Married couple can save over $400,000 with $77,000 annual Roth conversions
Updated
Updated · 24/7 Wall St. · May 10
Married couple can save over $400,000 with $77,000 annual Roth conversions
10 articles · Updated · 24/7 Wall St. · May 10
For retirees aged 61 and 62 with $2 million in traditional 401(k)s and $300,000 in brokerage assets, converting $77,000 yearly for 12 years shifts $924,000 into Roth accounts.
The plan works by using low-income years before age 73 and delayed Social Security, costing about $124,700 in conversion tax versus facing roughly $151,000 first-year RMDs on a $4 million balance.
The report says timing matters because Medicare IRMAA surcharges use a two-year lookback, and surviving spouses filing singly could face higher 24% tax rates on future distributions.
To save thousands on taxes, what is the critical 'golden window' every pre-retiree with a 401(k) must know about?
Why do most retirees fail to execute long-term tax plans like this, even when it could save them a fortune?
What's the biggest risk that could turn this couple's $400,000 tax-saving plan into a costly mistake?