I'm 55 With $900,000 in an IRA. Should I Move $100k Annually to a Roth IRA to Reduce RMDs?

Core Insights - Converting $100,000 per year from a traditional IRA to a Roth IRA can help reduce required minimum distributions (RMDs) and related taxes in retirement, despite creating current tax liabilities [1][5] - An incremental Roth conversion approach can distribute the tax impact over time, keeping individuals in lower tax brackets based on total income for the year [2][5] - Roth IRAs are not subject to RMD rules, allowing savers to avoid mandatory withdrawals in the future, although immediate ordinary income taxes are triggered upon conversion [5][6] RMD Basics - Traditional IRA holders must start taking annual RMDs at age 73, which are based on IRS life expectancy tables and account balances, potentially pushing retirees into higher tax brackets [4][7] - The first-year RMD for a $900,000 IRA, assuming a 5% growth rate, would be approximately $81,734 when the account holder turns 73 [7] Roth Conversion Considerations - A Roth conversion requires careful planning, as withdrawals cannot be made within five years of opening the account, regardless of age [6] - Working with a financial advisor can provide personalized guidance on Roth IRA conversions and retirement planning decisions [3]