Quote:
Originally Posted by JRcorvette
We have been moving money out of our IRA into a ROTH for several years now. Taxes are as cheap as they ever will be. We take as much as we can and stay in the 22% bracket. Yes we will pay more on the Medicare side but it is still the smartest move you can make.
One other thing a ROTH being a tax free haven is it much better for your kids to inherit a ROTH vs an IRA.
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Filling your tax bracket with a Roth conversion can be a smart move. Don’t forget, the next tax bracket is only 24% (2% more). If married, you can convert an additional $182,850 for just under $3,700 in additional taxes over the 22% rate. If single, an additional $91,425 for around $1,800 in additional taxes over the 22% rate. Who knows how long this small spread between tax brackets will last? This could be a way to supersize your conversions and reduce RMD’s, if so inclined. Talk to a fee-only (not fee-based) advisor or your CPA.