Is it better to do Roth conversions now or maximize Roth contributions for a two more years?
I am almost 60 and retired at 59. DW is 63 and will work till age 65 in Jan 2026. She makes $90K.
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$1.7M in 401K and IRAs (before tax)... No pensions, state tax is 5%.
What is the average basis fraction on what you would have to sell? If not ridiculously low (e.g., you got the investments 30 years ago and since then...) it's still going to be an advantage converting in the 12% bracket.I will have to sell some stock ETFs or I bonds depending on how much I convert.
That seems good thinking.But then I was thinking since I can only contribute to Roth 401K for a couple more years I should maximize that.
The comments make me realize I need to learn about IRMAA.
If your only unavoidable taxable income in retirement will be qualified dividends in your taxable account, you could withdraw/convert over $200K/yr before hitting the first IRMAA tier. The first ~$110K would be at 12% federal (I'm assuming the state is a flat, not progressive, rate). You would then have a short stretch at a 27% marginal tax rate due to those dividends before a long stretch at 22% up to whatever the IRMAA Premium MAGI Brackets will be.
Statistics: Posted by FiveK — Tue Jun 11, 2024 9:48 pm — Replies 7 — Views 486