Whether to Rollover 401k (TSP) to a Roth IRA
Hi Terry, I am 71 years old and wondering if I should rollover $15k to a Roth IRA in a Vanguard account this year and again next year, before having to take RMDs. My husband is 80 years old, and our AGI was $105K last year. We are both retired, and have about $500K in investments. My reason is to keep Medicare from increasing.
Thank you.
Terry Says
This is a tough trade off. If you roll now, you pay taxes now! That eats up your liquid cash.
And you must calculate the amount you pay in taxes (not to mention what you might have safely earned inside the plan) vs the IRMAA impact for each of you every month, based on the actual RMD account!
This is not a matter of guesswork or emotionally trying to avoid IRMAA! (But many brokers, seeking to earn commissions on your newly acquired Roth will encourage you to do it!)
Only one program does this mathematically. Search under my columns for “Roth Conversion Advice”.
