Conversion of Regular IRA to Roth IRA

[Guest rumple1130]

When I am able to start withdrawing from my Regular IRA without penalty (in about 2 years) I am considering putting the distributions into a Roth IRA and so avoid taxes on any further growth of this money. Am I permitted to do this?

[John G]

You can only contribute to a Roth if you have earned income and meet the income/tax filing status requirements.

You may be able to do a Roth conversion (income and tax filing status applies here too!) but taxes will be owed in the year of conversion. However, a Roth has no mandatory distribution schedule - which may be helpful.

There are many ways retired folks attempt to manage there taxes. You may also want to put IRA dispursements into tax free bonds, a tax managed mutual fund, buy stock for long term capital gains, or buy any asset and let it pass via your estate with a stepped up mechanism. A word of caution - making investment decisions based upon tax avoidance is taking your eye off the ball. Focus on the performance of your assets first.