mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
http://www.investorsolutions.com/lc-library.cfm?show=detail&articleID=480&artcategory=5
Why would anyone pay tax now that they could defer into the future? The reason would be that you might be able to pay less tax now than later. The schedule above shows that the required minimum distributions would end up moving most retiree’s into a higher tax bracket in the future.
A strategy might be to convert a portion of the retirement account to a Roth IRA now thus reducing the amount of required minimum distributions and thus taxable income in the future. The strategy works best if you have the funds outside of retirement accounts to pay taxes that would be due on the conversion of a traditional IRA to a Roth IRA. In addition the taxes paid would remove the funds from your estate thus avoiding estate taxes assuming your estate is large enough to be taxed when distributed to your heirs.
Why would anyone pay tax now that they could defer into the future? The reason would be that you might be able to pay less tax now than later. The schedule above shows that the required minimum distributions would end up moving most retiree’s into a higher tax bracket in the future.
A strategy might be to convert a portion of the retirement account to a Roth IRA now thus reducing the amount of required minimum distributions and thus taxable income in the future. The strategy works best if you have the funds outside of retirement accounts to pay taxes that would be due on the conversion of a traditional IRA to a Roth IRA. In addition the taxes paid would remove the funds from your estate thus avoiding estate taxes assuming your estate is large enough to be taxed when distributed to your heirs.