Who says people aren’t having fun spending their retirement earnings while not paying taxes? We spend 6 digits of money each year buying jut stuff, way more than needed, without spend a $1 on taxes. At the same time, my net worth goes up more than what we spend. All without paying any advisor.
As for a Roth conversion, This is not a slam dunk decision. IMO, the time to do this was in 2020 when the market was down 35% or more and you knew it was coming back in a hurry, ‘V’ shaped recovery. Your portfolio was way down, you could have sold and paid a lot les taxes, reinvested the money into the same stocks/equities (after 30 day waiting period), then recovered all the money you paid for taxes.
Now, the market is up compared to 2020 or even last year, so you aren’t selling/converting at the lows.
Besides that, you have the drawbacks, or at least in my eyes:
1) you can’t take money out of a Roth for 5 years. So if you start a Roth today, you will have to wait until 10/11/2028 to take money out.
2) congress has adjusted the year that you have to take your rmd based on your birthdate. I have to start taking mine at 74, my wife even later.
3) you don’t know how much your taxes will be in the future, it could be lower or higher, depending who is in the WH. Right now, congress is working on that we don’t pay any taxes on our social security. Maybe they will have something to help out the retirees later on.
4) I think the economy is still going to have a major recession in the next couple of years if not sooner, and if it does go down 30-40% again, then I will be open to a conversion. I’m going to open up :2 Roths for my wife and I so we won’t have to wait the full 5 years if we do.
5) we don’t need the money from our Ira’s or non taxable accounts, and if/when we do, we draw down our taxable accounts 1st
Last edited by huge-pigeons; 10-11-2023 at 06:09 AM.
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