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Question

I retired in 2021 at age 71 and for 2022, my taxable income includes Social Security and distributions that I take out of my 403(b)/457(b) pre-tax retirement accounts.

Assume that my RMD for 2022 is $50,000 and I wish to take distributions of $70,000 out of my 403(b)/457(b) pre-tax retirement accounts and pay tax on them.

Could I convert the excess $20,000 (i.e., the amount not required for RMD) into a Roth IRA so that I do not have to pay any future taxes on earnings from this $20,000?

Answer

Required minimum payouts cannot be converted to a Roth, but the excess, in this case, the $20,000 mentioned ($50,000 RMD plus $20,000 extra) could be converted to a Roth, says Bob Kargenian, CMT, president of TABR Capital Management, LLC.

“So, yes, you pay tax on all $70,000 and convert $20,000 to the Roth,” he confirms.

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Question

I retired in 2021 at age 71 and for 2022, my taxable income includes Social Security and distributions that I take out of my 403(b)/457(b) pre-tax retirement accounts.

Assume that my RMD for 2022 is $50,000 and I wish to take distributions of $70,000 out of my 403(b)/457(b) pre-tax retirement accounts and pay tax on them.

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