Quote:
Originally Posted by Boomer
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 — you never forget your first — 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. . .I always picture IRMAA as that big mean girl who was always waiting to give me a hard time in PE class when I messed up, in even a slight way, on whatever the sport du jour happened to be. The only time I was ever any good at PE was trampoline time. Oh, well. . .
Uh, oh. . .I sure am digressing today, killing time, it looks like, so I better get back to real life, where I think I need to stop thinking about Roth conversions at this point in our lives.
But to answer your question, “Why now?” — it’s because sometime I might want a little extra ice cream on my cake.
Boomer
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Why a ROTH conversion, of which you are proud of your decision versus a perceived professional, is not at all the question, nor the history . . remember, cpas and tax prep professionals have a current tax minimization today motivation. Tax minimization strategy is what you did, which is not their strength most of the time.. . . for that you need a planning professional, very different animal, one looks forward, the other looks backward. Very well done, and no criticism of your move to ROTH.
But now that the conversion is done, the question is for wealth maximization in conjunction with tax minimization, under what future scenarios for those two constraints or goals, does it make sense to take any money out of a Roth, versus using other sources of wealth. .
to be clear, the question is a future scenario question, one of which you are struggling for the constraints listed above. (which is the difference between finance and accounting) I am a finance professional, who only looks forward, as I can't change history, but I can influence the future towards wealth maximization and tax minimization, which is the point of the question.
looking forward to your thoughtfulness on your future decisions