Date: Mon, 23 Apr 2007 12:35:01 -0500
From: DLC 
Newsgroups: misc.invest.financial-plan
Subject: Re: RMD strategy
	iQBVAwUARizuRfl/I4+O31e5AQE9JAIAufev+8n34OP4d5og/DcggbUjidlUtT+y
	2Cyn1QDzL8ixTPfOfe+BB70jm/HE0R7Q6PFLT08mtW3FiLqlIVGB7w==
	=oTuf

joetaxpayer wrote:
> DLC wrote:
> 
>> We are thinking ahead to when we must begin the required minimum IRA 
>> distributions.  At present, our expenses are covered by social 
>> security and pension and a small (less than 1 percent) distribution 
>> from investments.
>>
>> Over 70 percent of our investments are in traditional IRA or 403B 
>> accounts held in mutual finds.
>>
>> We are planning on transferring an amount equal to the RMD from IRA 
>> mutual funds to identical funds outside the IRA at the end of each 
>> year. If there is a substantial decline in prices earlier in the year, 
>> We would do the transfer then.
> 
> I'd suggest looking at what your current marginal rate is, and doing a 
> Roth conversion to "top off" that rate (i.e. convert enough to stay just 
> within that bracket). Since a Roth conversion does not necessitate a 
> sale, just movement to a different account, you don't have to worry 
> about a buy/sell. This will lessen your RMDs and reduce the risk those 
> RMDs push you into the higher bracket further down the road.
> See http://www.joetaxpayer.com/roth.html for two delightful anecdotes on 
> how I've used Roth conversions for those I've advised.
> 
> JOE
> 
DLC responds:

Thanks for your comments.

I guess I could have mentioned that I am 67, so there are only three 
years before RMD starts.

Also,  The amount we have in traditional IRA and 403B accounts exceeds 
1.75 million.  We do have $200,000 in Roth accounts.

I have not been willing to convert to Roth accounts and paying the taxes 
now.  I know that I will be in a much higher bracket when I do start the 
RMD, but I will also have (presumably) more investment value with which 
to pay the taxes.

DLC


======================================= MODERATOR'S COMMENT: 
 Please trim the post to which you are responding.  "Trim" means that except for a FEW lines to add context, the previous post is deleted.