always_learning
Recycles dryer sheets
- Joined
- Feb 2, 2017
- Messages
- 267
The question is: "Would you convert 401K/tIRA over to Roth, using after-tax money from mutual funds to pay the taxes, if doing so would leave you with almost zero after-tax money left?"
Here is why I'm asking:
Pension + his & hers SS will hit around the $65-68k mark. That doesn't leave much room for DIV/CG before being tossed into the next bracket and having to pay on on DIV/CG. RMDs, when it's time for those, will most likely just go into MFs, as the pension & SS should cover our needs. By converting and spending down after tax money, the bulk of our money would then be in ROTH, so we could withdraw as needed without tax implications.
At first glance, this would most likely be an 8-10 year process. Conversions of some magnitude will be happening no matter what, so we don't have large RMDs, but I was curious about this strategy and everyone's thoughts.
Also, if it makes a difference, retirement will be at ages 58/51 and conversions would begin at that time, so we're looking at a long time for tax-free growth in the Roth.
(I did search the forum but didn't see anything that resembled this question, so pardon me if this has already been discussed)
Thoughts?
Here is why I'm asking:
Pension + his & hers SS will hit around the $65-68k mark. That doesn't leave much room for DIV/CG before being tossed into the next bracket and having to pay on on DIV/CG. RMDs, when it's time for those, will most likely just go into MFs, as the pension & SS should cover our needs. By converting and spending down after tax money, the bulk of our money would then be in ROTH, so we could withdraw as needed without tax implications.
At first glance, this would most likely be an 8-10 year process. Conversions of some magnitude will be happening no matter what, so we don't have large RMDs, but I was curious about this strategy and everyone's thoughts.
Also, if it makes a difference, retirement will be at ages 58/51 and conversions would begin at that time, so we're looking at a long time for tax-free growth in the Roth.
(I did search the forum but didn't see anything that resembled this question, so pardon me if this has already been discussed)
Thoughts?