VyStar Investment Services

76 S Laura Street
Jacksonville, FL 32202
904-908-2495
vismarketing@vystarcu.org
www.vystarinvestmentservices.com
 
 




Roth IRA Conversion Calculator (Advanced)
Roth IRA Conversion Calculator (Advanced)

With a Roth conversion, the taxable portion of your traditional IRA (deductible contributions and earnings) is subject to tax in the year of conversion. This calculator compares two scenarios: (1) The full or partial conversion of a traditional IRA to a Roth IRA, and (2) No traditional-to-Roth conversion. The calculator assumes that you'll pay any conversion taxes from other assets, and determines (for scenario 2) the amount you could have earned on that "side fund" had you not converted. For both scenarios, all required minimum distributions (RMDs) are also assumed to be invested in the side fund. The calculator estimates the IRA accumulation, and RMD distributions, for the IRA owner and up to three beneficiaries, (you can specify one spouse beneficiary and up to two non-spouse beneficiaries). Total after-tax dollars are compared.

The current year and the conversion year are assumed to be 2020.

Part One: General Information
Current Age
Month of Birth
End projection for IRA owner at age
Current traditional IRA balance $
Nontaxable amount allocated to IRA* $
Percent of IRA to be converted %
Part Two (Optional): Show distributions to beneficiaries?

Select "Yes" if you want to project amounts for beneficiaries

Spouse beneficiary (assumes rollover to own IRA)
Percent of IRA proceeds at death % Current Age
Nonspouse beneficiary(ies)
Nonspouse Beneficiary 1-- % of IRA proceeds at death % Current Age
Disabled or chronically ill? Child of IRA owner?
Age of majority (18 to 21)
Nonspouse Beneficiary 2-- % of IRA proceeds at death % Current Age
Disabled or chronically ill? Child of IRA owner?
Age of majority (18 to 21)
Prorate distributions when subject to 10-year rule?

* If you have multiple traditional IRAs, you must pro-rate your nontaxable balance among them. The IRS provides a worksheet in Publication 590-B.

Conversion taxes are paid from other assets.

Recent legislation changed the general RMD starting age from 70½ to 72 (if attain age 70½ after 2019).

The current year is assumed to be 2020. If an IRA owner attains age 71 (i.e., 70½ in 2019) in the first half of 2020, a distribution is shown for 2020. If an IRA owner attains age 71 (i.e., 70½ after 2019) in the last half of 2020, a distribution is not shown until 2021 when the indivudual is age 72.

Lifetime RMD calculation does not account for special rules that apply when spouse is more than 10 years younger than IRA owner.

Death occurs on last day of the year.

Conversion occurs at beginning of year.

Federal estate tax and possible credit for estate taxes paid are not accounted for; state income and death taxes and credits are also not taken into account.

All taxes are paid at end of year incurred.

RMDs are deposited into a side fund and grow at the specified annual rate of retiurn. Amount(s) equivalent to any conversion tax that would be owed as a result of the Roth conversion are also deposited into the side fund and grow at the specified annual rate of return.

Assumes spouse beneficiary rolls over inherited IRA to own IRA, and RMDs start when spouse reaches age 72.

Does not take into account special rule that says RMDs can be taken over owner's remaining life expectancy if longer then the beneficiary's.

Assumes separate accounts established for beneficiaries--beneficiaries' own life expectancy used for RMDs if the indiviual is no more than 10 years younger than the IRA owner, or is disabled, chronically ill, or the spouse or a minor child of the IRA owner. Otherwise, the entire account must be distributed within 10 years.

Assumptions:



Securities and Advisory Services are offered through LPL Financial, A Registered Investment Advisor, Member FINRA/SIPC.  Insurance products offered through LPL Financial or its licensed affiliates.  The investment products sold through LPL Financial are not VyStar Credit Union deposits and are not NCUA insured.  These products are not obligations of VyStar Credit Union and are not endorsed, recommended or guaranteed by VyStar Credit Union or any government agency.  The  value of the investment may fluctuate, the return on the investment is not guaranteed and loss of principal is possible.  VyStar Credit Union and VyStar Investment Services are not registered broker/dealers and are not affiliated with LPL Financial.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.   All performance referenced is historical and is no guarantee of future results.  All indices are un-managed and may not be invested into directly.   The information provided is not intended to be a substitute for specific individualized tax planning or legal advice.   We suggest that you consult with a qualified tax or legal advisor.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., and affiliate of LPL Financial. 

This communication is strictly intended for individuals residing in the state(s) of FL. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.