Traditional IRA balance of $200K, for simplicity lets assume it grows in value (investment growth & Dividends) by $100K between now an when I start to withdraw. I will pay taxes on the $300K as its withdrawn from the IRA.Roth Conversion - of the $200K I pay taxes on the $200K now at conversion(I would do this over a few years and minimize the tax rate.) Am I correct that the $100K of growth in the Roth IRA, would not be taxable, even when I eventually with draw it??Yes, but it doesn't matter, due to the fact that multiplication is commutative.The tax you'll pay now is money that *could* be growing but won't be because you don't have it anymore.Convert now: At 25% rate: you'll have 150K in the Roth. If that grows by 50% that's 225KDon't convert: 200K growing by 50% = 300K. Minus 25% tax = 225KBut if you don't convert *and* you're in the 15% bracket when you retire: 300K minus 15% tax = 255K
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