Imagine you’re crossing a road and are looking only to the left. You’ll be good for part of the road but may get hit by a car coming from the other direction. That’s kind of like doing a Roth conversion and looking only at income tax rates. You may do your math perfectly — but then realize that you unintentionally jumped into new Medicare premium brackets and possibly higher capital gains rates.
I see all sorts of articles online regarding the benefits of doing $100,000 Roth conversions over a 10-year period, which makes me think that a lot of people aren’t even evaluating income tax brackets. But that’s the best place to start when evaluating whether a Roth conversion makes sense.
