Comments on: The Retirement Savings Tax Bomb

By: Neil Christian

Neil Christian — Tue, 05 Nov 2024 18:12:08 +0000

So RMD is now 73. What is that formula again?
You can Google tax rates for 24’ to determine how much you pay IRS in Taxes with a Roth Conversion. But IRMMA for Medicare? And taxes on Social Security? Do we need a Tax planner ? There sure is a lot to look at and be smart with our hard earned dollars. Thanks

By: John Hankins

John Hankins — Thu, 24 Oct 2024 00:41:44 +0000

Here is what is guaranteed with a Roth conversion:
– RMD relief
– More flexibility for your heirs
– You lock in the tax rate that you are paying on the amount you are converting from your traditional IRA.
– You have access to a positive emotional state with your tax free Roth
But a guaranteed higher return on your initial investment is not one of them. Roth conversions are being way oversold. The benefits are totally dependent on long term future tax policy, which is unknown (last I looked).

By: Jane

Jane — Fri, 18 Oct 2024 23:25:09 +0000

In reply to Floridian For Now. Yes and those higher IRMAA rates stick with you for 2 years, even if your taxable income drops the next year if I understand the evaluation process. They look at your taxable income in the two years prior to present

By: Maryland Retiree

Maryland Retiree — Wed, 16 Oct 2024 20:02:41 +0000

A bigger issue than the income tax that must be paid on withdrawals from IRA and 401(k) accounts is the jolt tha occurs to a surviving spouse when one member of a married couple dies. When my husband died five years ago, my tax status went from “married filing jointly” to “single.” His IRA and 401(k) accounts were rolled over to mine, so I had to pay much higher taxes on what was essentially the same income. This phenomenon is ignored much too often in articles about taxes paid in retirement

By: Floridian For Now

Floridian For Now — Wed, 16 Oct 2024 18:45:21 +0000

In reply to P.M. Bellace. Yes. Taxable as income. They also can trigger Medicare IRMAA charges etc..

By: Floridian For Now

Floridian For Now — Wed, 16 Oct 2024 18:44:13 +0000

In reply to Nancy. It is true that Roth contributions are limited. But Roth conversions are not, except that you can only do ONE a year. And they are taxable (as income as the article points out). So when you convert, make sure you get the right amount that won't lift you into a higher tax bracket, trigger IRMAA (extra Medicare fees), or cause your Social Security to be taxed.

By: Nancy

Nancy — Wed, 16 Oct 2024 12:40:59 +0000

I wish your article had pointed out that contributions to Roth IRA’s are limited both in the amount that can be contributed each year and who can participate.

By: Richard

Richard — Wed, 16 Oct 2024 03:10:35 +0000

In reply to Michele Lawson. It is also worth considering that when you convert to a Roth, your income will increase and thereby may cause you to pay higher Medicare premiums under the "IRMA" rules.

By: P.M. Bellace

P.M. Bellace — Wed, 16 Oct 2024 00:30:03 +0000

When you do a conversion, you have to pay taxes on that amount — yes or no?

By: Michele Lawson

Michele Lawson — Mon, 14 Oct 2024 15:01:41 +0000

It’s worth considering the impact of. moving oneself into a higher tax bracket when making a ROTH conversion.