1. Wife and I are fully retired.
2. Married filing jointly.
3. Both 61 years old.
4. Probably can not be talked out of taking SS at age 62 (September & October 2025).
5. $3M in retirement saving. All in pre-tax accounts (401k/403b).
6. Taxes will have to be paid from Conversion.
7. No debt.
8. ~$39K/yr pension and ~$46K/yr SS = ~$85K/yr.
9. Plan would be to fill up the 24% bracket.
I'll comment on your numbers.
1: Good, between that and #3, you don't have IRMAA to add to your penalties for a couple years.
2: Best way
3: Ok, gives you 2 free years before it counts for IRMAA. A year beyond that and you can simply file for a recalculation.
4: Social security is income. This reduces how much Roth conversions before you hit the next tax bracket. With $3M saved, you are MUCH better off not taking SS until 70 and reducing your pre-tax savings now. Remember that interest and dividends on taxable are also income.
5: This means that at 75, first year of RMD, your amount you MUST take out will be $256,067. Add taxable portion of social security and interest to that to get your income. Will that make you hit IRMAA? Too far away to say for sure. Be aware that when one of you passes, the other will have the same RMDs but the tax bracket and IRMAA will dramatically increase tax and penalty.
6: That's fine. You do realize that in 2026, that 24% bracket becomes 28%, right?
7: Good
8: Ah, more to be taxed. Add that to the above for both taxes and with IRMAA when added to interest, dividends and RMDs
9: Good plan to do that now to reduce that pre-tax as much as possible. To re-iterate, it'll be 24% for this and next year and 28% after that.
Here is the Schwab RMD calculator. Hoover over the slices to see your actual age, asset value with 6% gain per year and RMD. I've used these to build my own spread sheet yielding the % for each age. With this, I can change the asset value by what I Roth convert.
https://www.schwab.com/ira/ira-calculators/rmd
2. Married filing jointly.
3. Both 61 years old.
4. Probably can not be talked out of taking SS at age 62 (September & October 2025).
5. $3M in retirement saving. All in pre-tax accounts (401k/403b).
6. Taxes will have to be paid from Conversion.
7. No debt.
8. ~$39K/yr pension and ~$46K/yr SS = ~$85K/yr.
9. Plan would be to fill up the 24% bracket.
I'll comment on your numbers.
1: Good, between that and #3, you don't have IRMAA to add to your penalties for a couple years.
2: Best way
3: Ok, gives you 2 free years before it counts for IRMAA. A year beyond that and you can simply file for a recalculation.
4: Social security is income. This reduces how much Roth conversions before you hit the next tax bracket. With $3M saved, you are MUCH better off not taking SS until 70 and reducing your pre-tax savings now. Remember that interest and dividends on taxable are also income.
5: This means that at 75, first year of RMD, your amount you MUST take out will be $256,067. Add taxable portion of social security and interest to that to get your income. Will that make you hit IRMAA? Too far away to say for sure. Be aware that when one of you passes, the other will have the same RMDs but the tax bracket and IRMAA will dramatically increase tax and penalty.
6: That's fine. You do realize that in 2026, that 24% bracket becomes 28%, right?
7: Good
8: Ah, more to be taxed. Add that to the above for both taxes and with IRMAA when added to interest, dividends and RMDs
9: Good plan to do that now to reduce that pre-tax as much as possible. To re-iterate, it'll be 24% for this and next year and 28% after that.
Here is the Schwab RMD calculator. Hoover over the slices to see your actual age, asset value with 6% gain per year and RMD. I've used these to build my own spread sheet yielding the % for each age. With this, I can change the asset value by what I Roth convert.
https://www.schwab.com/ira/ira-calculators/rmd
Statistics: Posted by Jack FFR1846 — Tue Dec 03, 2024 8:37 am