Subject: Re: Roth Conversions
We have just spend several days building an ugly spreadsheet to model whether the IRA->Roth conversion makes sense. The issue is that those dollars grow untaxed in the IRA vs growing after-tax in the Roth. What we are seeing is that our net worth 10 years from now is significantly higher if we just wait and be forced to take the higher RMD having not done the conversion. This includes the IRMAA tax penalty due to higher RMDs. I haven't modeled the 24%->26% jump in 2025 but I doubt it would make a significant difference in our case.

I don't want to dissuade anyone from doing the conversion, but I do recommmend spending some time building a model that you can then stress-test. I went in to the process pretty sure that the conversion would be favored and came away surprised.

Rgds,
HH/Sean