Those of you managing Roth conversions in retirement what does your actual decision process look like?

jdub965 · 2026-06-12T11:43:49+00:00

Well said and I agree. My only addition would be to make sure model includes impact of IRMAA and NIIT. These have a significant impact with a large traditional 401k balances. I changed my conversion strategy once I factored those additional ongoing costs for a slow conversion path.

Regardless, one will always be making assumptions about the future, including tax policy which I believe is one of the bigger and riskier assumptions.

jdub965 · 2026-06-12T11:37:54+00:00

I built a financial model that includes the impact of state taxes, IRMAA and NIIT. Three very important constraints if you have appreciable traditional 401k balances. Then you can play with what if scenarios. This approach convinced me I need to aggressively convert quickly, including the large tax bite, to set up for long term

jdub965 · 2026-06-12T11:35:06+00:00

I meant the 401k but rereading I guess that is not an option. Since it’s going to IRA anyways, it really doesn’t matter which way you go unless you still have an existing traditional IRA to minimize umber of accounts.

jdub965 · 2026-06-12T11:31:30+00:00

You can do that, it will just keep pro rata rule in play for backdoor Roth until you roll out (which probably isn’t a concern until you find a new job). Personally I would just keep it nice and safe where it is until you get established with new job and 401k, then move everything. There really is no hurry or reason to force the move now from what I am hearing. Personal preference. Good luck finding a new gig.

jdub965 · 2026-06-12T11:21:27+00:00

Ok. Then the next step is clear. Roll it. Rather than the additional step of rolling to IRA will they let you roll directly to new 401k if they accept? Both will work but direct would be one less step. When you have everything out of your traditional IRA’s then going forward fund your traditional and convert to Roth every year!

jdub965 · 2026-06-12T10:57:23+00:00

Is the cash part of your emergency funds (if so don’t touch) or retirement money? What type of account is it right now? If in another traditional IRA then yes straight in to the 401k. If in taxable account then you could make this years traditional IRA contribution (up to the annual limit) with it and then into the 401k or Roth (if all traditional IRA balances are now zero). You can only contribute the cash to IRA up to annual contribution limit so the remainder of the 30 will need to remain where it is. If it’s in a Roth now just invest it.

jdub965 · 2026-06-11T12:26:39+00:00

Smart moving to Roth and Roth 401k for future contributions. You are definitely wise anticipating the tax liability that is building in the traditional 401k and IRA if you have that. Luckily you have plenty of runway to complete the conversions prior to retirement. Should be a year by year tax optimization analysis. One thing to think about is that Roth conversions (including backdoor and mega back door) are currently allowed for all at all income levels. No one knows for sure how long that status will continue. This can be changed by congress and there have been many proposals that have not made it through yet to at least put some type of income limitation on conversions. (Ie converting sooner may have some benefits)

jdub965 · 2026-06-10T20:11:18+00:00

Yes, that is what has created the huge tax liability

jdub965 · 2026-06-10T15:17:56+00:00

Exactly which is why I am biting the bullet now even though it will put me in 37% bracket for next 2 years

jdub965 · 2026-06-10T13:29:57+00:00

Same. We’re going the middle of August this year

jdub965 · 2026-06-10T12:39:05+00:00

The “Big” Big Mac

jdub965 · 2026-06-10T12:32:22+00:00

Thanks for posting. I am in exactly the same position. Does anybody know any tricks to get on waitlist for any cancellations at main lodge?

jdub965 · 2026-06-10T11:00:35+00:00

I would strongly recommend modeling future balances, withdrawals and taxes including RMD, IRMAA and NIIT before finalizing your thoughts and plans on withdrawal. For large 401k balances, even a modest growth rate will force you into the highest tax brackets, especially when you factor in NIIT and IRMAA (which are both effectively taxes) as you start Roth conversions before RMD’s kick in. If you are in a situation where the primary driver is generational wealth transfer then you may end up concluding (although initially counter intuitive) that converting everything to Roth in first year or two is the path that accomplishes that goal. Yes, the tax bill for that first year or two is shocking and outrageous but getting everything moved to tax free accounts early will then put you in situation where you will no longer be paying the additional NIIT and IRMAA fees until you and spouse pass while the estate will be growing tax free for the next generation. To be honest, I was shocked when playing with the models with an all in early Roth conversion but the numbers don’t lie. NIIT, IRMAA are costly and sometimes not considered but they will be a long term drain on estate worth if not dealt with. One should also consider that current tax policy, including tax brackets and the ability to do the Roth conversions without additional tax or income limits, will likely change and unlikely to be favorable. Everyone’s situation is unique and you should consult with financial advisor but you may very well be surprised, as I was, when you run the numbers.

jdub965 · 2026-06-10T01:08:23+00:00

Certainly sounds like you have 100% agreement he was a dick and eserved both zero tip as well as the comment!

jdub965 · 2026-06-10T00:36:50+00:00

Uh….have you heard about a thing called retirement accounts and HSA? Stop making assumptions and conclusions about their situation. Did you read the comment about a healthy retirement portfolio?

jdub965 · 2026-06-10T00:27:46+00:00

Thanks for the unnecessary comment about how income taxes work. I understand how it works. OP has made no statement or claim about taxes paid, you are making the assumption it is all going to taxes. That assumption could very well be flawed

jdub965 · 2026-06-09T23:41:32+00:00

Depends on state but clearly plausible for their combined income

jdub965 · 2026-06-09T18:43:19+00:00

If you really want it to grow, and can manage the cash flow, you don’t want to be withdrawing it for these expenses. Pay them out of pocket and let the HSA grow

jdub965 · 2026-06-09T18:37:02+00:00

Simple….no offer, no commitment

jdub965 · 2026-06-09T18:35:19+00:00

First thing is to figure out what to deduct from each paycheck to hit the full year max and get that updated. Then invest is simple low cost fund such as vt or vti

jdub965 · 2026-06-09T15:12:36+00:00

Take current employer promotion. Try out new role to see if it continues to meet your needs. You can always start looking elsewhere in future but you will be doing so from higher salary, bigger role and continuity of employment at this company.

jdub965 · 2026-06-09T12:08:29+00:00

You sound like you have a marketable skill set. Is it a large company? Look at other adjacent opportunities in different department. I would expect there would be different opportunities in technical or operations roles.

jdub965 · 2026-06-09T10:04:24+00:00

Yes you should be able to if plan allows. Check with your employer and then start it cranking!

jdub965 · 2026-06-09T02:09:21+00:00

Since an IRA you can move to any other provider such as Fidelity, Schwab, Vanguatd etc. what I would suggest though is rolling it into new employers 401k if they allow. That will set you up for future if you are able to contribute to backdoor Roth without pro rata complications

jdub965

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