. If you want to convert, you must first take a distribution to satisfy RMD and then whatever assets are remaining in TIRA can be converted to Roth IRA.

I see from your other posts that you are married. If you're still working you and your spouse can contribute to Roth IRA income permitting. You still have time to contribute for 2013 as deadline is today April 15, 2013. Vanguard will accept 2013 IRA contribution online as long as it is made before 11:59PM ET.

IRS Amount of Roth IRA Contributions That You Can Make For 2013:
http://www.irs.gov/Retirement-Plans/Amo ... e-For-2013

If your MAGI for 2013 is under 178K, you and your spouse can each contribute $6,500 to Roth IRA for 2013. I assume that your taxable compensation is at least 13K.

The MAGI limits for 2014 are slightly higher. Full Roth IRA contribution permitted if MAGI < 181K.
IRS Amount of Roth IRA Contributions That You Can Make for 2014:
http://www.irs.gov/Retirement-Plans/Pla ... e-for-2014
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