5 Times Not to Do a Roth Conversion

[@KarenLavia]

I converted my 401k to a Roth IRA to avoid higher taxes in the future. I'd rather pay taxes now than be stuck paying taxes on my retirement income when I'm 59 and living off my savings.

[@ChristianKelv]

Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retirement.

[@JohnSmith060]

Both have their perks but you can also save for retirement outside of a retirement plan, such as an individual investment account or employing the services of a retirement planner/financial Advisor.

[@HectorWhitney]

How can one find a verifiable financial planner? I would not mind looking up the professional that helped you

[@JohnSmith060]

My CFA Sophia Maurine Lanting, a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.

[@SandraDave.]

Found her online page by searching her full name, I wrote her an email and scheduled a call, hopefully she responds.

[@Ballesteros-d]

I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.

[@Biggerstaff4]

consider financial advisory so you don’t keep switching it up... those sound like great picks anyways, not bad for 350k

[@mette-lo]

Agreed, I'm in line with having an advisor oversee my day-to-day investing cos, my job doesn't permit me the time to analyze stocks myself. Thankfully, my portfolio has 5X in barely 5 years, summing up nearly $1m as of today.

[@Emily-p4vv]

@@mette-lo this is huge! would you mind revealing info of your advisor here please? in dire need of portfolio rebalancing

[@mette-lo]

I'll be kind to leave just her name here ''Sophia Verdekal O'neal''. She's a renowned figure in the financial sector with over two decades of experience. I'd suggest you research her further on the web.

[@NatanaelMitchell]

thanks for sharing, I must say Sophia Verdekal O'neal appears to be quite knowledgeable.. curiously copied and pasted her full name on the web and at once came across her consulting page, no bs!

[@HenryLucask5l]

Investments are the roots of financial security; the deeper they grow, the stronger your future will be."

[@TheodoreMateo3h]

The deeper your investment roots, the stronger your financial security will be in the future.

[@CharlotteNoah3]

Exactly! With my adviser, I’ve cultivated deep investment roots, strengthening my financial security for the future.

[@DeborahMicheal6k]

I would love an introduction to an adviser who can help me strengthen my financial roots.

[@CharlotteNoah3]

My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further.

[@DeborahMicheal6k]

Thank you for this amazing tip. I just looked the name up and wrote her.

[@seanhibbeler]

Don't work for money; make money work for you. Invest wisely today to create the freedom you desire tomorrow.

[@semendx]

Many new tra-ders face challenges without proper guidance. I found success by learning from James Clark's expertise.

[@AseoLimpieza]

​@@semendxexactly that's why I always seek Mr J Clark's guidance in all I do 😊

[@bayhunter6]

I recently sold half my tech stock holdings due to all-time highs, leaving me with $400k. Should I invest in ETFs now or wait for a market correction considering potential inflation?

[@AudricEnriquez]

Celebrating a $30k stock portfolio today from a $6k start. Investing wisely has given me time for family and future plans.

[@CierraMetzga]

Any specific guide. I'm from Georgia how do I go about this? I think I'm interested how can I get in touch with Mr J Clark

[@jeffwise6398]

Good show guys. Lot of food for thought. You stuck the landing at the end because I was already taking notes and roughly mapping out projected tax planning taking into consideration APTC for next year and then IRMAA for subsequent years. You really hit home with the what-if scenario of one partner dying and the remaining spouse then deals with a single-payor scenario with IRMAA and total IRA RMD piling on to one person's life expectancy which just forces you into that worse tax scenario.

[@keithmachado-pp6fv]

Other reasons not to do a Roth conversion 1. You already have more tax free assets than you will ever need that will go to your heirs tax free or with a step up in basis (paid off house, life insurance, brokerage account). 2. Your heirs are in a lower tax bracket than you and the combined tax rate of your RMDs and the beneficiary taxes are lower % than the conversion tax rate. 3. You prefer a brokerage account where you can defer gains indefinitely, harvest losses, and invest in assets like collectibles and MLPs which are either not allowed or have issues when held in an IRA. A brokerage account also provides a more seamless transfer upon death via a POD designation vs a Roth which requires each beneficiary to establish a new inherited IRA account and transfer their share. This may require cost including copies of death certificates, medallion signatures, and possibly annual fees. 4. Market risk. If you are 60 years old and pay the tax today when you may have 30 more years to fund, a big market decline will have a much bigger impact than a similar market decline when your RMDs ramp up in your 80s and you have less time needed to fund. 5. Inflation risk. If you convert and pay the tax today based on calculation of future tax rates and inflation is higher than projected, increases in the standard deduction and tax brackets may mean RMDs will not push you into higher tax brackets as you anticipated. Also time value of money as when you convert you pay tax up front in today’s dollars. When you defer, tax on RMDs are paid slowly over many years in future inflation adjusted dollars. 6. State tax. If you convert today and pay state tax but plan on relocating to a zero tax state in retirement, your calculation needs to adjust to account for the difference in combined fed and state tax.

[@zackcinq-mars2129]

This is great

[@ShaquilleMagnusson]

Great analysis, thank you! Just a quick off-topic question: My OKX wallet holds some USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). How can I transfer them to Binance?

[@ClaireYeargin]

Thanks for the breakdown! Could you help me with something unrelated: My OKX wallet holds some USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). Could you explain how to move them to Binance?

[@BenJimenez-n3p]

If I am a REP, will my passive depreciation from real estate, be able to offset any Roth Conversion during the same year, if I perform a Cost Segregation on a new rental investment property purchase in the same year?

[@donnathompson7908]

Would rule of 55 eliminate the penalty on conversion? Retired at 55, currently 58 living off of savings. I have a 401k with a small portion post-tax 401k. Also, have a separate Roth IRA outside of my 401k.

[@densnow4816]

Is it also bad to do Roth conversion the year before doing FAFSA application for college-age dependant?

[@chumbawumba1959]

Convert in Jan and let the Roth account grow and then pay taxes in December from your basis without penalty. Current market climate makes that a winning strategy, as you can cover a big chunk of the tax obligation on the conversion.

[@1ael346]

My mother passed 5 years ago in December. This year I have to empty her 401k. If she died one month later, January 2020 I would have 10 years to empty her 401k. I'm 60 years old, and have a job that offers me medical benefits. The reason I don't want to convert this year is because I may need my IRA in order to get Covered California in case I lose my job, or my hours are lowered so my only option would be cobra, which only covers me for a year and half. At the same time I don't want to convert too much at 63, or else I have to worry about IRMA. The goal is to have everything out of my IRA so I'm not taxed while collecting social security, and have no RMD's.

[@keithmachado-pp6fv]

Sorry for your loss. You are correct that had she died in 2020 you would have until December 2030 to fully empty the account. In addition, annual RMDs will need to be taken starting in 2025 (the IRS forgave RMDs from 2020 to 2024). If the death was in 2019 you would have qualified for the stretch IRA (assuming you were the beneficiary as opposed to it going into the estate if no beneficiary was named). I assume the reason you need to empty the account within 5 years is you selected the 5 year rule instead of annual RMDs, either on purpose or accidentally by not taking RMDs. Either way, you are correct that the timing was unfortunate.

[@keithmachado-pp6fv]

One small consolation if you are subject to the 5 year rule. I believe the 5 year clock starts in the year following death, thus you have until Dec 2025 to empty the account so you could split the withdrawal between 2024 and 2025 if that helps.

[@PorscheSpeedster-kz6nc]

@@keithmachado-pp6fvyes - they screwed up on their choice if givien. Take the tax hit and move on….