As a 59-year-old retiree, you’re facing concerns about required minimum distributions (RMDs) from your 401(k)s and IRAs. With $3.2 million invested in these accounts, converting some of it to a Roth IRA may help mitigate RMD impact. You expect annual income from investments, pensions, Social Security, and other sources, which will cover expenses.
To further reduce RMD burden, consider the following:
1. **Hold off on Social Security**: Delaying full retirement age or waiting until 70 might give you more room to convert additional funds to a Roth IRA. However, this also means forgoing income during those years.
2. **Increase non-Roth account contributions**: Allocate more funds from your taxable accounts, like a brokerage or taxable IRA, to offset RMDs in later years.
3. **Consider a Roth IRA conversion strategy**: Spread out conversions over several years to minimize RMD impact and potential tax implications.
Assessing the risks associated with Social Security is also wise. Although there are concerns about its future, delaying benefits might provide more flexibility for your retirement planning.
Reviewing your overall financial plan will help you make informed decisions about managing RMDs, Social Security, and Roth IRA conversions to ensure a secure retirement.
Source: https://www.marketwatch.com/story/i-plan-to-convert-100-000-a-year-to-a-roth-im-59-and-worried-about-social-security-and-rmds-c413d20f