My plan has been: convert to the top of the 12% bracket.
The brackets are clustered: 10,12; 22,24; 32,35,37. While they're scheduled to rise in the future, the clustering remains to some extent.
Thinking in three clusters, rather than seven brackets, simplifies the thought process.
When DW begins SS, we start RMD, or one of us passes, we will be forever in the second cluster. I don't see the point in going there now. I do see a huge advantage in paying 12% today to avoid 22% tomorrow.
In addition to Roth conversions, I have started Qualified Charitable Deductions. Those are available at age 70.5, while RMD for me is at age 73.
Taxation of Social Security benefits, IRMAA, and NIIT are factors that may make this more complex. Additionally, DW and I may inherit an IRA within a few years. RMD from the inherited IRA is another factor that could raise our tax bracket in the future.
This is highly situational. YMMV.
The brackets are clustered: 10,12; 22,24; 32,35,37. While they're scheduled to rise in the future, the clustering remains to some extent.
Thinking in three clusters, rather than seven brackets, simplifies the thought process.
When DW begins SS, we start RMD, or one of us passes, we will be forever in the second cluster. I don't see the point in going there now. I do see a huge advantage in paying 12% today to avoid 22% tomorrow.
In addition to Roth conversions, I have started Qualified Charitable Deductions. Those are available at age 70.5, while RMD for me is at age 73.
Taxation of Social Security benefits, IRMAA, and NIIT are factors that may make this more complex. Additionally, DW and I may inherit an IRA within a few years. RMD from the inherited IRA is another factor that could raise our tax bracket in the future.
This is highly situational. YMMV.
Statistics: Posted by trueblueky — Wed Jul 17, 2024 5:18 am — Replies 1 — Views 286