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My plan is to convert 401k money to a Roth IRA each of the four years up to the 10 - 15% tax bracket.

Good plan. There's no good reason to skip this opportunity for some low tax conversions.

I am currently funding my Roth (including the catch up), purchasing a chunk of I Bonds and funding $15,500 into my 401k. I can't really afford to put the extra $5,000 in catch up contributions into my 401k, but I would love to for the tax deduction.

Maybe I shouldn't be funding my Roth, but instead max out the 401k to $20,500. Then when I retire convert the 401k to the Roth. I could get the tax deduction now, then move the money when I'm in a really low tax bracket. I am currently in the 28% bracket on the Federal level and 9% State.


Given your facts, I'd certainly fund the 401k before the Roth. You're saving taxes now at 28% in exchange for the conversions in the near future at no more than 15%.

--Peter
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