66 • RUBY, WILDING & SWANSBURG t o h f i s r a d T v s h i n o is f g e a a v n n e a d r l y y a t s l h l i s i t n h u g e n I a c ’v s o s e v o s e c a r i v a e t e d e d d a t n o g r t u o h p w i s s t e p h t o — ti i n n h g t a — s fa f j c u o t s r : t t N y b - e e p a e l r u n l s y t y o off my future tax bill. Now, if I had used my RMDs as income rather than ri neci nr evde si bt ilny gh i gt hherme l, a tmi vye ttoa xt h eb islilz ewoofuml dy abcec oluonwt .e r , b u t s t i l l t e w p a a o r y s -
IRA Value: $700,000 Assumed Tax Liability 25% Pre-Tax Growth Rate 5% Receive RMDs from Age 7 5 to Age 90, Per IRS Rules
Total Taxes Paid on RMDs
$ 262,392
Taxes Paid by Heirs on Remaining IRA Value at Death (Age 90)
$ 234,054
TOTAL TAXES PAID
$ 496 ,446
Example shown for illustrative purposes only and is not guaranteed. Actual results may vary. IRSIf$ I spent my RMDs instead, I would still owe the 496, 000 in taxes—more than half of my current IRA value. The Cost of Conversion $T7h0e0o, 0t h0 e0 rI Rt hAi nt go IaeRv oa tl uh aItReAd . wF oa rs tt hh ies tcaaxl ccuolsatt oi of nc ,oIndviedrnt i’ tn ng eme dy an Excel spreadsheet. If I withdrew $700,000 and paid 25 percent in taxes on bt hee dwoint he d. rSaow, at hl sr, oI uwg oh ual dg ep anyi n$e1t7y 5, , I0 0w0o iunl dt a ox ewse. T$h1e7n5I, 0w0o0u il nd taxes.
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