I have did enough homework to move away from our financial planner and manage our own investments. What I am now looking into is Roth conversions.
We are 55 and 57 and I have $1.1M in my 401K and my wife has 500K in her IRA. I am trying to figure out how to weigh the various factors of
- expected tax rates now and when we hit 70 1/2
- ACA subsidies/cost sharing that we currently qualify for
- Medicare premiums
- assumptions about returns (and therefore values of 401K/IRA @ 70 1/2)
- benefit to heirs if we don't spend it all
The easy thing to do is to convert up to the top of our tax bracket (currently low but will be going up once our cash reserves run out). The problem with that is taking out that amount doesn't put much of a dent in the RMD problem @ 70 1/2. Should I convert all of it or just a portion?
My head is spinning trying to weight all of the options and come up with a reasonable plan. Is hiring a CPA/tax planning person a good idea to put a plan in place?
Would love to know what others have done or would recommend. It is obviously a nice problem to have!
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We are 55 and 57 and I have $1.1M in my 401K and my wife has 500K in her IRA. I am trying to figure out how to weigh the various factors of
- expected tax rates now and when we hit 70 1/2
- ACA subsidies/cost sharing that we currently qualify for
- Medicare premiums
- assumptions about returns (and therefore values of 401K/IRA @ 70 1/2)
- benefit to heirs if we don't spend it all
The easy thing to do is to convert up to the top of our tax bracket (currently low but will be going up once our cash reserves run out). The problem with that is taking out that amount doesn't put much of a dent in the RMD problem @ 70 1/2. Should I convert all of it or just a portion?
My head is spinning trying to weight all of the options and come up with a reasonable plan. Is hiring a CPA/tax planning person a good idea to put a plan in place?
Would love to know what others have done or would recommend. It is obviously a nice problem to have!
Sent from my iPad using Tapatalk