@SecondCor521 thanks. I don’t want the last word on anything. I want to bring the ground truth to light on Roth conversions. It’s an element of my own retirement financial planning that I don’t think makes sense for me. I don’t understand how it can make sense for as many people as seem to be in support of Roth conversions on this site and bheads. McQuarrie’s work for me is one small piece of information in a large bucket of information. I briefly read some of his work and moved on.
I have used i-orp, RPM and my own spreadsheet and I don’t see the benefit for Roth conversions. To gain a wider perspective, I have asked HNW, UHNW individuals and a family office trustee (UUHNW families) and none of them are doing Roth conversions for themselves or their clients.
You said you are Roth converting with zero tax, correct? How does that work?
What gets less mention than it should is that whether a Roth conversion makes sense depends a lot of factors - marital status, number of children, life expectancy, relative percentage of assets in traditional IRA, opinion on future tax changes, estate planning approach, the rest of one's tax picture, etc. This is really what you might consider the "ground truth" on Roth conversions: It depends.
People often assume that others' factors are the same and arrive at the conclusion that since Roth conversions make sense (or don't make sense, or are a wash) for them, then this must be true for others. This is a fallacious conclusion based on a faulty assumption.
Roth conversions clearly make a lot of sense for me, given my particular set of factors. I fully accept that they may not make sense for you given your factors. I assume your factors differ, which explains the difference in our conclusions. Fine by me.
I suppose what you see as broad support for Roth conversions here is really a combination of two things: (1) the people here may have similar sets of factors - there are probably a number of us who are in our 50s/60s who are early retired with large traditional IRAs, and (2) there are a few posters who are pretty positive towards Roth conversions who post frequently on the topic (myself and @pb4uski are probably in this group).
And as for me - and I presume @pb4uski as well - I think we're generally saying that Roth conversions make sense for us. We often omit or leave unwritten the part about it may not make sense for others who may be in different situations.
Whether *HNW individuals or their offices are doing Roth conversions or not is perhaps only partially applicable to you or me anyway. Yes, they may be smart, capable people with money, but if their circumstances or goals differ too much from yours or mine, what makes sense for them to do may not make sense for us to do.
And yes, last year I did a low-five figure Roth conversion and had a total tax in the single digits on my Form 1040 line 24.(*) This happened because I had nonrefundable tax credits that almost equaled my tax liability (line 21 was just a little bit less than line 16). My nonrefundable credits included a dependent tax credit, the AOTC, and a residential energy tax credit.
It was that way by design. Every year I do volunteer tax preparation, which gives me access in December to a tax preparation program. I go in there, put in all my numbers, and then do a Roth conversion at the end of December to dial in my income exactly where I want it. The only reason I couldn't get my 1040 line 24 to exactly $0 has to do with the fact that the tax tables are in $50 increments.
Of course, federal income tax isn't the whole story. In my case, state income tax, ACA subsidy effects, and FAFSA EFC effects are part of the strategy as well.
(*) Which, I just realized, means I didn't actually pay zero federal income tax. I paid 0.012% federal income tax. Perhaps I rounded in my other post - rounding 1.2 basis points to zero seems OK in the larger context - I didn't want the forest to get lost for the trees.