Who is a Good Candidate?

1. If you believe taxes are going up in the future, you'll pay less taxes now to convert AND you'll avoid higher

RMD's and higher taxes on future distributions.

2. If you believe that a large percentage of your future income needed to support your lifestyle will come

from your social security, pension, investments and savings accounts and only a small percentage will

come from your IRA, then conversion makes a lot of sense.

If a larger percentage will come from your IRA, then be sure the IRA is large enough to cover the taxes due

upon conversion, only if you don't have significant funds in non-IRA accounts to cover taxes.

3. If you are facing RMD's on substantial IRA balances, that will wreak havoc on your tax liability.

Large IRA balance = Bigger RMD's (2-3x current balance with growth!) = Bigger Tax consequence!

Taxes on RMD's often affect buying and lifestyle decisions. (Vehicle purchase, 2nd home, travel)

4. If you are concerned that RMD's will have an impact on the taxation of your social security benefits.

If you haven't considered this, you should. Once RMD's start, it is possible that up to 85% of your social

security benefits may be taxable. This is one example where the cost of not converting can have a

tremendous impact on your total lifetime tax liability.

5. If you are concerned that RMD's will have an impact on your Medicare Part B & D premiums.

Like the social security issue above, if you haven't considered this, you definitely should.

IRMAA (Income Related Monthly Adjustment Amount) is the surcharge you are subject to when your

income increases due to RMD's being added into the picture. This surcharge can dramatically increase

your Medicare Part B & D premiums!

By not converting to a Roth, you subject yourself to a lifetime of larger IRMAA later!

Many people mistakenly decide to not convert to a Roth IRA to avoid higher IRMAA surcharges in the short

term. Remember, you only pay higher IRMAA surcharges while doing conversions, which typically is 2-5

years. When the conversion is complete, and after a 2 year lookback, your Medicare Part B & D premiums

go back to minimum amounts!

Remember the mantra of a successful Roth conversion. Short term tax pain = Long term tax gain!

6. If you are concerned about protecting your legacy for your heirs and avoiding making the IRS a

significant "heir", then you should certainly consider a Roth conversion.

Although your heirs can hold off taking distributions for 10 years, that may change, and either way, they

eventually have to pay taxes on your legacy. And consider, that by waiting, it allows your IRA to grow

and compound tax deferred, meaning even MORE taxes later!

Important FACT: ALL of the growth and income that occurs within the new Roth account will be

totally Free of Income Taxes - FOREVER!

7. If you are concerned about the tax impact to your surviving spouse when you die. A surviving spouse

becomes a "single" tax filer AND may likely be dealing with additional RMD income which just

exacerbates some of the issues mentioned earlier.

8. If you are curious to see what an enormous difference a Roth conversion can make on your total

lifetime tax liability, then it would behoove you to explore an analysis of doing a Roth conversion

versus not converting.

Final thought: A successful Roth conversion is never about minimizing taxes during conversion years, but

rather, it is about a potential massive tax savings on your total lifetime tax liability!