Originally Posted by pb4uski
If you're going to live on retirement account distributions and pay the taxes on them then monthly makes as much sense as annual to me.
However, part of my tax strategy is to limit my taxable income to the 15% bracket so in my case living off taxable accounts and doing Roth conversions annually to the top of the 15% bracket makes more sense for me. I don;t know how much I can convert and stay within the 15% tax bracket until I know what my taxable account dividends and capital gain distributions are for the year and they vary so a pre-programmed monthly conversion (or distribution) would not work for me. I think that there are many other ER members in the same boat.
We are looking to retire in a couple of years with DH being 56 and having access to his 401K funds. We too want to convert as much as possible to Roths, but have been struggling with what makes the most sense for funding our expenses in the meantime. We have plenty of taxable assets, some funds that have high capital gains that we could harvest at our lower tax rate, and the 401K. Still can't figure out if it makes the most sense to artificially keep our taxable income down by using savings for expenses and doing conversions to Roth, or keeping our savings and using the retirement account at these low rates, converting to Roths when we can. Will have two kids in college, and can file a Fafsa for financial aid that ignores our assets if we keep our 'income" below $50K, as well as a serious ACA subsidy, so not much wiggle room for conversions until about 60.
So many variables!