I will be retiring in May and my wife will work till the end of the year. I'll be 62 and she will be 59.
A big part of our retirement budget will be qualifying for ACA subsidies. I just converted $10,000 from my IRA to a Roth, not having taxes taken out. This will basically bring my normal tax return to about zero. This should be plenty (with what I already have in my Roth) to get me to 65. But then we'll need 3 more years to get my wife to 65. Depending on how the market does she may or may not have enough in her and what's left of my Roth.
So my question is, while I know taking taxes out of the converted money is frowned upon, I wonder if it makes sense in my case?
What are the negatives besides the fact you have less money in your account going forward? I would maybe need to convert $50K at most to insure we'd have enough. We're in the 12% tax bracket so it would be about $8K in taxes, fed and state. But this could save us thousands if we don't qualify for as much in ACA subsidy.
Anything I'm missing here? Thanks for any help.
A big part of our retirement budget will be qualifying for ACA subsidies. I just converted $10,000 from my IRA to a Roth, not having taxes taken out. This will basically bring my normal tax return to about zero. This should be plenty (with what I already have in my Roth) to get me to 65. But then we'll need 3 more years to get my wife to 65. Depending on how the market does she may or may not have enough in her and what's left of my Roth.
So my question is, while I know taking taxes out of the converted money is frowned upon, I wonder if it makes sense in my case?
What are the negatives besides the fact you have less money in your account going forward? I would maybe need to convert $50K at most to insure we'd have enough. We're in the 12% tax bracket so it would be about $8K in taxes, fed and state. But this could save us thousands if we don't qualify for as much in ACA subsidy.
Anything I'm missing here? Thanks for any help.
