Age restrictions for Roth conversion?

[Badger]

Once you reach 70 1/2 and have to take RMD can you still make conversions to a Roth IRA?

With our combined pensions, SS, and dividends from taxable accounts I estimate that once we turn 70 1/2 the resulting addition of RMD will put us in the 25% tax bracket with more income than we need for our living expenses. Instead of taking the distribution and putting the money in a taxable account is it possible to use the RMD for a conversion to a Roth instead? Or would that not be considered taking the RMD?

I guess that is two questions. If the second question is not possible then any suggestions for how to deal with that situation are welcome.

Cheers!

[travelover]

Looks like there is no age restriction. I found this article useful on the why / why-nots of conversion:
Post-Retirement Roth Conversion « Fairmark.com Fairmark.com

[kaneohe]

Quote:

Originally Posted by travelover Looks like there is no age restriction. I found this article useful on the why / why-nots of conversion: Post-Retirement Roth Conversion « Fairmark.com Fairmark.com

Maybe it's buried in there but I didn't see it..........you cannot convert the RMD and since RMDs must come out first (or are considered to come out first), in order to do a conversion, you need to pull the RMD first, then pull additional funds to convert. Kind of a dilemna since you then have to worry about higher medicare B premiums if you get too high but perhaps you might want to console yourself by knowing there could be worse problems to have

[travelover]

Quote:

Originally Posted by kaneohe Maybe it's buried in there but I didn't see it................

Sorry, a better reference:

RMD and Roth Conversion

Quote:

People receiving required minimum distributions aren't allowed to roll them over to another IRA or retirement plan — and that means they aren't allowed to convert these payments to a Roth IRA. What's more, the IRS says the first dollars that come out of a traditional IRA in a year for which the RMD rule applies must be treated as RMD dollars. In effect, they are saying you have to satisfy the RMD requirement before you do a Roth conversion.

[Alan]

Quote:

Originally Posted by kaneohe Maybe it's buried in there but I didn't see it..........you cannot convert the RMD and since RMDs must come out first (or are considered to come out first), in order to do a conversion, you need to pull the RMD first, then pull additional funds to convert.

That is how I understand it as well. I know a couple of folks who are in their 70's and doing ROTH conversions so that it is better for their children when they inherit them.

[Badger]

Quote:

Originally Posted by travelover Sorry, a better reference: RMD and Roth Conversion

Thanks for clearing that up. I kind of figured it would work this way. Bummer!

Cheers!