Similar to the 'limits' options that can be set in Roth Conversions for IRMAA, Tax Bracket, etc., can we have a limit of the Dollars that can be converted in a given year? It is nice to have the various limits and optimizations but if you do not have the funds available, it is of little value. This way, you can 'Roth Convert' up to the dollars available as another limiting factor. Thx.
@slaufer By "not having the funds available" are you talking about to pay the taxes? I believe PRC makes sure those taxes are accounted for in the cash flow and available from somewhere (hopefully excluding the converted funds themselves).
@hines202 Bill, a bit of clarification; this is not about the process flow for Roth conversions, which, I agree, Pralana does address the funding for taxes (however, Pralana may pull additional 401K funds to address this, which may not be ideal or allowed). Remember, some maybe doing Roth conversions while still employed (earned income) or have not reached the age of 59 1/2.
This is about setting limits on each annual conversion amount - currently we are allowed limits based on several variables - including tax bracket. What if I do not want to convert to the limit of the tax bracket but to a 'spend level' inside the tax bracket?
This is the ask, simply another column/category called 'spending maximum' (or whatever), that allows me to set a plan to convert an absolute amount - let's say $192K for 1 year, then 100K/year, for 3 years, then based on tax bracket limit etc.
Thx
@slaufer I agree, this is a feature I would like to see. Seems like it would be a fairly easy thing to implement, as the SW is already checking several maximums.
As you stated, I don't necessarily want to convert to the top of a bracket. Rather, I'm looking to manually adjust my conversion amounts over 5-10 years. Using the existing limit controls does not give sufficient granularity to achieve my desired conversion amounts. In one example, trying all combinations of setting the limits, my conversion amount jumps from $260K to $440K. (Those are approximate values, but illustrate the issue).
Doug
I would like to propose a variation of this request: the ability to specify that Roth conversions come only from a designated tax-deferred account (meaning that if the account were empty, no more conversions) AND that the conversions be made without regard to asset allocation. Similarly, I’d like the ability specify that RMDs come first from a separate tax deferred account.
To illustrate: consider a “mode 3” for advanced asset allocation in which user could specify two separate tax-deferred accounts - let’s call #1 “available for Roth conversions” and let’s call #2 “available for RMDs.” Regardless of asset allocation, #2 would never be available for conversion, and, regardless of asset allocation, #1 would not be used for RMDs until/unless #2 was empty.
This approach would be useful for people who have a portion of their tax deferred assets set up to cover their expected expenses in retirement through fixed income investments, such as a TIPS ladder (a liability matching portfolio) and are willing to allow the equity % of their overall asset allocation increase over time, as they spend down the fixed income portion of their portfolio, including a substantial portion of what comes out of tIRA as RMDs.
Currently, even when using mode 2 and having different asset allocations in the 4 or 5 different time periods allowed, and regardless of whether I set my own parameters for Roth conversions or use the optimize feature, I am still seeing transactions I would never make due to the need to maintain the asset allocation for that time period. The solution is to enable Roth conversions from one account, without regard to the effect on AA, and likewise to take RMDs from #2 until #2 is empty, likewise without taking into account the effect on AA. These separately-specified tax deferred accounts would also make it easier to avoid what still is a problem in mode 2 of “too high” Roth conversions due to the higher ROfR in an all stock Roth, compared to a blended stock/bond tIRA.
Thx for considering,
Pdxcess
SORRY - I meant to make the suggtion above for the ON LINE version of Pralana. Saw that there is a separate wish list satin for on line after I had posted the above.