Menu

📰
0

Can I use a Roth conversion before retirement to avoid taxes?

Reddit r/Fire·u/NoNefariousness8064·about 1 month ago
#ghVs9Qfc
Reading 0:00
15s threshold

I'm in my early 50s with a healthy traditional 401k. I would like to diversify with some money in a Roth IRA under a different investment strategy. I have a unique situation where I work in a tax state (MA) but live in a tax-free state (NH). If I directly contribute post-tax dollars to a Roth (or as Roth contributions to my 401k) I'll have paid FICA and MA taxes on the contribution. Please confirm that if I instead contribute the money to the 401k first (tax-deferred), I can then use a Roth conversion and avoid both FICA and MA taxes. I expect to be in the same tax bracket on retirement, so as long as I keep the conversion small enough to not burst my current bracket is there a down side to this strategy?

Read More