Social Security Timing & Roth Conversions

[john0608]

This may be a repetitive or redundant question but I am wondering how others in similar situations feel
- My current plan is to defer my SS till age 70 (will be 67 in June 2023), do moderate Roth conversions up thru 2025 ($100k to $150K)
- wife is retiring age 64 (late 2023) and will take early SS in Jan 2024.
- this is what all SS models say will maximize our combined SS lifetime income assuming current projected actuary tables.
- we have no pensions other than lump sums included in total assets, only future income is SS, also less than $10k in rental income.

Financial advisor whom i pay small mthly fee tells me we will never run out of money given our assets, AA, and spending habits.
He says continue to defer SS as long as you are doing Roth's, but that Roth's are primarily going to benefit heirs given our situation, but that deferring SS is a personal decision and some people 'just want the money now'

I am finding it a bit of a challenge to dissipate funds after 40 years of accumulation, but it is what it is.
also questioning if it really matters if i maximize SS given it takes 12 years to break even at which time i would be 79 or 80 if i take it at 67 or 68
my questions
- does anyone else feel it may be better to just take the SS now vs maximizing your lifetime payout given uncertainties and frailties of old age?
- am i just being paranoid due to current financial chaos or is this a common thought pattern? ie - taking SS earlier would offset pressure to spend down assets
- i assume if i take SS early ($45K approx) i could still perform some Roth conversions (maybe $75k) or does that not really make sense?

thanks in advance for any and all opinions.

[retired@50]

- i assume if i take SS early ($45K approx) i could still perform some Roth conversions (maybe $75k) or does that not really make sense?

thanks in advance for any and all opinions.

Performing Roth conversions while collecting Social Security might lead to some weird marginal tax rates and outcomes.

See this post: viewtopic.php?p=6960716#p6960716

Also, see the "Cautions" section of this wiki page: https://www.bogleheads.org/wiki/Roth_IRA_conversion

Regards,

[ehh]

Financial advisor whom i pay small mthly fee tells me we will never run out of money given our assets, AA, and spending habits.
He says continue to defer SS as long as you are doing Roth's, but that Roth's are primarily going to benefit heirs given our situation, but that deferring SS is a personal decision and some people 'just want the money now'

Sensible. In general it is good to have some balance between taxable, traditional, and Roth. If you encounter an unexpected expense, you can utilize the Roth without affecting your taxes. If one of you needs long term care, you can utilize the traditional IRA and make use of the health care deduction to control taxes.

- does anyone else feel it may be better to just take the SS now vs maximizing your lifetime payout given uncertainties and frailties of old age?

Would taking social security early change how you live during the next couple years? Is your SS at 70 greater than your wife's at 64/65? By how much? If so, and the amount is not trivial, you have a good reason to wait until age 70.

am i just being paranoid due to current financial chaos or is this a common thought pattern? ie - taking SS earlier would offset pressure to spend down assets

Probably. Try not to let current (and hopefully temporary conditions) affect your decision.

i assume if i take SS early ($45K approx) i could still perform some Roth conversions (maybe $75k) or does that not really make sense?

See retired@50's response above.

[Artsdoctor]

When you're considering timing of social security benefits, try thinking in terms of maximizing benefits as a couple (and not an individual). There is a compelling case for the higher earner waiting until 70 to start benefits, with the other spouse starting earlier (whenever retiring before full retirement age, for example). You'll need to do your own math. Don't just think about "breakeven points" for yourself because survivor benefits can be a very big factor in the equation as well.

[Wiggums]

We started with 2/3rds in tax deferred and 1/3 in taxable. We concluded that we will not take SS early (before full retirement age) so that we will convert larger dollar amounts into Roth. Our goal is to move 1/3 into Roth. That will position us for 1/3rd each in pretax, taxable, and Roth. We think that will give us a good mix of account types and better manage the surviving spouse filing as single. We are less concerned with higher medicare payments for 1-3 years.

The open social security tool does not take into account Roth conversions. Also, as the interest rate rises, it favors taking SS earlier will limit Roth conversions. I very much like the SS tool, but it’s important to understand how it works. The tool has a lot of good details on this.

Sometimes people are concerned about getting their money out of SS. We fall in the camp of managing the overall nest egg snd RMDs, because we do not know how long we will live, for example.

[delamer]

There is a good chance that Roths won’t just benefit your heirs, in terms of taxes.

When the first spouse dies, the total RMDs on your tax-deferred accounts will stay about the same. But the progressive marginal tax rates kick in at much lower income levels for those filing as single rather than MFJ.

There’s no easy answer to the question of the amounts you should convert or at what tax rates. I’ve managed my conversion decisions around my other financial choices, rather than letting the desire to convert be the driver.

We’ll be able to convert about 20% of our current tax-deferred into Roths before RMDs start.

[Exchme]

A glance at a mortality table says the odds are greater than 50% that at least one of you makes it to age 89, which is the relevant breakeven point for the larger benefit. It's those last years when deferring SS pulls ahead. The addition of the opportunity to do some Roth Conversions before claiming your SS benefit is another bonus in favor of waiting to claim the larger benefit.

[smitcat]

This may be a repetitive or redundant question but I am wondering how others in similar situations feel
- My current plan is to defer my SS till age 70 (will be 67 in June 2023), do moderate Roth conversions up thru 2025 ($100k to $150K)
- wife is retiring age 64 (late 2023) and will take early SS in Jan 2024.
- this is what all SS models say will maximize our combined SS lifetime income assuming current projected actuary tables.
- we have no pensions other than lump sums included in total assets, only future income is SS, also less than $10k in rental income.

Financial advisor whom i pay small mthly fee tells me we will never run out of money given our assets, AA, and spending habits.
He says continue to defer SS as long as you are doing Roth's, but that Roth's are primarily going to benefit heirs given our situation, but that deferring SS is a personal decision and some people 'just want the money now'

I am finding it a bit of a challenge to dissipate funds after 40 years of accumulation, but it is what it is.
also questioning if it really matters if i maximize SS given it takes 12 years to break even at which time i would be 79 or 80 if i take it at 67 or 68
my questions
- does anyone else feel it may be better to just take the SS now vs maximizing your lifetime payout given uncertainties and frailties of old age?
- am i just being paranoid due to current financial chaos or is this a common thought pattern? ie - taking SS earlier would offset pressure to spend down assets
- i assume if i take SS early ($45K approx) i could still perform some Roth conversions (maybe $75k) or does that not really make sense?

thanks in advance for any and all opinions.

'Financial advisor whom i pay small mthly fee tells me we will never run out of money given our assets, AA, and spending habits.
He says continue to defer SS as long as you are doing Roth's, but that Roth's are primarily going to benefit heirs given our situation, but that deferring SS is a personal decision and some people 'just want the money now''
He is likely correct, but you would need a bunch more data and work to confirm that....
- will the tax rates of your heir's warrant performing larger Roth conversions now?
- did you take into consideration charitable giving of that is one of your goals?
- is your draw rate on your portfolio in retirement very low?
- will a projected survivor and heir plan show any estate taxes due?
- have you run any of these scenarios through RPM or Pralana or has your FA run them thru equivalent calculators?

[Navillus1968]

This may be a repetitive or redundant question but I am wondering how others in similar situations feel
- My current plan is to defer my SS till age 70 (will be 67 in June 2023), do moderate Roth conversions up thru 2025 ($100k to $150K)

What size are your tax-deferrred accounts today & how large do you expect your RMDs to be in 6 years?
https://www.schwab.com/ira/ira-calculators/rmd

Any particular reason you plan to stop Roth conversions after 2025? RMDs shouldn't begin until 2029, yes? Why not continue the conversions at a lower level once the TCJA brackets revert?

In general, you want to avoid a low-tax trough in your 60s income followed by a permanent spike in marginal tax rates in your mid/late 70s caused by RMDs & SS. Better to accelerate some of the IRA income via Roth conversions to even out your lifetime income/lifetime taxes. Another Roth conversion consideration is avoiding hefty taxes on large RMDs for the eventual widow, filing SIngle.

- wife is retiring age 64 (late 2023) and will take early SS in Jan 2024.

How large will your wife's SS benefit be in 2024? At FRA? At 70? Wil she get a spousal benefit when you are 70 & she is 67 or is her SS benefit too high?

- this is what all SS models say will maximize our combined SS lifetime income assuming current projected actuary tables.
- we have no pensions other than lump sums included in total assets, only future income is SS, also less than $10k in rental income.

You don't mention a taxable account. Generally, it's beneficial to pay the Roth conversion taxes from a separate taxable account, but conversions can still be beneficial even if you are forced to withdraw TIRA funds to pay the taxes. Do you have a source of income for living expenses if you delay both of your SS benefits?

Financial advisor whom i pay small mthly fee tells me we will never run out of money given our assets, AA, and spending habits.
He says continue to defer SS as long as you are doing Roth's, but that Roth's are primarily going to benefit heirs given our situation, but that deferring SS is a personal decision and some people 'just want the money now'

I am finding it a bit of a challenge to dissipate funds after 40 years of accumulation, but it is what it is.
also questioning if it really matters if i maximize SS given it takes 12 years to break even at which time i would be 79 or 80 if i take it at 67 or 68
my questions
- does anyone else feel it may be better to just take the SS now vs maximizing your lifetime payout given uncertainties and frailties of old age?
- am i just being paranoid due to current financial chaos or is this a common thought pattern? ie - taking SS earlier would offset pressure to spend down assets
- i assume if i take SS early ($45K approx) i could still perform some Roth conversions (maybe $75k) or does that not really make sense?

thanks in advance for any and all opinions.

It's hard to give advice with so many unknowns- but in general, if your TIRA balances and your wife's SS benefit are both on the larger side, I would delay her benefit to free up additional space for Roth conversions.
I would delay your benefit until 70 for the higher Survivor's benefit.

[john0608]

some additional info based on above comments
my wife's early SS at age 64 in Jan 2024 will be ~$24k/yr
my SS at age 70 in Jun 2026 will be ~$55k/yr (current calculations but assume it will be higher due to COLA)

taxable accounts total ~$1.5m AA 65/35 - can fund living expenses and Roth taxes from taxable until SS or RMD's hit
T-IRA ~$3m AA 55/45
R-IRA - $160k AA 100% equities
current spending $140k to $175k annually (includes $40k or more for non-essentials like gifts, charities, grandkids 529, multiple vacations, etc.)

- from taxable we will sell mutuals or stocks and pay capital gains if/when the 35% in fixed is gone (all in treasuries, i-bonds, CDs & money markets)
- in taxable I would probably rotate out of mutuals and stocks to maintain at least $150k in fixed but have to see how it goes year by year
- i would assume in 3 years the R-IRA balance will be at least $500k and that would probably be the end of my contributions

current plan is to fund Roth and living expenses from taxable - although some models suggest taking some t-ira now for living expenses to reduce RMD hit but there are lots of opinions out there, once RMD hits at age 72 (moving target) distributions will be ~$125k or more i assume so that plus SS will fund living expenses.

[smitcat]

some additional info based on above comments
my wife's early SS at age 64 in Jan 2024 will be ~$24k/yr
my SS at age 70 in Jun 2026 will be ~$55k/yr (current calculations but assume it will be higher due to COLA)

taxable accounts total ~$1.5m AA 65/35 - can fund living expenses and Roth taxes from taxable until SS or RMD's hit
T-IRA ~$3m AA 55/45
R-IRA - $160k AA 100% equities
current spending $140k to $175k annually (includes $40k or more for non-essentials like gifts, charities, grandkids 529, multiple vacations, etc.)

- from taxable we will sell mutuals or stocks and pay capital gains if/when the 35% in fixed is gone (all in treasuries, i-bonds, CDs & money markets)
- in taxable I would probably rotate out of mutuals and stocks to maintain at least $150k in fixed but have to see how it goes year by year
- i would assume in 3 years the R-IRA balance will be at least $500k and that would probably be the end of my contributions

current plan is to fund Roth and living expenses from taxable - although some models suggest taking some t-ira now for living expenses to reduce RMD hit but there are lots of opinions out there, once RMD hits at age 72 (moving target) distributions will be ~$125k or more i assume so that plus SS will fund living expenses.

I do not know if your FA has used any plan calculators and/or shown you the results but you can also do this on your own if you like.
Both RPM and Pralana will let you run future scenarios to optimize withdrawal strategies with your personal numbers and goals. Neither of them are quick to use or easy so you need to put in some efforts with setup/run/review top get the details. We have found both of them to be quite good and very helpful.
RPM
https://www.bogleheads.org/wiki/Retiree_Portfolio_Model
Pralana
https://pralanaretirementcalculator.com/

The results will vary dependent upon the variables that you put in such as: portfolio performance, election age of SS, draw rate, age of demise, etc
If you do this, I suggest running numerous combinations that you think might be likely for your review.
In your case we would likely delay SS and perform some Roth conversions dependent upon your heir's tax rates, charitable giving and then rerun and adjust each year.

Another thought - does your spending number include projected taxes?

[Navillus1968]

some additional info based on above comments
my wife's early SS at age 64 in Jan 2024 will be ~$24k/yr
my SS at age 70 in Jun 2026 will be ~$55k/yr (current calculations but assume it will be higher due to COLA)

$150k in Roth conversions will put you in the middle of the 22% marginal tax rate, adding $24k of SS benefit ($20.4k taxable income) won't change that.

taxable accounts total ~$1.5m AA 65/35 - can fund living expenses and Roth taxes from taxable until SS or RMD's hit
T-IRA ~$3m AA 55/45
R-IRA - $160k AA 100% equities
current spending $140k to $175k annually (includes $40k or more for non-essentials like gifts, charities, grandkids 529, multiple vacations, etc.)

- from taxable we will sell mutuals or stocks and pay capital gains if/when the 35% in fixed is gone (all in treasuries, i-bonds, CDs & money markets)
- in taxable I would probably rotate out of mutuals and stocks to maintain at least $150k in fixed but have to see how it goes year by year
- i would assume in 3 years the R-IRA balance will be at least $500k and that would probably be the end of my contributions

If your TIRAs are worth $3M today & you do 3 years of $150k conversions and stop, that level of conversions is unlikely to appreciably reduce your RMDs to a manageable level, depending on future growth.
$150k is 5% of 3 million- if your TIRA grows at 5%, that growth will tend to cancel out the 5% conversion, leaving your TIRA roughly the same size at year's end. If you execute your planned 3 years of conversions (67, 68, 69), after 3 more years of 5% growth (70,71,72) with zero conversions, you are likely to start RMDs at 73 with a TIRA balance well above $3M & RMDs >$140k (& growing) by age 75.

As Celia likes to put it- you're only treading water at this level of Roth conversions, to really reduce future RMDs, you need to convert a percentage that is substantially larger than annual account growth.

Add $140k RMDs to SS of $55k +$24k= income of ~$220k would put you in the future 28% bracket. If you get hit by a bus, your widow could be pushed into the 33% bracket in her early 80s as RMDs increase with age, coupled with $55k of survivor's SS.

current plan is to fund Roth and living expenses from taxable - although some models suggest taking some t-ira now for living expenses to reduce RMD hit but there are lots of opinions out there, once RMD hits at age 72 (moving target) distributions will be ~$125k or more i assume so that plus SS will fund living expenses.

I would take advantage of the current low TCJA tax brackets to Roth convert deep into the 24% bracket, basically doubling your planned $150k conversions to >$300k per year.

The top of the 24% bracket is taxable income of $364k.2, standard deduction with 1 person >65= $27,300, so AGI of $391.5k.
Depending on future inflation, that level of income would put you in danger of hitting IRMAA Tier 4 (Top of Tier 3 estimated to be MAGI $386k-$406k for 2023. https://thefinancebuff.com/medicare-irm ... a-brackets).

Alternatively, you could target the top of IRMAA Tier 2 (est. MAGI $322k-$340k for 2023) & save some IRMAA taxes while still converting a healthy amount.

Once the 24% bracket reverts to 28%, I would continue Roth conversions at a lower rate to stay inside that bracket top, which could be about $250k taxable income, depending on inflation. Your SS benefit will have started as well, which will fill up the lower OI brackets, further reducing room for big Roth conversions.

$250k taxable income in 2026 would probably be close to IRMAA Tier 1 MAGI, you would have to run the numbers to see if IRMAA Tier 1 or the 28% tax bracket top should be your target for conversions. If your keep your MAGI below $250k, you will also avoid the NIIT tax on QDI/cap gains.

Overall, I would target Roth conversions at a level that result in RMDs that provide the income you need, without a huge surplus. Since SS income will be about $80k ($55k +$24k), added to taxable dividends of $20K (?) leaves $80k in RMDs to provide income of $180k.

You'll have to run your own numbers, but that's a TIRA in the $1.6M-$1.8M range? I would probably bias towards $1.5M since you can always withdraw more than the RMD. For your heirs, the taxable & Roth accounts are worth much more than TIRA since the stretch IRA is gone, so prioritizing drawing down the TIRA over the other accounts probably makes sense.

Regarding SS, your wife's $24k is only ~5% of $300k, maybe not enough to worry about. Or you could delay her SS to her FRA, boosting her benefit by 20% (6.67%/year plus-up) while allowing an extra $72k of Roth conversions- maybe a win-win?
Delaying your own SS to 70 for the survivor benefit (& to keep your larger benefit from filling OI brackets- keep them open for Roth conversions) also makes sense.

PS_ Regarding SS crossover/breakeven points vs life expectancy, this longevity calculator is eye-opening- https://media.nmfn.com/tnetwork/lifespan/index.html#0 It's from Northwestern Mutual, so I assume it's reliable to a degree, although it seems pretty optimistic?

[smitcat]

some additional info based on above comments
my wife's early SS at age 64 in Jan 2024 will be ~$24k/yr
my SS at age 70 in Jun 2026 will be ~$55k/yr (current calculations but assume it will be higher due to COLA)

$150k in Roth conversions will put you in the middle of the 22% marginal tax rate, adding $24k of SS benefit ($20.4k taxable income) won't change that.

taxable accounts total ~$1.5m AA 65/35 - can fund living expenses and Roth taxes from taxable until SS or RMD's hit
T-IRA ~$3m AA 55/45
R-IRA - $160k AA 100% equities
current spending $140k to $175k annually (includes $40k or more for non-essentials like gifts, charities, grandkids 529, multiple vacations, etc.)

- from taxable we will sell mutuals or stocks and pay capital gains if/when the 35% in fixed is gone (all in treasuries, i-bonds, CDs & money markets)
- in taxable I would probably rotate out of mutuals and stocks to maintain at least $150k in fixed but have to see how it goes year by year
- i would assume in 3 years the R-IRA balance will be at least $500k and that would probably be the end of my contributions

If your TIRAs are worth $3M today & you do 3 years of $150k conversions and stop, that level of conversions is unlikely to appreciably reduce your RMDs to a manageable level, depending on future growth.
$150k is 5% of 3 million- if your TIRA grows at 5%, that growth will tend to cancel out the 5% conversion, leaving your TIRA roughly the same size at year's end. If you execute your planned 3 years of conversions (67, 68, 69), after 3 more years of 5% growth (70,71,72) with zero conversions, you are likely to start RMDs at 73 with a TIRA balance well above $3M & RMDs >$140k (& growing) by age 75.

As Celia likes to put it- you're only treading water at this level of Roth conversions, to really reduce future RMDs, you need to convert a percentage that is substantially larger than annual account growth.

Add $140k RMDs to SS of $55k +$24k= income of ~$220k would put you in the future 28% bracket. If you get hit by a bus, your widow could be pushed into the 33% bracket in her early 80s as RMDs increase with age, coupled with $55k of survivor's SS.

current plan is to fund Roth and living expenses from taxable - although some models suggest taking some t-ira now for living expenses to reduce RMD hit but there are lots of opinions out there, once RMD hits at age 72 (moving target) distributions will be ~$125k or more i assume so that plus SS will fund living expenses.

I would take advantage of the current low TCJA tax brackets to Roth convert deep into the 24% bracket, basically doubling your planned $150k conversions to >$300k per year.

The top of the 24% bracket is taxable income of $364k.2, standard deduction with 1 person >65= $27,300, so AGI of $391.5k.
Depending on future inflation, that level of income would put you in danger of hitting IRMAA Tier 4 (Top of Tier 3 estimated to be MAGI $386k-$406k for 2023. https://thefinancebuff.com/medicare-irm ... a-brackets).

Alternatively, you could target the top of IRMAA Tier 2 (est. MAGI $322k-$340k for 2023) & save some IRMAA taxes while still converting a healthy amount.

Once the 24% bracket reverts to 28%, I would continue Roth conversions at a lower rate to stay inside that bracket top, which could be about $250k taxable income, depending on inflation. Your SS benefit will have started as well, which will fill up the lower OI brackets, further reducing room for big Roth conversions.

$250k taxable income in 2026 would probably be close to IRMAA Tier 1 MAGI, you would have to run the numbers to see if IRMAA Tier 1 or the 28% tax bracket top should be your target for conversions. If your keep your MAGI below $250k, you will also avoid the NIIT tax on QDI/cap gains.

Overall, I would target Roth conversions at a level that result in RMDs that provide the income you need, without a huge surplus. Since SS income will be about $80k ($55k +$24k), added to taxable dividends of $20K (?) leaves $80k in RMDs to provide income of $180k.

You'll have to run your own numbers, but that's a TIRA in the $1.6M-$1.8M range? I would probably bias towards $1.5M since you can always withdraw more than the RMD. For your heirs, the taxable & Roth accounts are worth much more than TIRA since the stretch IRA is gone, so prioritizing drawing down the TIRA over the other accounts probably makes sense.

Regarding SS, your wife's $24k is only ~5% of $300k, maybe not enough to worry about. Or you could delay her SS to her FRA, boosting her benefit by 20% (6.67%/year plus-up) while allowing an extra $72k of Roth conversions- maybe a win-win?
Delaying your own SS to 70 for the survivor benefit (& to keep your larger benefit from filling OI brackets- keep them open for Roth conversions) also makes sense.

PS_ Regarding SS crossover/breakeven points vs life expectancy, this longevity calculator is eye-opening- https://media.nmfn.com/tnetwork/lifespan/index.html#0 It's from Northwestern Mutual, so I assume it's reliable to a degree, although it seems pretty optimistic?

An excellent response it total.
I have a question about one point here...
"Overall, I would target Roth conversions at a level that result in RMDs that provide the income you need, without a huge surplus. Since SS income will be about $80k ($55k +$24k), added to taxable dividends of $20K (?) leaves $80k in RMDs to provide income of $180k"

I am very curious how you determined maintaining TIRA accounts without further conversions. More specifically have you run these scenarios through some calculators to determine that there is more 'spendable' after tax dollars as a result of this move?
And if you have determined that retaining these funds in TIRA vs Roth conversions, have you been able to identify which variable(s) would tend to drive this result? (ie - low draw rate, high portfolio performance, age of spousal demise, etc).
I am really trying to understand the relationships of these numbers and variables.

[delamer]

Since your taxable account is significant, be mindful of the Net Investment Income Tax.

That kicks in with $250,000 MAGI.

We got hit with it the first year we did conversions. It’s not huge, but it’s not zero.

[Navillus1968]

some additional info based on above comments
my wife's early SS at age 64 in Jan 2024 will be ~$24k/yr
my SS at age 70 in Jun 2026 will be ~$55k/yr (current calculations but assume it will be higher due to COLA)

$150k in Roth conversions will put you in the middle of the 22% marginal tax rate, adding $24k of SS benefit ($20.4k taxable income) won't change that.

taxable accounts total ~$1.5m AA 65/35 - can fund living expenses and Roth taxes from taxable until SS or RMD's hit
T-IRA ~$3m AA 55/45
R-IRA - $160k AA 100% equities
current spending $140k to $175k annually (includes $40k or more for non-essentials like gifts, charities, grandkids 529, multiple vacations, etc.)

- from taxable we will sell mutuals or stocks and pay capital gains if/when the 35% in fixed is gone (all in treasuries, i-bonds, CDs & money markets)
- in taxable I would probably rotate out of mutuals and stocks to maintain at least $150k in fixed but have to see how it goes year by year
- i would assume in 3 years the R-IRA balance will be at least $500k and that would probably be the end of my contributions

<snip>

current plan is to fund Roth and living expenses from taxable - although some models suggest taking some t-ira now for living expenses to reduce RMD hit but there are lots of opinions out there, once RMD hits at age 72 (moving target) distributions will be ~$125k or more i assume so that plus SS will fund living expenses.

<snip>

Overall, I would target Roth conversions at a level that result in RMDs that provide the income you need, without a huge surplus. Since SS income will be about $80k ($55k +$24k), added to taxable dividends of $20K (?) leaves $80k in RMDs to provide income of $180k.

You'll have to run your own numbers, but that's a TIRA in the $1.6M-$1.8M range? I would probably bias towards $1.5M since you can always withdraw more than the RMD. For your heirs, the taxable & Roth accounts are worth much more than TIRA since the stretch IRA is gone, so prioritizing drawing down the TIRA over the other accounts probably makes sense.

Regarding SS, your wife's $24k is only ~5% of $300k, maybe not enough to worry about. Or you could delay her SS to her FRA, boosting her benefit by 20% (6.67%/year plus-up) while allowing an extra $72k of Roth conversions- maybe a win-win?
Delaying your own SS to 70 for the survivor benefit (& to keep your larger benefit from filling OI brackets- keep them open for Roth conversions) also makes sense.

PS_ Regarding SS crossover/breakeven points vs life expectancy, this longevity calculator is eye-opening- https://media.nmfn.com/tnetwork/lifespan/index.html#0 It's from Northwestern Mutual, so I assume it's reliable to a degree, although it seems pretty optimistic?

An excellent response in total.
I have a question about one point here...
"Overall, I would target Roth conversions at a level that result in RMDs that provide the income you need, without a huge surplus. Since SS income will be about $80k ($55k +$24k), added to taxable dividends of $20K (?) leaves $80k in RMDs to provide income of $180k"

I am very curious how you determined maintaining TIRA accounts without further conversions. More specifically have you run these scenarios through some calculators to determine that there is more 'spendable' after tax dollars as a result of this move?
And if you have determined that retaining these funds in TIRA vs Roth conversions, have you been able to identify which variable(s) would tend to drive this result? (ie - low draw rate, high portfolio performance, age of spousal demise, etc).
I am really trying to understand the relationships of these numbers and variables.

No calculator used, I just took a SWAG at desired/required income from RMDs for the OP after accounting for 2x SS benefits & nominal 2% QDI from a $1.5M taxable account with a 65/35 AA.
Working backwards from the $80k extra needed to reach roughly $180k, gives a TIRA about $1.6M-$1.7M for somebody in their 70s. Obviously, RMDs grow over time, so $80k RMD in the 70s decade grows to $90k & higher in 80s & later.
That's why my preference is to bias to a smaller TIRA to at age 73, with withdrawals that are initially larger than RMDs, if needed.

The "Goldilocks just-right size" TIRA is a moving target, since there's so much we don't know- possible QCDs or possible spending from the TIRA on medical expenses, potential heirs' tax rates, etc. A $2M TIRA is probably too big, what the lower limit might be is the real question. Post-73 Roth conversions might also make sense, albeit at a much reduced size.

I think OP would be wise to plug his numbers into RPM or Pralana or meet with a fee-based planner, before making any decisions- my post was mostly a thumbnail sketch to show the value of larger Roth conversions compared to what OP had in mind, with his substantial TIRA & 6 years of growth before RMDs kick in.

[smitcat]

some additional info based on above comments
my wife's early SS at age 64 in Jan 2024 will be ~$24k/yr
my SS at age 70 in Jun 2026 will be ~$55k/yr (current calculations but assume it will be higher due to COLA)

$150k in Roth conversions will put you in the middle of the 22% marginal tax rate, adding $24k of SS benefit ($20.4k taxable income) won't change that.

taxable accounts total ~$1.5m AA 65/35 - can fund living expenses and Roth taxes from taxable until SS or RMD's hit
T-IRA ~$3m AA 55/45
R-IRA - $160k AA 100% equities
current spending $140k to $175k annually (includes $40k or more for non-essentials like gifts, charities, grandkids 529, multiple vacations, etc.)

- from taxable we will sell mutuals or stocks and pay capital gains if/when the 35% in fixed is gone (all in treasuries, i-bonds, CDs & money markets)
- in taxable I would probably rotate out of mutuals and stocks to maintain at least $150k in fixed but have to see how it goes year by year
- i would assume in 3 years the R-IRA balance will be at least $500k and that would probably be the end of my contributions

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current plan is to fund Roth and living expenses from taxable - although some models suggest taking some t-ira now for living expenses to reduce RMD hit but there are lots of opinions out there, once RMD hits at age 72 (moving target) distributions will be ~$125k or more i assume so that plus SS will fund living expenses.

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Overall, I would target Roth conversions at a level that result in RMDs that provide the income you need, without a huge surplus. Since SS income will be about $80k ($55k +$24k), added to taxable dividends of $20K (?) leaves $80k in RMDs to provide income of $180k.

You'll have to run your own numbers, but that's a TIRA in the $1.6M-$1.8M range? I would probably bias towards $1.5M since you can always withdraw more than the RMD. For your heirs, the taxable & Roth accounts are worth much more than TIRA since the stretch IRA is gone, so prioritizing drawing down the TIRA over the other accounts probably makes sense.

Regarding SS, your wife's $24k is only ~5% of $300k, maybe not enough to worry about. Or you could delay her SS to her FRA, boosting her benefit by 20% (6.67%/year plus-up) while allowing an extra $72k of Roth conversions- maybe a win-win?
Delaying your own SS to 70 for the survivor benefit (& to keep your larger benefit from filling OI brackets- keep them open for Roth conversions) also makes sense.

PS_ Regarding SS crossover/breakeven points vs life expectancy, this longevity calculator is eye-opening- https://media.nmfn.com/tnetwork/lifespan/index.html#0 It's from Northwestern Mutual, so I assume it's reliable to a degree, although it seems pretty optimistic?

An excellent response in total.
I have a question about one point here...
"Overall, I would target Roth conversions at a level that result in RMDs that provide the income you need, without a huge surplus. Since SS income will be about $80k ($55k +$24k), added to taxable dividends of $20K (?) leaves $80k in RMDs to provide income of $180k"

I am very curious how you determined maintaining TIRA accounts without further conversions. More specifically have you run these scenarios through some calculators to determine that there is more 'spendable' after tax dollars as a result of this move?
And if you have determined that retaining these funds in TIRA vs Roth conversions, have you been able to identify which variable(s) would tend to drive this result? (ie - low draw rate, high portfolio performance, age of spousal demise, etc).
I am really trying to understand the relationships of these numbers and variables.

No calculator used, I just took a SWAG at desired/required income from RMDs for the OP after accounting for 2x SS benefits & nominal 2% QDI from a $1.5M taxable account with a 65/35 AA.
Working backwards from the $80k extra needed to reach roughly $180k, gives a TIRA about $1.6M-$1.7M for somebody in their 70s. Obviously, RMDs grow over time, so $80k RMD in the 70s decade grows to $90k & higher in 80s & later.
That's why my preference is to bias to a smaller TIRA to at age 73, with withdrawals that are initially larger than RMDs, if needed.

The "Goldilocks just-right size" TIRA is a moving target, since there's so much we don't know- possible QCDs or possible spending from the TIRA on medical expenses, potential heirs' tax rates, etc. A $2M TIRA is probably too big, what the lower limit might be is the real question. Post-73 Roth conversions might also make sense, albeit at a much reduced size.

I think OP would be wise to plug his numbers into RPM or Pralana or meet with a fee-based planner, before making any decisions- my post was mostly a thumbnail sketch to show the value of larger Roth conversions compared to what OP had in mind, with his substantial TIRA & 6 years of growth before RMDs kick in.

Thank you - I think that is an excellent summary without running scenarios in detail.
"I think OP would be wise to plug his numbers into RPM or Pralana or meet with a fee-based planner, before making any decisions"
These are the programs providing outputs that get me very interested in the variables. I have only limited input experience with them but it appears that there may be some patterns when trying to optimize conversions. In some cases, it may make sense to convert completely fairly early on and those appear to be the cases where the draw rate is below the accumulation rate - which seems to be the case for the OP.
In any case thank you for your feedback and good posts.

[MichDad]

You may find this thread informative:

viewtopic.php?t=294692

I'm a year older than you (OP) and am waiting until age 70 to collect my maximum Social Security benefits. My wife began collecting her Social Security benefits at age 62. We've been making substantial Roth conversions beginning in 2018 when I retired and hope to complete our conversions the year I'll turn age 70, in 2025. Our RMDs will be a relatively small part of our income when I turn age 73. When my wife turns age 73 in 2031, she'll have no RMDs whatsoever. All of her assets will be Roth assets (as will be the vast majority of mine).

An important caveat is that we have good lifetime federal retiree health insurance coverage and have therefore declined to enroll in Medicare Part B. This has freed up additional space for our Roth conversions without having to worry about the IRMAA surcharges.

MichDad