1 thought on “Notes on Roth IRA Conversion

  1. Steve Hoge

    Here in Colorado we get an extra break which makes a Roth conversion even more attractive, assuming you convert it over time instead of in a single big taxable event.

    The 1st $20K distribution from a retirement fund (eg, distributing the trad. IRA to fund the Roth ) is free of state tax – that’s an extra 5% effective gain! So I’m liquidating the IRA in $20K chunks over the next 15 years and using that to fund the Roth.

    Dribbling the conversion out over time also helps stay within a much lower combined Fed+State tax bracket (yeah, we stay way below 40%) than if we took it all at once.

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