Originally Posted by N02L84ER
* is there any advantage to either method? I see the same end result, but probably a little less effort on your part if you have the taxes withheld.
* Does it make any difference if I pay 24% on the yearly conversions or pay 24% on the RMD amount? If the tax tables revert in 2025 like they are currently scheduled, the 22% current bracket returns to 25% so paying the 24% now may have a slight advantage. You should also research IRMAA and decide if you are willing to pay the higher Medicare premiums associated with the larger conversions.
On the first part IMO it doesn't matter. At the end of the day the conversion amount less the tax ends up in the Roth and the tax ends up with the feds so I would probably favor having the tax withheld from the converion amount since it is one transaction rather than two.
I would not convert into any bracket higher than what i ultimately expect to pay once SS and pensions and RMDs are all online.... be it 22% or 24%.
I would normally agree that it would probably make sense to take IRMAA into consideration so that would be a ceiling of $169,999 in MAGI in 2019.... however, if you convert into the 24% bracket in 2019 and they propose an increase in Part B premiums for you in 2021, you can always appeal and say that your income will be lower in 2021 because you don't intend to convert that much. I suspect that you can only play that card once or maybe twice.