Reduce or Eliminate Your Required Minimum Distributions With a Roth IRA Conversion

A lot of people I talk to get upset when they discover that they must begin taking required minimum distributions ("RMD's") from their traditional IRA's beginning at age 70-1/2. They forget about all of the income tax savings that they've realized over the years from either making deductible IRA contributions or from making pre-tax contributions into 401(k) plans that they rolled over into their IRA accounts. This is especially true when they haven't reinvested the tax savings from their deductible contributions which is fairly typical.

Moreover, many people don't realize that IRS has authorized a deduction for their contributions in exchange for the right to tax distributions from their traditional IRA's, whether voluntarily or via RMD's. Whether or not you've taken any distributions from your IRA, beginning at age 70-1/2, you are required to take a minimum distribution each year from your traditional IRA accounts based on their value on December 31^st of the preceding year and an IRS table life expectancy factor. The taxable portion of each distribution includes deductible contributions as well as earnings.