plan for Roth Conversions
I would appreciate a review of my plan for Roth Conversions. I am still working on taxes, but it appears that I hit the top of the 15% tax bracket. (next dollars would be incremental tax rate of 25%) With the changes in tax structure, I am trying to develop my plan for future Roth Conversions.
From age 61 to Age 70, draw down Tax advantaged IRAs, 401k, + Roth Conversions to top of 12% bracket. (Incremental tax rate 22%)
From Age 70 on, with my SS plus RMDs, we expect to be in middle of 22% tax bracket. (Incremental tax rate 22%)
Tax torpedo- when I die, DW SS goes to survivor SS, pension goes to Survivor pension benefit, standard deduction for MFJ goes to Single. Income drops from 140K to 131K, taxes go from 23K to 26K. Middle of the 24% tax bracket. (Incremental tax rate 24%)
My initial plan was to do draw down plus Roth Conversions to the top of the 12% bracket. Given that a single filing status will have one of us firmly in the 24% tax bracket, does it make sense to convert to the top of the 22% tax bracket now? Or does it not really make much difference because 22% is so close to 24%? ACA is not in play as I have megaCorp retirement healthcare. Also- am I missing anything?
I appreciate any comments.
I would appreciate a review of my plan for Roth Conversions. I am still working on taxes, but it appears that I hit the top of the 15% tax bracket. (next dollars would be incremental tax rate of 25%) With the changes in tax structure, I am trying to develop my plan for future Roth Conversions.
From age 61 to Age 70, draw down Tax advantaged IRAs, 401k, + Roth Conversions to top of 12% bracket. (Incremental tax rate 22%)
From Age 70 on, with my SS plus RMDs, we expect to be in middle of 22% tax bracket. (Incremental tax rate 22%)
Tax torpedo- when I die, DW SS goes to survivor SS, pension goes to Survivor pension benefit, standard deduction for MFJ goes to Single. Income drops from 140K to 131K, taxes go from 23K to 26K. Middle of the 24% tax bracket. (Incremental tax rate 24%)
My initial plan was to do draw down plus Roth Conversions to the top of the 12% bracket. Given that a single filing status will have one of us firmly in the 24% tax bracket, does it make sense to convert to the top of the 22% tax bracket now? Or does it not really make much difference because 22% is so close to 24%? ACA is not in play as I have megaCorp retirement healthcare. Also- am I missing anything?
I appreciate any comments.
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