No. of Recommendations: 2
I'm not sure why you want to eliminate RMDs. By taking a big Roth conversion, you will pay taxes at a higher rate than you would pay by spreading the distribution out over multiple years (assuming 'big' means bracket moving size).
Keep them to a manageable size - yes. Pay more taxes than required - no. - Merumancer
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I am well aware of taxes, quite aware. I have an elaborate spreadsheet to compute my RMD and remain within the bracket of my choosing.
for 2024 the top of the 12% bracket is $47,150.
The top of the 22% bracket is $100,525.
And the top of the 24% bracket is $191,150.
My social security, small pension, and other income alone put me in the 22% bracket. I could do a really small conversion and stay in the 22% bracket. But moving into the 24% bracket opens up an additional $90K of conversion opportunity. So yes, I am paying more than the 22% min I am stuck with but the opportunity to convert $90K more each year is worth the extra 2%.
Starting with the 2025 tax year in the 22% rate established under the Trump tax cut will expire. The present 22% rate jump back to 25% and the present 24% rate jump to 28%.
Any dollars I convert now will avoid that 4% rate increase starting in 2026.
My intention is for my heirs to inherit a tax free Roth rather than a taxes pending TIRA.
