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My plan is to retire in six years at age 56. I will defer my pension until age 60 to avoid a 30% reduction. I will live off my I Bonds for the first four years of retirement. This means my tax rate will be close to 0% during those four years.

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

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.

Can anyone see a reason why I shouldn't do this ?

Also, if I understand this correctly, I don't need an earned income to do a conversion to a Roth - is this correct ?

Thanks for any help,

-helen
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