But Congress Could Provide the Wild Card. Roth accounts can be attractive, especially when viewed through the lens of our national debt and the possibility (probability?) of higher taxes in the future to fund that debt.
There may be times when a Roth conversion may be advantageous; but there are others when it may not be your best move.
A Roth conversion for some IRA assets may provide more tax savings than you realize.
Required minimum distributions (RMDs) have been eliminated for 2020 due to the COVID-19 pandemic; but, you just might want to consider taking a distribution anyway. Why?
If you have $500,000 in your 401(k) or IRA, it’s not really $500.000. That’s a tax planning mistake most people make going right out of the gate. If you’re married and filing jointly, it’s more likely you could have $325,000 (35% tax bracket) or just $315,000 (37% tax bracket).
The three largest expenses in the federal budget are Social Security/Medicare, interest on the debt, and defense.
