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I was doing the annual small conversions. It was a lot of work balancing dividend income, a little pension and other income to get an amount for the conversion to not increase my taxes.

A couple years ago, I realized I would not need the IRA money. Our taxable account easily handles everything.

Now we are considering using the Qualified Charitable Distribution (QCD) option, page 40, 2012 IRS Pub 590 if it is still in effect.

In some respect, we wasted money paying taxes that we probably did not have to pay simply because there were still parts of our retirement that we had not put enough thought into.

My primary concern for initially doing the conversions: a big increase in taxable income at RMD time. Using our current values of income and the trad IRA balances, our equivalent income for $1,000 raises to $2,400. That RMD bump is money we do not need for expenses. Extrapolate the numbers and it does cause a huge bump in taxes and AGI. The AGI will increase the taxes on dividends in our taxable account.

I would say the OP needs to look at all options and what the true need for the money is. Depending on the amounts involved, talk with a tax professional.

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