Personal Finance (Not Investing) • How to pay for a Roth Conversion in retirement

A question I have (currently 50 years old), is what is the best way to pay for Roth conversions in retirement. My understanding is people take advantage of their "gap years" to do these conversions. To lower the amount of money in their non-Roth accounts before RMDs hit. Assuming you are retired in these years you do conversions (assume no income coming in from other sources), where does the money come from to pay the tax on these conversions?

For example. Say I retire at 60. Where does the money to pay the tax come from? Here is a scenario:

I am 60

I need 100k per year in living expenses

I want to do a 50k tax conversion

Since I am 10 years or so away from retirement I just want to do some pre-planning. Should I be planning on growing my brokerage to pay these taxes? Or should I just assume the money to pay the tax will come out of my IRA? Or does it matter?

Thanks!

Statistics: Posted by EricInAtlanta — Sun Jul 07, 2024 10:21 am — Replies 0 — Views 45

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