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Accessible Finance Episode 49: Listener Scenario - High Net Worth Couple, 68 & 66, Looking To Maintain Lifestyle While Being Tax Efficient
Should I convert 401k to Roth IRA to minimize RMD and future tax liabilities? What strategies can I use to tax impact to heirs?
Yes, if impending RMDs will catapult you into a higher bracket, you likely want to employ a Roth conversion strategy to minimize your lifetime effective tax rate. This strategy has the added benefit of allowing heirs to avoid paying ordinary income tax on the conversion amounts plus earnings.
If you would like us to discuss your specific scenario without providing financial advice, have seen any article or advice you'd like some feedback on, or have any general questions, feel free to write to us at [email protected]. We will anonymize your personal information. Thanks!
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By Eric Johns CFP®, EA, MBAShould I convert 401k to Roth IRA to minimize RMD and future tax liabilities? What strategies can I use to tax impact to heirs?
Yes, if impending RMDs will catapult you into a higher bracket, you likely want to employ a Roth conversion strategy to minimize your lifetime effective tax rate. This strategy has the added benefit of allowing heirs to avoid paying ordinary income tax on the conversion amounts plus earnings.
If you would like us to discuss your specific scenario without providing financial advice, have seen any article or advice you'd like some feedback on, or have any general questions, feel free to write to us at [email protected]. We will anonymize your personal information. Thanks!