Alternative to Roth Conversions?

[Gotadimple]

As a twist on RMDs - yes you have to take them, and if you take them for yourself they are taxable. However if you take your RMD (full or partial) as a Qualified Charitable Distribution, the QCD is not subject to income tax, and you cannot claim it as a charitable donation on income taxes.

For future planning, it is an option to consider where RMDs will be large (especially as you get older and the % RMD increases).

- Rita

 

[DawgMan]

I commented earlier today on another Roth conversion thread, but it appears to me (at least in my analysis) that picking a top tax bracket that looks somewhat consistent, taking into account annual with Roth conversions, which keep you in the same tax bracket through RMDs is the optimal approach. In my case, 24% seems to be the optimal tax bracket. My other observation in playing around with annual conversion amounts, was that it was better to do similar annual conversion amounts until RMDs, as opposed to say first 5 yrs at bigger amounts, then no conversions until RMDs, even if the gross amounts were the same. Lifetime tax savings were higher with consistent Roth conversions every year until RMDS. At least that's what my calculator told me.