The Sweet Spot for Roth IRA Conversions

The Sweet Spot for Roth IRA Conversions

The tax rate paid is lower but the lifetime taxes paid start climbing higher.   With regard to lifetime tax liability, there’s a sweet spot in the conversion strategy for most early retirees:   Don’t go so quick that it triggers tax rates higher than 24% federal, but don’t go so slow on the conversions that investment earnings outstrip any progress on lowering the pre-tax account balances.