Quote:
Originally Posted by Boomer
I did some Roth conversions before RMD age. I regret not doing more of them.
Now we are at the point where the RMD has to come out before a conversion. I have not done any more conversions since — thought about it — but have not. . .
One reason is that I am not clear on how the 5-year rule works when converting from a traditional IRA to add to a long-standing Roth. From what I can decipher, I think it would work against me if I wanted to get to the newly converted money sooner than 5 years. . .
Does anybody here know if I am right? (And — for some of my fellow posters — for the sake of behaving in a gentlemanly manner, and not looking like grouchy cliches, please do not go into that condescending “look it up” litany that we see around this place all the time.)
For the record. . .
Investopedia gave me 3 applications of the 5 year rule but did not clarify separating newly converted money or stocks from the old money in the same long-existing account. And I will not make what could be an additionally taxable move without knowing, for sure, what I am doing. . .
I am advising myself against any further Roth conversions at this point because it looks like if I would want the newer money back before 5 years, I would get slammed. I think I am right. Damn!
Boomer
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So I can't answer your question at the moment as far as taxes, and its a great question,
but the first question is: when or why will you take money from a roth?
My initial intuitive answer, which is about 1/1000th of a second of deep thought, is that you would live on SS and RMDs, and take money out of Roth ONLY when you need money more than SS and RMD, such as buying a new car, etc, where you would incur significantly higher taxes with additional RMD, and zero incremental from the ROTH. .
If that makes sense, that is the best use case I have thought about to diversify into a ROTH. . .
What's your thoughts on that logic about when to consider a ROTH distribution?