Transferring money from IRA to Roth IRA
Since seniors do not have to take an RMD this year, I am thinking of taking money from my IRA and putting it in my ROTH. (I can do that, correct? ) I know I won’t be able to take money out of my ROTH for 5 years. I have a small amount in my ROTH. Sorry I didn’t put more in while I was working. I feel my children will benefit from this. Your thoughts.
Terry Says
YOu can do that — and pay the taxes. The amount will be added to your ordinary income, so make sure it doesn’t put you in a higher tax bracket, or Medicare part B bracket, or impact any other benefits. But if you just move the amount you have been taking as an RMD in other years, that shouldn’t be a problem.
And, yes, you won’t be required to make withdrawals from your ROTH in the future, letting the money grow for your heirs. But recent tax reform somewhat limited their ability to stretch and grow the account once they receive it. Still it’s a good move for this year.
