Quote:
Originally Posted by retiredguy123
Another potential advantage to not doing a ROTH conversion is that you can reserve the taxable account to pay for a future large medical expense, such as an out-of-pocket assisted living or nursing home stay. You can withdraw taxable retirement money for the medical expense and take a medical tax deduction in that year or years and avoid the income tax.
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I am pretty sure that the medical deduction for 2019 will be only the amount that exceeds 10% of AGI. Under the new tax law, in 2017 and 2018, that amount was what exceeded 7.5 % of AGI. But now, two years later, that law is allowing the medical deduction only in the amount that exceeds 10% of AGI. The rest — no deduction.
As I am sure you know — if said taxable account is holding stocks that are sold to pay medical expenses and the stocks have increased in value from the cost basis, that is when the capital gains tax kicks in.
Soooooo, let’s say stocks are held inside a Roth and have increased beyond cost basis. When the need for the money arrives, the stocks then can be sold while still inside the Roth and then the cash can come out tax free.
A decision to convert to Roth has to play through different scenarios, all individually based It is definitely not a one-size- fits-all thing.
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Geez. Whatinthehellisthematterwithme? I find myself fascinated by conversations about taxes. I get pulled in on TOTV sometimes, but I try hard to resist doing this in my real life. But (sigh) that does not always work. I think I bored the hell out of some friends at a dinner party last week when I went waxing philosophic on the wonders of the QCD. I really must give myself a little credit though because I did stop when I saw one guest fall face down asleep in his stroganoff.