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- Posts: 140
- Joined: Fri Feb 17, 2012 8:59 am
- Location: Tennessee
Just trying to get some opinions. Have been doing some tIRA to Roth conversions since retirement since retiring and was thinking whether it makes more sense to do this early in the year or wait till December. Any thoughts ... What do others do in this situation?
Everthing works out in the end. If it doesn't then its not the end.
- Posts: 7869
- Joined: Tue Nov 20, 2007 6:02 am
There are pluses and minuses to both. Done towards the end of the year, you have a clearer picture of your tax situation and exactly how much you can convert at your desired tax bracket. But as the stock market trends up, you might be able to convert less shares due to a nav increase. I do it in late dec. myself, but I have some shares in a private stock that sometimes gives surprise distributions.
- Posts: 33
- Joined: Sun Oct 04, 2015 4:01 pm
I think a combination of the two can make sense.
1. Convert most of the estimated desired amount early in the year (to capture expected gains in Roth throughout the year).
2. Use an end of year conversion to optimize based on tax situation.
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- Joined: Tue Jun 06, 2017 12:09 am
- Location: SF Bay Area
If there is a good dip during the year, I'll do mine during the dip as a fortuitous gift, otherwise I'll do it in Dec.
So far it's been Dec the last 4 years. The one decent dip that did occur happened in a Dec.
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I have been using a Pseudo Dollar Cost Averaging approach. Concert a bit every month with an option for more if there is a Dip. I haven’t backtested it but it seems reasonable to me.
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- Location: Arizona
Could keep it in taxable until the beginning of December. That way you can be sure you won't forget you made XYZ contribution or rollover.
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- Joined: Fri Apr 08, 2016 12:41 pm
I've been doing them at the start of the year with a true-up at the end of the year. I'm thinking about quarterly this year -- effectively a DCA approach. I might speed up the conversions if a "significant" market drop occurred -- but I'll have to define what that means first.
I do miss the re-characterization option...
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