The issue with *state* estate taxes and retirements savings has to do with whether your (non-charity) heirs will receive more if you convert your traditional retirements savings to Roth before you die.[. . .] but am now starting to think about estate taxes, which in my STATE might but us in a marginal 30% bracket, likely highest in country. Not sure there is a relation between estate taxes, and retirement savings, though.
If your overall estate is big enough so that you are going to owe *federal* estate tax, at the *federal* level there is something called the "Income in Respect of a Decedent Deduction (IRD deduction) that has the goal of equalizing the results for your heirs, regardless of whether you convert your traditional retirement savings to Roth before you die or not. (Kitces has a useful discussion, with examples, of the *federal* IRD Deduction in his article "Understanding The IRD Deduction That Inherited IRA Beneficiaries Often Miss" (Kitces.com, 2015))
However, at the *state* estate tax level, most (all?) states do not have a deduction that fills same role as the federal IRD deduction. Plus there are some states with vastly lower estate tax limits than the federal estate tax limit, so there may be a lot more estates in those states that will owe *state* estate taxes than will owe *federal* estate taxes. (e.g., I think Oregon has a $1 million state estate tax exemption, with no portability of the exemption to a surviving spouse.) In these cases, Roth conversions may be a useful *state* estate planning tool for certain people.
However, all of the above has to do with weighing traditional-vs-Roth accounts. (And, either way, the estate tax implications affect your heirs, not you.)
The rest of your question, about mega-backdoor Roth, would seem to have to do with weighing taxable-vs-Roth accounts. (And that decision does have an effect on you, during your lifetime. But state estate tax considerations aren't involved, as far as I know.)
Unless ... by "mega-backdoor Roth," were you possibly asking about making a BIG Roth *conversion* from a traditional IRA? You certainly wouldn't be the first poster to use "mega-backdoor Roth" to mean "a big Roth conversion," but that isn't what "mega-backdoor Roth" means. (As HomeStretch and retiredjg said, MBR is a feature that a 401(k) plan might (or might not) offer you while you are working.)
Statistics: Posted by cas — Sun Sep 28, 2025 4:00 pm — Replies 3 — Views 137