Investing - Theory, News & General • Tax efficient withdrawals and the need to do Roth conversions (Mike Piper comment)

As far as your final question, I don't understand what you're asking. I don't think people usually have "conversion goals" per se, nor do I have such goals for them. Rather, I try to understand their financial/life goals, and it's simply a question of whether conversions help serve those goals. In some cases they do, and in some cases they don't.

• We decided to optimize our Conversion Tax Planning for the both of us, rather than focusing on the Surviving Spouse or Heirs.
• We wanted to spend significantly more in the first phase of Retirement (travel, gifting, moving) than in the later years. Conversions were an important tool for liquidity since we wanted to be flexible and take advantage of opportunities that weren’t necessarily budgeted for.
• Charitable giving is a key priority for us and we plan to give away a significant portion of our assets. This significantly impacts how we deal with better than expected market performance since we can dial up QCDs and/or increase the % that is left to our DAF.
• Our Heirs are in lower Tax brackets than we are so it doesn’t make sense for us to convert at a higher marginal rate than they would pay. Plus, we prioritized our Retirement ahead of leaving anything (although it’s highly likely they will inherit significant assets).
• We needed to self-fund a portion of LTC expenses so holding these funds in reserve and not converting them is our strategy

Statistics: Posted by WoodSpinner — Wed Jul 17, 2024 9:35 am — Replies 22 — Views 1725