I’m 69 and Single with $1,000,000 in IRAs - Should I do a Roth Conversion?

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So you’re single, a widow or widower with $1 million dollars saved in your IRA or 401k and you’re wondering whether you should convert to a Roth. Would the roth conversion strategy benefit you or would it be better to keep your money where it is??
In this video, we’ll examine two sample cases of single people who are single, retired, and collecting Social Security as their only income. We’ll show you why one of these shouldn’t convert to a Roth while the other should consider converting to Roth and start moving some of their 401k and IRA money.
Here’s some of what we discuss in this episode:
0:00 - Intro
1:00 - Sample case summaries
3:03 - Retirement Tax projections
4:32 - Tax brackets
8:10 - Sue Sample Roth conversion recommendation
12:00 - Jane Sample Roth conversion recommendation
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Опубликовано:

7 авг 2024

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Комментарии : 2

@martinneumann9345 2 месяца назад

Also need to consider IRMA brackets for Medicare. A big conversion would trigger large increase in Medicare costs that would affect SS benefit.

@M22Research 3 месяца назад

1) Implied, but I did not hear it said - Sue’s potentially future tax impacting RMD is largely a non issue since she’ll be withdrawing about the same amount for her spending anyway. ($60,000+$7,500 = $67,500 spending minus Social Security $25,000 = $42,500 needs from her IRA/401K, more than what her initial IRA/401K RMD will be.) Jane’s future RMD will drive her into a higher tax bracket, so minimizing the size of that RMD by converting some IRA/401K money to a Roth IRA makes sense. ($48,000 spending minus $25,000 Social Security = $23,000, about half what her initial RMD will be, thus “unnecessarily” driving her up into a higher tax bracket.) Another factor impacting whether to do a Roth conversion - does either of these women have post tax (brokerage or savings) money to pay the Roth IRA conversion tax? If you have to pay the Roth IRS conversion income tax out of the Roth IRS conversion withdrawal amount itself, you are undercutting the net Roth IRA balance of tax protection you’d otherwise achieve by paying those income taxes out of post taxed funds.