Ask Terry Questions Roth-IRA conversions

Roth-IRA conversions

By Terry Savage on January 12, 2024 | Financial Planning / Retirement

Can an individual who is over 73 years old and taking RMDs, continue to transfer money from an IRA to a Roth IRA?

Terry Says

Yes. But why?? Why pay the taxes now? You MUST take RMDs — and those will be taxed. If you take out more, you could increase your Medicare Part B and D premiums! My suggestion is to just leave the money where it is and take the RMDs, remembering to have taxes withheld.

The only reason to do a Roth conversion is if you feel taxes will rise sharply in the future — AND, if you have money OUTSIDE the IRA to pay the taxes on the conversion –AND if it doesn’t push you into a higher tax and Medicare bracket. That’s rarely the case, and not necessary at this stage of your life.

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