Originally Posted by
ThumbsUp
A little off topic, but does anyone know how often you can convert post-tax taxable PRAP funds into the Roth 401k? Obviously, I'd like to hold this money for as short as possible to pay as little short term gains as possible, but wasn't sure if it was a once a year thing.
Not limited to a once a year thing but it takes time to do the conversion. I max out my 401k by the mid April to get maximum VEBA spillage. As soon as I hit the annual max, I request the conversion forms. Plan on the conversion taking at least a month to complete.
Since the new tax law no longer has the Pease/PEP phaseout, I'm considering converting all of my pretax money to Roth. I ordered the forms a couple of weeks ago and have them in a drawer at home. I'm just waiting for the next market dip to send them in. This will be pretax and B/C funds that are still taxable.
Since my income stream through retirement will allow me to never touch those funds, I want to get them into a Roth to a) avoid RMDs starting at 70 1/2 and 2) allow my children to inherit the funds tax free. I'm getting ready to put documents in place where the funds will go into a trust on my death and RMDs will be based on my childrens' ages.