Last edited Tue Jan 12, 2021, 12:30 PM - Edit history (1)
should probably convert -- if it makes sense to convert -- relatively small amounts annually. I've been doing conversions since 1999, a little at a time, though I skipped maybe 3 years. Generally to convert enough to still stay in the same tax bracket, and maybe a little bit in the next tax bracket. In most of these years, that meant converting until I topped off the 15% bracket and even went some way into the 25% bracket.
The plan was on the withdrawal end, when I had used up all my non-retirement savings, I would withdraw from the traditional IRA (TIRA) first. As needed I would withdraw from the TIRA up to the top of the 15% bracket. Then, if more is needed, I would withdraw from Roth after that in a given year, thus avoiding 25% and higher taxes, e.g. because of major medical expenses.
My situation would have been a tax disaster if I had not converted any of it. My Traditional IRA RMDs after about 10 years would have driven me way into the next bracket at least.
As for nobody reading a post this long, I don't know about NOBODY. Absolutes (like ALL, NONE, NOBODY, EVERY, NEVER etc.) are rarely true. But I understood probably only someone who was actually seriously considering a conversion in what little time remained in 2020 (I posted early A.M. Dec 28) would likely read it all. Most who are interested in the topic would skim, skip and read what might be important to them - hopefully the part about how people who claim to be IRA experts (and generally regarded as such) making so many dodgy assumptions to make Roths look like an almost always sure bet. And likely one's financial adviser gloms off their work and doesn't dig deep into it, or have the analytical skills to do such a deep dive.
I spent the better part of 3 days analyzing the decision and going through the Bob Carlson spreadsheet. But then some of us are more serious about our investments than others.
In the past, I've been a part of very long discussions in other forums where we really went into the math and analysis. But I realize that's not everyone's cup of tea. I find it a more fruitful and interesting use of my time, than for example, clipping and sorting grocery coupons, and then buying that unhealthy crap.
Edited to add: it was also meant to hopefully trigger a discussion about the subject. I'm meaning to get back to Pobeka #6, but it's been a busy time.
1/11 11:11pm - Edited for clarity -- particularly the title and first sentence to say that if you do have a large amount to convert, and if it makes sense to convert, it's probably best to do it in relatively small amounts over several years.
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