Roth Conversions

Roth Conversions can be a great way to take advantage of lower income years between your retirement and all pensions and required minimum distributions (RMDs) fully kicking in. This can reduce the impact of RMDs taking couples and surviving spouses into the highest tax brackets and extra IRMAA payments for Medicare.

Whether to make Roth Conversions is very individual and quite complex as it involves a number of assumptions about the future. If you would like us to provide with your individual recommendation then please contact us.

What is a Roth Conversion?

A Roth Conversion is money converted directly from a traditional IRA (or 401K) into a Roth IRA (or Roth 401K). The income from the conversion is taxable(unless there were any non-deductible contributions. However, the conversion is not subject to the usual Roth earned income limits.

Roth Conversion Strategies

Typically would recommend up to one of the breakpoints based on IRMAA or Tax Brackets. The first few tax brackets and IRMAA breakpoints for 2024 are:

12% 89,450

22% 192,470

24% 364,200

IRMAA (2021)

$194,000
$246,000
$306,000
$366,000

Factors affecting Roth Conversions