Roth conversion confusion

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NeverGiveUP
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Roth conversion confusion

Post by NeverGiveUP » Sat Jan 13, 2018 10:24 am

I am converting my T-IRA to Roth because I do not want RMD's. I would like to convert some of it each year for tax purposes. I am confused about when I have to start taking RMD's and their relation to tax years.

Let's say my birthday is 01/15/1950.
In 2018, I am 68, and pay income taxes on 2017 income (which included a conversion to Roth that I did in 2017);

In 2019, I will be 69, and will pay income taxes on 2018 income (which will include a conversion to Roth that I will do in 2018);

In 2020, I will be 70, and will pay income taxes on 2019 income.
Can I do a conversion to Roth in 2019 for the remaining balance of the T-IRA in order to avoid having to ever take RMD?

So, my question is: do I have 2 more years (2018, 2019) or 3 more years (2018, 2019,2020) to complete the conversion to avoid ever having to take an RMD?

I hope I asked this in a non-confusing way. If it is too confusing please let me know and I will try to make it more understandable.
Thanks for any help :)

pshonore
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Re: Roth conversion confusion

Post by pshonore » Sat Jan 13, 2018 10:27 am

In the year (2020) you turn 70 1/2, you must take an RMD before doing any Roth conversions. You therefore have 2018 and 2019 to complete your task

retiredjg
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Re: Roth conversion confusion

Post by retiredjg » Sat Jan 13, 2018 10:39 am

You will be 70.5 in June July of 2020 so 2020 is the first year of your RMD. As I understand it, you get a "grace period" your first year so you could theoretically delay that payment until April 15 of 2021. I don't recommend it because that means you have to take 2 RMDs in the same tax year (2021).

Whether that grace period extends your conversion time another year I don't know. I would not count on it though.

The problem with rushing your conversions is that it may push you over one of the IRMAA limits which will raise your Medicare premiums. If you are not familiar with that, you need to do a search for some previous discussions. It doesn't make sense to me to pay extra for Medicare just to avoid RMDs a few years if you are near to getting finished with your conversions.
Last edited by retiredjg on Sat Jan 13, 2018 10:57 am, edited 1 time in total.

livesoft
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Re: Roth conversion confusion

Post by livesoft » Sat Jan 13, 2018 10:50 am

retiredjg wrote:
Sat Jan 13, 2018 10:39 am
You will be 70.5 in June of 2020 ...
June? You mean July right? Nobody born in 1950 can be 70.5 until after June 30th of 2020.
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susa
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Re: Roth conversion confusion

Post by susa » Sat Jan 13, 2018 10:53 am

NeverGiveUP wrote: I am converting my T-IRA to Roth because I do not want RMD's.
//
Can I do a conversion to Roth in 2019 for the remaining balance of the T-IRA in order to avoid having to ever take RMD?
As I understand your question, here is a simplified example of your T-IRA balances by year

Let's assume you have 500,000 balance to begin with in T-IRA

Year, Conversion, Balance End
2018 150,000 350,000
2019 150,000 200,000
2020 200,000 0

So, you should be able to deplete all funds from the T-IRA but with a hefty tax bill and Medicare (as mentioned) implications.
Strictly, if your goal is to never have to take an RMD, you can convert entire balance in 2018, settle that taxes in 2019 and be done.

livesoft
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Re: Roth conversion confusion

Post by livesoft » Sat Jan 13, 2018 10:55 am

I am not afraid of RMDs myself. I know that the standard deduction will make $24,000 of RMDs become untaxed in 2018.
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pshonore
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Re: Roth conversion confusion

Post by pshonore » Sat Jan 13, 2018 10:56 am

retiredjg wrote:
Sat Jan 13, 2018 10:39 am
You will be 70.5 in June of 2020 so 2020 is the first year of your RMD. As I understand it, you get a "grace period" your first year so you could theoretically delay that payment until April 15 of 2021. I don't recommend it because that means you have to take 2 RMDs in the same tax year (2021).

Whether that grace period extends your conversion time another year I don't know. I would not count on it though.

The problem with rushing your conversions is that it may push you over one of the IRMAA limits which will raise your Medicare premiums. If you are not familiar with that, you need to do a search for some previous discussions. It doesn't make sense to me to pay extra for Medicare just to avoid RMDs a few years if you are near to getting finished with your conversions.
I asked that grace period question a few years back and Alan S. replied as follows. The first withdrawals from an IRA in the year your reach 70 1/2 count as RMDs and cannot be converted. So you can delay until April 1 of the following year, but cannot do conversions in the year you turn 70 1/2 in that case.

retiredjg
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Re: Roth conversion confusion

Post by retiredjg » Sat Jan 13, 2018 10:56 am

livesoft wrote:
Sat Jan 13, 2018 10:50 am
retiredjg wrote:
Sat Jan 13, 2018 10:39 am
You will be 70.5 in June of 2020 ...
June? You mean July right? Nobody born in 1950 can be 70.5 until after June 30th of 2020.
:oops:

retiredjg
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Re: Roth conversion confusion

Post by retiredjg » Sat Jan 13, 2018 10:58 am

pshonore wrote:
Sat Jan 13, 2018 10:56 am
retiredjg wrote:
Sat Jan 13, 2018 10:39 am
You will be 70.5 in June of 2020 so 2020 is the first year of your RMD. As I understand it, you get a "grace period" your first year so you could theoretically delay that payment until April 15 of 2021. I don't recommend it because that means you have to take 2 RMDs in the same tax year (2021).

Whether that grace period extends your conversion time another year I don't know. I would not count on it though.

The problem with rushing your conversions is that it may push you over one of the IRMAA limits which will raise your Medicare premiums. If you are not familiar with that, you need to do a search for some previous discussions. It doesn't make sense to me to pay extra for Medicare just to avoid RMDs a few years if you are near to getting finished with your conversions.
I asked that grace period question a few years back and Alan S. replied as follows. The first withdrawals from an IRA in the year your reach 70 1/2 count as RMDs and cannot be converted. So you can delay until April 1 of the following year, but cannot do conversions in the year you turn 70 1/2 in that case.
That makes good sense to me.

livesoft
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Re: Roth conversion confusion

Post by livesoft » Sat Jan 13, 2018 11:07 am

And somebody born after June 30th cannot be 70.5 until the next year? Is that right? Didn't this question come up before since June 30th is either the 181st or 182nd day of the year and the 365/2 day comes later than that.
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DrGoogle2017
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Re: Roth conversion confusion

Post by DrGoogle2017 » Sat Jan 13, 2018 11:26 am

pshonore wrote:
Sat Jan 13, 2018 10:56 am
retiredjg wrote:
Sat Jan 13, 2018 10:39 am
You will be 70.5 in June of 2020 so 2020 is the first year of your RMD. As I understand it, you get a "grace period" your first year so you could theoretically delay that payment until April 15 of 2021. I don't recommend it because that means you have to take 2 RMDs in the same tax year (2021).

Whether that grace period extends your conversion time another year I don't know. I would not count on it though.

The problem with rushing your conversions is that it may push you over one of the IRMAA limits which will raise your Medicare premiums. If you are not familiar with that, you need to do a search for some previous discussions. It doesn't make sense to me to pay extra for Medicare just to avoid RMDs a few years if you are near to getting finished with your conversions.
I asked that grace period question a few years back and Alan S. replied as follows. The first withdrawals from an IRA in the year your reach 70 1/2 count as RMDs and cannot be converted. So you can delay until April 1 of the following year, but cannot do conversions in the year you turn 70 1/2 in that case.
My understanding of RMDs withdrawal is that you can still convert to Roth and take RMD at the same time. So take the minimum that is required base on previous year, then also do Roth conversion.

TravelforFun
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Re: Roth conversion confusion

Post by TravelforFun » Sat Jan 13, 2018 11:39 am

NeverGiveUP wrote:
Sat Jan 13, 2018 10:24 am
I am converting my T-IRA to Roth because I do not want RMD's. I would like to convert some of it each year for tax purposes. I am confused about when I have to start taking RMD's and their relation to tax years.

Let's say my birthday is 01/15/1950.
In 2018, I am 68, and pay income taxes on 2017 income (which included a conversion to Roth that I did in 2017);

In 2019, I will be 69, and will pay income taxes on 2018 income (which will include a conversion to Roth that I will do in 2018);

In 2020, I will be 70, and will pay income taxes on 2019 income.
Can I do a conversion to Roth in 2019 for the remaining balance of the T-IRA in order to avoid having to ever take RMD?

So, my question is: do I have 2 more years (2018, 2019) or 3 more years (2018, 2019,2020) to complete the conversion to avoid ever having to take an RMD?

I hope I asked this in a non-confusing way. If it is too confusing please let me know and I will try to make it more understandable.
Thanks for any help :)
I got a few more years before I have to face RMD but out of curiosity, why would you want to convert your IRA over a two or three-year period rather than going the RMD route and convert that IRA over a much longer period? I would think RMD taxes would less burdensome.

TravelforFun

kaneohe
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Re: Roth conversion confusion

Post by kaneohe » Sat Jan 13, 2018 11:44 am

DrGoogle2017 wrote:
Sat Jan 13, 2018 11:26 am
pshonore wrote:
Sat Jan 13, 2018 10:56 am
retiredjg wrote:
Sat Jan 13, 2018 10:39 am
You will be 70.5 in June of 2020 so 2020 is the first year of your RMD. As I understand it, you get a "grace period" your first year so you could theoretically delay that payment until April 15 of 2021. I don't recommend it because that means you have to take 2 RMDs in the same tax year (2021).

Whether that grace period extends your conversion time another year I don't know. I would not count on it though.

The problem with rushing your conversions is that it may push you over one of the IRMAA limits which will raise your Medicare premiums. If you are not familiar with that, you need to do a search for some previous discussions. It doesn't make sense to me to pay extra for Medicare just to avoid RMDs a few years if you are near to getting finished with your conversions.
I asked that grace period question a few years back and Alan S. replied as follows. The first withdrawals from an IRA in the year your reach 70 1/2 count as RMDs and cannot be converted. So you can delay until April 1 of the following year, but cannot do conversions in the year you turn 70 1/2 in that case.
My understanding of RMDs withdrawal is that you can still convert to Roth and take RMD at the same time. So take the minimum that is required base on previous year, then also do Roth conversion.
As stated earlier, you can not convert the RMD. Remove the RMD first and then you can convert additional withdrawals. Perhaps that is what you meant but it is a bit ambiguous.

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BL
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Re: Roth conversion confusion

Post by BL » Sat Jan 13, 2018 11:49 am

We converted to Roth after RMDs started. You have to do the RMDs first, then you can convert whatever you want to pay tax on. We converted to the top of our tax bracket for several years until QCDs became permanent, and now use charitable donations in lieu of RMDs for tax-free distributions.

Now that the Standard Deduction has increased, I expect more QCDs instead of itemizing charitable contributions.

DrGoogle2017
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Re: Roth conversion confusion

Post by DrGoogle2017 » Sat Jan 13, 2018 11:56 am

kaneohe wrote:
Sat Jan 13, 2018 11:44 am
DrGoogle2017 wrote:
Sat Jan 13, 2018 11:26 am
pshonore wrote:
Sat Jan 13, 2018 10:56 am
retiredjg wrote:
Sat Jan 13, 2018 10:39 am
You will be 70.5 in June of 2020 so 2020 is the first year of your RMD. As I understand it, you get a "grace period" your first year so you could theoretically delay that payment until April 15 of 2021. I don't recommend it because that means you have to take 2 RMDs in the same tax year (2021).

Whether that grace period extends your conversion time another year I don't know. I would not count on it though.

The problem with rushing your conversions is that it may push you over one of the IRMAA limits which will raise your Medicare premiums. If you are not familiar with that, you need to do a search for some previous discussions. It doesn't make sense to me to pay extra for Medicare just to avoid RMDs a few years if you are near to getting finished with your conversions.
I asked that grace period question a few years back and Alan S. replied as follows. The first withdrawals from an IRA in the year your reach 70 1/2 count as RMDs and cannot be converted. So you can delay until April 1 of the following year, but cannot do conversions in the year you turn 70 1/2 in that case.
My understanding of RMDs withdrawal is that you can still convert to Roth and take RMD at the same time. So take the minimum that is required base on previous year, then also do Roth conversion.
As stated earlier, you can not convert the RMD. Remove the RMD first and then you can convert additional withdrawals. Perhaps that is what you meant but it is a bit ambiguous.
That is what I believe I wrote. You take the RMD then you still can convert. So if you have $500k, you need to take about 4%, which is $20k, then you can still convert up to your max tax rate of 12% if you have space. Just because you are taking RMDs, does not preclude you from more conversion.
Last edited by DrGoogle2017 on Sat Jan 13, 2018 11:58 am, edited 1 time in total.

peppers
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Re: Roth conversion confusion

Post by peppers » Sat Jan 13, 2018 11:56 am

livesoft wrote:
Sat Jan 13, 2018 11:07 am
And somebody born after June 30th cannot be 70.5 until the next year? Is that right? Didn't this question come up before since June 30th is either the 181st or 182nd day of the year and the 365/2 day comes later than that.
Now that looks like something sscritic would write.
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FiveK
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Re: Roth conversion confusion

Post by FiveK » Sat Jan 13, 2018 1:39 pm

NeverGiveUP wrote:
Sat Jan 13, 2018 10:24 am
I am converting my T-IRA to Roth because I do not want RMD's. I would like to convert some of it each year for tax purposes.
You probably understand this, but just in case....

There is nothing inherently bad about RMDs. E.g., whether you have an RMD of $0 or $1 will likely make no difference at all to your taxes. An RMD of $100,000 (should you be fortunate enough to have $2,740,000 in your tIRA) will make a significant difference.

A 2020 RMD somewhere between $0 and whatever your RMD will be if no conversions are done between now and 2020 is probably the "right" amount in terms of maximizing your after-tax results.

In other words, if you expect to jump to a higher bracket when RMDs start, can you convert enough each year to stay in your current bracket, both in the conversion years and after RMDs start?

retiredjg
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Re: Roth conversion confusion

Post by retiredjg » Sat Jan 13, 2018 3:37 pm

TravelforFun wrote:
Sat Jan 13, 2018 11:39 am
I got a few more years before I have to face RMD but out of curiosity, why would you want to convert your IRA over a two or three-year period rather than going the RMD route and convert that IRA over a much longer period? I would think RMD taxes would less burdensome.
I don't know this poster's motivation, but here's a common reason. For some people the RMD taxes are more burdensome.

Some people have other sources of income and do not need to take money from IRA/401k in retirement. When RMDs start, they have to remove money from the IRA/401k and pay taxes on it. For some, this is about the same time they start taking SS. This results in higher income which can result in higher taxes and higher medicare premiums and probably other stuff I've not thought about.

Even for someone who is actually already withdrawing from IRA, a person who is fortunate enough to live until mid 80's might be forced to take way more than they actually need (because the RMD percentage increases each year), even being pushed into a higher tax bracket as well as higher Medicare premiums.

TravelforFun
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Re: Roth conversion confusion

Post by TravelforFun » Sat Jan 13, 2018 4:08 pm

retiredjg wrote:
Sat Jan 13, 2018 3:37 pm
TravelforFun wrote:
Sat Jan 13, 2018 11:39 am
I got a few more years before I have to face RMD but out of curiosity, why would you want to convert your IRA over a two or three-year period rather than going the RMD route and convert that IRA over a much longer period? I would think RMD taxes would less burdensome.
I don't know this poster's motivation, but here's a common reason. For some people the RMD taxes are more burdensome.

Some people have other sources of income and do not need to take money from IRA/401k in retirement. When RMDs start, they have to remove money from the IRA/401k and pay taxes on it. For some, this is about the same time they start taking SS. This results in higher income which can result in higher taxes and higher medicare premiums and probably other stuff I've not thought about.

Even for someone who is actually already withdrawing from IRA, a person who is fortunate enough to live until mid 80's might be forced to take way more than they actually need (because the RMD percentage increases each year), even being pushed into a higher tax bracket as well as higher Medicare premiums.
OK. So say you file jointly and have $1 million in IRA. If you convert it all in one year, your marginal tax rate is 37% which would apply to anything above $600K taxable income. If you convert enough so your taxable income is below $315K a year, your marginal rate is 24%, and if you convert it over 13 years, your marginal rate is 12%.

Shouldn't you want to stretch the conversion over a longer period of time to lower your annual taxable income?

TravelforFun

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FiveK
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Re: Roth conversion confusion

Post by FiveK » Sat Jan 13, 2018 4:16 pm

TravelforFun wrote:
Sat Jan 13, 2018 4:08 pm
Shouldn't you want to stretch the conversion over a longer period of time to lower your annual taxable income?
Yes. To a first approximation, minimizing the maximum tax rate one will pay in any retirement year (e.g., by doing some conversions earlier, thus reducing RMDs later) will work well.

DrGoogle2017
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Re: Roth conversion confusion

Post by DrGoogle2017 » Sat Jan 13, 2018 4:18 pm

It’s a trade off. The RMD rate at 90 is about 9%, the RMD rate at 70 is about 4%. If you withdraw just the minimum, you will get hit with the tax torpedo. If you have two IRAs, two SS, and other additional incomes, you will not be able to stretch your tax advantage. Plus you have IRRMA from Medicare, and if one spouse dies, you will be in a higher bracket.
It’s much easier to see this by modeling in TT.
Last edited by DrGoogle2017 on Sat Jan 13, 2018 4:20 pm, edited 1 time in total.

cherijoh
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Re: Roth conversion confusion

Post by cherijoh » Sat Jan 13, 2018 4:19 pm

TravelforFun wrote:
Sat Jan 13, 2018 11:39 am
NeverGiveUP wrote:
Sat Jan 13, 2018 10:24 am
I am converting my T-IRA to Roth because I do not want RMD's. I would like to convert some of it each year for tax purposes. I am confused about when I have to start taking RMD's and their relation to tax years.

Let's say my birthday is 01/15/1950.
In 2018, I am 68, and pay income taxes on 2017 income (which included a conversion to Roth that I did in 2017);

In 2019, I will be 69, and will pay income taxes on 2018 income (which will include a conversion to Roth that I will do in 2018);

In 2020, I will be 70, and will pay income taxes on 2019 income.
Can I do a conversion to Roth in 2019 for the remaining balance of the T-IRA in order to avoid having to ever take RMD?

So, my question is: do I have 2 more years (2018, 2019) or 3 more years (2018, 2019,2020) to complete the conversion to avoid ever having to take an RMD?

I hope I asked this in a non-confusing way. If it is too confusing please let me know and I will try to make it more understandable.
Thanks for any help :)
I got a few more years before I have to face RMD but out of curiosity, why would you want to convert your IRA over a two or three-year period rather than going the RMD route and convert that IRA over a much longer period? I would think RMD taxes would less burdensome.

TravelforFun
People who are delaying SS until 70 may end up getting rocketed up to a higher tax bracket with RMDs. So they may wish to finish up with Roth Conversions before hitting 70 - especially if their living expenses are being covered by withdrawals from taxable accounts where they would otherwise be paying very little taxes.

Also married couples may be hit with a double whammy of increasing % for RMD and a jump in tax bracket when the first spouse dies.

NeverGiveUP
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Re: Roth conversion confusion

Post by NeverGiveUP » Sat Jan 13, 2018 4:29 pm

OP here.
retiredjg - Bingo! You hit the nail right on the head in your last post.

In addition to what you wrote, I live in NJ and want to keep my taxable income below $100,000 to get the 'retirement income exclusion'. The two year conversion window is what I'm looking at because after that soc sec kicks in for me and my wife.

And thanks for bringing up the IRMAA limits - I am aware of that and have included it in my calculations. But that is invaluable information for anyone else who goes through this thread.

Thanks to all for clearing up what was a confusing topic for me and educating me. I am in the process of building what is turning out to be a massive spreadsheet. But I'm going to give it a rest today before my head explodes :)

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FiveK
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Re: Roth conversion confusion

Post by FiveK » Sat Jan 13, 2018 4:35 pm

NeverGiveUP wrote:
Sat Jan 13, 2018 4:29 pm
I am in the process of building what is turning out to be a massive spreadsheet. But I'm going to give it a rest today before my head explodes :)
See Retiree Portfolio Model and personal finance toolbox for other spreadsheets in particular, and Tools and calculators - Bogleheads in general, in case you are interested....

vested1
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Re: Roth conversion confusion

Post by vested1 » Sat Jan 13, 2018 6:00 pm

livesoft wrote:
Sat Jan 13, 2018 11:07 am
And somebody born after June 30th cannot be 70.5 until the next year? Is that right? Didn't this question come up before since June 30th is either the 181st or 182nd day of the year and the 365/2 day comes later than that.
In the off chance that you are being serious, RMD requirements are measured by the month. January 1st through the end of June is the 1st half of the year, and July 1st through December 31st is the 2nd half of the year. Turning 70 on or before June 30th requires an RMD in the same year. Turning 70 on on after July 1st requires RMD in the following year. Both 1st year RMD's can be delayed until April of the year after turning 70.5, but would require 2 RMD's in one year if taken that way.

If you were born in the 2nd half of the year your 1st RMD is a slightly higher percentage of pre-tax savings as compared to being born in the 1st half of the year. It is debatable as to which is preferable.

livesoft
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Re: Roth conversion confusion

Post by livesoft » Sat Jan 13, 2018 7:06 pm

^Thanks for that. I'm looking at Pub 590-B and it would be nice to search on the words "month", "half", "June", and "July" find something. Nothing.
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cherijoh
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Re: Roth conversion confusion

Post by cherijoh » Sat Jan 13, 2018 7:16 pm

DrGoogle2017 wrote:
Sat Jan 13, 2018 11:56 am
kaneohe wrote:
Sat Jan 13, 2018 11:44 am
DrGoogle2017 wrote:
Sat Jan 13, 2018 11:26 am
pshonore wrote:
Sat Jan 13, 2018 10:56 am
retiredjg wrote:
Sat Jan 13, 2018 10:39 am
You will be 70.5 in June of 2020 so 2020 is the first year of your RMD. As I understand it, you get a "grace period" your first year so you could theoretically delay that payment until April 15 of 2021. I don't recommend it because that means you have to take 2 RMDs in the same tax year (2021).

Whether that grace period extends your conversion time another year I don't know. I would not count on it though.

The problem with rushing your conversions is that it may push you over one of the IRMAA limits which will raise your Medicare premiums. If you are not familiar with that, you need to do a search for some previous discussions. It doesn't make sense to me to pay extra for Medicare just to avoid RMDs a few years if you are near to getting finished with your conversions.
I asked that grace period question a few years back and Alan S. replied as follows. The first withdrawals from an IRA in the year your reach 70 1/2 count as RMDs and cannot be converted. So you can delay until April 1 of the following year, but cannot do conversions in the year you turn 70 1/2 in that case.
My understanding of RMDs withdrawal is that you can still convert to Roth and take RMD at the same time. So take the minimum that is required base on previous year, then also do Roth conversion.
As stated earlier, you can not convert the RMD. Remove the RMD first and then you can convert additional withdrawals. Perhaps that is what you meant but it is a bit ambiguous.
That is what I believe I wrote. You take the RMD then you still can convert. So if you have $500k, you need to take about 4%, which is $20k, then you can still convert up to your max tax rate of 12% if you have space. Just because you are taking RMDs, does not preclude you from more conversion.
I agree with kaneohe that your original post was ambiguous - "at the same time" could be interpreted by the less knowledgeable as using the same distribution to count as the RMD and as a Roth conversion.

Alan S.
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Re: Roth conversion confusion

Post by Alan S. » Sat Jan 13, 2018 7:33 pm

The IRS cite for determination of age 70.5 is Reg 1.401(a)(9) -2 Q 3:
Q-3. When does an employee attain age 70 1/2?
A-3. An employee attains age 70 1/2 as of the date six calendar months after the 70th anniversary of the employee's birth. For example, if an employee's date of birth was June 30, 1933, the 70th anniversary of such employee's birth is June 30, 2003. Such employee attains age 70 1/2 on December 30, 2003. Consequently, if the employee is a 5-percent owner or retired, such employee's required beginning date is April 1, 2004. However, if the employee's date of birth was July 1, 1933, the 70th anniversary of such employee's birth would be July 1, 2003. Such employee would then attain age 70 1/2 on January 1, 2004 and such employee's required beginning date would be April 1, 2005.
There is no equivalent Reg. for age 59.5, but the consensus is that this regulation also applies for determining the date when age 59.5 is attained.

DrGoogle2017
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Re: Roth conversion confusion

Post by DrGoogle2017 » Sat Jan 13, 2018 10:18 pm

cherijoh wrote:
Sat Jan 13, 2018 7:16 pm
DrGoogle2017 wrote:
Sat Jan 13, 2018 11:56 am
kaneohe wrote:
Sat Jan 13, 2018 11:44 am
DrGoogle2017 wrote:
Sat Jan 13, 2018 11:26 am
pshonore wrote:
Sat Jan 13, 2018 10:56 am
I asked that grace period question a few years back and Alan S. replied as follows. The first withdrawals from an IRA in the year your reach 70 1/2 count as RMDs and cannot be converted. So you can delay until April 1 of the following year, but cannot do conversions in the year you turn 70 1/2 in that case.
My understanding of RMDs withdrawal is that you can still convert to Roth and take RMD at the same time. So take the minimum that is required base on previous year, then also do Roth conversion.
As stated earlier, you can not convert the RMD. Remove the RMD first and then you can convert additional withdrawals. Perhaps that is what you meant but it is a bit ambiguous.
That is what I believe I wrote. You take the RMD then you still can convert. So if you have $500k, you need to take about 4%, which is $20k, then you can still convert up to your max tax rate of 12% if you have space. Just because you are taking RMDs, does not preclude you from more conversion.
I agree with kaneohe that your original post was ambiguous - "at the same time" could be interpreted by the less knowledgeable as using the same distribution to count as the RMD and as a Roth conversion.
I can see that, but that would be a Roth conversion, not an RMD, except for the people who want to believe they can have cake and eat it too. Too good to be true.

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