Ask Terry Questions Roth Conversion

Roth Conversion

By Terry Savage on April 14, 2019 | Financial Planning / Retirement

Can I convert amounts in excess of RMD to Roth even though I no loner have wage income? Also how would I show contribution to Roth on the tax form? I am 72.


Terry Says

There is no age limit on doing a Roth conversion — BUT if you’ older than age 70-1/2 and thus subject to RMDs, you must take your RMD first, before doing the conversion   People might ask why you would do that, so let me point out that were are in a period of relatively low tax rates — AND there are no RMDs required from a Roth.  On the other hand, you’ll need to have money available — preferably from outside your IRA — to pay the taxes that will be due next April.  And if there is a significant boost to your income because of the conversion (the entire amount is treated as ordinary income), then you might have to make quarterly estimated tax payments during this year.  Consult your tax advisor.

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