Personal Finance and Investing
In reply to the discussion: Roth IRA conversion tax reporting. I am so confused! [View all]nmmi
(209 posts)They are great at a young or middle age, but are dubious for seniors. I'd at least check out the Roth conversion calculators out there -- that tell you whether it will really save you money over the long run (over the short run it obviously won't -- it costs you taxes up front to save relatively small amounts of taxes later on over several years). Roth conversions are also good when assuming what's invested will gets a high rate of return, much less so for lower rates of return). T Rowe Price used to have a good one but that was many years ago that I used it, it may still have.
This Google search got a lot of promising hits:
Roth conversion calculators - how much will a Roth conversion save me?
(I eventually made my own spreadsheet version, modeled on T Rowe Price's calculator, but that also takes into account that stocks in a regular (non-IRA) account have a lower capital gains rate that is less than the ordinary rate that apply to IRA RMD and other withdrawals and to Roth conversions. It's complicated to get into the weeds of it, but there is a lot of bubbly boo blather about Roth conversions in the media written by people who have no analytical skills, who are just parroting others with the same skills.
What is certain is that it very much depends on individual circumstances and assumptions about many future variables.
IRAHelp.com is a great resource.
https://irahelp.com/forum/
I do my own taxes now (with the help of TurboTax), but for 40 years I had paid help, including 35 years with a CPA professional tax preparer / advisor. I learned a lot from him, as well as reading things like Retirement Watch newsletter that has a lot of focus on taxes, AAII Journal for decades (American Association of Individual Investors), among many others. I hope you will consider having a CPA tax preparer/advisor for a couple of years (at least) and going over this with them.