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ER community, RMDs, Roth conversions and Pops!
Old 11-21-2023, 11:41 AM   #1
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ER community, RMDs, Roth conversions and Pops!

Pops is coming up on RMD in 2024 for his first time. Had we/I not stumbled upon this forum a decade prior, he would likely be facing much higher RMDs with a larger tax-deferred balance. But alas, thanks to the wits of this Er community, he started re-focusing on Roth contributions, conversions, and mega backdoors to get him in a more favorable 45% of his invested in tax-deferred.

At this point, with all your help, we have maneuvered him nicely away from the tax torpedo's.

Mom and Dad have 5 pensions of various sizes, plus a sizable SS payout...and dad owns some investment property.

So that tax torpedo could have been pretty big.

I have also learned of the ways, and I myself have been able to do 2 mega backdoor roth's in some low income years which has positioned us to have 0 tax-deferred balances by the time RMD comes (provided conversion rules and RMD rules are simiilar in 30+ yrs).

This combined gain, is basically a massive boost to generational wealth, where my kids will experience the availability of money much greater than I could have ever imagined.

My plan is to open a family office, I know it sounds pretentious...but it makes sense considering some of our family dynamics and circumstances.

We will be on the tail end of the boomer transfer of wealth... DF and DFIL both have strong healthy genes with decades of runway to only increase the legacy. It's truly a great time to be thankful. Blessings to all!



We put more money into the Red Kettle's these holidays and we owe it all to the ER community!
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Old 11-21-2023, 12:51 PM   #2
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I can't tell if your pops paid less tax or just shifted the tax burden to earlier.

But, if he's happy and you are happy, then paying the tax earlier worked out fine.

Each dollar earned was deferred at a rate off the top and tax was paid filling in from the bottom.
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Old 11-21-2023, 01:20 PM   #3
Thinks s/he gets paid by the post
 
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Well, time will tell if he paid less! If he dies tomorrow, he probably paid too much tax

His tax brackets are higher now and will continue to climb than when he was converting, so as time goes on he should beat the torpedo?
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