I'm 61 With $1.8M. Should I Avoid ROTH Conversions?

[@gmanblue2026]

For thirty years, financial advisors told us to use traditional IRA's because taxes will be lower in retirement. Now it's time to retire and the mantra is "Traditional IRAs suck, you need to be in at Roth IRA!" And as a completely separate issue, don't trust someone's judgement just because they are attractive.

[@TravelingTheWorld1993]

I have been investing in the stock market since early 2000 and I am 42 now. The last four years I have been investing 100% into the Roth 401k. I currently have 40% my account balance in Roth. I did that by contributions and doing In Plan Roth Rollovers.I plan on getting my account to 75% in Roth. Because if I don't , I will be in the highest taxable bracket. Also I know an individual that pays more than $500.00 a month in Medicare premium. I don't want to have that problem!

[@SL-uk2sm]

How do you get the 5013C to contractually accept donations for services for the grandson? The intent of QCD is to donate and not directly benefit but avoid taxes for a cause you care about. What am I missing?

[@RetirewithJulia]

Because the organization that builds these homes is a 501c3 nonprofit. The intent of the QCD is irrelevant.

[@J-2024-v8i]

@@RetirewithJulia This response doesn’t make sense. Even if the organization is a 501c3, they are not allowed to receive “donations” if they provide a service or good in return to the donor. For example, you can donate to a church for your membership dues, but not for the amount due on tuition for your kid attending religious school there.

[@Thebink21]

Were Medicare premiums factored into this analysis? Presumably, after ROTH conversions at some point Medicare premiums would go down - unless they are still at the lowest level. Thoughts?

[@ang8479]

You can start Roth conversion before you hit 65 that’s when Medicare kicks in as away to avoid high income results of high Medicare premium from conversion done after age 64.

[@suecamaione]

Roth conversions must be carefully calculated to the Medicare IRMAA. May raise income enough to kick up your Medicare premiums from $74/mo to over $343/month. It’s insane.

[@dsvillalva]

Thanks Julia I love our videos they are so informative. What I learn from your videos time and time again is that every retirement story is different and requires customization depending on your goals and objectives. For me, it seems a Roth conversion makes sense over the next 4 years or so under a presidential administration that will push to keep income taxes low - so better to convert now when tax rates may be relatively higher in the future (4+ years from now). Of course, it also depends on what your marginal tax rate will be.

[@RetirewithJulia]

Thanks so much for watching!

[@danthome2956]

How does the QCD fund their grandchild’s care or does it go to the home in general? Seems like a questionable charitable contribution.

[@RetirewithJulia]

Any registered 501c3 nonprofit organization will work.

[@danthome2956]

@ But implies they are caring for their grandson vs. the home in general. Just not clear.

[@RetirewithJulia]

It’s perfectly clear. Thanks for watching.

[@J-2024-v8i]

@@RetirewithJulia No. QCDs/Donations to a 501c3 organization are not considered valid donations in the eyes of the IRS if the donor receives a benefit (goods or services) in return, and these organizations are not allowed to accept such payments as being donations.

[@mikeandkathyaillon6749]

Thank you Julia! Your videos are fantastic. If this couple did not have the desire to fund their grandchild's needs and therefore could not use QCDs, would you have recommended they do Roth conversions? How about early Roth conversions? Many thanks!

[@Ivanovich2112]

This video is supposed to be about me, lol but this scenario does not apply to most people!

[@ronleven1944]

Re: ROTH conversion. . . I’m not an accountant but, why not start converting between $20k to $50k per year to minimize the tax burden? If they don’t need all of their ROTH money, their sons may inherit that money. JMHO

[@matthewowcarz8259]

As always, interesting video, thanks Julia. Quick question, at 10:36 whern youre discussing the options for distributions, does that particular program offer what distribution will maximize potential returns or do you have to play around with the numbers? Just wondering.

[@RetirewithJulia]

We do that in our portfolio software; this is tax software.

[@matthewowcarz8259]

@RetirewithJulia that's really cool! Thanks for the reply, love the videos!

[@RetirewithJulia]

@@matthewowcarz8259 Thanks so much for watching!

[@DJohnson-od6oj]

Love the videos. If you can do a single person with a realistic portfolio (like 1 million) that would be great. A lot of You Tubers forget there are a lot of single people out there as well.

[@mandypdx]

Yes! And, singles planning for an early retirement. I am 47 with the majority in pre-tax dollars

[@sleddy01]

yep. it's always 'families'

[@davidscott7682]

@@mandypdx Mandy - I tell my nieces and nephews to fund their 401Ks in order to take advantage of the company contribution, then fund their Roth IRAs with the max and set up a Roth 401K for any additional funding they can afford each year. In tougher years, they should focus on funding the pretax options in order to reduce tax liability those years. Check out the link I posted in other responses - one below in this thread

[@marknowak]

I think health care costs aren't adequately discussed or covered here. How much do those long term care insurance premiums cost? Those premiums will increase faster than inflation. And most people won't have a pension let alone one that large. This couple's pension and social security is already large enough to equate to the US household median annual income. It's no surprise they have a 100% chance of success. And their expenses besides underestimating health care costs also don't include inevitable surprise costs like needing to replace a car or a roof repair. Take away their pension and use a more typical social security payout and these people would be in a more precarious position.

[@stuarthudson2158]

Thanks 🎉Julia im only a common Birmingham city Council worker on 25,000 pounds a year with wife, 2 Girls 👭 own a small Townhouse/ 2 Bedroom unit in the City get 15% super 👌 put 5.5% extra Before Tax Employer Match to 401k 26% super a Fortnight allready have 160,000 pounds 💷 in super 320,000 US Dollars should have almost 1 million by the time ⏲️ im 60yrs old invested in growth us S& P 500 and Dow Jones index around 500 Pounds 💷 a month contributions dollar cost Averaged if you have $1 million pounds 💷 draw 5% a year thats 50,000 pounds a year us 100,000 double what im earning now compound intetest cheers 🍻 mate regards from stewy Hudson and Family Birmingham city England 🍻 🇬🇧 👍 👌 👏 🙌 🍻 🇬🇧 👍