Author Topic: Making 401k/IRA contributions during Roth conversion period  (Read 536 times)

Brentbutner

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Making 401k/IRA contributions during Roth conversion period
« on: January 22, 2018, 12:45:39 PM »
Hello all.  Plan to enter FI in 5 years from now at about 49.  This is when I will start my Roth conversion ladder while living on taxable accounts.  Should only be paying long term cap gains at that time in order to keep my income low for the Roth conversions. 
My question is, is it a good idea to keep working very part time to make just enough money to Max out  my pre-tax accounts like my solo401k and IRA.  Seems like it would be cool because then I would basically replentish thiose pre-tax accounts as money is being pulled out to the Roth conversions.   I am very fortunate to have a job that would allow me to do this with very few hours worked.  Has anyone else done this?  Any thoughts positive or negative about doing this?  I very much appreciate any input on this subject. 

bacchi

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Re: Making 401k/IRA contributions during Roth conversion period
« Reply #1 on: January 22, 2018, 07:57:03 PM »
It's a finer line than you think to fit in the 12% tax bracket (it's easier for couples, obviously). Unless what you earn is completely tax-deferred, your earnings plus your conversion could push you into a higher bracket. There's also ACA subsidies to worry about.

But, yeah, I did it last year. I worked a short contract and did a conversion. The contract money paid living expenses and filled up my IRA and HSA.