Q.: I see a lot of articles touting Roth conversions as a way to lower RMDs. I’m 71, engaged to be married in February (Valentine’s), and will retire in 2021 from a current salary of $225,000. The RMDs on my $2.6 million IRA are annoying because I’m paying taxes at a high rate when I don’t really need the money (expenses run about $100,000). Given my tax bracket, is a conversion really a good idea?
— Tyler in Tampa
A.: Tyler, you are wise to hesitate on converting to a Roth. Conversions make sense when the rate you would pay on the conversion is less than the rate you think would be paid when the money was eventually distributed. At that income level, you are probably subject to a marginal tax rate of at least 32%. Adding a conversion would likely increase the rate on the conversion to 35% or more.
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