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re: Using a Roth 401K to minimize RMDs - Good idea?
Posted on 4/4/24 at 7:29 am to FortunateSon
Posted on 4/4/24 at 7:29 am to FortunateSon
We are in our early 40s and our guy is advising the same thing. When he first mentioned it, I thought he was crazy, but the model has us thinking it’s the right thing to start doing. I was a difference of about 3 million in taxes paid over the model to age 90.
I switched this year to Roth 401k contributions from traditional, and will start converting our traditional 401k over the next decade or so at the top of each bracket.
Couple things we are considering to pay taxes now:
Already mentioned potential loss of spouse and impact on tax brackets
Tax free (with no 10 year RMD) for heirs
Lower bracket for Medicare and health insurance
I switched this year to Roth 401k contributions from traditional, and will start converting our traditional 401k over the next decade or so at the top of each bracket.
Couple things we are considering to pay taxes now:
Already mentioned potential loss of spouse and impact on tax brackets
Tax free (with no 10 year RMD) for heirs
Lower bracket for Medicare and health insurance
This post was edited on 4/4/24 at 6:37 pm
1
Posted on 4/4/24 at 11:38 am to Tygermanjohn
quote:
We are in our early 40s and our guy is advising the same thing. When he first mentioned it, I thought he was crazy, but the model has us thinking it’s the right thing to start doing. I was a difference of about 3 million in taxes paid over the model to age 90.
I switched this year to Roth 401k conversions from traditional, and will start converting our traditional 401k over the next decade or so at the top of each bracket.
I appreciate you weighing in on this. This seems to be a paradigm shift in the way to consider retirement savings.
quote:
Tax free (with no 10 year RMD) for heirs
IIRC, the spouse is the only one that doesn't have a 10 year RMD window. I'm fairly sure that heirs would still have the 10 year window.
quote:
Lower bracket for Medicare and health insurance
Good point there.
Thanks again
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