I find that RMDs are one of the least understood & not well-planned tax events in many taxpayer’s lives. At 72, the law requires that most people begin taking ...RMDs, from these tax-deferred accounts (401k, IRA, similar) while easily causing a retiree to pay more in #tax then they should.
The article talks about doing Roth Conversions closer to #retirement, which if done properly can be a very good idea.
However, there is much more taxpayers can do during their careers with Roth funds resulting in far less or no tax. Here's 3 quick strategies:
1. Life's a journey & things happen so in lean years (recession, job loss) a Roth Conversion could be taxed are far lower rates then later.
2. In lean years or years with reduce income due to a life event (unpaid or reduced pay for sickness, injury, maternity, etc.) classify more or all your 401k contributions as #Roth’s (non RMD funds).
3. I'm a huge fan of Back Door Roth’s as there a great way to diversify your retirement & increase Post-Tax (non RMD funds) accounts, all while being able to make contributions beyond the W2 limits.
#ramlcpa #tax #taxplanning #401k #IRA #Roth #rmd #rmds #taxsavings #retirementstrategy
#retirementplanning #retirementgoals #taxstrategy #retirementplan#RothConversion
Travis Raml, CPA