Started converting my IRA to Roth IRA when I retired at 62 and will continue till 70. I use a bracket management strategy. Will adjust when the 2017 tax brackets come back in 2026 (or higher). Hindsight - would have started converting early
If you are 55 , you are separate from work, you can withdraw from your 401k or if your are 59 , you can withdraw from Ira up to 12% tax bracket, don’t going into 22% tax bracket. Do retire in low cost are so 12% withdraw can meet your expense budget
Beat taxes by gifting directly to charities and church living to make a difference. Distributions directly to charity counts as part of the RMD but does not get taxed even if you don t itemize.
I maxed out my 401k but I also maxed out my Roth inside my 401k. Can I do a Roth conversion within my 401k to my Roth 401k? How do annuities affect all this?
So if both husband and wife are in their 70s and taking RMDs as required and working, at what point would you consider it still worth it/not worth it to do a ROTH conversion/back door ROTH? I’m sorry if you already explained this…it’s a lot of info and I’m still trying to soak it in. :) Also, good point about the taxable rate changing when one passes.
I have a question about ROTH conversion and the five year rule. I started contributing to ROTH in 2017 and 2018 through TSP. In 2019 I moved everything over to TD Ameritrade. Does the 5 year start over in 2019 when I moved out of TSP or still applies when I started contributing in 2017 in TSP?
I believe there may be some confusion in your questioning, as your question refers to both Roth conversions and contributions. You can always withdraw “contributions” to the Roth IRA, tax and penalty free, as these contributions are made after-tax. As it pertains to the five-year rule, “earnings” on Roth contributions and Roth conversions are treated in pretty much the same fashion. For each Roth conversion, you need to be 59 ½ years AND wait five years from January 1 in the year the conversion took place to withdraw tax/penalty free. For example, if you made a Roth conversion in 2017, the clock on the five-year rule for either starts from January 1, 2017. Switching custodians is not considered a conversion or contribution and therefore the five-year rule is unaffected by this. Please reach out to us if you have any questions.
I'm actually thinking of working Part-time to lower Income but Keep Healthcare? Instead of Full Retirement? Ease into Retirement? Do Conversions ect but ACA ISNT A Factor? I only pay about $100 p mo for Healthcare while working!
see th-cam.com/video/T7QebIbugcM/w-d-xo.html 0:15 Is there an online calculator that helps people understand this required minimum distribution case that you describe? Let's use some real numbers? They were a couple retiring at 68 and ending up because of RMD paying more in tax than they budgeted for themselves. It would be helpful if the IRS / SSA / etc. simply showed a projection of the possible outcomes. It seems very odd that this couple does everything right and they are caught in a "political tax trap" because they worked their whole lives. Amazing!
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Started converting my IRA to Roth IRA when I retired at 62 and will continue till 70. I use a bracket management strategy. Will adjust when the 2017 tax brackets come back in 2026 (or higher).
Hindsight - would have started converting early
I’m 66, retired, will be doing conversions for the rest of my life. I retired with 2m in a IRA. Good problem.
If you are 55 , you are separate from work, you can withdraw from your 401k or if your are 59 , you can withdraw from Ira up to 12% tax bracket, don’t going into 22% tax bracket. Do retire in low cost are so 12% withdraw can meet your expense budget
doesnt the tax free growth over the 10,20 or 30 years timeframe of the roth conversion make paying the higher tax rate worth it in most cases.
Very good. Need Financial Planner ASAP
Very valuable information . Thanks for this video .
Beat taxes by gifting directly to charities and church living to make a difference. Distributions directly to charity counts as part of the RMD but does not get taxed even if you don t itemize.
Start 401k Ira earlier, retire earlier, do Roth conversion before 701/2， you hear me?
I maxed out my 401k but I also maxed out my Roth inside my 401k. Can I do a Roth conversion within my 401k to my Roth 401k? How do annuities affect all this?
U Need to Open Roth IRA! There is a 5 year clock that does Not let you take money out until 5 yr after u Open the Account!
So if both husband and wife are in their 70s and taking RMDs as required and working, at what point would you consider it still worth it/not worth it to do a ROTH conversion/back door ROTH? I’m sorry if you already explained this…it’s a lot of info and I’m still trying to soak it in. :) Also, good point about the taxable rate changing when one passes.
I have a question about ROTH conversion and the five year rule. I started contributing to ROTH in 2017 and 2018 through TSP. In 2019 I moved everything over to TD Ameritrade. Does the 5 year start over in 2019 when I moved out of TSP or still applies when I started contributing in 2017 in TSP?
I believe there may be some confusion in your questioning, as your question refers to both Roth conversions and contributions. You can always withdraw “contributions” to the Roth IRA, tax and penalty free, as these contributions are made after-tax.
As it pertains to the five-year rule, “earnings” on Roth contributions and Roth conversions are treated in pretty much the same fashion. For each Roth conversion, you need to be 59 ½ years AND wait five years from January 1 in the year the conversion took place to withdraw tax/penalty free.
For example, if you made a Roth conversion in 2017, the clock on the five-year rule for either starts from January 1, 2017. Switching custodians is not considered a conversion or contribution and therefore the five-year rule is unaffected by this. Please reach out to us if you have any questions.
Your definition of a conversion is from an IRA to a Roth IRA but can”t it come from a 457 or other pretax accounts like 401(k)s?
I rolled my 457 to an IRA rollover account then rolled that to a Roth IRA. Did the same thing for my daughter with her 401
Within your Solo 401k you can make rollovers to ROth portion.
I'm actually thinking of working Part-time to lower Income but Keep Healthcare? Instead of Full Retirement? Ease into Retirement? Do Conversions ect but ACA ISNT A Factor? I only pay about $100 p mo for Healthcare while working!
Be careful. Check with your CPA or Tax Advisor before making your move.
Once we reach 72, not 70 1/2
FYI: This was recorded in early 2020, before SECURE act was passed. RMDs now kick in at 72.
And now it is up to 75! The same strategy applies.
see th-cam.com/video/T7QebIbugcM/w-d-xo.html 0:15
Is there an online calculator that helps people understand this required minimum distribution case that you describe?
Let's use some real numbers?
They were a couple retiring at 68 and ending up because of RMD paying more in tax than they budgeted for themselves.
It would be helpful if the IRS / SSA / etc. simply showed a projection of the possible outcomes.
It seems very odd that this couple does everything right and they are caught in a "political tax trap" because they worked their whole lives.
Amazing!