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Old 12-05-2019, 11:38 AM
retiredguy123 retiredguy123 is online now
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Quote:
Originally Posted by DAVES View Post
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My view is you are always better off paying taxes later. If you convert your IRA to a Roth and since you state you have a pension, you are likely in a 30% bracket on your last dollars.
Assuming your IRA is 10,000, the true number does not matter
You convert it all and your 10,000 is now 10,000-30%=7,000.
Actually it is worse than that as that 10,000 is added to your taxable income.

You may want to explore leaving your IRA to your heirs as an inherited IRA. They inherit it at it's current value so no one pays tax on the gains. Yes, they will need to take a withdrawal every year-a minor pain but a gift that keeps on giving. The RMD is calculated based on you living to 100. So, there is likely to be a left over balance to use in your will as an inherited IRA.
It is not much money but that is what my mother did for my sister and I.
I agree with avoiding paying taxes as long as possible.

But, when you say that, with an inherited IRA, no one pays tax on the gains, that is not really correct. If you have a fully taxable Traditional IRA, your heir will pay tax at their ordinary income tax rate when they withdraw the money.

And, actually, the RMD is calculated based you living to be 115+, not 100.