Talk of The Villages Florida - View Single Post - Interesting tidbit from the Fidelity Advisor
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Old 04-28-2023, 07:12 AM
CoachKandSportsguy CoachKandSportsguy is online now
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but from a practicality point of view, for the short opportunity peeps like myself due to salary limitations and matching opportunities, the Rollover IRA gets opened at 60, so at 65 can withdraw the money tax free.

So you perform a rollover at 66, you can take the money out the next year, tax free Woo Who! but you haven't earned much if any, so any tax advantages are moot. So the real advantage is not the tax free withdrawal part, but the exclusion of the RMD, and a longer term compounding period prior to withdrawal. . . so the maximum effectiveness of the conversion is if you can live comfortably on SS and any pension payout and other incomes including smaller RMD such that you recover the taxes paid on the conversion, and gain materially when fixed pension or SS lags behind your living expenses due to inflation. .

That needs an optimization model based up the value of the IRA, maximum SS, optional pension. . and tax rate / portfolio construction of equity / bond returns. .

gives me something to do