Hello Everyone,
I am hoping the brain trust here can assist me on deciding what to do in my current situation. My wife and I just recently have been gifted $26,000 and I am thinking about utilizing all of it to do a ROTH Conversion but want to make sure its actually the best thing to do with the money and that I'm not doing something thats not best use of the money. I am looking at converting an IRA account currently valued at about $76,000. I imagine you would need as much information about my finances as possible to answer the question, so hopefully the information below is enough:
Filing Status: Married Filing Joint (My Age is 40 / My wife 37)
Residence: NYC
Employment: My wife and I are both Federal Employees and will recieve a pension upon retirement
Dependent: 1 (Age 4)
Total Annual Wages: $264,000 (My Salary $193,500 / Wife 70,500 - this salary will increase to 101,00 over the next 3 years)
Primary Residence: Valued at 1.35 million / Mortgage balance of $378k @ 2.5% with 15 years remaining)
Cash Savings Emergency Fund: $95,000 in a high yield savings earning 4.75% (We are able to save about $1,300 a month after bills)
529 Account: $94,000 (We are currently contributing $550 per month)
401k Combined Balance: $388,000 (My wife and I both get a 5% match - I contribute $23,000 per year and my wife does 12% of salary)
ROTH Account: $28,000
Traditional IRA Accounts: Total $237,000 (Account 1 = 125k / Account 2 = 76k / Account 3 = 36k)
2023 Tax Information:
AGI: 180K
Taxable Income: 152k
Effective Federal Tax Rate shown on Turbo Tax: 11.94%
My salary went up by about $11k this year compared 2023 and my wife's increased about 8k.
It seems to convert the entire IRA Account valued at 76k will run me about $23,000? I'm figuring sending a check to the IRS of $15,200 (20%) and to NYC of $7,600 (10%). Hoping to get some advice if this seems right and if its a smart thing to do all things considered with my situation. Thank you all in advance!
I am hoping the brain trust here can assist me on deciding what to do in my current situation. My wife and I just recently have been gifted $26,000 and I am thinking about utilizing all of it to do a ROTH Conversion but want to make sure its actually the best thing to do with the money and that I'm not doing something thats not best use of the money. I am looking at converting an IRA account currently valued at about $76,000. I imagine you would need as much information about my finances as possible to answer the question, so hopefully the information below is enough:
Filing Status: Married Filing Joint (My Age is 40 / My wife 37)
Residence: NYC
Employment: My wife and I are both Federal Employees and will recieve a pension upon retirement
Dependent: 1 (Age 4)
Total Annual Wages: $264,000 (My Salary $193,500 / Wife 70,500 - this salary will increase to 101,00 over the next 3 years)
Primary Residence: Valued at 1.35 million / Mortgage balance of $378k @ 2.5% with 15 years remaining)
Cash Savings Emergency Fund: $95,000 in a high yield savings earning 4.75% (We are able to save about $1,300 a month after bills)
529 Account: $94,000 (We are currently contributing $550 per month)
401k Combined Balance: $388,000 (My wife and I both get a 5% match - I contribute $23,000 per year and my wife does 12% of salary)
ROTH Account: $28,000
Traditional IRA Accounts: Total $237,000 (Account 1 = 125k / Account 2 = 76k / Account 3 = 36k)
2023 Tax Information:
AGI: 180K
Taxable Income: 152k
Effective Federal Tax Rate shown on Turbo Tax: 11.94%
My salary went up by about $11k this year compared 2023 and my wife's increased about 8k.
It seems to convert the entire IRA Account valued at 76k will run me about $23,000? I'm figuring sending a check to the IRS of $15,200 (20%) and to NYC of $7,600 (10%). Hoping to get some advice if this seems right and if its a smart thing to do all things considered with my situation. Thank you all in advance!
Statistics: Posted by VVenti7401 — Sun Sep 29, 2024 7:47 pm — Replies 0 — Views 63