Possibly doing a large Roth Conversion this year

Forum|Forum|7 months ago
October 22, 2025
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This is my first year of retirement. I somehow was able to go the entire year so far without withdrawing any funds from my IRA or 401k. I decided instead to sell the profits from my tech stocks which I bought at a low during Covid. I had $36,000 dollars of realized gains. I also withdrew $4000 RMD from my inherited IRA from my father for an Adjusted Income of $40,000 , which I have paid my living expenses so far this year with. .

When I did a 1040ES, with my all my deductions for being over 65, with the standardized deduction subtracted from my Adjusted income. I currently owe no or very little income taxes this year. I think this would be a perfect year to do a large Roth Conversion of a $100,000 dollars. Do you agree that this would be an excellent year to do that large a conversion. I realize that it will still be painful in April to write a large check for taxes that I do not actually owe yet. Do you agree that I should do this and how much do you think the Roth Conversion could cost me?

Not A Product Question

fanfare

Level 15

Ideally, convert just under the amount that would bring your tax from zero to above zero.

Otherwise convert more up to the tax you find acceptable.

The trick is, to accurately calculate your 2025 AGI, deductiona and incorporate the 2025 Tax brackets, etc.

It is no longer allowed to reverse a conversion if you make a mistake.

@JRretires

JRretiresAuthor

Level 3

Thank you for taking the time to answer my question. I will have an accountant and my financial advisor assisting me. Because I will have no withdrawals from my IRA or 401k this year. I can afford to pay more income taxes than if I was withdrawing funds from my IRA. I came up with a $100,000 as a large enough number to lower my taxes in the future. I was trying to get your opinion if this amount is to large an amount if I have no further Capital gains this year which I should not. And maybe how much or how large a check I would need to write to do a $100,000 Roth Conversion.

AmeliesUncle

Level 15

@JRretires wrote:
I will have an accountant and my financial advisor assisting me.

This is a discussion that you need to have with them.

You are right that this could be a good year to do a conversion or withdrawal. However, with no other information, arbitrarily picking $100,000 to pay tax before you need to doesn't make sense.

Knowing your age, when you plan on collecting Social Security, how much your Social Security will be, the total value of your Traditional retirement account, your plans, your goals, your needs, your wants and more all come into play with strategizing what to do with retirement funds. That is why you need to have some discussions with your tax preparers and financial advisor.