I leave like a dollar in my Trad IRA account when I do the conversion each year so the account stays open. In the past I’ve sometimes earned a couple bucks of interest in the trad account (because I didn’t convert it fast enough) but the tax burden rounds down to $0 so I just ignore it when filing my taxes
I think as long as you transfer money in and out at least once every 2 years they will keep your account open
fidelity specifically asked if I wanted to keep the account open at $0, I said yes. I’m sure they have a time limit on that but I am not likely to find out.
I thought I somehow avoided this, $7,000 in, $7,000 out a few days later (it didn’t take a full week), everything read $7,000 was the balance as I converted it to Roth.
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I’ve been doing what tommie said, tell them to keep the Trad open but transfer the full amount to the Roth. Then the past couple of years, I get a little interest to the Trad at the next monthly cycle…
That looks like about the right amount of interest for less than a week (5.2%/52 * 7000 = $7), just make another transfer/conversion to your Roth on the interest, keep the account open with 0, and pay the tax on the $5 next spring, noting it accurately on your 8606. It’s fine that your converted amount exceeds the contribution limit.
eta: the interest should automatically more to the Roth if your Trad is closed, I just find it less hassle to initiate a second conversion vs opening a new account every year
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I did not expect that. Guess I’ll research it before receiving a headache over $5, but 
You can convert however much you want. Just have to pax taxes if when you put the money into the trad IRA it was deducted from taxes, or if you earned money in the account itself. For earning $5, that might be where I just ignore it when filing taxes.
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Oh, duh. I’m not contributing extra to the IRA, it’s just reclassification. Thanks for screwing my head on, was thinking I’d have a contribution of $7,005 but the IRS just allows these little cases.
Yep. Gets me every year
Just wait until you Rothify those 5 bucks
Don’t be surprised if there are a couple of cents hanging out there when you check
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I have the opportunity to rollover a small pension from a former employer.
They said I could tap it now at age 52.7 for $100/mo (relative value 100%)
Or I could do a rollover, worth between $18,700 and $19,800 (relative value 121%)
I did a back-of-the-napkin calculation and thought the rollover option was worth less than this range, and wondered if the 121% meant they were offering me 21% more to leave the plan?
And why are they that uncertain about the value in the first place? Do they think interest rates could move in the meantime?
In any case, I’ll probably take it and get another 1% Robinhood match. Exam 4A (CAS Life contingencies was the last CAS exam I walked out of telling people I’d passed)
Another random thought.
I am on track to amass a significant amount of money that I will leave behind, unspent before my dying day.
I’ll deal with it for you after you pass.
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I was given similar feedback.
And this fully excludes an inheritance that one day could double that.
Thankfully, I was born to poor, stupid parents that never burdened me with problems like an inheritance. All I inherited was their funeral bills.
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Have you considered retiring? And spending more time with friends/family/community?
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Aw yeah.
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I was certainly not poor growing up, but definitely not rich. This outcome is mostly due to my mother who is frugal and her parents who she learned this from (she inherited money from them when they passed, but they got their on their own without it), along with a fair bit of good fortunes along the way in mostly avoiding costly life events. They are the millionaires next door no one would expect.
But it doesn’t lead to much more than a random financial thought. They are in good health (the important part) and none of it changes anything I am doing today to save for retirement (which is already excessive).
That post didn’t come across as particularly excited
No more than 1000 times a day.
But I find myself in a gray area.
I have enough to retire and live meagerly until age 90. If I live less meagerly, I’ll run out of cash at 84 or 78 or if I have major, expensive health issues, then I’ll run out of cash early too.
It feels like I cannot feel like I can retire until I know I will have enough to live lavishly (ie which for me means travel), weather unexpected health care costs, and can stretch the money out until 100. And a mil or two does not cut that kind of mustard.
So I wait and build my bank roll and put off retirement. I just fear that I will wait until I got the big bucks and won’t live to enjoy it.
I had an acquaintance who retired and died suddenly well within a year. What a shame.
Is working part time an option? Im not sure how easy that is to negotiate but thats my hope… one day just working a couple days a week as an actuary and semi-retiring.