Quote:
Originally Posted by Boilerman
You wouldn’t make that large a conversion in any one year for the reasons you stated. But a $8M IRA balance at age 70 would result in an RMD at age 73 of over $300K. Depending of your other income you could permanently be in at least the 32% tax bracket and paying around $500 a month for Medicare forever (times 2 if you’re married). Ideally, you be starting conversions at an earlier age with smaller amounts each year. $8M might be hard to convert. Good problem to have.
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There is a certain wealth point above which these issues are non issues, as a different point of view from those which are significantly below the wealth point. Its behavioral economics, and most people assume a sufficing life style, and they hope to maintain it. Especially if you live a relatively frugal life, and even after all the taxes, you still have plenty of money to live your lifestyle, many issues become non issues.
In reality, the older you are, the less active you are, and the less likely you will be living an expensive lifestyle, other than healthcare related expenses.
But remember that many times, you can control events, and at other times, you can't control events, and this is a time where you can't control events. the IRMAA tax is transitionary for those with windfalls or other wealth point issues, but beyond your control due to events, foreseen or unforeseen. So yes, you are being taxed differently, but you are probably viewing the added tax through the lack of control issue view, which you live the rest of your life. At this point, the tax is what it is, and I admire those who have this issue that they did better than I, and those who saved and worked well enough to have these issues.
But I do love this bbs and the responses here, gives me great insights into different views of behavioral finance for sure.