ROTH target

[RunningBum]

I currently have no intention to convert any more to Roth. I fundamentally don’t want to pre pay Uncle Sam.

All that discussion, and this is your rationale?
Ah well, probably doesn't make that big of a difference.

 

[bingybear]

Wanted to see what everyone’s target for Roth balance is? By age? Do you plan to have x% in Roth versus total retirement assets; or an absolute $ amount?

Ours is currently about 350k of a 2M retirement balance and I’m 60; DW is 55. Target is to have at least 50% in ROTH by age 70. Plan to get there by slow withdrawals from ROTH relative to other assets.

All that discussion, and this is your rationale?
Ah well, probably doesn't make that big of a difference.

I like some reason why to understand. But I'll play along. >75%

 

[pb4uski]

I currently have no intention to convert any more to Roth. I fundamentally don’t want to pre pay Uncle Sam. My plan, currently, is to draw down the tIRA first to RMD date at 72; and keep the tIRA balance under RMD after that. ....

A couple things. First, even if your tax rate now and later are the same, there is a small benefit to pre-paying.... see post #36 of this thread.... the benefit is essentially that the taxable account money used to pay the tax grows tax-free rather than taxed.

Second, please elaborate how you "keep tIRA balance under RMD"... RMDs are a percentage of your balance as of the beginning of whether you have $100 or $1,000,000.

Finally, RMDs start at 70 1/2, not 72... but it might change to 72.

 

[free2020]

A couple things. First, even if your tax rate now and later are the same, there is a small benefit to pre-paying.... see post #36 of this thread.... the benefit is essentially that the taxable account money used to pay the tax grows tax-free rather than taxed.

Second, please elaborate how you "keep tIRA balance under RMD"... RMDs are a percentage of your balance as of the beginning of whether you have $100 or $1,000,000.

Finally, RMDs start at 70 1/2, not 72... but it might change to 72.

#1: Reply # 38 is more apt for me. If I convert, my tIRA will pony up the IRS portion. I agree with that poster that there is no benefit to pre paying.
#2: RMD based on tIRA balance at the start every year from age 70-1/2 to 115. I have modeled the percentage by age to 115 and plan to spend/give away by the end of each year to stay under the RMD threshold for the next year. Good thing that I did was to model this from age 50 and thus am better prepared for 2030. In fact I created my own RMD from age 50 at the run rate of the post 70 RMD. I took a 72t at age 54 as part of this plan. Fortunately it’s working out quite okay 6 years later.

 

[SecondCor521]

^ What do you mean by "stay under the RMD threshold"?

If you're over age 70.5 and have a traditional IRA, you can have $100 in there and the IRS will require you to take out at least a few bucks.

An example (with made up numbers) would help me understand if you don't mind. I always like to learn from others.

 

[free2020]

I realized that I've been making a gaffe after several posters were puzzled with my "below RMD threshold"...what I meant all along was that my plan is to withdraw to meet our living needs which are above the RMD threshold....by spending down the tIRA and thus not letting the IRS determine when I withdraw and how much taxes I pay.

Thanks for the input so far! Sorry for the confusion this has caused.

I will slink back into the cave for a bit.

 

[SecondCor521]

Ah, that makes perfect sense. Thanks for the explanation! No need to cave!

 

[pb4uski]

I realized that I've been making a gaffe after several posters were puzzled with my "below RMD threshold"...what I meant all along was that my plan is to withdraw to meet our living needs which are above the RMD threshold....by spending down the tIRA and thus not letting the IRS determine when I withdraw and how much taxes I pay. ...

Well... why the heck didn't you just say that before?