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Re: Think twice before converting to a ROTH.
Old 03-21-2006, 02:29 PM   #41
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Re: Think twice before converting to a ROTH.

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Originally Posted by markf57
There appears to me to be another benifit of converting to a Roth that I don't see mentioned that much. When one converts to a Roth, you no longer have to worry about the 70 1/2 rules about required distributions and the taxes and penalties if you do that wrong. Am I right?
Yup. We go through this every year with my FIL. It's getting better but the anxiety levels are still pretty high.

With a Roth IRA, the only people who have to worry about RMDs are your heirs.

(Edited to split off the Hawaii rain discussion.)
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Re: Think twice before converting to a ROTH.
Old 03-21-2006, 03:21 PM   #42
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Re: Think twice before converting to a ROTH.

Quote:
Originally Posted by markf57
There appears to me to be another benifit of converting to a Roth that I don't see mentioned that much. When one converts to a Roth, you no longer have to worry about the 70 1/2 rules about required distributions and the taxes and penalties if you do that wrong. Am I right?
Yep, AND your Roth withdrawals don't show up on your AGI. So you may avoid future SS "means testing" or other limits. It also doesn't push up your AGI like traditional IRAs will, so you might indirectly avoid other higher taxes as well.

Of course, taxes between here and FIRE are a crapshoot, to I'm just trying to keep both types of IRAs balanced.
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Re: Think twice before converting to a ROTH.
Old 03-21-2006, 03:42 PM   #43
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Re: Think twice before converting to a ROTH.

I'm wondering...

Baby boomers retire in volume, see how crappy their ss payments are, see the tax implications on their ss payments from taking money out of their retirement accounts...how long before the lobbying to eliminate taxation of ss benefits...?
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Re: Think twice before converting to a ROTH.
Old 03-21-2006, 03:49 PM   #44
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Re: Think twice before converting to a ROTH.

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Originally Posted by Cute 'n' Fuzzy Bunny
how long before the lobbying to eliminate taxation of ss benefits...?
All of Congress (and their staffs) will be Boomers who didn't save enough for retirement and are working into their 70s & 80s, so I can see that happening.
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