Originally Posted by Animorph
I've probably spent most of my retirement working on this problem. It's not easy if everything is in play.
If you can identify the federal tax bracket that you will be exceeding during RMD's you can then try to Roth convert whenever you get a chance to within that bracket. Until it looks like RMD's will come out within that bracket. This might be determined with a fairly rough calculation of your taxes at age 70. Then if you get the chance to take extra tIRA withdrawals/Roth conversions in a lower bracket before age 70, jump on it.
It's not a big deal if you don't get it exactly perfect. But if you are well into the 25% tax bracket with RMD's at age 70 and have no taxable income now, it can make a big difference.
Any time you need to make a taxable withdrawal from a tIRA and have an equivalent amount in your taxable account, make it a Roth conversion.
I was right with ya until the last sentence.
Originally Posted by Lsbcal
If you are safe within the 15% zone through SS and RMD's, then it's a no brainer. You don't need to do any Roth conversions.
I was referring to the case where someone knows they will likely have 2 income streams (SS + RMD's) that push them into higher brackets later in life.
I'm still in non-actionable territory, but next year I could take action. I'd even like to see a 'non-calculator' app that used rules like the above to direct people to the right general scheme, or if they fall into a place where there are more considerations. If the latter, the tool might be able to bracket the scope of the advantage. For instance, are we talking 0.5% or 5%? I recall in one of my spreadsheets messing up the state income tax and realized that I could save 10X more by moving 20 miles south than I could by optimizing conversions!