No advantage to doing Roth conversions?

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Lazareth
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No advantage to doing Roth conversions?

Post by Lazareth » Tue Jul 09, 2019 11:46 am

Being age mid-60’s, the next few years offer a window to convert IRA savings (which are 80% of total savings) to Roth IRA and stay within lower income tax bracket.

I really like the Optimal Retirement Planner spreadsheet (i-ORP.com) for modeling various conversion strategies... from no conversion at all, to an aggressive approach that pushes the first-year conversion well-into a higher tax bracket with an eye-popping tax bill.

But when I finally read the FAQ section of i-ORP I was surprised to find this (I underline #3 for my own emphasis):

ORP users are familiar with 3 key results:
  1. Partial IRA to Roth IRA conversions can be done with taxable income at much higher, but still constrained, tax rates during the first few years of retirement. Some ORP users suffer a panic attack when they first turn on unconstrained conversions and see the resultant tax bill for the first few years of retirement.
  2. Tax efficient retirement income management can done without IRA to Roth IRA conversions.
  3. Both methods give much the same disposable income for any given model; i.e. there is no particular economic advantage to doing conversions.
Conversions move tax payments up to the front of the retirement plan while the non conversion method spreads the tax-deferred withdrawals and thus income taxes across retirement. In most cases, conversions will pay less total taxes than non-conversions, an irrelevant consideration since the goal is to maximize disposable income.

In light of this, that “there is no particular economic advantage” I ask this group for reason they choose to convert, to pay more taxes now, rather than smooth out the taxes over the draw down period?

jdilla1107
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Re: No advantage to doing Roth conversions?

Post by jdilla1107 » Tue Jul 09, 2019 11:54 am

The idea is to do partial Roth conversions in years where your income would otherwise be zero or very low. You are trying to smooth out your taxable income over a number of years. (Note that what you spend can be very different than how the IRS sees your income in a year.)

If all your money is in a traditional IRA and you need the money to live, then you may not have much of an opportunity to smooth your income. In other words, your retirement income may already be smooth.

Roth ira conversions are popular with early retirees who can live off taxable investments and control their taxable income. Imagine that you have 10 years of expenses in taxable liquid investments and no other income. You could live on that for 10 years and do roth conversions during that time at very low tax rates.

smitcat
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Re: No advantage to doing Roth conversions?

Post by smitcat » Tue Jul 09, 2019 12:14 pm

Lazareth wrote:
Tue Jul 09, 2019 11:46 am
Being age mid-60’s, the next few years offer a window to convert IRA savings (which are 80% of total savings) to Roth IRA and stay within lower income tax bracket.

I really like the Optimal Retirement Planner spreadsheet (i-ORP.com) for modeling various conversion strategies... from no conversion at all, to an aggressive approach that pushes the first-year conversion well-into a higher tax bracket with an eye-popping tax bill.

But when I finally read the FAQ section of i-ORP I was surprised to find this (I underline #3 for my own emphasis):

ORP users are familiar with 3 key results:
  1. Partial IRA to Roth IRA conversions can be done with taxable income at much higher, but still constrained, tax rates during the first few years of retirement. Some ORP users suffer a panic attack when they first turn on unconstrained conversions and see the resultant tax bill for the first few years of retirement.
  2. Tax efficient retirement income management can done without IRA to Roth IRA conversions.
  3. Both methods give much the same disposable income for any given model; i.e. there is no particular economic advantage to doing conversions.
Conversions move tax payments up to the front of the retirement plan while the non conversion method spreads the tax-deferred withdrawals and thus income taxes across retirement. In most cases, conversions will pay less total taxes than non-conversions, an irrelevant consideration since the goal is to maximize disposable income.

In light of this, that “there is no particular economic advantage” I ask this group for reason they choose to convert, to pay more taxes now, rather than smooth out the taxes over the draw down period?
Perhaps try utilizing the RPM calculator if you really want to know the details of conversions for your own situation.
Please be aware - the RPM is much harder to set up and use with your data but in my opinion it yields a very good tool to evaluate Roth conversions in general and the rate of conversions.

And this question....
"In light of this, that “there is no particular economic advantage” I ask this group for reason they choose to convert, to pay more taxes now, rather than smooth out the taxes over the draw down period?"
That will depend entirely on your specific situation, the variables you load into your future projection , and the future goals for your funds.

Admiral
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Re: No advantage to doing Roth conversions?

Post by Admiral » Tue Jul 09, 2019 12:25 pm

I-ORPs goal is to maximize spending and, while doing so, pay as little tax as possible. That may not be your goal. In other words, you may not need to have as much disposable cash as possible in the early retirement years, which means you could be in a lower tax bracket and, thus, benefit (tax-wise) from converting to Roth.

The devil is in the details. Many assume that both people in a marriage will die around the same time. However, this is often not the case, and the survivor is then left paying single-payer tax rates and may face a large, unanticipated tax bill. For this reason, it can be better to lock in a lower tax rate, via Roth conversion, when one is just starting retirement.

I also recommend RPM. Bigfoot will respond on the thread if you have questions. It's complicated but well worth your time to set up.

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dodecahedron
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Re: No advantage to doing Roth conversions?

Post by dodecahedron » Tue Jul 09, 2019 12:28 pm

Lazareth wrote:
Tue Jul 09, 2019 11:46 am
[*]Tax efficient retirement income management can done without IRA to Roth IRA conversions.
[*]Both methods give much the same disposable income for any given model; i.e. there is no particular economic advantage to doing conversions.[/list]Conversions move tax payments up to the front of the retirement plan while the non conversion method spreads the tax-deferred withdrawals and thus income taxes across retirement. In most cases, conversions will pay less total taxes than non-conversions, an irrelevant consideration since the goal is to maximize disposable income.
[/i]
In light of this, that “there is no particular economic advantage” I ask this group for reason they choose to convert, to pay more taxes now, rather than smooth out the taxes over the draw down period?
I do not understand the full context of this particular statement, but it is a highly individual matter, depending on many circumstances.

I can say that about $30K in carefully titrated Roth conversions do make sense for me, this year, at age 65, for a variety of reasons. Roth conversions will not make sense in 2020 (or possibly a very small amount, a few thousand, at most.)

I am mindful of many things in saying that (taxable SS, keeping my qualified divs taxed at 0%, Medicare IRMAA, senior citizen property tax reduction income limits, charitable giving plans and deduction lumping and the 30% limit on annual deductions for FMV of appreciated securities, my solar credit carryforward, the way my state treats IRA income, foreign tax credit, etc.) I am sure that i-ORP can´t possibly take into account everything that *I* do

My current marginal tax bracket has room for almost 30K in Roth conversions in 2019 without leaving the effective 12% marginal tax bracket. I do have to be mindful of lots of things, but I am pretty confident it will work this year.

Towards the end of this year, I will reach the point at which it makes sense to file for my widow´s SS benefits. (Note that widow´s benefits do not increase after FRA, so no point to waiting any longer.) So in 2020 I will be facing a very different situation--more than just a few thousand in Roth conversions could push me into the infamous SS ¨tax hump/torpedo¨ zone. My effective marginal tax rate will go very quickly from 10% to 49% in 2020.

After that who knows? I am taking it one year at a time.

My late husband and I did a significant amount of opportunistic Roth conversions before his death. (Our self-employment income had peaks and valleys that made this make sense for us.) As a result of those Roth conversions and his decision to invest relatively aggressively in the Roths during his life time, I wound up with almost equal amounts of Roth and tax deferred in my retirement accounts when he died six years ago. In the year of his death, I did more Roth conversions (it was my last year at MFJ rates and I also made signficant deduction lumping charitable donations to DAFs that year, intending to use them in his memory.) The next five years, I had an ACA exchange plan covering myself and my young adult daughter and it did not make sense to do Roth conversions. This year, 2019, seems to be another good opportunity. Next year likely won´t be--but who knows? Something unexpected could happen. (Tax law changes can´t be discussed here, but the possibility of sudden windfall taxable income also has to be taken into account, very large medical expenses, etc.)

One year at a time.

And I highly recommend the NBER´s TaxSimulator model for making projections free online. It is not perfect but pretty darn good for my purposes. It will deal with state as well as federal tax projections. I also plan to buy HR Block tax software on the Black Friday sale in late November to do fine tuning at that point.

MathWizard
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Re: No advantage to doing Roth conversions?

Post by MathWizard » Tue Jul 09, 2019 12:43 pm

I simulate inflation adjusted constant income after tax/after health care spending, with my calculation of SS benefits
and taxes, both state and federal. I one of us (myself likely) to last until 85, and my wife to last until 100.
I delay SS until 70, my wife takes hers at FRA. I also assume a 4% real return on my portfolio.

I've done this both with and without ROTH conversions filling up the 12% bracket with ROTH conversions before age 70.
For my situation, we can have a $1500 higher income by doing the ROTH conversions.

Much more in taxes is paid before age 70.

However, the primary benefits come after age 70, and again after age 85:
  • Lower taxes on SS benefits after age 70.
  • Substantial lowering of taxes after I die (as my wife's filing status would be single, and she loses her SS and gets just mine.)
As I become older, I have more in tax deferred, so more to convert, and less time to convert, so the advantage becomes less.
Clearly it has to go away completely by age 70.

is50xenough
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Re: No advantage to doing Roth conversions?

Post by is50xenough » Wed Jul 10, 2019 6:56 am

Lazareth wrote:
Tue Jul 09, 2019 11:46 am
Being age mid-60’s, the next few years offer a window to convert IRA savings (which are 80% of total savings) to Roth IRA and stay within lower income tax bracket.

I really like the Optimal Retirement Planner spreadsheet (i-ORP.com) for modeling various conversion strategies... from no conversion at all, to an aggressive approach that pushes the first-year conversion well-into a higher tax bracket with an eye-popping tax bill.

But when I finally read the FAQ section of i-ORP I was surprised to find this (I underline #3 for my own emphasis):

ORP users are familiar with 3 key results:
  1. Partial IRA to Roth IRA conversions can be done with taxable income at much higher, but still constrained, tax rates during the first few years of retirement. Some ORP users suffer a panic attack when they first turn on unconstrained conversions and see the resultant tax bill for the first few years of retirement.
  2. Tax efficient retirement income management can done without IRA to Roth IRA conversions.
  3. Both methods give much the same disposable income for any given model; i.e. there is no particular economic advantage to doing conversions.
Conversions move tax payments up to the front of the retirement plan while the non conversion method spreads the tax-deferred withdrawals and thus income taxes across retirement. In most cases, conversions will pay less total taxes than non-conversions, an irrelevant consideration since the goal is to maximize disposable income.

In light of this, that “there is no particular economic advantage” I ask this group for reason they choose to convert, to pay more taxes now, rather than smooth out the taxes over the draw down period?
There are a couple papers that looked at this and came to conclusion that the conversion strategy, ON AVERAGE, ended up with 3% more at end of life. That agrees with what you quote. But it also translates into money lasting one more year if you think about a 30 year retirement time horizon. 3% seems to be of no particular economic advantage. Money lasting at end of lifespan suddenly does. As several have said each individual situation a bit different.

bradpevans
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Re: No advantage to doing Roth conversions?

Post by bradpevans » Wed Jul 10, 2019 7:15 am

Lazareth wrote:
Tue Jul 09, 2019 11:46 am
Being age mid-60’s, the next few years offer a window to convert IRA savings (which are 80% of total savings) to Roth IRA and stay within lower income tax bracket.

I really like the Optimal Retirement Planner spreadsheet (i-ORP.com) for modeling various conversion strategies... from no conversion at all, to an aggressive approach that pushes the first-year conversion well-into a higher tax bracket with an eye-popping tax bill.

But when I finally read the FAQ section of i-ORP I was surprised to find this (I underline #3 for my own emphasis):

ORP users are familiar with 3 key results:
  1. Partial IRA to Roth IRA conversions can be done with taxable income at much higher, but still constrained, tax rates during the first few years of retirement. Some ORP users suffer a panic attack when they first turn on unconstrained conversions and see the resultant tax bill for the first few years of retirement.
  2. Tax efficient retirement income management can done without IRA to Roth IRA conversions.
  3. Both methods give much the same disposable income for any given model; i.e. there is no particular economic advantage to doing conversions.
Conversions move tax payments up to the front of the retirement plan while the non conversion method spreads the tax-deferred withdrawals and thus income taxes across retirement. In most cases, conversions will pay less total taxes than non-conversions, an irrelevant consideration since the goal is to maximize disposable income.

In light of this, that “there is no particular economic advantage” I ask this group for reason they choose to convert, to pay more taxes now, rather than smooth out the taxes over the draw down period?
while I haven't dug into the details, the part that struck me (now bolded) is paying for the conversions with income (rather than, for instance, cash in the bank). I think this is what leads to the "...much the same disposable income" statement

Retired2013
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Re: No advantage to doing Roth conversions?

Post by Retired2013 » Wed Jul 10, 2019 7:22 am

I remember reading that i-ORP doesn’t take Medicare IRMAA penalty into consideration. It treats the penalty as just an added expense.

randomguy
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Re: No advantage to doing Roth conversions?

Post by randomguy » Wed Jul 10, 2019 7:58 am

is50xenough wrote:
Wed Jul 10, 2019 6:56 am

There are a couple papers that looked at this and came to conclusion that the conversion strategy, ON AVERAGE, ended up with 3% more at end of life. That agrees with what you quote. But it also translates into money lasting one more year if you think about a 30 year retirement time horizon. 3% seems to be of no particular economic advantage. Money lasting at end of lifespan suddenly does. As several have said each individual situation a bit different.
3% more spending OR 3% more are EOL? The first is say spending 3.09 million instead of 3 million over 30 years. The other is having 100k versus 103k when you die.

At a high level ROTH versus traditional is all about tax games.If you pay 25% now or 25% later AND there is no tax drag, you end up in the same spot. But for most people the ROTHs allow for lower taxes. Between tiered rates, SS taxation, Medicare IRMAA, spousal death there is a decent chance you can get hit with higher rates . Obviously things like tax cuts, moving to a no tax state, getting a spouse and large medical expenses can drop your taxes. If things are equal but you have taxable, avoiding tax drag get you some benefit.

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Cyclesafe
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Re: No advantage to doing Roth conversions?

Post by Cyclesafe » Wed Jul 10, 2019 8:41 am

We know nothing.

Roth conversions afford tax diversification, especially as continuing MFJ cannot be assumed.

Conversion at low rates is really a no brainer: at the higher rates could be - at worse - break even. Conversion now with current slightly more favorable tax rates until law reversion in 2025 should be considered. Trying to figure out one's lifetime average incremental tax rate and trying to convert up to it involves too many variables/assumptions to be actionable.

One is easily overwhelmed by the analysis, but one is nevertheless forced to act because of fear of missing out (FOMO).

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jeffyscott
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Re: No advantage to doing Roth conversions?

Post by jeffyscott » Wed Jul 10, 2019 8:42 am

Admiral wrote:
Tue Jul 09, 2019 12:25 pm
I-ORPs goal is to maximize spending and, while doing so, pay as little tax as possible. That may not be your goal. In other words, you may not need to have as much disposable cash as possible in the early retirement years, which means you could be in a lower tax bracket and, thus, benefit (tax-wise) from converting to Roth.
Yes, if you are going to spend every penny, there may be no reason to Roth convert. Roth conversion is a withdrawal just as taking the money out of TIRA and spending it is. If I am going to spend $100K per year from retirement accounts, I can take that from TIRA and not convert. But if I am only going to spend $50K, even though ORP says I can spend $100K, then I should spend $50K from TIRA and convert $50K to Roth.

I jut tested that calculator I put in our actual asset locations, then I shaved 19.5% off the TIRA money and added that to Roth. This would be as if we converted everything at 12% Fed, 7.5% state, we are doing max conversions at those tax rates. The calculator came up with a 1% max spending difference in favor of not converting.

But it gives maximum after-tax spending of about 3X what we actually spend and we do not have any interest in searching out more ways to spend money, just for the sake of spending it.

I think you can look at the output from ORP as also being a Roth conversion guide. If it says optimal plan is to withdraw $50K from TIRA, then you can do that and either spend or convert it. My results seemed to be just what we are doing, it has TIRA withdrawals to the top of the 12% tax bracket and that is what we are doing, only after withdrawing the money goes to Roth.
Time is your friend; impulse is your enemy. - John C. Bogle

afan
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Re: No advantage to doing Roth conversions?

Post by afan » Wed Jul 10, 2019 8:55 am

Conversions work best for those who retire early and have years during which their taxable income would be quite low. If they also have sizeable amounts in tax deffered savings they can move those to Roth without paying too much in taxes. When SS and RMDs begin their tax rates will go up.

People who do not fit this scenario, for example will be working past 70, may never have these low tax years. Their retirement tax bracket will be lower than the marginal rate while working. For them Roth conversions do not save money.

For such people there may be a role for Roth in estate planning, since it will reduce the taxable estate and save on estate taxes.

As others have noted, you have to take account of the effects of converting, or not, on other factors such as Medicare rates.

So one cannot generalize that conversions are good or bad. They work for some people and not for others.
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bsteiner
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Re: No advantage to doing Roth conversions?

Post by bsteiner » Wed Jul 10, 2019 9:06 am

is50xenough wrote:
Wed Jul 10, 2019 6:56 am
...
There are a couple papers that looked at this and came to conclusion that the conversion strategy, ON AVERAGE, ended up with 3% more at end of life. ...
You have to figure it through the time when the last dollar is distributed.

We've found that, making reasonable assumptions, to the extent you can convert at a tax rate less than, equal to, or not too much higher than the tax rate that would otherwise apply to the distributions, it's likely to add much more than 3% to the amount remaining after the last dollar is distributed.

sawdust60
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Re: No advantage to doing Roth conversions?

Post by sawdust60 » Wed Jul 10, 2019 9:58 am

Generalized approach may not be suitable. Use i-orp for some ideas. Using RPM and/or your own spreadsheet can help understanding.

12% marginal rates are scarce, once you start SS. see the wiki.

Also consider tax rates of heirs for inherited IRA.

And there may be years with low taxes, due to high medical costs or charitable contributions.

It's also nice to have the flexibility to be able to utilize the Roth funds, instead of making a large taxable withdrawal.

My plan is to do Roth conversions each year, staying under the first IRMAA tier, which results in 22% tax on some conversions. Review annually. I use RPM, and check to see that I am utilizing 100% of the 12% bracket in all future years. (In my case, 85% of SS is always taxable. i-orp might take this shortcut for everyone, and it also ignores the hidden tax effect of IRMAA.)

RPM shows both answers. So I can see that Roth conversions make a significant difference for my case with my assumptions and my expenses and my balances, etc.

Take time to work thru the details.

is50xenough
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Re: No advantage to doing Roth conversions?

Post by is50xenough » Wed Jul 10, 2019 10:46 am

bsteiner wrote:
Wed Jul 10, 2019 9:06 am
is50xenough wrote:
Wed Jul 10, 2019 6:56 am
...
There are a couple papers that looked at this and came to conclusion that the conversion strategy, ON AVERAGE, ended up with 3% more at end of life. ...
You have to figure it through the time when the last dollar is distributed.

We've found that, making reasonable assumptions, to the extent you can convert at a tax rate less than, equal to, or not too much higher than the tax rate that would otherwise apply to the distributions, it's likely to add much more than 3% to the amount remaining after the last dollar is distributed.
To clarify what I said/meant above. I think two best pieces of info I've seen is the very readable article by Kitces---love how he illustrates:

https://www.kitces.com/blog/tax-efficie ... ing-needs/

I think his numbers would imply that it is 3% return per year so either money last longer or you can spend more a year eventually (that part is individual preference and use of his results.

The other source I referred to is an article called "Tax-Efficient Withdrawal Strategies" by Cook, Meyer, Reichenstein published in Financial Analysts Journal. I can't lay my hands on a link and am hesitant to post article since the site I can find charges. In the latter study they compare different withdrawal strategies. The Roth conversions add a year compared to a smart but not Roth conversion strategy. More years are added compared to strategies that I just don't think Bogleheads would utilize.

I agree that personal tax situations would change these numbers and the unknown of tax rates in future would as well.

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FiveK
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Re: No advantage to doing Roth conversions?

Post by FiveK » Wed Jul 10, 2019 10:49 am

Retired2013 wrote:
Wed Jul 10, 2019 7:22 am
I remember reading that i-ORP doesn’t take Medicare IRMAA penalty into consideration. It treats the penalty as just an added expense.
The latest version of ORP does treat IRMAA costs the same as taxes.

ORP's assumptions on taxation of SS benefits and investment income will be correct for some, and incorrect for others. Comparing ORP's tax calculation with a good tax package can help you understand how well ORP "understands" your situation.

cherijoh
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Re: No advantage to doing Roth conversions?

Post by cherijoh » Wed Jul 10, 2019 11:31 am

dodecahedron wrote:
Tue Jul 09, 2019 12:28 pm
I do not understand the full context of this particular statement, but it is a highly individual matter, depending on many circumstances.

I can say that about $30K in carefully titrated Roth conversions do make sense for me, this year, at age 65, for a variety of reasons. Roth conversions will not make sense in 2020 (or possibly a very small amount, a few thousand, at most.)

I am mindful of many things in saying that (taxable SS, keeping my qualified divs taxed at 0%, Medicare IRMAA, senior citizen property tax reduction income limits, charitable giving plans and deduction lumping and the 30% limit on annual deductions for FMV of appreciated securities, my solar credit carryforward, the way my state treats IRA income, foreign tax credit, etc.)
+1

You have raised many good points in your post. Using an off-the-shelf planning tool can only take you so far.

I did some opportunistic Roth conversions during the Great Recession - in addition to VTSAX being "on sale", I was also in a lower tax bracket (from being under-employed) than when the 401k contributions had been made. That allowed me to push my Roth to be in the 10-12% range of my total assets after the recovery at a very low tax cost. Personally, I think it is a good idea to have some diversification in my investments from a tax-treatment perspective. You never know what the future will bring.

Last year I retired in the spring and started back to doing some Roth Conversions. I ended up jumping on the December dip in the stock market and converted up to the top of the 22% marginal tax bracket.

In January, I started a pension from a former employer that had reached its maximum value. It complicates my Roth conversion strategy since if I take the standard deduction, as a single person I'm already into the 22% tax bracket between the pension, interest and dividends. (I'm not complaining though - I'd rather have the pension than have space in the 12% msrginsl tsx bracket to do conversions :wink:) I'm currently wrestling with how much of my IRA/401k to convert to Roth. I can envision circumstances where I could convert too much to my Roth account.

trueblueky
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Re: No advantage to doing Roth conversions?

Post by trueblueky » Wed Jul 10, 2019 10:00 pm

Taxes are on sale.

Our marginal rate will jump when any of the following occur:
* I pass
* DW passes
* DW starts SS (will be 85% taxed forever)
* RMDs begin

Tax holiday expiration in 2026 happens after our RMDs start. That will push us into an even higher bracket.

I think of tax rate in three groups 10-12 , 22-24 , 32-37. We are in the first group now; once second group starts for us, there is no end.

I can pay 12% now on Roth conversions or pay twice that or more later. I have run it thru i-Orp and RPM. No brainer for us.

YMMV.

heyyou
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Re: No advantage to doing Roth conversions?

Post by heyyou » Thu Jul 11, 2019 2:03 am

As early retirees in a low cost area, with far below six-digit retirement income, and a history of delayed gratification paying well, Roth conversions suited us. Your mileage may vary due to a plethora of reasons.

Now, due to a health problem, the survivor will have a reduced tax load as a single payer on the RMDs (mid-four digits at the start) on the remaining tIRA (traditional IRA). I also like storing only stock funds in the 3x larger RIRA, with only bond funds in the tIRA to limit its growth. Without the recent, long bull market, our returns would have been different, but paying some extra tax early, for a dozen years, made a difference. Thank you to the tax-savvy Bogleheads, Celia and others.

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dodecahedron
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Re: No advantage to doing Roth conversions?

Post by dodecahedron » Thu Jul 11, 2019 2:54 am

trueblueky wrote:
Wed Jul 10, 2019 10:00 pm
Taxes are on sale.
To carry the analogy further: in my case, taxes are on sale *AND* I have a gift card!

(My gift card is my solar credit carryforward from the investment I made in community solar panels over a year ago. I might as well use my gift card while taxes are on sale for me.)

Roth conversion makes a lot of sense for me this year.

SGM
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Re: No advantage to doing Roth conversions?

Post by SGM » Thu Jul 11, 2019 3:53 am

The advantages for us include no RMDs after age 70, avoiding a higher tax bracket and the next higher Medicare premium. We converted after cutting working hours way back and after complete retirement. We did a series of conversions over about 6 years before taking delayed SS and a work related annuity. If one pays taxes out of a taxable account the purchasing power is unchanged at the immediate time of conversion, a fact misunderstood by many FAs.


Now we avoid many years of higher taxes and Medicare premiums for what I expect to be a long retirement. Also there are advantages for widows or for inheritance purposes. James Lange, a Pittsburgh accountant has written extensively on the subject of conversions. There was a slight advantage in lowering our taxable dividends. Fortunately the market continued to rise after conversions. In our case conversions were an excellent move.

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