Phil Cannella – Phillip Cannella Blog: Phil Cannella’s advice here may sound too good to be true. Some may even challenge that it is just not possible to do away with RMDs completely. Before making that conclusion you first have to hear Phil Cannella and his look at retirement accounts.
Phil Cannella puts it this way: “Something else happens when you convert your tax-deferred, tax-infested retirement account to a tax-free Roth IRA: your forced RMD goes away. You don’t have to take it if you don’t need it. And when you are ready to collect the income, you won’t have to pay taxes on the withdrawals or report the income. When I hold educational programs for seniors, my favorite part is when I say, “How would you like to have a tax-free IRA in your retired years?” and “What if I told you that you don’t have to take your required minimum distributions— even if you’re older than 70 ½?” That’s my favorite part because, without fail, the entire room becomes quiet as they absorb the information.”
This is the beauty of the Roth IRA, you can take care of the taxes now and from then on never have to be concerned with the tax implications later on. And considering the national debt and other factors, Phil Cannella warns us that tax brackets may see a return to former levels and then you really will have lost out if you didn’t convert when you had the opportunity at a lower tax level.