On 7/26/25 08:19, Tom Elam wrote:

Hugh,

Gosh, its another stalking attempt!

https://www.youtube.com/watch?v=GI-selxwr2c&t=4s

Yeah, so what?

As the video advises in its first minute, use math, not fear.

Likewise, at roughly 4:00 while citing a paper by McCory, they state:

"If the future tax bracket is reasonably projected to be higher,
conversion is recommended; if lower, conversion is ill-advised; and if
tax rates seem likely to be constant, conversion may or may not [be recommended].

Recalling when we had this conversation, my assessment was within the
context of the TCJA rate cuts being scheduled to expire in 2026.

> When beneficiaries will pay almost no tax on inherited wealth Roth

conversions make no sense at all.

Incorrect, because it depends on where the inherited funds are, and Roth conversions are only relevant to tax-advantaged retirement accounts.

Thus, post-tax savings (eg brokerage) are irrelevant to the question.

For assessing the feasibility of a Roth conversion for the tax
optimization benefit of the beneficiaries, because Secure 2.0 requires
that all non-spousal beneficiaries must distribute (be taxed) within ten
(10) years.

The basic "now vs later" marginal tax rate fiscal comparison stays
effectively the same, except now instead of being a self-comparison, its comparing the same starting point (donor's tax rates) to dates even
further in the future, and with an additional uncertainty risk that one
doesn't likely even know the marginal tax rates of said beneficiaries
today, let alone what they're likely to be 20 years into the future: the assessment only is relatively easy if one has children (beneficiaries)
who you know are significantly worse off financially than you are, and
the prospects of them 'catching up' in <20 years are low.

In my case there is no reason to loan state and federal
government money today in the hope that the small
payback over time will eventually be net positive.

Which is because you're already old which shortens the benefit timeline,
and the 2017 TJCA extension has kicked the can down the road until that
fiscal reality bites.

-hh

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On 7/29/25 10:17, Tom Elam wrote:

On 7/27/2025 7:25 AM, -hh wrote:

On 7/26/25 08:19, Tom Elam wrote:

Hugh,

Gosh, its another stalking attempt!

https://www.youtube.com/watch?v=GI-selxwr2c&t=4s

Yeah, so what?

As the video advises in its first minute, use math, not fear.

Likewise, at roughly 4:00 while citing a paper by McCory, they state:

"If the future tax bracket is reasonably projected to be higher,
conversion is recommended; if lower, conversion is ill-advised; and if
tax rates seem likely to be constant, conversion may or may not [be
recommended].

Recalling when we had this conversation, my assessment was within the
context of the TCJA rate cuts being scheduled to expire in 2026.

  > When beneficiaries will pay almost no tax on inherited wealth Roth

conversions make no sense at all.

Incorrect, because it depends on where the inherited funds are, and
Roth conversions are only relevant to tax-advantaged retirement accounts.

Thus, post-tax savings (eg brokerage) are irrelevant to the question.

For assessing the feasibility of a Roth conversion for the tax
optimization benefit of the beneficiaries, because Secure 2.0 requires
that all non-spousal beneficiaries must distribute (be taxed) within
ten (10) years.

The basic "now vs later" marginal tax rate fiscal comparison stays
effectively the same, except now instead of being a self-comparison,
its comparing the same starting point (donor's tax rates) to dates
even further in the future, and with an additional uncertainty risk
that one doesn't likely even know the marginal tax rates of said
beneficiaries today, let alone what they're likely to be 20 years into
the future: the assessment only is relatively easy if one has children
(beneficiaries) who you know are significantly worse off financially
than you are, and the prospects of them 'catching up' in <20 years are
low.

In my case there is no reason to loan state and federal government
money today in the hope that the small payback over time will
eventually be net positive.

Which is because you're already old which shortens the benefit
timeline, and the 2017 TJCA extension has kicked the can down the road
until that fiscal reality bites.

-hh

No stalking.

Oh, so this newsgroup is <alt.invest> or <misc.invest.financial-plan>?

You used fear of tax rates going up in 2026 to make the
case for a Roth conversion.

"Fear"? Nope: at the time it was the law that the tax rates were going
to go back up, and structurally the deficit, GOP positions, and general stalemate in Congress made it unlikely to change.

At this time, and for the foreseeable future, we are in the 24% marginal federal tax bracket.

Which for 2025 MFJ is a pretty broad bracket of taxable income (line 15)
of $206,700 to $394,600 in taxable income. It can afford a pretty
generous amount of headroom for Roth conversions, although one does have
to monitor the expected IRMAA brackets independent of this once over 62.

I could cash out my IRA in excess of RMD and donate
the proceeds via QCD with no income tax liability increase. Sort of a
Roth conversion but not paying any taxes. However, I would deprive
recipients of potential growth in the process, and reduce my own future income too.

You still do not understand the situation.

Incorrect: its that you've already told us this & we don't care.

That's because your personal situation is irrelevant to the general use
case and of everyone else's situations.

Most of my tax advantaged
funds go to charitable organizations who will cash them out immediately
and fold them into their own financial portfolios, paying no income tax. There is no tax rate uncertainly. If something changes with these beneficiaries we will revise the trust. Not likely, as the named organizations have all been around for quite a while.

The named family will get mostly funds that are not tax advantaged, but
with basis step up. They will also owe no income taxes on those funds
upon receipt. They can then take out the tax advantaged pieces, if any,
over 10 years, spreading out any tax burden. And yes, at this time all
the family member beneficiaries are not as well off as we are.

My estate administrator also has instructions to minimize family member
tax liability as the funds are distributed.

Which was their fiduciary responsibility anyway, even without specific additional instructions; BTDT.

-hh"

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On 8/6/25 10:54, Tom Elam wrote:

On 7/29/2025 11:05 AM, -hh wrote:

That's because your personal situation is irrelevant to the general
use case and of everyone else's situations.

Precisely, so stop offering advice that does not apply to my circumstances.

You got that backwards: stop whining about general use case because
your personal circumstances don't fit the general use case.

IRMAA is a consideration. We are very close to hitting a limit, and for
very little long term benefit.

Well, well: that's a very useless statement, because the IRMAA brackets
lack significant separation (roughly just $55K for MFJ), especially in
the context of Roth conversions ...

... plus ...

... the IRMAA values for 2026 Medicare rates aren't known yet to know if
your 2024 income was close to a limit or just over.

-hh

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On 8/11/25 10:28, Tom Elam wrote:

On 8/6/2025 3:52 PM, -hh wrote:

Well, well:  that's a very useless statement, because the IRMAA
brackets lack significant separation (roughly just $55K for MFJ),
especially in the context of Roth conversions ...

... plus ...

... the IRMAA values for 2026 Medicare rates aren't known yet to know
if your 2024 income was close to a limit or just over.

You are wrong on both counts. We were very close to hitting the step-up
this year based on 2023 IRMAA.

My point was that was essentially just good luck on your part, because
you didn't have the IRMAA numbers for 2025 back in 2023 to be able to accurately, deliberately plan to be a "buck under".

Our 2024 income was also almost enough to trip a step-up if applied to
2025. The 2026 IRMAA forecast brackets are a 2.5-3% increase. So we will
be close.

Keyword being "forecast".

Now if your 2024 income was indeed below the 2023 income values
published for 2025, then you will be under that same IRMAA bracket for
2026 ... but for purposes of being "close", not really: at the $266K
MFJ bracket, not using a 2.5% increase is ~$6.6K left on the table.

And since this bracket is $212K-$266K = just $54K wide, to forgo $6.6K
right off the bat is over 10% of that bracket's total width, so one is
not particularly "close" (even before including however much you were
also short of the 2023 cap)

I am beginning to think you are really stupid hiding behind convoluted arguments.

Nah, your weak insult attempt doesn't change the fact that the IRMAA
brackets for 2025 income which will be applied in 2027 are utterly
unknowable today.

That's because they're not published until 11 months after the end of
2025, which was the last chance that you had to actually do anything
about it.

This unknowability IRMAA risk aspect also increases as one has more
taxable brokerage investment funds with tax implications.

Consider for example, PJFAX. It had an earnings surprise in 2024 where
its payout was ~double that of 2023. So even if one had planned for
IRMAA based on 2023, you're now off by potentially quite a big chunk:
if one had just $300K in this fund, earnings surprise difference on its
own is the equivalent of a half IRMAA bracket jump.

The only time that one really has fine control over IRMAA bracket
targets is when there's minimal/no taxable income variance. Which then
pretty much excludes having a taxable brokerage investment account with
any appreciable amount of assets therein.


-hh

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