It sounds like for you and your wife, it really doesn't matter what you do as your portfolio will keep increasing. The only caveat to that is when one of you pre-deceases the other, your income will drop. It will drop by the amount of the smaller SS benefit and possibly drop based on how your pension will work.I turn 73 next April, so will need to begin taking RMDs in 2026. My wife is 71, and we are both retired and receiving SS Benefits, and in excellent health. We are living on our SS benefits and my pension (~ $7,400/month). No debt, house is paid off. Currently have $1,135,000 in a traditional IRA and $242,000 in a Roth IRA. Estimate my RMD amount next year will be > $42,000. We will probably use ~ $20,000 of this as a QCD. Does it make sense for me to initiate a Roth conversion at my age as an attempt to decrease future RMD amounts?
Roth conversions at this point are primarily going to save taxes for your heirs, not necessarily you. Reducing RMDs possibly could reduce future IRMAA charges down the road as well. Both of those are worth goals in my opinion.
If you can convert at the 12% to avoid paying 22% or 24% later, that is a no-brainer. When you are converting in the 22% and 24% range it gets harder. I am picking thresholds that I don't want to cross if I can help it. I can't get below the 22% bracket so my thresholds are the 24% bracket, NIIT, and the top of the IRMAA bracket I'm in. As soon as RMDs start, I'll be stuck in the 24% bracket and paying Tier 2 IRMMA for about 20 years. After that, it just gets worse.
Statistics: Posted by WeakOldGuy — Sun Dec 14, 2025 1:19 am — Replies 3 — Views 289