Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

Maximizing IRA and Avoiding Tax Problems in Retirement

3 Apr 2024 · 0 min

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Short excerpt from a financial-planning video where Craig Wear, CFP®, explains that large IRA balances can trigger tax problems in retirement—large required minimum distributions (RMDs) can increase taxable Social Security income, raise Medicare Part B and D premiums, and otherwise create significant tax burdens; modest IRA balances are less likely to cause these issues.

So if you have big balances in your IRAs, you're definitely a good candidate to do conversions. But when your balances are more modest, then they're not going to cause as big a problem. So the problem comes from the required minimum distributions being so large that they cause all of a sudden your Social Security to be greater, taxed greater. Or they're so large that you now have to pay Medicare Part B and D premiums. Or that they're so large that all in their own, they're going to create a big tax problem.