Is it a good idea to convert a conventional IRA to a Roth? Like the rest of life, no way to know until the
fat lady starts to sing.
My sister ha two IRAs, her husband one. All are conventional.
Taxes this year:
Income:
Interest $2904 - mostly from a CD account where money will be transferred to checking as needed.
Husbands IRA withdrawal: $13,716 tax withheld $1112
Sisters IRA withdrawals $37,585 tax withheld $641 - before I dropped it to zero
Total Social Security $51,640
Total income $104,119. Tax withheld $1726.
Deductions:
Mortgage interest: $6483
Prop. Taxes $4978
Medical expenses: $79,790.
Total deductions $91,251.
They get back the $1726 they paid in, so zero tax.
Something to look at is that my sisters IRAs earn just over $42,000. If she had converted, we would
be working with less money and she would be earning less.
This year, my sister had $17,000 from a small long term policy to help. Not next year.
Roughly figuring $29,000 more medical expenses with a full year. If we don't take more out of her IRA, we
will essentially be giving up a tax deduction. Hmmmm... I'm thinking on it.
Currently taking out $36k of the $42k being earned. Of the total $700k, $82k in growth, and $156k between
PEY and SCHD. I have room to move, but don't want the income going down. |
