Ask Terry Questions Conversions to ROTH over and above RMD

Conversions to ROTH over and above RMD

By Terry Savage on April 09, 2023 | Financial Planning / Retirement

I began taking RMD last year. Is there a benefit for taking additional Traditional IRA funds – over and above the RMD – and converting those to ROTH?
I understand I should limit the amount to not impact Medicare premium and should also consider possible impact to tax brackets – right? I’m currently in the 22% tax bracket.
Given all that, is there an advantage in paying those additional taxes now? Do you have thoughts and/or a recommendation?
I am single/widowed and 72 years of age. Thanks!
BTW – I did take you advice and have invested in I-Bonds.

Terry Says

The real advantage of converting to a ROTH is all those years of tax-free future growth after you do the conversion. But at age 72, that advantage is minimal. And you likely won’t have a LOT of tax-free growth in the Roth because you will want to invest more safely. I’d just stick with the traditional IRA now and not give the government the taxes ahead of time.

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