Should I do ROTH conversions on money I may need soon?

[sayhey24]

As much as I’ve learned from everyone here......I’m sometimes not too sharp....so please tell me what I’m missing.
We are 59 ( DW)and 60 (me) and living off ~ $500,000 in a taxable account until 62 (DW) and 65 (me) when we will take SS and perhaps start drawing off the 401/IRA’s. I recently discovered that I can do a withdrawal even though I’m still on the books as “part time variable “ . Anyway I ‘ve been thinking about withdrawing ~~$80,000 from he 401k just to free up the funds for a second home purchase in AZ somewhere down the line. I don’t want to use the taxable funds for the second home as that would more than half that account. Next year I should be off the books and will need to manage income for ACA, but will still be able to take some smaller amount. Seems like I should just do ROTH conversions into an old ROTH on his money.
If I need it, I can get it....if not it grows.
Be gentle

Thanks # 24

 

[SevenUp]

What question(s) do you have?

Taking $80K from the 401k will probably have a higher tax cost in 2020 than taking $80K from a taxable account.

But it appears you may have planning considerations for years to come, so...?

 

[RetireBy90]

If I understand you are thinking of doing an $80K Roth conversion this year before ACA limits kick in next year, but you may need the money in near future. You or spouse have a Roth already setup so 5 year rule isn’t an issue.
I would compute cost of doing it this year with the $80K added to your other income and then compute the cost of doing it next year to include increase of ACA cost.
If you don’t buy the house in near term, You have already taken $80K out of future tax liability.
If the cost is more with being added to this year’s income try a smaller number. Perhaps $40K this year and same next year?
If I understand the question, it is all about a computation of when to take the funds from your 401K. At some point you will owe taxes in your non-Roth accounts.