My wife has 45,000 in a SIMPLE IRA from a previous employer that no longer receives contributions. Her current employer does not have a retirement plan so we opened a ROTH for her two years ago and have been making the max contribution (6K) to her ROTH. She will probably stay at this employer until she retires in 15-20 years. She is currently 43.
My question is this. I was thinking about converting her 45K IRA to the ROTH but I keep getting hung up on the numbers. I think I’m at the point where I’m overthinking things so I’m looking for a little help. I’ve used multiple conversion calculators, even those from Vanguard, Fidelity and Schwab, which is where her accounts are. According to my calculations if I convert all of the 45K to the ROTH I’ll pay about 10K in taxes which we have the cash to pay. Then we’ll have approximately 300K +/- in her ROTH, tax free of course in 15-20 years. If we don’t convert we’ll have 200K +/- in the ROTH and approximately 120K in her IRA, which again will have no contributions and we’ll let it ride. Then, of course, when we do receive distribution of the IRA we’ll have to pay taxes on the 120K at 22% (probably). So, do we convert or stay as-is with letting the IRA ride and keep maxing out her ROTH for another 15-20 years. I used a 7% rate on all my calculations.
Am I missing something? What would you do? I feel like I’m overcomplicating things. Thank you in advance for your help.