Can we "afford" to begin converting our Traditional IRA to CDs over the next few years....were both 80ish?

[tagteam]

You should speak directly with your financial advisor with respect to issues with your IRA.

Your IRA custodian (e.g., brokerage firm) may already offer CDs as an investment vehicle; your IRA is actually just a container for different types of investments, one of which would be CDs.

Regardless, your advisor or custodian can provide all of the relevant advice you would need to make a decision.

[fanfare]

You have no choice - you must be liquidating your IRAs via the RMD (Required Minimum Distribution) each year.

At age 82 (that's 80-ish) you must take out 1 / 17th or 5.9% of each IRA.

If you want to put that money into CDs, then do that

.

[Critter]

Or were you asking about converting the traditional IRAs to ROTH IRAs ?

[rdradden]

No short term CDs or Mutual Funds

[DianeC958]

When you take money out of your Traditional IRA accounts the amount you take out is taxable to you.  To limit the amount of tax you need to pay it is best to consider the tax bracket you will be in depending on the amount you take out.

Since tax rates are so low currently you may want to consider moving the money.

Currently for 2020 the tax brackets for Married Filing Joint are:

Marginal Rates: For tax year 2020, the top tax rate remains 37% for individual single taxpayers with incomes greater than $518,400 ($622,050 for married couples filing jointly). The other rates are:

• 35%, for incomes over $207,350 ($414,700 for married couples filing jointly);
• 32% for incomes over $163,300 ($326,600 for married couples filing jointly);
• 24% for incomes over $85,525 ($171,050 for married couples filing jointly);
• 22% for incomes over $40,125 ($80,250 for married couples filing jointly);
• 12% for incomes over $9,875 ($19,750 for married couples filing jointly).

Also if you are receiving Social Security, when you take money out of a retirement account file a joint return, and you and your spouse have a combined income* that is

• between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.
• more than $44,000, up to 85 percent of your benefits may be taxable.