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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76397  
Subject: Re: IRA to Roth IRA Conversion Date: 7/28/2013 11:37 AM
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Instead of living off what I assume are taxable investment income, why not take money out of your IRAs up to the 25% tax bracket?

Because the OP said that they are living off of my investment and rental income. In order to stop the investment and rental income from coming in, the OP would presumably have to sell their investments/rental properties, likely resulting in capital gains taxes. The sale of investments/rentals would require the OP to find new investments that would not provide income, or else the IRA withdrawal will be additive to both income and taxes. This would all result in the OP paying more in taxes, not less.

Additionally, depending on how the OP has the money invested, the investment income may be taxed at a lower rate than the IRA withdrawals would be taxed at, so it would make no sense to substitute IRA withdrawals for this investment income.

Since the OP already is generating enough income to live on, and pay taxes from, there is no need to substitute IRA withdrawals for investment/rental income. The OP's idea of converting from traditional to Roth IRAs is more likely to result in lower tax bills than starting early IRA withdrawals that are not needed for income.

AJ
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