Roth Conversions and RMDs (Required Minimum Distributions): The Overlooked Connection
Roth conversions and RMDs are more connected than most people realize. Every dollar you move from a traditional IRA to a Roth now is one less dollar subject to future RMD calculations. This can result in smaller RMDs and lower taxable income over time, which may reduce the likelihood of higher Medicare premiums, depending on individual income and tax circumstances.
Think of it as buying back control. Instead of letting Washington decide when and how to tax your savings, you take charge while tax rates are still low.
Yes, you’ll pay taxes on the conversion — but these are some of the lowest brackets we’ve seen in decades.
Paying a known rate today can be cheaper than gambling on higher rates later.
If you’re staring at a big IRA balance and thinking, “I’ll just deal with RMDs when they start,” rethink that.
A few small conversions now can make your 70s, 80s, or 90s a lot simpler.
