12-28-2020, 07:31 AM
Many discussions on this topic thorough out the year but time is running out. I thought I was clever in March when, after the crash, I took my RMD in kind to get more shares transferred for the same dollar value, allowing for more growth opportunity in the recovery. Good move but then requirement for an RMD was removed so I rolled the distribution back and am now neutral for the year. Looking to 2021, I now see an RMD requirement of over $100k thanks to having no withdrawals this year, being a year older, and achieving a 20% return again this year. That means next year I must take the $100k RMD before even considering a Roth rollover. Should I rollover to the Roth now and thereby reduce the 2021 RMD? I know every time this question is asked we talk about Medicare costs and SS tax but none of those apply. I am in the 22% tax bracket and bumping to 24% is not enough different to matter to me. The next jump is to 32% and that is huge but will not kick in until income hits $326k; I must stay below that.
I am planning under the assumption that taxes will never be lower than they are today. By the rule of 72, my current rate of return will double the value of the T-IRA in 3.6 years (minus MRDs) and I will have to pay taxes, at higher rates than today, sometime. I am leaning toward exhausting the 24% tax bracket before year end and would appreciate opinions.
72t calculator
72t calculator