I converted about $100,000 last year and paid the taxes from cash reserves.
This year I have cold feet about doing more conversions.
Current bracket is 24%. I am buying property and paying for a wedding with my cash this year. To preserve my emergency fund, and to get the money from brokerage to pay the taxes I'll have to sell stock funds at LT cap gain rate plus the extra 3.8% due to our income.
The benefit of the Roth will go to our heirs. Future tax rate is 35% or 39.6%. I understand the argument to do it. I'm struggling with paying now vs later. Seems like the opportunity cost of selling stock funds to pay taxes early is high.
Age is 66. Not on SS yet. Am I missing something thinking about the opportunity cost of the source of tax money?
This year I have cold feet about doing more conversions.
Current bracket is 24%. I am buying property and paying for a wedding with my cash this year. To preserve my emergency fund, and to get the money from brokerage to pay the taxes I'll have to sell stock funds at LT cap gain rate plus the extra 3.8% due to our income.
The benefit of the Roth will go to our heirs. Future tax rate is 35% or 39.6%. I understand the argument to do it. I'm struggling with paying now vs later. Seems like the opportunity cost of selling stock funds to pay taxes early is high.
Age is 66. Not on SS yet. Am I missing something thinking about the opportunity cost of the source of tax money?
Statistics: Posted by R7000 — Sat Jul 13, 2024 7:33 pm — Replies 2 — Views 269