I'm 55 with ALL PRE-TAX (401k, IRA). When Should I Do Roth Conversions?

[@markwilhelm6938]

! Great video! and wow the scenario of the first couple was very close to ours. Our plan is to work until 60,sell our house, use the equity to do conversions while we have no income. We’ll be renting for the rest of our lives as we slow travel domestically and internationally! At least that’s the plan. Will be calling you in a few years Ari to see if we can pull it off! 😅

[@StressLessFinancial]

Your plan sounds exciting and well thought out-leveraging equity for conversions and embracing a nomadic lifestyle! What strategies are you considering to ensure a smooth transition between selling your home and funding your retirement while managing your investments?

[@NaufalKnoechel]

I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.

[@ThamaraSchlossarek]

I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes...

[@NaufalKnoechel]

@@ThamaraSchlossarek That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well

[@ThamaraSchlossarek]

@@NaufalKnoechel My advisor is *MARGARET MOLLI ALVEY*

[@ThamaraSchlossarek]

You can look her up online

[@ЕленаФирсова-ц6м]

@@NaufalKnoechel The crazy part is that those advisors are probably outperforming the market and raising good returns but some are charging fees over fees that drain your portfolio. Is this the case with yours too?

[@jeromesand]

Whenever I leave a company, I move it immediately to an IRA while using the new companies 401k. The thing I like about not keeping it in the 401k once you leave a company is in CONTROL. I like controlling what I can invest in, unlike the 401k where it’s ultimately picked for you.

[@BrianJason-d3s]

what's the rollover for ?

[@jeromesand]

The purpose of the rollover is technically to consolidate your retirement assets so it can grow faster in one managed account. I put about $80k in rollovers from 2 previous jobs that are managed by my Financial Advisor, Now my portfolio is about $400k... it has been great returns.

[@SusanAlice-o6k]

I'm still sort of a rookie out here ..if you don't mind who is your F.A ?

[@jeromesand]

I've experimented with a few over the past years, but I've stuck with the popularly ‘’Melissa Terri Swayne” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.

[@avamadison-r9p]

Thanks a lot for this suggestion. I needed this myself, I looked her up on google, and I have sent her an email. I hope she gets back to me soon.

[@Resmith18S]

This is why I want to do is divest my 70k portfolio to include digital currencies with potential for high growth and profit. I've read that is how people are making a lot of profit in the market now. Can you make a video on that?

[@LeepinLeopard]

That's a good way to go. I had some difficulties two years ago when I wanted to invest some money in the digital cryptocurrencies, but I started with a CFP and investment just feels really easy since then and I've also made a lot of profit.

[@Petroguest-i4g]

I agree. I also work with a CFP who has a good understanding of both the digital market and stock market. These days experts who have an all-round understanding are in short supply. This last quarter alone I've already made more than 150k in net profit.

[@wealthychronicle-i1u]

This sounds incredible. Could you recommend who you work with so I can check them out?

[@Petroguest-i4g]

Sophia Irene Powell is the licensed advisor I use. Just search the name. You’ll find necessary details to work with to set up an appointment.

[@Countstep0099]

Thanks a lot for the recommendation. I'll send her an email and I hope I'm able to connect with her.

[@petermilian4455]

Do one for early retirees aiming to retire at 50! Keep up the amazing content 💪

[@don_hug]

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.

[@MariaLorenpe]

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.

[@ric-morris7763]

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

[@don_hug]

I have thought about this, but haven't figured out how to get consultation, I don’t live in a big city.

[@ChristianJacquet9]

​ @ric-morris Hi what is the fee you are charged for the services offered, did you pay any upfront fees for consulting? Because I just set up a consult and I am not sure what to expect back.

[@TheFutureisTheFuture]

I'm pretty much in this boat... age 54, 1.5 mill in a regular 401k, pension... yada yada yada. I looked at conversion and the cost was $350k to convert and you can NOT use the money in the 401k to do the conversion. It has to be fresh money. Sadly I do not have an additional $350k sitting around so I'm holding tight for them to come up with new ways to convert that won't make me poor until I retire 🙂

[@MarkJoe-e7f]

How can I maximize my investment portfolio without having to be taxed to the teeth whenever I liquidate my assets? I currently have about 80k in stocks and some more in the crypto market.

[@BarryWhite-h9m]

True, the tax codes can be unfavourable. I can definitely relate with this.

[@NormanGhali]

Haha but you could actually make a lot of profit and not worry too much about taxes. It's all about playing the game well. I work with a financial advisor and I make sizeable profit north of 300k every quarter without even doing much.

[@Redwood4040]

This sounds like incredible profit. Could you recommend who you work with so I could check them out?

[@NormanGhali]

Marissa Lynn Babula is the licensed advisor I use. Just search the name. You’ll find necessary details to work with to set up an appointment.

[@JoelCharisma-q5u]

Thanks a lot for the recommendation. I'll send her an email and I hope I'm able to connect with her.

[@MidlifeCrisisManagement]

great video, Ari! always appreciate you explaining the "why" behind the "what" and showing real-life examples.

[@earlyretirementari]

Appreciate that!!

[@NKUBill]

Great video Ari! I'm currently (Retired and 56) filling up my tax bracket with Roth conversions. KY residents pay no state taxes on the first 31k that is converted so on the money I convert I will never pay state taxes 😀

[@markb8515]

Thanks Ari for another very informative video!

[@kylesweet4640]

Hi, You reccommed opening a ROTH IRA as soon as possible. However, we make too much money as a married couple. Any suggestions?

[@alrocky]

Are you familiar with *_back door_* Roth IRA process?

[@azieltobias]

This is my fifth year after retirement. I’ve been following the 4% rule thing I saw on a KZbin channel, but this isn’t really how hard I expected things to be. After I cashed out a lump sum, I still have about $760k left, but at this rate, and with how the market is (we were putting money away in an index fund), I’m starting to get really worried.

[@BaileyHoward101]

Not a lot of people are able to save that much in a lifetime. But now you are retired and depend on your investment, it’s best you redistribute your capital. To simplify the process, you could allocate your resources with the help of a financial advisor.

[@mellon-wrigley3]

I’m closing in on retirement, too, and I have benefitted so much from using a financial advisor. I didn’t start early, so I knew the compound interest of index fund investing would not work for me. Funny how I pulled in more profit than some of my peers who had been investing for many years.

[@Buffet-walton22]

@@mellon-wrigley3 That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this consultant?

[@mellon-wrigley3]

My CFA Izella Annette Anderson a renowned figure in her line of work. I recommend researching her credentials further.

[@sloanmarriott5]

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

[@gavinbowman8234]

Is all the conversion modeling in the Roots software?

[@earlyretirementari]

Yes

[@chrisjtyson3532]

Great video. I’m 49 and routinely backdoor my IRA contributions into my Roth IRA so my retirement is all 401k/403b and Roth IRA. Is it possible to convert 401k/403b funds to Roth IRA before 59.5? I thought doing so would incur the early withdrawal penalty. Thanks!

[@J-2024-v8i]

Yes, you can convert to Roth at any age without penalty, but you pay income tax on the amount converted. Converting out of a pre-tax 401k can be tricky. If you are an active employee with the company, you can probably not rollover/convert to an outside Roth IRA, unless you have in it funds that you rolled over from a previous employer 401k and your current plan allows for in-service distributions of those funds. If you are no longer an employee, you would have to check if the plan allows for partial distributions, as otherwise, to avoid having to convert the entire amount, you would first need to rollover the full amount to a rollover IRA (still pretax), and then you can convert partial amounts from the rollover IRA to your Roth IRA.

[@chrisjtyson3532]

@@J-2024-v8i thanks! That’s helpful.

[@jqx7743]

Monthly expenses are after taxes or before taxes?

[@earlyretirementari]

After taxes, adjusted for inflation.

[@jeffgilmore3147]

Is the academy and software for $250 for a year only, lifetime, subscription...?

[@earlyretirementari]

Lifetime. One time cost.

[@aspnetp]

@@earlyretirementari wait, I see it for $299. Do I need a promo code?

[@earlyretirementari]

@@aspnetp no code. The price is $299 for all.

[@brianmcdermott7208]

Where's the link to the academy? Looked for it on the Root webpage and couldn't seem to find it.

[@denwoz7788]

Does the software pull in data from my bank/brokerage? Does it pull in updated tax information as well? I currently use Personal Capital for my retirement planner, so was wondering how this would compare? If there’s more details on the software itself, I’d love to read more.

[@earlyretirementari]

Check out RightCapital - that’s the software. It pulls in information for maximum optimization minus anything that impedes security.

[@mikej.4416]

Does it make sense to do Roth conversions before getting to retirement age? For example, if someone was in their 30’s or 40’s, does it get better or worse?

[@coastalhillbilly3419]

Likely, most people in their 30s-40s are already in high ( 22+ %) tax brackets?

[@semosancus5506]

All depends on your current marginal tax rate vs. what you anticipate paying later. If you are high income now, it is likely best to not do anything. But if you happen to take a year off and live off cash - yes fill up the 22% bracket that year.

[@scottbaker9066]

What does your Conservative, Moderate, and Aggressive options entail? I think we are Moderate but maybe almost Aggressive. We have a LOT of stocks (they grow) and 20% bonds or 'not stock' investments like the house, ss and a pension and some other crap that doesn't grow in value.

[@earlyretirementari]

You can see all in the academy!

[@yeffblanco]

I like this channel & recently subscribed. The algorithm is good but not perfect. It suggests you first, when I was going to look at the live chart BTC. Surely you are watching price BTC go ATH, currently.

[@LizaPhilips]

3 years ago, I started investing with $300k, but I've only made about 6% total, or 2% per year, which my friends say is very low. I also put $800k into a 401k with a financial advisor, and it's now worth about $1.2 million after 10 years. I think I need to revamp my portfolio. Any advice on what to do with my money would be greatly appreciated.

[@phillogan1]

I don.t really know your risk tolerance or asset allocation, sounds like just bad stock picking. Also unclear if the advisor is providing any other value via financial planning or other decision making. But likely-scenario is just bad stock picks. Index -funds, Etfs and -chill.

[@Johnlarry12]

You should de-finitely fire your advisor! That's a bad financial-advisor. Over 5O years of data reveal that those who work with fiduciary advisors typically earn more than those who go it alone. I've been fortunate to work with one for 6 years, resulting in a $3 million-portfolio.

[@emiliabucks33]

Your ad-visor must be really good. How I can get in touch? My re-tirement portfolio's decline is a concern, and I could use some guidance.

[@Johnlarry12]

Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with Carol Vivian Constable for about five years now, and her performance has been consistently impressive.

[@emiliabucks33]

I just googled her name and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a call.

[@pglover19]

Ari. I have access to the academy that was offered by James Conole. This gives me access to the RightCapital software; however, for some reason the Tax module is not accessible for me. If I pay for academy being offered by you, will I get the same content that is in Jame's academy? Also, will I get access to the tax module within RightCapital if I pay for the academy being offered by you? Thank you so much for your awesome videos. I have learned so much and appreciate the awesome content. God bless you.

[@earlyretirementari]

Send my team an email: [e-mail]

[@pglover19]

@@earlyretirementari Just sent you an email. Thank you.

[@RetrieverTrainingAlone]

Retired and age 67. We used some of our recent inheritance to pay taxes on Roth Conversions to reduce tax bracket starting at age 73 and RMDs. Plus the Roth will be tax free for our heirs when we die.

[@Rick-s5d]

Thank you for your videos! For those who are more than 5 years away from early retirement, would it ever make sense to use a Roth conversion ladder strategy instead of contributing to a taxable account to bridge the gap from age X to age 59.5?

[@earlyretirementari]

Yes. Per usual, it depends.

[@J-2024-v8i]

The Roth conversion ladder may work if you only have the money from your retirement accounts to fund that gap, but you will be limiting the growth in the Roth since you will be withdrawing the converted money 5 years after the conversion, and you probably will be investing it conservatively to avoid having to withdraw it in a down market. It might be best, if you can afford it and have enough time before retirement, to fund the taxable brokerage account while you are working and let it grow until you retire, to hopefully an amount large enough to fund the gap, and invest it more conservatively once you retire so that it lasts at least until 59.5 or more. Of course you should try to fund both, prioritizing the Roth early in your career so that it grows for the future, and prioritizing the brokerage as you get closer to retirement, but best to be funding both if you can afford it, as you are limited anyway on how much you can contribute to a retirement account each year (although there is no limit on conversions).

[@darinkizer1231]

Great info. Quick question: At one point you said something along the lines of "working ONE MORE year makes a big difference". Wouldn't it be more accurate to say "one LESS YEAR of drawing down savings makes a big difference"? Thanks for the content and keep it coming!

[@earlyretirementari]

Here you go kzbin.info/www/bejne/l5Obn6FvZbt5bJIsi=idBb19kkkp4hYX_8

[@nino714]

Yes. Working one more year would mean one less year of drawdown. AND it would mean contributing to reticent accounts for one more year.

[@earlyretirementari]

@@nino714 Working longer can be great, but working one year less can be great if you don’t need it and get more time with family

[@karengacke3787]

Is it best to wait until after you retire to open a roth account or to open one before retirement and then do roth conversions after retiring? Love your videos, Ari.

[@J-2024-v8i]

It is best to open a Roth account ASAP and fund even if with a small contribution. This is because one of the rules for withdrawal of earnings to be tax and penalty free after 59.5, is for the account to be open with a first contribution for at least 5 years.

[@karengacke3787]

Thanks ​@@J-2024-v8i

[@delawariand9860]

A big problem with the projection is that the RMDs are sometimes 20 years into the future but they assume the same tax brackets. If you assume inflation it is also probable that the tax brackets will move. This will lower your taxes. Think about it the RMD is only about 5% at age 75. The other problem with all projections is the tax code can change. Which is likely over 20 years. Not saying this projection is bad just that taxes are likely to change depending on who gets elected.

[@earlyretirementari]

I assume different tax brackets but good thought!

[@scottbaker9066]

As you point out; there are several variables, it's like college Algebra (not DiffyQ or Laplace Transforms) just make good plans for the situation we have now and understand the likelihood of various changes - 1 could be expensive, 1 could be a wash, 2 could be to your benefit. if you see one party win in 24 you might expect upper tax bracket rates to increase, and stock values to rise slower, and SSI/Medicare to go up? if the other wins ... you just need to plan for expected adjustments ... and if your RMDs are 20 years out you can bet the pendulum will sing 2 or 3 times.

[@EC-pk1qb]

Thank you for another great video. I noticed that in the video, the example for cash flow at 9:40 has the unsaved cash flow go to the net flow. In the software from the academy it is set to spend unsaved cash flow. Is there a way to change to what you have in the video?

[@gambno99]

What planning software do you use?

[@earlyretirementari]

RightCapital

[@gambno99]

@@earlyretirementari Thank you! I appreciate the informative videos you have been posting.

[@earlyretirementari]

@@gambno99 you’re very welcome!

[@mathalwaysii]

I'm confused. How is this couple with less than $2M asset your client?

[@earlyretirementari]

The minimum wasn’t always $2M and we hope to decrease it in the future once again.

[@RGTechTalk]

These videos are very informative, but it seems like they always give examples for high wage earning households. I want to to see an example that resonates with the 98% of people who earn less than $100k per year mid fifties with far less saved in a 401K. No additional side money, small bank account, no brokerage account etc. The example I just laid out fits the majority, not the 2% he always uses in his examples. Personally my retirement savings will be where they need to be, but not until full retirement age and assuming Social Security doesn't go away or get reduced. I will rely on both SSI and my 401K.

[@nrivera567]

Ari can you please do another example for a couple trying to retire early 50y/o with 2+ mil in 401K Thanks! I’m so confused on what to do to Bridge the cap until 59.5!

[@earlyretirementari]

You got it!

[@kjafar0502]

I love all your content and how you teach us to think about the retirement problem we are trying to solve. Is there a coupon code that can be used to get the Early Retirement course for $250? It currently shows $299 on the site. Thanks for all that you do!

[@fprintf]

Your series has been so helpful and amazing. I'm going to try and do this on my own using the software to show my wife what is possible with the money we've saved (more than what you showed here). However I suspect we may come knocking for live guidance as I'm certain she'll want me to keep working forever. :-)

[@earlyretirementari]

Thank you for the kind words. Sounds great. We’ll be here in the future and appreciate the kind words.

[@jamesstudy686]

How can you convert to a roth after you stopped earning an income? Isn’t that what this strategy is showing?

[@J-2024-v8i]

You don’t need to earn income to convert from a pre-tax IRA to a Roth. You only need earned income to make NEW contributions to a Roth.

[@jamesstudy686]

@@J-2024-v8i Thanks. Is it possible to convert if the employer plan doesn’t offer any Roth option? My guess is no.

[@J-2024-v8i]

@@jamesstudy686 Usually when we convert, it is done from an IRA (not an employer 401k plan) to a Roth IRA. You can rollover your 401k first to a rollover IRA (this is not taxable). Then you can do partial conversions from the rollover IRA to your Roth IRA. If for some reason you don’t want to get completely out of the 401k, you need to check if your plan allows for partial distributions/rollovers that you can move (convert) to a Roth IRA, which is taxable. If partial distributions are not allowed, then you would only be able to do a full conversion of your entire 401k to your Roth IRA, which you may not want to do if the 401k is large as it would be a big tax hit, and you are better of moving it to the rollover IRA first as I mention above.

[@ralphparker]

Nice presentation.

[@RamzanBarysheva]

Great Video! Planning ahead can really make a big difference, especially when it comes to minimizing taxes. I’ve been exploring the crypto and stock markets for about six months now, and it’s been a game changer for me. I decided to reinvest my RMD strategically, and that decision has really paid off-I’m now pulling in around $25k a week with very little trading on my end. It’s been a great way to create a cushion and relieve a lot of financial stress. Best of luck with your-I hope you find the same peace of mind!

[@VishalFaucet]

25k a week? Amazing! how did you get started?

[@RamzanBarysheva]

I signed up for a 1-on-1 trading session. It's like copy trading, but with personalized guidance.

[@RamzanBarysheva]

It's a secure and supportive way to improve your trading skills while earning, the best part is there's no upfront payment required

[@RamzanBarysheva]

I suggest consulting with Dave for guidance, This way you can get strategies designed to address your unique long/short-term goals

[@RamzanBarysheva]

Dave is someone who offers guidance and strategies for trading, helping individuals navigate the market more effectively. He’s known for his personalized approach, which can be really helpful for both new and experienced traders!

[@Ozymandias-r2v]

What happens if I am in the highest tax bracket before I retire and my dividends from my taxable account still keep me in the highest tax bracket after I retire? There is no point in doing a conversion. I would pay out 50% in tax immediately. I am better off holding until I have mandatory distributions.

[@betcoinking]

swear, $STEP represents what real blockchain utility looks like)))

[@MurderMostFowl]

It’s “sigh-ann”

[@BrigetGstar]

Retirement isn’t an end g0al, but a journey best secured by careful and consistent investments....

[@NoahNollens]

Diversification spreads the risk, just like planting different seeds ensures a fruitful harvest.

[@tahirisaid2693]

That makes sense. I’ve been using a financial market expert for two years now and I own a six-figure diversified portfolio from investing in stocks. I want to diversify more this year, though.

[@MablePauls]

Mind if I ask you to recommend this particular coach you using their service? Seems you've figured it all out.

[@tahirisaid2693]

If you’re looking for guidance, Julianne Iwersen Niemann is the advisor i use. Research her name for all the necessary info to contact her.

[@tahirisaid2693]

JULIANNE IWERSEN NIEMANN' is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.

[@墨紫月]

Same situation, we choose not to convert

[@LiviaDeantyG]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months , my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family....

[@LiviaDeantyG]

@KeonKramertgF Quitting may not be the best approach if you ask me. This is where an AI comes into the picture. I barely have time to trade myself as my job swallows up most of my time. *MARGARET MOLLI ALVEY* , a licensed fiduciary whom has made me over 5 figures in profit in less than seven months, handles my investments. I could leave you a lead if you need help.

[@LiviaDeantyG]

@KeonKramertgF *MARGARET MOLLI ALVEY*

[@LiviaDeantyG]

Lookup with her name on the webpage.

[@YareliClarketwG]

@KeonKramertgF *MARGARET MOLLI ALVEY* her trading strategies is working for me for more than a year now and I’m making good profit from the stock market and she's 100% honest, reputable and trustworthy

[@sanjaypatelmd4669]

I will not go for Roth IRA…I will grow my pre taxed money and pay taxes later…I would put more money from my pay check into 401k…pay taxes later. In retirement I withdraw my money wisely…. While I am withdrawing money from 401 k I will buy and sell my other taxable portfolio tax neutral by tax lost harvesting strategy and if I need extra income rely on my municipality bond interest portfolio.

[@rolandosouffrain7957]

Lucky me, all my retirement money is in Roth 401k and Roth I.R.A. i alao have a super hero account at Robinhood but i wont retire till 65. I like my job and hate being gome doing nothing. Lol 😂😂🎉🎉

[@earlyretirementari]

You’re crushing it!

[@mandypdx]

Wouldn’t you want some pre-tax, up to the standard deduction for when you do retire?

[@rolandosouffrain7957]

@mandypdx a few reasons why I only do Roth. At retirement I need all my money, not now. I will never have RMDs, no or less taxes on my S.S. when I die I will pass all of my money a milly or 2 tax free to my daughter. When I see 1 million in my account all of that 1 million is mine. Lol 🤣 😂

[@lionelmandrake785]

2 mil minimum. Well la di da.

[@wadsbanks7068]

Do all you can before age 63!!!! Medicare tax

[@earlyretirementari]

IRMAA!!

[@earlyretirementari]

kzbin.info/www/bejne/iaS9hpd4m7qMpc0si=egLZShpP5a74tDoC

[@darrellq6954]

People will always feel they don't have enough even though they have Enough.....

[@mickeymcintire7621]

The average lifespan is 74-78. Why dies with millions. Use it now!!!

[@bryanturner4686]

Disappointing video. No info just click bait. No info given other than buy my software and we’ll see what you may need. Smh

[@subri120499]

lol. I shut you off as soon as I heard “$2M to work with us”. None of you YT advisors are realistic, and to make matters worse- you assume people in ‘not-great-shape’ for retirement at say age 60… don’t care/arent motivated to improve/arent smart enough or make enough to improve or be better. This is terrible advice just based on principle… before I even look at your video. But - you have your audience. Good luck with that, I understand you’re not good enough to work with anybody that has a lower net worth, since you’d have to work that much harder.

[@runslow5054]

The min to work with us is 2m😂😂😂

[@Mitzi73]

Well at least he is releasing free videos.

[@Pje3ski]

Guess that means they have plenty of work.

[@davedeboy5726]

When I saw only 1m I rolled my eyes. you need 4-5m today to retire.

[@MrEdwardCollins]

Good grief. That's not true at all. Not everyone needs four to five million to retire. I retired three years ago with far, FAR less than that, and I'm fine. My home is paid for, I have no outstanding debt, I have a passive income that pays for all of my expenses...