Convert to a Better IRA
Even though it may not make much sense, converting money from a traditional IRA to a Roth IRA is one of the best tax decisions you could make. Considering that your tax rate drops, you will pay less for a Roth conversion in 2018 than you would’ve last year.
Furthermore, you will pay taxes on the conversion at lower rates than a traditional IRA withdrawal would have faced. Simply put, the sooner you get your money into a Roth IRA, the sooner your earnings will become tax-free.
2 thoughts on “7 Clever Tax Strategies Every Retiree Should Know”
I’m 72 1/2 I cant retire because of credit card debt I hav good credit but 33k in credit card total What do you suggest? I have never been late on my payments
I have concerns with the advice given.
1) According to IRS Publication 590B, you must be 70 1/2 to make such a contribution, not 70. Also, the limit is $100,000 not 4100,000, as your article suggests.
2) The advice to rollover to a Roth as soon as possible may cost tax money. Had one done it in 2017 the rates would have been higher than they will be in 2018. The issue of one’s personal marginal tax rate is not even mentioned. If one is in a 25% marginal tax bracket this year because of unusually high income, but expects to be in a 15% marginal tax bracket next year, your advice to do it as soon as possible will cost the tax payer money.