100% Roth for the next 30-40 yrs possible?

[PatrickA5]

That makes sense. Thanks for running the numbers.

This is also consistent with the general rule we've been saying all along--convert if you in a lower (or probably the same) tax bracket than you will be at your RMD and SS age. Otherwise you most likely should not convert. So if you're going to be at 0% later, don't pay conversions taxes now.

And don't forget to account for growth in your IRA if you think it will grow faster than the tax brackets and standard deduction grow.

Agreed. Right now, I'm better off converting. I don't have much in Taxable, but my TIRA is large enough that I doubt I'll ever get it down low enough to make RMD's completely non taxable. That and the fact our SS will be substantial if we both wait until 70.

You're right about the growth in IRA balances. I've done substantial conversions the last 3 years and my balance is higher than what it was to start with. A good problem to have.

 

[ncbill]

My kid now dedicates 30% of pay to Roth TSP...5% matched under the BRS, unfortunately to to traditional tax-deferred.

He can afford to do that because of the (nontaxable) BAH/BAS he also receives.

 

[HI Bill]

I don't think keeping taxes at 0% at any time in your life should be a goal. The goal should be to maximize your portfolio and spending.

It turns out that my plan is to maximize my portfolio and spending while achieving a close to 0% tax rate for the first 6 years of retirement (prior to age 59.5). To do so, I'll be taking $24.8K in inherited IRA distributions (= to the MFJ standard deduction), recieving dividends, and most importantly, selling taxable equities with LTCGs to make my taxable income just under $80K. Then, the LTGCs are taxed at 0%, and my federal taxes are about $203 (projection for 2020). At age 59.5, I should have sold about $1M in taxable investments (realizing ~$360K in LTCGs tax-free), and taken $140K in inherited IRA distributions, all without paying federal taxes. By resetting the basis on most of the taxable funds, I'll have them to spend nearly tax-free on a house (expensive, in Hawaii).

Then, from 59.5 to 70, I'll focus on taking tax-deferred withdrawals and paying taxes to try to minimize the later tax torpedo when SS kicks in. If anyone thinks there's a better way to attack this, please let me know!

 

[teejayevans]

It turns out that my plan is to maximize my portfolio and spending while achieving a close to 0% tax rate for the first 6 years of retirement (prior to age 59.5).
Then, from 59.5 to 70, I'll focus on taking tax-deferred withdrawals and paying taxes to try to minimize the later tax torpedo when SS kicks in. If anyone thinks there's a better way to attack this, please let me know!

That’s my plan, I now in stage 2. The only problem is it hurts leaving near 0% tax rate.

 

[free2020]

]If you are going to convert, in general you want to do so while tIRA asset prices are low. [/B]So you want to get in your time machine and bulk convert during 2009 or 2010 so that the run-up in value during the next decade all happens tax free. Converting now, while asset valuations seem high, is more risky. You might convert, pay the tax, then see the market tank depending on who is next elected prez.

Single best way to convert. And no need to get back to the future. Markets will correct in the future. Do the young uns in your circles a big favor by explaining this to them. They are likely to have more than one such opportunity . I tell every 20 something that I come across to:
1. Build up a Roth balance of $50k by age 30.
2. Keep cash on hand to pay taxes due on opportunistic ROTH conversions every time market goes into a tizzy

I know of one that listened to me...