02-15-2014, 09:02 AM
Traditional IRAs for both my wife and I. We're both self-employed and the tax reduction helps especially since we pay both employer and employee portions of Social Security and Medicare taxes.
I'm thinking of transferring a little at a time into a Roth just because of the no RMD requirement when the extra cash for the taxes are available. According to my calculations, dividend income will not cover the RMD and I don't want to have to sell my capital just to make the RMD. Recharacterization can be done with in-kind transfers but it's going to be more of a hassle picking in choosing at the time. Plus, everything that comes of out the Roth will be tax free.
I'm thinking of transferring a little at a time into a Roth just because of the no RMD requirement when the extra cash for the taxes are available. According to my calculations, dividend income will not cover the RMD and I don't want to have to sell my capital just to make the RMD. Recharacterization can be done with in-kind transfers but it's going to be more of a hassle picking in choosing at the time. Plus, everything that comes of out the Roth will be tax free.