I am 42, been saving since I was 26. Currently DW and I have 35% of our assets in the way of the tax torpedo. The idea is to sink the size of the IRA ship, by doing roth contributions and conversions on the sea's passage... but not too much that you overheat the main engine (pay too much tax).
People who SHOULD NOT do roth conversions are those that expect to be in a LOWER tax bracket as they begin to withdraw (distribution phase of retirement).
I will be in a higher tax bracket (paying more taxes) Later, when my RMD (Required Minimum Distribution) comes DUE on the IRA money that I had been saving tax free all these years!
Uncle Sam is gonna get his!
DF who is 72 has 58% of his assets in the way of the torpedo...a good half the ship! One sign that he did NOT do enough roth conversions, is that now, starting this year and beyond, due to RMD he will forever be in at LEAST a 22% bracket, if not more soon...
Because his IRA balance is so sizable, and his RMD is then so sizable, that huge distribution is taxed along with his pensions, social security, mom's pension and social security, and of course now his distribution.
I would rather have a tax problem than an income problem is what my dad used to say, but now he is realizing the benefits of having a creative accountant as well to reduce that taxable income.
My thing is I will likely inherit an IRA from my dad, RIGHT when I am trying to FIRE. So I will be taking my own taxed early distributions for about 4 to 5 years easily, while I will also be taking out a 100k a year Inherited RMD distribution.
So this tax torpedo, it can come generational and hit your kids, and likely even your grandkids. That's why it is REALLY appealing to convert as MUCH of your IRA to Roth early in your working years (and lower tax years) and pay the tax as soon as possible if you have been primarily saving into an IRA.
I think Roth conversions (and the Roth account type in general) are probably the single most important attribute to the US Investment opportunities that we as middle-class have access to.
IMAGINE taking that money tax free two generations later!