Hi folks,
I'll get right to it. My wife and I have been contributing to Trad IRAs for the past few years for a couple of reasons that I thought were good (mainly, it was keeping us below 74k AGI), but now I'm wondering if this year I should recharacterize the 2018 Trad IRA contributions to ROTH.
Without the traditional IRA deduction, we'd have about $1000 taxed at the 22% rate, and the rest ($10,000) taxed at the 12% rate.
A friend of mine got me thinking about this because he's worried we'll save so much (i.e. won't decide to FIRE) that we'll be screwed over by RMDs later (we're only 37). I think my reasoning for the trad-IRA at this income level came from reading around here that there are ways to manage withdrawals later to stay in the 0% capital gains tax bracket or at worst, in the 15% bracket.
Am I way off? Should I stick with traditional for the near future until such time as it is no longer deductible? I am hopeful that income will rise that high in the next 3-5 years.
Does this calculation change if I am expecting a large-ish (upper 6 figures) inheritance in 20 years?
Thanks for any and all insight.