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IRA to Roth Conversion - another question
Old 05-07-2008, 03:08 PM   #1
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IRA to Roth Conversion - another question

A question on IRA to Roth conversion when you reach 70 1/2 and have to take RMDs from the IRA.
1) can you convert IRA funds to Roth after you reach 70 1/2
2) If you want to convert more IRA money to a Roth after you reach 70 1/2, does the amount you convert have to be in addition to the RMD amount?

For example (made up numbers);
$1M in IRA. @ age 70 1/2 the rmd is 37k and have to pay taxes on that.
If I want to convert 20k that year, then do I have to take out at total of 57k (37k+20k)?

Thanks.
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Old 05-07-2008, 03:25 PM   #2
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YUP

Conversion does not satisfy the RMD. Convert early & often!
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Old 05-07-2008, 04:01 PM   #3
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Very interesting question and I'm finding conflicting answers. The only reason I could think of why you couldn't do this, is if the money withdrawn put you over the limit on annual earnings, which would prevent you from contributing to a Roth.
As long as you're paying taxes on the distribution, why would it matter if you roll it to a Roth? Are you currently employed?
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Old 05-07-2008, 06:39 PM   #4
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Megacorp -- the answers are:
1) Yes
2) Yes
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Old 05-08-2008, 12:26 AM   #5
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Quote:
Originally Posted by Art G View Post
Very interesting question and I'm finding conflicting answers. The only reason I could think of why you couldn't do this, is if the money withdrawn put you over the limit on annual earnings, which would prevent you from contributing to a Roth.
As long as you're paying taxes on the distribution, why would it matter if you roll it to a Roth? Are you currently employed?
nope, I'm FIREd.
... and I don't think that the dollars you convert are counted towards the earnings limit for conversion.
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Old 05-08-2008, 09:22 AM   #6
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I was basing my thoughts on this article...

Roth conversions after 70 1/2 some seniors face obstacles | CPA Journal, The | Find Articles at BNET.com
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Old 05-08-2008, 03:11 PM   #7
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Slight revision of prior post...

1) Yes
2) Yes, but that RMD does not count as income toward the 100k modified AGI conversion limit per the following citation: Modified Adjusted Gross Income.
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Old 05-09-2008, 09:28 AM   #8
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Hmmmmm, who to believe? Conflicting reports.
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