Hello!
Hope this message finds you well. I am asking assistance or guidance regarding my parents' retirement situation. My parents are in a stable financial position between pension, social security, and rental properties. Their current marginal tax bracket is 22%. My father is already on medicare and my mother will be eligible for medicare later this year. My father will be forced to take out RMDs end of 2025. My mother has a healthy traditional 401k account which she is considering converting to Roth IRA for more flexibility.
Question to you all:
1. Is it worth converting some of her traditional 401k to ROTH IRA, and if so, how so?
2. I read that it may affect both their social security and medicare. For medicare, if income approximately <195k then it won't affect medicare premiums. I think to address this, parents could convert enough to stay below the <195k threshold.
3. For social security, it may affect how much is taxed, ultimately reducing their current social security. I'm not sure what the threshold for this reduction for be, and if reduced, how long would it be reduced?
Would the easy answer be to reach out to a financial advisor to navigate, or is this feasible to navigate ourselves?
Thanks!
Anthony
Hope this message finds you well. I am asking assistance or guidance regarding my parents' retirement situation. My parents are in a stable financial position between pension, social security, and rental properties. Their current marginal tax bracket is 22%. My father is already on medicare and my mother will be eligible for medicare later this year. My father will be forced to take out RMDs end of 2025. My mother has a healthy traditional 401k account which she is considering converting to Roth IRA for more flexibility.
Question to you all:
1. Is it worth converting some of her traditional 401k to ROTH IRA, and if so, how so?
2. I read that it may affect both their social security and medicare. For medicare, if income approximately <195k then it won't affect medicare premiums. I think to address this, parents could convert enough to stay below the <195k threshold.
3. For social security, it may affect how much is taxed, ultimately reducing their current social security. I'm not sure what the threshold for this reduction for be, and if reduced, how long would it be reduced?
Would the easy answer be to reach out to a financial advisor to navigate, or is this feasible to navigate ourselves?
Thanks!
Anthony
Statistics: Posted by anthonyphamy — Thu Feb 29, 2024 1:30 am — Replies 0 — Views 121
