Qualitatively, your Roth conversion plan is hobbled by two things:It's interesting that I would pay less tax over 17 years than if I did the Roth conversions (76K less).
Social security
RMD
Why ? the marginal tax you pay on the conversion starts after the above two things bump you into a high(er) tax bracket. This is why two rules of thumb exist
1. Convert before RMDs start
2. Convert before SS starts
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My experience with NRP so far suggests that the software tool needs user help to spit out a useful answer. My approach is to look at an output of tax brackets without Roth conversions and to identify the excursion into the tax bracket I want to avoid by doing Roth. E.g., avoid the 32% tax bracket. Then run the following Roth Conversion scenarios:
1. Using the 24% tax bracket (one under the bracket you wish to avoid.)
2. Using the tax bracket 2 levels under the bracket you with to avoid
3. Setting the tax scheme to revert in 2026, 2027, 2028 or never
Statistics: Posted by EricGold — Wed Jun 19, 2024 2:39 am — Replies 58 — Views 5043
