Anonymous
Post 07/16/2025 11:12     Subject: Roth Conversion later in life, near retirement
What if you have no kids and don't plan to leave large inheritances?
Anonymous
Post 07/15/2025 10:43     Subject: Roth Conversion later in life, near retirement
Anonymous wrote:
Anonymous wrote:
tbh my rule of thumb is that Roth conversions are rarely worthwhile— the benefits are generally small and uncertain.


That’s about where I am. I retired in January with a huge pre-tax balance but I also decided to claim social security at 64 because of externalities - in this administration’s grasp, a bird in the hand is worth two in the bush. I have a bunch of taxable income still this year so next year is the first year it might be worthwhile. I’ll probably pay for Pralana to model things out, but I’m also of the “keep it simple stupid” mentality. Roth conversions are so speculative that unless it’s really clear to me that it’s going to benefit me (and only secondarily, my heirs) I probably won’t do it.



You don't need to hire anyone, but many people with hefty pre-tax money will be required to take larger RMDs than they need to support their retirement spending (& pay tax on that large amount) AND --this is a big issue for us--there is the IRMAA "cliff" which can increase your Medicare cost several fold. These two issues are partly driving our strategy and secondarily, the benefit to heirs.
Anonymous
Post 07/15/2025 09:58     Subject: Roth Conversion later in life, near retirement
Anonymous wrote:
tbh my rule of thumb is that Roth conversions are rarely worthwhile— the benefits are generally small and uncertain.


That’s about where I am. I retired in January with a huge pre-tax balance but I also decided to claim social security at 64 because of externalities - in this administration’s grasp, a bird in the hand is worth two in the bush. I have a bunch of taxable income still this year so next year is the first year it might be worthwhile. I’ll probably pay for Pralana to model things out, but I’m also of the “keep it simple stupid” mentality. Roth conversions are so speculative that unless it’s really clear to me that it’s going to benefit me (and only secondarily, my heirs) I probably won’t do it.
Anonymous
Post 07/14/2025 14:20     Subject: Re:Roth Conversion later in life, near retirement
Anonymous wrote:I'm a recently retired fed in my early 50's and came to the conclusion that I will do some conversions before age 62 but really have no idea if I will benefit much from doing so. There are just too many unknowns at this point:

- future tax rates are unknown I'd assume higher. can't imagine tax going down
- don't know if I will enroll in Medicare. I have Fehb benefits and will likely be overseas. (not sure how this plays?)
- unknown if iirma will be an issue. (what is iirma?)
- unknown future taxes rate for heirs. Again, I'd assume higher
- unknown if RMDs will increase my marginal tax rate much. this is easy to figure out if you have 30 min - pension + SS (if you are taking it during conversion years. personally i am planning to convert once RMD kicks in

I'm also currently in the 22% tax bracket, so doesn't really seem like a bargain to do a conversion.
Anonymous
Post 07/14/2025 14:20     Subject: Roth Conversion later in life, near retirement
One thing to note. If you live in Maryland and are 65 and over and have a 401k but no pension the first 40K of withdrawls could be tax free at state level. However, not for an IRA.

I plan on waiting to take SS till 70 and from 65 to 69 pull 40K each year avoid state tax and will be in low tax bracke for remainder.
Anonymous
Post 07/14/2025 14:05     Subject: Re:Roth Conversion later in life, near retirement
I'm a recently retired fed in my early 50's and came to the conclusion that I will do some conversions before age 62 but really have no idea if I will benefit much from doing so. There are just too many unknowns at this point:

- future tax rates are unknown
- don't know if I will enroll in Medicare. I have Fehb benefits and will likely be overseas.
- unknown if iirma will be an issue.
- unknown future taxes rate for heirs.
- unknown if RMDs will increase my marginal tax rate much.

I'm also currently in the 22% tax bracket, so doesn't really seem like a bargain to do a conversion.
Anonymous
Post 07/13/2025 15:10     Subject: Roth Conversion later in life, near retirement
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Anyone try the services of Craig Wear —who bills himself and his team as having a niche expertise in Roth conversions (having it done it exclusively fir past 15 years) to lessen tax liabilities and use money on own teems versus forced RMDs etc. His fee of 10k (or 9900). Seems steep but he offers 100% guarantee of tax savings or money back.


That’s crazy. No way would I pay that. I would start by paying for pralana or maybe boldin or at least post your info on bogleheads and see what reactions you get.

tbh my rule of thumb is that Roth conversions are rarely worthwhile— the benefits are generally small and uncertain.


The biggest benefit is to the heirs.. they get to have the money grow tax free for 10 years post-inheritance before withdrawing tax-free.


But the pot of money growing is smaller due to taxes paid and it’s very possible they’d be better off paying taxes at their rates over 10 years than having the OP pay taxes in a year or two at OP’s rates.


You can't pay tax out of pocket? Rollover 50k, entire 50K gets to ROTH, pay tax when you file tax next year, no?
Anonymous
Post 07/13/2025 14:37     Subject: Roth Conversion later in life, near retirement
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Anyone try the services of Craig Wear —who bills himself and his team as having a niche expertise in Roth conversions (having it done it exclusively fir past 15 years) to lessen tax liabilities and use money on own teems versus forced RMDs etc. His fee of 10k (or 9900). Seems steep but he offers 100% guarantee of tax savings or money back.


That’s crazy. No way would I pay that. I would start by paying for pralana or maybe boldin or at least post your info on bogleheads and see what reactions you get.

tbh my rule of thumb is that Roth conversions are rarely worthwhile— the benefits are generally small and uncertain.


The biggest benefit is to the heirs.. they get to have the money grow tax free for 10 years post-inheritance before withdrawing tax-free.


But the pot of money growing is smaller due to taxes paid and it’s very possible they’d be better off paying taxes at their rates over 10 years than having the OP pay taxes in a year or two at OP’s rates.


True. However, you can mitigate this in several ways:
- convert over multiple years vs in a couple
- pay taxes on those conversions (or at least partially)
- living in a low/no-cost state
- structuring your conversions for tax optimization so you pay lower taxes overall relative to what working adults would.

We are in the 24% tax bracket now with another 5.75% for state. In retirement, we hope to be in a zero tax state and be in the 12% tax bracket. We also expect our kids to be in at least the 32% tax bracket by the time we kick the bucket, plus potentially high state taxes. The tax rate differential would be huge for them.

Realistically, most people should begin these conversions at a tax-convenient time and move as much as they can into a Roth. The money grows tax free and can be withdrawn anytime. For example, if I have a $30K tax bill on the conversion and I have $30K in a brokerage account (stock), I'd rather sell the stock, put that money towards the tax and convert the entire amount into a Roth, and rebuy that same stock inside the Roth. I can withdraw from the Roth for as long as I need to and what's left will go to my kids.
Anonymous
Post 07/12/2025 23:14     Subject: Roth Conversion later in life, near retirement
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Anyone try the services of Craig Wear —who bills himself and his team as having a niche expertise in Roth conversions (having it done it exclusively fir past 15 years) to lessen tax liabilities and use money on own teems versus forced RMDs etc. His fee of 10k (or 9900). Seems steep but he offers 100% guarantee of tax savings or money back.


That’s crazy. No way would I pay that. I would start by paying for pralana or maybe boldin or at least post your info on bogleheads and see what reactions you get.

tbh my rule of thumb is that Roth conversions are rarely worthwhile— the benefits are generally small and uncertain.


The biggest benefit is to the heirs.. they get to have the money grow tax free for 10 years post-inheritance before withdrawing tax-free.


But the pot of money growing is smaller due to taxes paid and it’s very possible they’d be better off paying taxes at their rates over 10 years than having the OP pay taxes in a year or two at OP’s rates.
Anonymous
Post 07/12/2025 22:51     Subject: Roth Conversion later in life, near retirement
Anonymous wrote:
Anonymous wrote:Anyone try the services of Craig Wear —who bills himself and his team as having a niche expertise in Roth conversions (having it done it exclusively fir past 15 years) to lessen tax liabilities and use money on own teems versus forced RMDs etc. His fee of 10k (or 9900). Seems steep but he offers 100% guarantee of tax savings or money back.


That’s crazy. No way would I pay that. I would start by paying for pralana or maybe boldin or at least post your info on bogleheads and see what reactions you get.

tbh my rule of thumb is that Roth conversions are rarely worthwhile— the benefits are generally small and uncertain.


The biggest benefit is to the heirs.. they get to have the money grow tax free for 10 years post-inheritance before withdrawing tax-free.
Anonymous
Post 07/12/2025 22:39     Subject: Roth Conversion later in life, near retirement
Anonymous wrote:Anyone try the services of Craig Wear —who bills himself and his team as having a niche expertise in Roth conversions (having it done it exclusively fir past 15 years) to lessen tax liabilities and use money on own teems versus forced RMDs etc. His fee of 10k (or 9900). Seems steep but he offers 100% guarantee of tax savings or money back.


That’s crazy. No way would I pay that. I would start by paying for pralana or maybe boldin or at least post your info on bogleheads and see what reactions you get.

tbh my rule of thumb is that Roth conversions are rarely worthwhile— the benefits are generally small and uncertain.
Anonymous
Post 07/12/2025 21:54     Subject: Roth Conversion later in life, near retirement
Anyone try the services of Craig Wear —who bills himself and his team as having a niche expertise in Roth conversions (having it done it exclusively fir past 15 years) to lessen tax liabilities and use money on own teems versus forced RMDs etc. His fee of 10k (or 9900). Seems steep but he offers 100% guarantee of tax savings or money back.
Anonymous
Post 02/16/2024 16:29     Subject: Roth Conversion later in life, near retirement
Thanks for your response. Yes it is super complicated and the more I look into it the more I discover additional “ things to consider “.
One consideration is that if current tax rates go up in 2026, we would be better off taking care of the conversion this year or next year. However we are still 5-6 years away from retirement and our overall balances are not where they need to be so it feels scary to convert and pay a big tax bill. Otoh if tax rates do go up in 2026, it makes the Potential tax bills once RMDs begin quite painful.
Anonymous
Post 02/16/2024 16:21     Subject: Re:Roth Conversion later in life, near retirement
Anonymous wrote:Optimizing conversions is no easy task for many. Bogleheads has a number of active threads on this.

From what I have read there, it is usually not worth it if your 401k/IR is $1 million or less. For many, the sweet spot is after retirement and before taking social security. But then, you have to factor in if the conversion subjects you to the net invest tax (NIT) and, if you are taking Medicare, whether it subjects you to IRMAA on Medicare part B. Is it possible that RMDs will go to medical care that puts you over 7.5% of income, qualifying you for a medical deduction for taxes?

What is the source of funds for the conversion? Conversion proceeds makes the benefits less attractive, but if you can use proceeds from sales of holdings in your taxable account it is more attractive as they are taxed at lower long term capital gains tax rates.

I really big consideration, of course, is whether RMDs will catapult you into a higher tax bracket once you are 73. Add in the possibility that in retirement, one spouse may die and the other then will be subject to higher, single tax rates. Consider your views about the possibility of the current lower brackets expiring and not be renewed after 2026.

You also have to factor in what your objectives are for the Roth: Is it something you wish to draw on during retirement, or a pot of money you wish to pass on to your heirs. If the latter, you have to factor in whether a conversion will benefit your heirs from a state (or federal if your estate is large enough) estate tax perspective.

Personally, I am strictly a DIY investor, but taking in all of the above is very tricky, so I am considering getting professional advice. I understand there is financial management software out there that could help (Pralana, New Retirement) but haven't tried it.