Roth IRA
Terrry, I am 70 and semi retired. I have a traditional IRA with about $161 k. has lost 30 k in the last 6-8 months. Is now the time to convert to a Roth and pay the tax? also, if I do that will my income spike by that amount and adversely affect my SS income and medicare cost? can I move it all or am I limited. Thank you so much for your excellent advice. I listen to you on WGN.
Terry Says
Well, your question indicates you understand all the implications. One more consideration: Do you have money OUTSIDE your IRA to pay the taxes?? If not, it’s probably not worthwhile. But don’t let the conversion taxes soak up all your outside liquid savings.
The Roth won’t be subject to RMDs, but will you need the money anyway to live on, once you’re no longer “semi” retired? If so, why pay the taxes now?
And when you’re fully retired, won’t you be in a lower tax bracket,despite RMDs?
And yes, the additional amount of taxable income will definitly impact your Medicare Part B and D costs.
Go over this with your tax advisor — or just leave things as they are. Don’t try to be too cute with this!
