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#6. Breaking Medicare IRMAA* Bracket Thresholds and causing Medicare Part B and Part D Premium Bumps . . . - Matt, Please Explain IRMAA* to Viewers ;and also - Also refer to the 2-year Differential between Medicare Premiums and Tax Years; and - The benefit to doing Conversions from 59 1/2 - 62 years of Age because of IRMAA ( *= Income Related Monthly Adjusted Amount)

Guess I was lucky, or just well informed myself to do conversions over a longer period of time. I began at $10k and the maximum was $80k. I converted about 80% of all our IRA's and that is when I stopped converting. The 20% not converted will greatly reduce my RMD's, which begin next year. If for some odd reason I was to pass, my wife would not be taxed a huge amount if she filed single. We also have children and grandchildren and by leaving it all to my wife it can be in effect a stretch for the kids to have more time with. How much to convert/not convert had me wondering and only had one person suggest to aim for the amount of the standard/senior deductions. Interesting suggestion I thought and realize everyone's situation is very unique on what their income needs are. I opened Roth accounts and have funded 3 accounts for 2 children and one part time working teen grandchild. We pay for them with unplanned for inheritances and have mentioned in plan conversions if their work plans allow it. I think much more could be put in their Roths by the in plan route and I would pay any tax generated in lieu of making the annual contributions. Like I said before, everyone is on their own retirement planning venture. What I see as a huge mistake is to procrastinate to convert or not, and then how much. HUGE conversions are also a potential problem without CPA assistance.

Ethan, great info. Thank you, Sir!

Great advice! We’re reviewing this now for 2024, so this is perfect timing Mat!

I don't know that converting to the top of the 22% bracket is a no-brainer. In my case the last $139,000 would have an effective tax rate of 21%. Even if my portfolio doubles I'll be 90 before RMDs get large enough to create that much income. And inflation will also raise deductions, so probably older than that.

Great advice,, I have been doing conversions for quite a few years thanks to the help from you and Mark I have a few rental properties that I do not plan on selling for a while, if ever. I assumed I would have to add the capital gain and depreciation recapture into my other income when figuring the tax brackets? I have never had either before so not sure. Thanks for all you do

We sold a biz and are mostly clear of the amount of ordinary income from the sale. We have several million in taxable brokerage now and I retired in Feb redirecting 99 percent of my W2 wages to pretax 401k. It’s been rolled so I only have 240k in a traditional IRA at age 47 so it seems to make a lot of sense to do the full conversion now. We will not touch that Roth money for decades if ever so it’s prepaying tax for a legacy plan. I can aggressively invest that and draw down taxable and pay taxes out of the taxable. Obviously it’s nuanced but I’m having a hard time finding gotchas.

How about if I am dollar cost averaging daily in etfs and I max out my Roth too soon in the year? What can I do to keep dollar cost averaging? Should I be doing that on a regular brokerage rather than a Roth? Thanks

On mistake #5: You said you would take an $800,000 Roth over a $1mil Traditional IRA every time. But if you're assuming a 20% federal tax rate and 5% state tax rate, your $1mil Traditional would be equal to $700,000, not $800,000. It order to be fair, you would have to choose between a $1mil Traditional and $700,000 Roth. (Gotta watch those sales people.)

Can I convert a "Roth 401k" to a "Roth IRA" without maxing out the regular 401k portion of the account regardless of what level of income bracket i fall under (low or high)?

The jump from 22 tp 24% is just 2% so why not go to the limit of 24% for marginal increase of 2%?

No mention of the Rule of 55 as a benefit for doing 401k in-plan conversions without penalties?!?

Because i use obama care we cannot convert due to income restraints in order to get subsidies. It's very frustrating. When i turn 65 in 3 yrs and go on medicare then we can turn on roth conversions. Wife is already on medicare so by me retiring early roth conversions will have to wait.😔

Trump has said he will extend TCJA rates if elected.

Can I convert a SEP-IRA to a Roth IRA?

Thanks Trump for making sure the business rate was forever but sunsetting the regular man’s rate.

I don't see how converting to a ROTH helps--I just used AARPs RMD conversion calculator---I took a person born in 1960 who has to take RMDs in 2035--I assumed an Annual of 7.2%--this person has 2.5mm bal. at 65 yrs of age--in 10 years or 2035 it doubles to 5mm and min RMDs are required--in 20yrs or 2045 at 85 years of age this person has 6.275mm balance after RMDs----If that same person does a 100% conversion and takes a 30% tax hit which is insanely conservative --they have 2.5mm minus 750k or 1.75mm balance in a Roth--in 10yrs it doubles to 3.5mm in 2035--if that person takes the same RMDs by percentage the ROTH balance after RMDs is 4.398mm------------------------its not even close

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