I wish we had placed all our IRAs in a Roth account initially or soon afterwards. RMDs are a killer.
I read this NYT article last year. It was an eye-opener.
>>>One way to minimize the hit from the tax torpedo and the bump zone is to realize more of your taxable income before you collect Social Security. If you retire at, say, 62 and don’t start taking Social Security until age 70, the period in between is a good time to convert an ordinary, tax-deferred Individual Retirement Account or 401(k) into a Roth I.R.A. You’ll pay taxes on the money you put into the Roth, of course, but you’ll do it at your current relatively low tax rate, and then you won’t have to pay taxes later when you pull money out of the Roth. Plus you’ll avoid the tax on Social Security benefits, which you aren’t receiving yet. . . .
At the risk of making this too complicated, I’ll mention another tax trick I learned in researching this piece. Conventional wisdom says that you should hold off on spending down your Roth I.R.A.’s until you’ve used up all your other savings, so the money inside the Roth I.R.A.’s can continue to grow tax-free.
But you may actually want to save some taxable savings for your later years. The first dollars of your income aren’t taxed because they fall within the standard deduction. The taxable portion of your Social Security (and annuity income if you have it) might not completely use up your standard deduction. If you’ve already spent all your taxable savings, you’ll be letting room in the standard deduction go to waste. It’s a mistake that’s hard to spot, until it’s too late.<<<
I also read this article about Roth conversions
>>>Other times, though, writing a very big check is exactly the right thing to do for your long-term financial health. I’m referring to “Rothification,” a maneuver that costs a lot in taxes up front but raises your potential living standard in the long run. I
wrote about it last year.
Rothification is the conversion of an ordinary individual retirement account or 401(k) into a Roth I.R.A. For simplicity I’ll stick with the case of converting an ordinary I.R.A. to a Roth I.R.A. from here on. . . .
The pain of a Roth conversion comes when the government demands its cut up front. The money you take out of an ordinary I.R.A. to fund the Roth I.R.A. looks like regular income to the Internal Revenue Service and is taxed as such. The maneuver may push you into a higher tax bracket — say from 22 percent to 24 percent, 32 percent, or even 35 percent. <<<
https://www.nytimes.com/2025/01/31/opinion/retirement-roth-conversion.html
I bought the MaxiFi software mentioned in the article, and I have tried running a few Roth conversion scenarios, but so far I have not found a way to do a Roth conversion that is clearly better.
