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Later retirer question for my dad
Old 02-20-2011, 08:28 PM   #1
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Later retirer question for my dad

As I think aout retiring early I have learned a lot -but not enough..My fathr just retired-finally!- at 81 years of age and is taking required minimum IRA that he is retired I assume he will be in a lower tax bracket and should seriously consider using these minimums to convert from the IRA to a ROTH I right? Will this be to his advantage? He has been investing them, but I am not clear in what and won't pry into his affairs - though I would like to advise him...he has not really gotten much guidance from his current advisers.

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Old 02-20-2011, 08:33 PM   #2
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The IRS won't allow RMD funds to be converted to a Roth IRA.

This will provide more info: RMD and Roth Conversion

Numbers is hard.

Retired in 2005 at age 58, no pension

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Old 02-20-2011, 09:02 PM   #3
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However, dad could still do Roth conversions to reduce future RMDs. He can use this year's RMD to help pay the taxes on a conversion rather than banking the RMD.

The idea is that if conversions now results in a lower tax rate on the converted money than it would be taxed in the future, then it's a good deal. Remember that "the future" could even be when you inherit his IRA and then the money would get taxed at your marginal income tax rate.
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