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Pobeka

(4,999 posts)
6. It will (of course) depend on the particular case.
Tue Jan 5, 2021, 11:33 AM
Jan 2021

Being a programmer, I made a simple program that put in our basic spending needs (with different inflation factors for categories like health insurance, etc).

I coded in the federal tax regulations, medicare, etc.

The tricky part is comparing a ROTH vs a TIRA is you don't own all the $ in the TIRA. What I did was see what the tax rate was going to be with SS and RMD's and then discount the TIRA by that amount at the final step to compare it to the ROTH

Then I ran scenarios with different assumed rates of growth (2% thru 8%) on investments.

For our case, in general, the case where we convert 50% of our asset to ROTH, the ROTH scenario starts to win about 10 years out. Since we don't need that money in that time frame it makes sense to have those dollars in an account with no worries about taxes in the future, and to protect the TIRA from getting so large it may get taxed at a higher bracket in the future.

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