Traditional IRA with 1.5m balance at 40yo. Should I convert to Roth IRA
I was fortunate enough to find a good investment in my traditional IRA, and it grew the balance to $1.5 million. But I was idiotic enough not to convert it to a Roth at the time.
Is it worthwhile for me to convert now? I’m fortunate to have a net worth of over $30 million, so estate planning is a concern.
I’m concerned that my income tax rate is unlikely ever to be low. The RMDs could be brutal once I reach that age. In addition, our family has about another $1.25 million in 401(k) assets. That can’t be converted directly to a Roth IRA, but it still has the RMD problem. We also may never need the money in these retirement accounts, so perhaps it makes sense to let them keep growing and eventually pass them to our kids. We understand that an inherited Roth IRA is generally much more flexible than an inherited traditional IRA.
On the other hand, we currently live in a high-tax state and are in the top tax bracket, so converting would be expensive.
We also have trusts set up, FWIW.