Roth Conversion calculation

[imjustawarrior]

Any recommendation on one that is current and simple to use.

I use the Fidelity Retirement Calculator. One can look at the results in table form. One of the columns shows the RMDs for each year. I like this because I can look at the RMDs under the 3 different market conditions supported by the calculator. I assume the calculations are correct.

 

[G-Man]

I use the Fidelity Retirement Calculator. One can look at the results in table form. One of the columns shows the RMDs for each year. I like this because I can look at the RMDs under the 3 different market conditions supported by the calculator. I assume the calculations are correct.

Can you provide a link.

 

[imjustawarrior]

I log into Fidelity.
Select "Planning & Advice"
Select "My Goals"
Under "Goals" "Retirement" select "View details"
This gets you to the calculator.

Here is the address it gives me when I do the above.
Fidelity Retirement Calculator

Once you enter all your data and run the analysis:
select "Yearly cashflow in retirement"
select "table" view
toggle "withdrawals"
select "show all"

You can then go between the 3 different returns.

 

[USGrant1962]

Any recommendation on one that is current and simple to use.

This one is OK as far as correct RMD ages. Don't change Year of RMD though, it should be current year unless you are checking on a past RMD or something. That tripped me up.

Required Minimum Distribution (RMD) – Future Year Calculator - Victory Capital

The IRS requires that you withdraw at least a minimum amount known as a Required Minimum Distribution from your retirement accounts annually.

investor.vcm.com

The other issue with these calculators is they don't have any pre-RMD withdrawals. So, for my case, I intend to levelize withdrawals from my tax deferred accounts by drawing between now and RMD age. The result is that these calculators overstate my likely RMD.

 

[SecondCor521]

Any recommendation on one that is current and simple to use.

Unless you have a spouse who is more than 10 years younger than you or the IRA is inherited from someone else, I suggest using the calculator built into Windows.

The calculation is take your IRA balance and divide it by a divisor. The result is your RMD for the year. What's the divisor? Take your age on your birthday and look it up in the IRS table.

It's three numbers, one table lookup, and one division operation. It's not rocket surgery.

 

[Time2]

Thanks for that G-man. I have been Roth converting to the top of the 12% tax bracket for the last 6 years and expect to continue, just to lower the tax burden on my wife (and increase the kids inheritance). I ran the numbers and the first year both the wife and I have RMDs (2032), I expect our income of SS, Dividends and Interest to be $124,085. This is still in the 12% tax bracket, (I hope it will still be in 2032). Making me think I have got the tax deferred whittled down to a reasonable number. That is until, one of us dies, so, I must continue doing Roth Conversions. I do have 7 more years to convert and spend down the tax deferred, as long as the stock market doesn't do to good, I might be able to do it!
;-l

 

[Echard]

I’m struggling to decide whether to do Roth conversions. The main issue is that both my wife and I have had cancer and we aren’t very optimistic about making it past around 80. Plus, without a financial advisor I’m concerned about whether I’ll do it right and the administrative process for it. If the wife does survive past 80, there might be some additional inherited money that does put her in higher tax brackets.

 

[pb4uski]

Don't fret about doing it right... all the major brokerage firms have people who can help you with the execution once you decide what you want to do.

 

[BGH1]

Yes but can't convert the RMD itself directly into a Roth conversion.

The idea is to convert to Roth IRA prior to RMDs to reduce forced draws due to RMDs

 

[TheWizard]

The idea is to convert to Roth IRA prior to RMDs to reduce forced draws due to RMDs

Correct, and even better if you can delay SS to age 70, as I did, to get more headroom...

 

[BGH1]

Correct, and even better if you can delay SS to age 70, as I did, to get more headroom...

Spot on, its exactly what we are doing, ideal for Roth conversions