Taxes on Roth conversions
Hi Terry. I am retired & converting my 401k into a Roth IRA (We are in the 24% tax bracket). I have four NML whole life insurance policies with total cash value of $170k ($270k death benefits). I’m thinking of taking a policy loan, but only if I can use ongoing policy dividends to service the loan so there would not be out of pocket costs. What do you think?
Terry Says
Did you work with an accountant to see how high a tax bracket you will be in after conversion? And did you check to see how high your monthly Medicare Part B and Part D premiums will go if you add all this extra income???
PLEASE, if you haven’t done the conversion yet, consider all this. In fact, read this article: https://www.terrysavage.com/roth-conversions-2/
As to borrowing from your life insurance — WHY? Do you need the money? If you need more money, why convert your IRAs and have to pay the taxes??
Your ideas don’t make sense — and I don’t have enough info to guide you. But I suggest you have a session with a fee-only, FIDUCIARY advisor before you do anything else. Find one here:
https://www.terrysavage.com/pam-krueger-wealthramp/
