IRA to Roth Conversion - another question

[megacorp-firee]

A question on IRA to Roth conversion when you reach 70 1/2 and have to take RMDs from the IRA.
1) can you convert IRA funds to Roth after you reach 70 1/2
2) If you want to convert more IRA money to a Roth after you reach 70 1/2, does the amount you convert have to be in addition to the RMD amount?

For example (made up numbers);
$1M in IRA. @ age 70 1/2 the rmd is 37k and have to pay taxes on that.
If I want to convert 20k that year, then do I have to take out at total of 57k (37k+20k)?

Thanks.

[crazy connie]

YUP

Conversion does not satisfy the RMD. Convert early & often!

[Art G]

Very interesting question and I'm finding conflicting answers. The only reason I could think of why you couldn't do this, is if the money withdrawn put you over the limit on annual earnings, which would prevent you from contributing to a Roth.
As long as you're paying taxes on the distribution, why would it matter if you roll it to a Roth? Are you currently employed?

[baldeagle]

Megacorp -- the answers are:
1) Yes
2) Yes

[megacorp-firee]

Quote:

Originally Posted by Art G Very interesting question and I'm finding conflicting answers. The only reason I could think of why you couldn't do this, is if the money withdrawn put you over the limit on annual earnings, which would prevent you from contributing to a Roth. As long as you're paying taxes on the distribution, why would it matter if you roll it to a Roth? Are you currently employed?

nope, I'm FIREd.
... and I don't think that the dollars you convert are counted towards the earnings limit for conversion.

[Art G]

I was basing my thoughts on this article...

Roth conversions after 70 1/2 some seniors face obstacles | CPA Journal, The | Find Articles at BNET.com

[baldeagle]

Slight revision of prior post...

1) Yes
2) Yes, but that RMD does not count as income toward the 100k modified AGI conversion limit per the following citation: Modified Adjusted Gross Income.

[Art G]

Hmmmmm, who to believe? Conflicting reports.