Reported 25 days ago
A 65-year-old woman is considering whether to convert her $850,000 traditional IRA to a Roth IRA to avoid Required Minimum Distributions (RMDs) that could increase her taxable income, tax bill, and Medicare premiums. While a Roth conversion eliminates RMDs, it incurs significant upfront taxes, necessitating careful planning to manage future tax implications. Gradual conversions over several years might mitigate the tax hit, but the decision also hinges on projected income, tax rates, and personal financial circumstances, making consultation with a financial advisor advisable.
Source: YAHOO