Will there be a mad rush for conversion? (move, salary, husband)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Because I'm an long term planner and enjoy figuring out how to leave my heirs better off. Also, while this is not a political thread, there is no harm in educating my fellow citizens.
I get that but unfortunately absolutely nothing is certain with the bozos we elect. so my general thought is that I keep an eye out on what changes to ss may come but I darn sure do not make long term financial plans based on the daily headlines.
Anyhoo if I've read it right it only is a 2 year extension. so to answer your question no I don't plan to ramp up any conversions.
lol but then again I plan on spending all my money so worrying about what my kids will inherit is moot.
The math here is that filing married, the 12% tax bracket extends up to $80,250. The standard deduction is $24,800. You need an AGI of $105,050 in tax year 2020 to be outside the 12% bracket. My plan to do Roth conversions vaporized with the tax law change a couple of years ago.
In my opinion, the only reason to do Roth conversions is for estate planning.
And don't forget that capital gains income is taxed only after other income is calculated, in other words on top of that.
Yep. I'm planning to take advantage of that a couple times between now at age 61 1/2 and age 70. I should have a few years where I sell something, don't pull from my 401(k)/IRA accounts, and keep within the 0% bracket for long term capital gains. In those years, it would be really tax-inefficient to do a Roth conversion.
Under current law your Social Security becomes taxable when half of your SS plus all other income is greater than $25,000 for singles and $32,000 for married. Depending on your income up to 85% of your SS can be taxed. This low threshold means that even a very small pension can cause your SS to be taxed and discourages Roth conversions once SS is taken. The proposed SS 2100 Act raises that threshold to $50,000/100,000.
Has the threshold to 50k/100k been passed as part of the SECURE Act.
Converting to a Roth is all moot now that the rules for inheriting an IRA Roth or regular have been changed to 10 yr payout for anyone other than a spouse and child under 18 or disabled person
Single premium Life insurance policies could be the big benefactor......if I have 1 million left in my ira ,instead of leaving the ira’s to the kids , take some of the money later on in life ,pay the tax and buy a leveraged life policy for a million dollars .
they don’t cost anywhere near what they pay out ...
Instant tax free money for the kids ...anything left in the ira can go to a charity...otherwise that ira would add more than 100k in income a year to their incomes triggering nasty tax consequences.. now it is tax free for them.
Ssssssshhhhhhhh keep this under your hat
Last edited by mathjak107; 12-28-2019 at 04:23 PM..
Mathjak, I like the idea of the Single Premium Life Insurance. However, please clarify: "otherwise that ira would add more than 100k in income a year to their incomes triggering nasty tax consequences"
Suppose I start with a $1 million Traditional IRA, and over time pay the tax to convert it to a Roth. Once I pass, doesn't the kid have 10 years to cash out the funds Tax Free? Why would it trigger nasty of tax consequences?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.