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Old 12-14-2016, 05:23 PM   #41
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Originally Posted by Animorph View Post
a) You probably don't want to go all the way down to nothing in your tIRAs/401k. Just get the balance down far enough that RMDs stay mostly within the 0% to 10% tax bracket for you. There's no good reason to pay 15%/25% now when you can pay 0% to 10% later.
Thank you for this pearl especially! I had to "back into" this calculation. I used RPM's RMD calculator (on the Setup sheet) to find the balance I'd have to get my tIRA/401K down to such that the RMD's would keep us within the 10% tax bracket. Then, I plugged conversions in only up to the year when that balance was reached. I was able to trim another 18% in total taxes!
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Old 12-14-2016, 08:32 PM   #42
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You probably don't want to go all the way down to nothing in your tIRAs/401k. Just get the balance down far enough that RMDs stay mostly within the 0% to 10% tax bracket for you. There's no good reason to pay 15%/25% now when you can pay 0% to 10% later.
Like everything tax related: it depends. In some cases you may want to make taxable conversions to Roth, even if you pay some tax more now, to prevent heirs from paying even higher tax at their higher rates. Unless you know for sure the date of your future death, you cannot be sure to optimize exactly how much to leave in the tIRAs/401k for how many years of lower tax withdrawals. There could be a good reason to do this, depending on all the details of your situation.
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