In fact you can convert your entire IRA to a Roth

Of course you will need to pay taxes on the amount converted for the year you converted

give you a hard time for having done the right thing and saved.

A Google search (Because I forgot what I learned (!) and the rules had probably changed anyway) revealed a couple of pertinent articles. It looks like the short answer to your question is "no", there is no limit.

I'm sure you are aware of the tax implications, however.

Investopedia has a good write up.

As does Fidelity

IRS Publication 590A covers IRA's.

Hope that helps!

The way I have been doing is to ask Vanguard to withhold federal taxes from RMDs that went to the bank but not on the conversion because, well, the idea is to convert as much as possible.

But now I will ask them to withhold for the conversion, too. Also sending more with the quarterly estimates.

If you haven't used one already, to give you an idea of how long it would take to recoup the losses to tax once the conversion is completed.

If they don't, there are a few available elsewhere.

Schwab has one.

Only caution is to be aware that a large conversion can put you in a higher tax bracket -- the piece that gets taxed at a higher tax bracket would likely be a mistake if you expect to be in a lower tax bracket than that in some future year where you'd be doing RMD or other withdrawals from the traditional IRA that you converted.

In other words say you are in the 12% tax bracket and you convert a big amount such that it pushes you into the 22% tax bracket. Say that $10,000 of the conversion is actually taxed at 22%, and you pay $2200 in taxes to the federales on that portion.

Had you not converted that last $10,000, it would remain in your traditional IRA. If you withdraw that $10,000 from your traditional IRA in years when you are in the 12% tax bracket, the tax bill would be $1200.

I left out that the tax bill in the leave-it-in-the traditional IRA approach will be higher due to growth of the investment...

But consider that the amount of taxes you paid now on the conversion is gone forever and is not growing, not compounding...

anyway its complicated and there are a lot of Roth conversion calculators out there that one should very definitely check with

I left out Aunt Minne's share (Minnesota)

Your conversion is considered income for many purposes -- not just the regular tax purposes (if you convert $40,000, it's $40,000 additional taxable income as I'm sure you are aware of).

But also it raises your AGI by $40,000 and that raises your "stealth taxes" which are all dependent on the AGI level,

1. The amount you pay on your Social Security benefits will be higher, unless you are already maxed out at the 85% level.

2. Your Medicare Part B and Part D premiums may be higher -- Google "medicare irmaa"

3. If you were in the ACA, it would affect your ACA premium subsidy or get rid of it entirely

These were all considerations I had to take into account in recent years when deciding on my Roth conversion amount (in three recent years I converted $0 or a piddling amount because of the above)

I don't think the Roth conversion calculators out there consider these elements, but it's real money.

I am so so glad that I've been converting pieces of my traditional IRA almost every year starting in 1999. Had I not, I would have been facing enormous RMD's soon (which of course also raise one's taxable income and one's AGI and therefore also one's stealth taxes).

P.P.S. - if it's big, it could screw you up as far as estimated tax payments and penalties. For example, I do my IRA RMD's (on my beneficiary IRA) and my Roth conversion in December. I pay more estimated tax January 15 to cover that (what you pay on January 15 covers the October 1 - December 31 quarter). That should work out but TurboTax complains and comes up with a penalty -- thinking this "income" is spread out evenly over the year, but I'm paying estimated tax on most of it in the 4th quarter. (IRA RMDs and Roth conversions are "income" )

One can "annualize" by filling out a special tax form 2210, where you list your income by quarter as well as your estimated tax payments by quarter, and escape the penalty, but then my understanding is that TurboTax won't let you electronically file, GRRRR. I only had a small conversion in 2019, and owed a $1 penalty on my federal, and chose not to annualize because it wasn't worth the work for $1, and I'd have to snail-mail it in.

I owed Minnesota a $2 penalty for the same reason, and again I chose not to annualize. But TurboTax required that for Minnesota, any penalty means I can't electronically file. (And although I could annualize away the penalty, TT says I can't electronically file if i annualize). So I had to snail mail it in.

Yes, a consideration. I think that had the RMD not been suspended, we might be close to the 22%. And if the IRAs currently are above the Dec. 19 level.. will have the same "problem" next year. Working on my Projected 2020 tax spreadsheet right now.

Sigh

If you're 70 1/2* or older, you can donate up to $100,000 to charities directly from your IRA and have that counted toward your RMD for the year.

*While the RMD age increased to 72, my understanding is that the minimum age to make a QCD did not increase.

Does it mean that if I donate, say $10,000, to charity this will not be taxable income? And, can I add this to my itemized deductions? Will certainly raise it above the standard of $27,400.

Feeding America will be my top choice.

You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.

https://www.feedingamerica.org/ways-to-give/planned-giving

Next, I suppose, is the mechanics of this. I suppose I tell Vanguard to transfer money directly to them..

would do was to send a check in the mail directly to me, and then I have to get those funds to the other 401k. I really don't like the sound of that, although it seems like use of paper checks is common with some of these places.

else it's considered a distribution and taxed. There's no 60 day rollover or any of this. Based on what I read in the Retirement Watch newsletter.... also ...

https://www.fidelity.com/building-savings/learn-about-iras/required-minimum-distributions/qcds#:~:text=A%20QCD%20is%20a%20direct,as%20certain%20rules%20are%20met.

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-distributions-withdrawals

And, perhaps, the custodian. I would like to think that Vanguard has established procedures.

Since the Roth conversion money is coming out after your RMD, it will be taxed at the highest level for your situation.

I did some analysis, and considered two scenarios:

1) No Roth conversions at all.

2) Heavy Roth conversions (for us moving 50% of our IRA's to Roths)

I computed what the net asset value would be, after tax for both scenarios year by year. It's tricky because you have to realize you don't own all the money in a qualified IRA, so estimate your long term average tax rate and knock the asset value of qualified IRA down by that tax. Estimate your RMD every year and withdraw it from the qualified IRA.

At average interest rates of 4-6%, I found it would take many, many years for the Roth conversion scenario to have a net asset value greater than the no conversion scenario. And then it gets better and better. For us, given our time horizon, conversions make sense even with a large tax burden up front.

All that is extremely dependent on the situation, but maybe it will help give you an idea how to approach the amount you should convert given your particular situation.