Is there a way to have Pralana optimize Roth conversions with a predetermined amount to be left in tax-deferred?
@longview Hi, there is not a currently way to do this, but we will probably add a a capability to define a minimum balance for the taxable and IRA accounts (or all accounts) similar to the Cash account 'floor'.
This floor would be inflated and withdrawals would not be allowed to reduce the balance below the floor.
The only complication I can think of is insolvency: If you specify a floor of say $1million, you could conceivably go 'broke' with $1million (inflated) in that account. We could change the cash shortage/unscheduled withdrawal logic to make 2 passes...the first honoring your floor and the 2nd not honoring your floor....this is just an added complication. And Scheduled Withdrawals would not be allowed to dip into the floor amount.
[moved this thread to the Pralana Online section.]
I think this would be a useful feature. I was looking to leave an amount in Tax deferred to accommodate Long term care, essentially long term care self insure.
@bfisher101 Yes, also to continue doing QCDs. I like this idea. But the tool must allow for withdrawals for LTC and QCD at some point and not then maintain the hard 'floor' value until death.
Another reason to leave some money in your regular IRA is tax savings from standard ductions. The standard deduction for a couple now is about $31,000. Meaning you do not pay taxes on that amount. Over 10 years that's $310,000 and over 30 years its $930,000. So no point in converting that amount to Roth and paying taxes.
I also think this would be very useful. Would it work to simply disallow Roth conversions and drop the account to the bottom of the prioritization list (for covering expenses) when it is below the specified floor, but still allow scheduled withdrawals (and RMDs, of course)? And earnings might bring it back into play.
A little off topic but another thing to noddle on, once in the future you start taking RMDs, check with PRC to see if your RMDs are larger than your annual expenses. Meaning you are paying taxes on forced withdraws from your regular IRA that you may no want/need to do. You can avoid this by doing Roth conversions before RMDs start and before the present low tax brackets go up (which I am sure they will eventually) to the point where your RMDs equal your annual expenses.
