[villagetinker]

Originally Posted by Boomer

You have brought up an interesting question. I am just trying to give you a few things to learn more about. Like you said, VT, you will be getting professional advice. Please keep in mind that I am not a tax accountant or financial advisor or any such thing so I might not even know anything about what I just wrote in this post.

PS: I am not sure about this either but I think the new tax law took away the ability to recharacterize a Roth conversion.

I believe you are correct, about the returning a roth to non roth.
While I did not put any specific dollar amounts in my original post, the back of the envelope calculations show well in excess of $250,000 difference in taxes paid over a 25 year period. The difference was almost 3 to 1, in other words, paying the tax all at once the bill was about 1/3 of the 25 year total. As another poster noted, yes I need a crystal ball, but in a simplified view, if you were to convert the entire qualified account to roth account in one year, you take a large hit on taxes, then the remaining monies grow tax free. I am going to try and calculate the "breakeven" period using an assumed rate of return. Show be an interesting (no pun intended) calculation. None of this takes into account inflation, etc.
So lets keep up the discussion, as i stated before, I am looking for the gotchas that could occur with the eralry payment option.