The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies

URL:  http://boards.fool.com/thanks-to-all-for-the-answers-and-info-phil-i-30589592.aspx

Subject:  Re: IRA conversion / inherited IRA Date:  3/14/2013  12:10 PM
Author:  caretaker2 Number:  118054 of 121172

Thanks to all for the answers and info.

Phil,

I take care of ALL my uncle's needs, 24/7 and have done so for 12 years now. I put his interests before my own. At times, this has been to the detriment of my own needs -- e.g. for sleep, medical attention, attention to my own finances, my own home.

My uncle appreciates all that I do for him and wants what is best for me as well. (He also recognizes more than I do that if I don't take care of myself, I won't be in any condition to take care of him. I tend to think I'll have more time for me 'later'.)

My "preferences" are simply that, 'what I would prefer'. If I were one to act merely on my preferences rather than what would be best for my uncle, I wouldn't be asking questions and I would have changed his traditional IRA to a ROTH IRA long ago.

The answers to my questions will help me determine not only what is best for my uncle but also whether, in the case of his IRA, my preferences and his best interests are aligned.

As far as the RMD kicking my uncle into a higher tax bracket is concerned:

if he had NO RMD he would be in a lower tax bracket, would pay less taxes on his Soc Security benefits, etc.

The purpose of 'gradually moving his money' would be to AVOID putting him into a yet higher tax bracket (by only transferring an amount each year that would leave him in the same bracket).

I do not recall now who said that the conversion wouldn't be cost effective. It was more than 10 years ago. At the time, I don't think the person thought my uncle would live much longer. It was generally believed he would not live a year after his first stroke and the death of his wife. (Surprise, surprise what a strong will to live, enjoyment of life, and good care can do. I expect him to set longevity world records.)

Thank you, Phil, for being concerned about my uncle's welfare. I hope I have allayed your fears.
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us