Reported 13 days ago
A 59-year-old woman with $1.3 million in her 401(k) contemplates converting $130,000 annually into a Roth IRA to avoid required minimum distributions (RMDs) starting at age 73. This gradual conversion could mitigate tax liabilities compared to a lump-sum transfer, which would push her into a higher tax bracket. While Roth conversions can offer tax-free withdrawals and estate planning benefits, they come with risks and specific waiting periods for withdrawals. Consulting a financial advisor may help her strategize her conversions effectively.
Source: YAHOO