Roth Conversion

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jmp23834
Posts: 3
Joined: Sat Jan 16, 2016 9:52 pm

Roth Conversion

Post by jmp23834 »

I plan to do annual Roth conversions each year to reduce the MRD's. What is the best way to show this? Right now I have 2 additional inputs under cash flow, a tax deferred savings for -50k and a tax free savings for +50k.

jimr
Posts: 596
Joined: Thu Feb 28, 2008 6:48 pm

Re: Roth Conversion

Post by jimr »

That sounds right to me. It's a good idea to check the year-by-year Detail View table to make sure the planner is doing what you expect.

The detailed view table has lots of hidden columns that you might want to unhide just so you can see everything. First, click on the detail view tab, next select the 'Show More Detail' radio button in the top right of the window. Finally, right-mouse on any column header and select 'Show all columns' to show all available columns. You'll want a wide display to see everything, or you can right-mouse on any cell for export options.

jmp23834
Posts: 3
Joined: Sat Jan 16, 2016 9:52 pm

Re: Roth Conversion

Post by jmp23834 »

Jim, Does this take into consideration the taxes on the IRA withdrawal or should I add an additional expense for that.

jimr
Posts: 596
Joined: Thu Feb 28, 2008 6:48 pm

Re: Roth Conversion

Post by jimr »

Deleted. (Please see comment below)

jmp23834
Posts: 3
Joined: Sat Jan 16, 2016 9:52 pm

Re: Roth Conversion

Post by jmp23834 »

It doesn't look like the negative savings to the Tax Deferred account is being taxed. When I look at the detail all I see are the funds being moved. Is there a better way to model a IRA/Roth conversion

jimr
Posts: 596
Joined: Thu Feb 28, 2008 6:48 pm

Re: Roth Conversion

Post by jimr »

jmp23834 wrote:It doesn't look like the negative savings to the Tax Deferred account is being taxed. When I look at the detail all I see are the funds being moved. Is there a better way to model a IRA/Roth conversion
Sorry, I forgot this question was about using negative savings entries, not typical IRA withdrawals done by the program automatically to fund expenses. You're right that taxes don't get deducted automatically when you create negative savings entries in additional inputs from tax deferred accounts.

I still think this is the best way to model what you're doing, but you'll need to compute and deduct the taxes manually as part of setting up the cash flows.

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