Hello All. I have a situation in which I would appreciate some feedback / advice.
We have been performing Roth Conversions for the past 10 years and now have the following breakdown:
TAXBLE: $ 2.0 M
Tax Deferred IRA: $ 2.0M
ROTH IRA: $ 2.0 M
So a pretty even split among the groups. I am 65 and will need to take RMD's from the Trad. IRA at age 73...in 8 more years. At this point we feel that gifting ( to our 2 adult children) may supersede the desire to do additional Roth Conversions by simply selling $200,000/ year out of the Trad. IRA, pay the taxes , and still reduce the amount of RMD's required beginning in 8 years at age 73. True, by continuing to to more Roth Conversions, this would provide even more tax free distributions to the adult children in later years, but would not reduce the State Estate Tax they would need to pay....which now stand at $1.7 M ( exemption amount).
So by simply withdrawing from the Trad. IRA , this allows us to achieve 2 goals. Reduce future RMD's AND begin gifting now to reduce State Estate taxes down the road. We can pay the taxes due on the withdrawals out of taxable. We feel this gets some of the money out of our estate now and the children can use it to reduce some of their costs/ expenses.
Any comments/ feedback is appreciated.
We have been performing Roth Conversions for the past 10 years and now have the following breakdown:
TAXBLE: $ 2.0 M
Tax Deferred IRA: $ 2.0M
ROTH IRA: $ 2.0 M
So a pretty even split among the groups. I am 65 and will need to take RMD's from the Trad. IRA at age 73...in 8 more years. At this point we feel that gifting ( to our 2 adult children) may supersede the desire to do additional Roth Conversions by simply selling $200,000/ year out of the Trad. IRA, pay the taxes , and still reduce the amount of RMD's required beginning in 8 years at age 73. True, by continuing to to more Roth Conversions, this would provide even more tax free distributions to the adult children in later years, but would not reduce the State Estate Tax they would need to pay....which now stand at $1.7 M ( exemption amount).
So by simply withdrawing from the Trad. IRA , this allows us to achieve 2 goals. Reduce future RMD's AND begin gifting now to reduce State Estate taxes down the road. We can pay the taxes due on the withdrawals out of taxable. We feel this gets some of the money out of our estate now and the children can use it to reduce some of their costs/ expenses.
Any comments/ feedback is appreciated.
Statistics: Posted by MrLoco — Wed Sep 04, 2024 2:11 pm — Replies 0 — Views 72