Quote:
Originally Posted by mathjak107
are you in the 15% tax bracket it now if you convert? why is that a good deal?
did you know as a retiree you can pull almost 35,000 a year from your ira's or 401k and pay as little as 1500.00 regular tax on it
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To me, 15% tax is an arbitrary limit, so for a single person, thats about
39K, after that it jumps 10%, a pretty big jump, and I don't see taxes
going down in the future, hence I would take my 15% when I can.
I expect my income to be much less than 39k and that will allow me
to move money (39K-income) to roth.
I assume that 1500 is for 2 over the age of 65.
I look at retirement in 3 phases:
phase 1: before 59.5
phase 2: 59.5-70.5
phase 3: 70.5-death
phase 1: plan A is to live off taxable accounts, plan B is to do a 72t if I run short, so this is an idea time to move $ to roth
phase 2: when taxable accounts run out, start tapping 401k/IRA, when I take SS will depend on situation, for my purposes, I assume its not going
to be there.
phase 3: start taking min. distributions of the 401K
throughout phase 2,3 if I can move $ to roth at 15% or less, I will do it.
If I'm going to be taxed at 25% because of big withdrawl, I'll take money
out of roth.
Obviously the 15% applies because of my expected income, everybody's
situation is different. All subject to change of course. But by the time I
hit phase 2, I'll be somewhat tax diversified.
TJ