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Hi--

The shortish version:

Widow, 52, no kids
Still working, at least to 55
Salary/other income at top of 22% bracket
"Base" spending around $80k/year, including taxes
$850k Spousal inherited IRA (titled as beneficiary IRA, no RMDs yet)
$700k 401k
$300k taxable account
$40k Roth (just started Mega Backdooring $33k a year while still working)
Plan to take Survivor SS at 60 ($24k), my SS at 70 ($38k)
$32k non-COLA pension at 65
$900k equity in home and one other property, $290k mortgage ($1600 P/I, 3.625%)

My question centers around the inherited IRA. Since it's currently a beneficiary IRA, I can withdraw from it without penalty, though it's then taxed as income. I would then roll it into my own IRA at 59.5.

As I look way ahead, I see six-figure RMDs and a defined income near $81k. If I stop work at 55 and start SS survivor at 60, I probably only have 5 years where my income would drop to the 12% bracket.

So I'm wondering if I should be either making withdrawals from the inherited IRA to add to my taxable account (let's call it "giving myself a raise" :) ), or if I should be working harder to convert money from the inherited IRA to Roth, even if it's pushed into the 24% bracket.

I am not a crazy-spending widow (no rooms full of designer shoes!), but I also want to travel more and don't feel the need to be in steerage all the time, so to speak. And since I am now putting $62k into pre-tax/after-tax 401k, I do need to replace that salary and don't really want to spend down the taxable account too much too soon.

How would you approach this inherited IRA? Just ignore it until I need money? Withdraw more (the "raise")? Convert to Roth into the 24% bracket?

This is driving me a lot crazier than it should. Plus it's not a strategy that gets discussed very often--usually advice for widows is for older people, RMDs already started, etc.

Thanks.



Submitted February 17, 2019 at 10:13AM by MirandaHobbz http://bit.ly/2GvUR0a

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