Does it make sense to convert to Roth early before moving to HCOL?

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digitalchampion
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Joined: Wed Nov 10, 2021 10:30 am

Does it make sense to convert to Roth early before moving to HCOL?

Post by digitalchampion »

I had an earlier post that touched on this but it wasn't the emphasis so I wanted to see if there was any feedback. I have the following retirement accounts where I plan to run an aggressive portfolio mix:
- Roth ($115k): HFEA
- Traditional ($180): PSLDX
- HSA ($17k): HFEA

I'm a bit conflicted on if it makes sense to move some of my traditional to Roth early though. It would be at the max tax bracket today at a no-income tax state, but there's a good chance I'll be moving to a HCOL city this year.

I ran some simulations below. And it seems that I'll always come out ahead by converting early, especially if I'm being optimistic with a higher CAGR from leverage. Another concern that I had was if I left everything in the traditional account, will I be screwing myself later in life with RMDs? Alternatively I do see some advantage to keeping pre-tax funds so that I can do a conversion ladder if I retired early.


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Thanks for the feedback!
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