Quote Originally Posted by Rapid Robert View Post
That was kind of my point: why narrow it down to Social Security income, and a particular income level?
Because it came from a previous post where someone said clients should not convert to Roth pre SS benefits "unless he has an irrational desire to pay taxes needlessly early". I was pointing out that sometimes it makes complete sense. If someone is an a 15% bracket and not yet drawing SS they could convert 1K IRA to Roth for $150. If they are in the spot after benefits start where some but not the 85% of benefits are taxable, the tax effect will likely be 27.25%. A good investment should double every 10 years. In 20 years the 1K could be 4K, and a net rate of 27.25% would be $1,090. So, is paying more than 7 times the $150 in 20 years a good deal? If you were to invest the $150 for 20 years you would need a return of 11% to equal the 1,090.

It seems like we have been so conditioned to want to delay tax to a later time that we lose common sense. I myself was a little surprised that there is a spot where the effect can be over 45%.