MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Roth Conversion Strategy- Age 65 to 73

beebee
edited July 14 in Other Investing
I am considering doing Roth conversions over the next 4-8 years (from age 65-73).

With help from the standard deduction plus bonuses deductions ($2k + $8k) for tax filers over age 65 the 12% bracket has effectively just got wider:
the new $6,000 deduction is stacked on top of both the regular standard deduction — $15,750 for single filers or $31,500 for married couples filing jointly in 2025 — and the 65-plus addition. For instance, a 65-year-old single taxpayer who qualifies for the full $6,000 deduction would be able to deduct a total of $23,750 from these three tax breaks on their 2025 tax return. A qualifying 65-year-old couple could deduct up to $46,700.
source:
taxes/what-to-know-new-tax-law-2025

I am looking to fill the 12% Federal tax bracket ($48,475 for single filers for TY2025) with yearly Roth conversions over the next 4-8 years.

Anyone else see this as an opportune time to execute Roth conversions?

convert-a-traditional-ira-to-a-roth-in-retirement

Comments

  • a2z

    yes, most articles conclude that unless you anticipate a peak taxable income year and\or cannot pay taxes from a non-retirement source, any conversion to roth that does not bump up your conversion year marginal bracket is always a good idea.

    (one can waste a lot of time in complex estimates, as i have. but some common sense regarding age\inheritance need apply.)
  • yogibearbullyogibearbull
    Be aware of MAGI phaseouts.

    For some high income retirees, suggestion is to wait 3+ years for Roth Conversions.
  • msf
    Also be careful with taxation of SS income. The percentage of SS that's taxable can go as high as 85% depending on "combined income", a form of MAGI.

    Then there's the IRMAA surcharge. Another MAGI effect in addition to phaseouts.

    Next, there are state taxes to consider. Some states exempt retirement income such as IRA withdrawals (such as Roth conversions), but only up to certain limits. If you convert more, you may exceed this cap.

    The $6K extra deduction is scheduled to expire after 2028. So unless you're planning on this being extended, you've got just four years to take advantage of it.

Sign In or Register to comment.