Quote:
Originally Posted by CoachKandSportsguy
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?
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Many years ago I had a CPA I loved. He loved me, too. (Not real love, not hubba-hubba love, just the kind of love between a CPA and a multi-faceted woman who loved to pick his brain and always showed up prepared. But he retired. (sigh) I then found another CPA and I liked him a lot, but he retired on me, too. (Hmmmm, should I be taking these CPA retirements personally?)
And so, now, I have a wet-behind-the-ears CPA who is also a lawyer in the office of our regular lawyer. He’s fine, but I have to teach him a little something once in a while — like how the way I do our QCDs is OK because of where the IRAs are on deposit.
(Of course, I took him well-sourced documentation on the subject to make sure he knew that this retired high school English teacher knew what she was talking about. . .And about that English teacher thing, yes, I know in my posts I bastardize the hellouta punctuation, but I know I am doing that and it’s OK. And I will never correct anybody else, unless it is to share a laugh about a funny typo. We all have them. Although, I do wish some people would double-space longer posts into paragraphs to make them more readable — to make them look less like a manifesto — but I digress.)
Anyway, the new young CPA is coming along nicely and I don’t think he will retire any time soon.
Long story longer — CPA #1 used to tease me a little about doing those Roth conversions before RMD age. He always said, “Why do you want to pay your kids’ taxes?” I would explain that it was not about anybody else’s taxes, and that I had projected taxable income, found some room to take a little more hit, and took the opportunity. (It just seemed like a good idea at the time. And I was right. But as I said earlier, I regret not doing more of those conversions while I could.)
I still project taxable income and buffer our RMDs with QCDs, especially if I think the next year is not going to bring any need for extra income. And when I reach a point where there could be a reason to keep more of the RMDs for ourselves, I will do that. But, for now, I stay well-aware of thresholds and IRMAA.
But to answer your question, “Why now?” — it’s because sometime I might want a little extra ice cream on my cake.
Boomer