Why? By lowering your balance before you reach RMD age, your RMDs may not be as large when it's finally time to start them. Roth conversion. The idea here is to convert some of your tax-deferred savings into Roth savings. You'll have to pay taxes in the year of the conversion, ...
A Roth IRA conversion can be especially advantageous during your initial years of retirement, when RMDs haven't yet kicked in and you're most likely to be in a lower tax bracket vis-à-vis your working years. But if you're already receiving retirement benefits, be aware that the converted...
When you roll over some of your IRA funds into a Roth IRA, you won’t be required to take any RMDs or pay taxes on withdrawals as long as the account has been open for at least five years. However, you’ll pay taxes on the amount you roll over at the time of conversion.* Fill...
The goal during the conversion stage is to move as large a sum as possible from a Traditional IRA / 401k to a Roth IRA at the lowest possible tax rate. Just as the Traditional IRA / 401k is the ideal tool for the Accumulation phase, the Roth IRA is the ideal tool for the Conversion...
Again, if you are depositing funds paid from a traditional IRA back to a traditional IRA, you are limited and can only redistribute one amount received per 1-year period. An Example of a Rollover Contribution Conversion Because rollovers from traditional to Roth IRAs (“conversions”) are no...
This was the central question in thePaschallcase. In brief, Robert Paschall engaged in some “creative” Roth IRA conversion “planning” in 2000 (led by a major U.S. accounting firm). The “planning” was meant to allow Paschall to effectively transfer the value from his traditional IRA...
A Quick and Dirty Way to Determine Your PIA History of the Individual Retirement Arrangement (IRA history) Pre-Death Planning: Roth Conversion Previous Article Archives… Previous Article Archives… Contact Info Blankenship Financial Planning, Ltd. Jim Blankenship, CFP®, EA Phone 630-40-DUCKS...
If you have taken more than one distribution in the past 60 days, those additional distributions could be put into a Roth IRA, using a strategy called an indirect Roth conversion. Although you won’t avoid the tax on those distributions, you’ll have the benefit of letting th...
This irrevocable conversion happens through a process called "annuitization". When an IRA or 401k is annuitized, you no longer include the value of that annuity in future RMD calculations. The IRS considers your an IRA immediate annuity to have satisfied its future RMDs, but only for the ...
A Roth IRA conversion can be especially advantageous during your initial years of retirement, when RMDs haven't yet kicked in and you're most likely to be in a lower tax bracket as compared to your working years. But if you're already receiving retirement benefits, be aware that the conver...