Since RMDs are not due until age 73 or 75, how would higher RMDs affect ACA subsidies? Are there subsidies for people on Medicare which starts at 65?One advantage to a Roth conversion is that the larger your Roth account, the more flexibility you have in pulling money in from a source that doesn't increase your taxable income for the year, AGI, or MAGI. This can affect things like ACA subsidies. It's nice to be able to control your taxable income without reducing spending in a given year.There are some really long and complicated answers to this question with most referring to the tax bracket you are in when the conversion takes place. I just don't see an advantage to paying the tax on conversions vs paying the tax on a traditional ira when you are ready to use the money in retirement. Any after tax money you earn between now and retirement can be invested in a Roth ira and used before withdrawing your traditional ira. Thus postponing any tax for the foreseeable future.
The other nice thing about Roth conversions is that a conversion leaves you with the same amount of tax-advantaged space, whereas an IRA distribution to a taxable account reduces that tax-advantaged space.
I'm a pretty big fan of Roth accounts. Doesn't mean anyone else has to be. *shrug*
Statistics: Posted by Prokofiev — Wed Oct 09, 2024 11:36 pm
