IRA MRD question

'rates going up' won't necessarily hit everyone. I doubt those in the

On 12/2/13 2:58 PM, JoeTaxpayer wrote: The

By law you can not rollover an RMD to a Roth IRA.

RMDs cannot be rolled over to another traditional IRA or _converted_ to Roth IRAs, can they? If the OP has earned income (possibly not at age 77), a Roth _contribution_ could be done, but not a rollover of the RMD. Any amounts distributed in _excess_ of the RMD could be converted to Roth IRA but not the RMD.

Ok. Bad syntax. First take your RMD. Done. Then look at your Traditional IRA balance and consider converting a chunk of that remaining balance .........

Why do you think that? I agree there's a substantial risk of tax increases for some taxpayers, but it's not typical for retirees to face high tax rates. My first assumption would be the opposite, that there's a higher probability of paying too-high a rate if you accelerate IRA distributions. You could increase your adjusted gross income or taxable income to the point where you have an unusually high rates because of a higher tax bracket, plus phase-outs, lost credits and deductions, etc. And once out of the IRA, depending on the types of investments you own, you might face higher taxes on the investment income when you reinvest the proceeds using a taxable account (if not from dividends & interest, then from capital gains in future sales).

Of course...it's entirely specific to each individual which is why it's essential to run a tax projection with real numbers. If the higher IRA distributions won't be taxed at all currently, there's more of an argument for doing it.

-Tad

. . .

This was similar to what I tried to suggest. You are right, the question can't be answered without more details.

I circle back to partial conversions only for the fact that (a) they are reversible, and (b) they can top off the bracket each year and help avoid RMD creep.

Joe has it right, but be sure to pay your taxes on the conversion with non-IRA money.