Craig Wear explains why waiting until required minimum distributions start to do Roth conversions costs you money. Once RMDs begin, conversions don't count toward them, so you could pay taxes twice in the same year. You have fewer low-tax years to work with the longer you wait.
Three reasons to do a Roth conversion before it's Too late Reason 1 if you wait until RMDs or requirement of distributions kick in, you're going to have fewer low tax years to convert efficiently. Reason number two those RMDs are taxable income and they could make up to 85% of your Social Security taxable too, and cause higher premiums for your Medicare. Reason number 3 Once the RMDs start, conversions don't count toward meeting those requirements required distribution, so you could be taxed twice in the same year. Roth conversions aren't for everyone, but the sooner you explore them, the more control you're going to have over your tax bill later into retirement.
