Reply To: Please help settle a dispute between my wife and me

Home Fairmark Forum Other Tax Topics Please help settle a dispute between my wife and me Reply To: Please help settle a dispute between my wife and me

#2456
kaneohe
Participant

Seems to be a complex problem where gut feeling and intuition must be replaced by lifetime long spreadsheets to prove which is better. 1M in TIRAs would produce initially 40K in RMDs (if both same age, or if owned mostly by one). The 24% bracket is 150K wide so conceivably you would be in the same bracket then if you didn’t convert….at least initially so perhaps you are paying IRMAA for 5 yrs that you didn’t need to.

Are your kids in lower or higher bracket than you?

The general rule is if tax bracket will be lower in retirement (w/RMDs) that favors not converting now. If tax bracket will be higher in retirement (w/RMDs), that favors converting now. If tax bracket will be the same, things are fairly even w/ a slight edge to Roth over time.

So maybe it’s a tie in your case…….w/ the kids brackets a possible tie-breaker……….but again this is just gut feel not a spreadsheet.

  • This reply was modified 2 years, 6 months ago by kaneohe.