Telly
Thinks s/he gets paid by the post
- Joined
- Feb 22, 2003
- Messages
- 2,395
I have started to do some thinking about the future when we get to RMD age. For myself, I am predicting that the first required distribution at 3.65% will yield more than our predicted expenses. And the predicted expenses (always subject to change and disaster!) would anyway already be met by my SS + DW on my SS with her GPO offset + some dividends from taxable accounts. So I would probably put most/all $ from RMDs into a Roth (do a Roth conversion), and pay the taxes, and then never pay taxes on gains in the Roth over the forthcoming years.
The question: Let's assume that every year I do this RMD to Roth Conversion. Let's call the first year "A", the second "B", etc. So the "A" year conversion to Roth I need to leave alone for 5 years, right? And so on with years B, C, D, etc. leaving each alone for its respective 5 years due to the conversions.
Does this mean I would create a separate Roth account for each year, to keep the 5 year visible for each? Or can they be all put into the same Roth account, and basis or something that is tracked by mutual fund companies keeps it all straight, so if I later decide to cash in some shares, the shares greater than 5 years old are used, and not some newer shares which would incur a penalty?
The question: Let's assume that every year I do this RMD to Roth Conversion. Let's call the first year "A", the second "B", etc. So the "A" year conversion to Roth I need to leave alone for 5 years, right? And so on with years B, C, D, etc. leaving each alone for its respective 5 years due to the conversions.
Does this mean I would create a separate Roth account for each year, to keep the 5 year visible for each? Or can they be all put into the same Roth account, and basis or something that is tracked by mutual fund companies keeps it all straight, so if I later decide to cash in some shares, the shares greater than 5 years old are used, and not some newer shares which would incur a penalty?