NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 3, 2008
- Messages
- 35,712
I would not do Roth conversion when I was still working.Well it goes without saying that tIRA withdrawals in retirement will be taxed at some TBD average rate. Roth conversions however are taxed at your (perhaps higher) current marginal tax rate.
But now, I am retired and have been living off my after-tax accounts, and can pay no tax if that's what I like.
By stuffing the Roth with retirement money, I am paying some tax now rather than more later. When I exhaust my after-tax money and start to draw from IRA/401k, it looks like I will be in 25% bracket at least, so I've got nothing to lose by doing at least the 15% bracket now to lock in that lower rate.
I-ORP tells me to put pedal to the metal to the top of 25% bracket, but the tax bill hurts too much, compared to paying nothing now.
PS. I already missed out on some Roth conversions the last couple of years, and did not go as far as I should. I enjoyed the low-tax status too much to realize it will come back and hurt me more later.
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