Roth Conversion
I have a couple of million dollars in rollover IRA’s that kick off quite a bit of RMD’s. We don’t need the RMD money to live on. I’m 76 years old. My wife is the beneficiary of record.
If I die first and she gets all of that money to put into an inherited IRA fund, I assume she’ll have to take RMDs based on her age.
Does it make sense at my age to convert a bunch of it now into a Roth IRA and get the tax thing out of the way? I think the next beneficiary will be either our children or grandchildren. Is it more than just philosophical who should pay the tax, me or our children?
Thanks for your suggestions.
Terry Says
A lot of people are having that discussion with their financial planners. Some of it depends on how much cash you have OUTSIDE the IRAs to pay the taxes. Some depends on what you think future tax rates will be! (And whether any tax changes will be made THIS year, retroactive to Jan 1st.) So given the size of the amount and the estate planning issues, I’d suggest you discuss with your tax advisor and/or financial planner. And if you dont’ have a sophisticated guide to these issues, now is the time to get one!!