Short excerpt from a YouTube video by Craig Wear, CFP® about Roth conversion strategy. The speaker discusses deciding how much of an IRA to convert to a Roth versus leaving in the IRA to enable Qualified Charitable Distributions (QCDs). He advises solving for a target IRA balance that can be used for QCDs, and to factor in rate of return and inflation; one practical approach is to avoid converting everything.
If I'm going to do Roth conversions, then there's a strategy involved whereby I have to calculate how much of my IRA should I convert and how much should I just leave in the IRA, because I can use these QCDs, and if I'm going to be giving money anyway, then why pay tax on it? We just like to calculate how low of an IRA balance should that be. So you're look, you're trying to solve for how much money can I leave in the IRA that I could use QCDs to pay those on? You got to remember, put a rate of return on it, inflation, those kinds into things as well. So that's one way to do it, is just don't convert everything.
