Is A Roth Conversion Right for You? New Retirement's New Tool Can Help You Decide

[@tatianastarcic]

Becoming a millionaire through a Roth IRA or a 401(k) involves different strategies for maximizing profits. A Roth IRA offers tax-free withdrawals in retirement, which can be advantageous if you expect to be in a higher tax bracket later in life. On the other hand, a 401(k) provides tax-deferred growth and potential employer contributions, boosting your savings. The optimal choice depends on factors like your current and future tax situation, employer match, and investment options. Consulting a financial advisor can help tailor a strategy that aligns with your financial goals and circumstances.

[@sharonwinson-m8g]

Prioritizing effective personal finance management holds greater significance than the sheer amount saved, irrespective of income source. Consulting a certified financial advisor can offer tailored strategies to optimize financial results by reducing expenses and enhancing income, regardless of whether it's earned through employment or investments.

[@Vincent-j8u]

I wholeheartedly concur. At 62 years old and newly retired, my external retirement funds total around One million two hundred fifty thousand dollars.. With no debt and minimal retirement fund allocation relative to my portfolio's value over the last three years, I recognize the importance of a financial advisor. Neglecting them isn't an option; however, thorough research is vital to find a trustworthy fiduciary advisor.

[@TinaJames222]

How can I reach this adviser of yours? because I'm seeking for a more effective investment approach on my savings

[@Vincent-j8u]

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 Sophia Maurine Lanting for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.

[@janethunt4037]

I watched this again after 7 months. It was even more helpful after having NewRetirement for several months.

[@athenachloewoodrow6356]

I like that he doesn't rush through things. This can be complicated stuff

[@janethunt4037]

Thank you for walking through this. I bought the program precisely to plan out Roth conversions.

[@joeburns3302]

Thank you for the information Rob. I have been mulling over whether to do Roth conversions. This will help. Your channel consistently has the best financial help on KZbin.

[@timtaylor9339]

I tried New Retirement back in December and cancelled the subscription because the Roth Tool at the time was so bad. Glad to see they have improved the program.

[@PH-dm8ew]

@ROB BERGER: wow i have been fighting with the various roth conversion scenarios forever, this is very very helpful. Great Job explaining the program. Many thanks. I may have to agree with that person who called you a national treasure in your youtube live last night.

[@joeprince3921]

Fantastic job of highlighting the NR tool and all the things to consider before making any Roth Conversions. Thank you for posting this video!

[@OLinUnix188]

I’ve played with this tool in NewRetirement a few times, but never really understood if I was doing it correctly. This video is very helpful and has helped me to understand better what the tool is doing. Thank you for taking the time to walk through the process!

[@elholt7095]

Are you using the Basic or the Paid version? I assume it is the paid version Thanks!

[@OLinUnix188]

@@elholt7095 You are correct; it is the paid version. 👍

[@donaldfafard]

@@OLinUnix188 What is the cost?

[@SouthfieldRunner]

@@donaldfafard Cost is $120/yr

[@ach3322]

@@donaldfafard $120 a year

[@NicoleL8600]

Best explanation of a Roth conversion on the internet!! Thanks Rob! Your detailed walk through of all the different options and scenarios is fantastic.

[@rickdunn3883]

Wow Rob. You did a great job on this. Ive been playing with this Roth Converion tool a lot. This helps quite a bit.

[@bradduncan1778]

Thanks Rob. Just an FYI. This Roth Conversion tool is only available to NewRetirement subscribers and is not available for the Free version.

[@cathya222]

Brad that was going to be my question. Thank you for posting!

[@SVaya2018]

​@@cathya222 ditto...lol

[@wilma6235]

What does a subscription cost?

[@sknorling]

@@wilma6235$120 per year. Well worth it!

[@likethesky]

Plus you get a 14-day free trial before they charge you the $120. You can do a lot of modeling in two weeks, then cancel--I'm in that period now, but it's so useful, I'll likely not cancel and will probably subscribe at the end of the two weeks.

[@joekuhnlovesretirement]

Rob, best channel on KZbin. Thanks.

[@USMCAllTheWay]

You do heck of a job as well, Joe!

[@bamalam9622]

Another excellent video, Rob. This appears to be a very sophisticated Roth conversion planner. The missing piece, and it's a big one, is the effect of ACA subsidies. Those that live in a high cost/high subsidy state and do the math know that the loss of the subsidy can mean an additional 12% tax on income. That 'tax' is incurred in what would otherwise be prime Roth conversion years. It would be extremely helpful if the New Retirement planner added ACA subsidies as a variable.

[@jimcraychee835]

I was going to add this very comment also! I would pay for this tool if they added the ACA affects to the Roth conversion analysis!

[@carolinevh8849]

Me too. The loss of the subsidy would be significant. May need to wait until 65 and Medicare to start the conversions, but by then it may revert to the 2017 tax rates.

[@alphamale2363]

No way I'm doing Roth conversions until 65 and on Medicare, which is much less income sensitive than ACA.

[@robjones3482]

I had the same conclusion, it’s impossible to do use this Roth conversion calculator with ACA subsidy input. I’ve run my own analysis and a strategy I’m considering is switching to a Bronze HMO plan to lower my premium. The lower premium enables me to increase my AGI within the 12% tax bracket without a subsidy impact and convert some $ to Roth.

[@johnyjsl9219]

@@robjones3482 how does bronze help you increase AGI? I am missing some concept

[@SedExplorer]

Fantastic advise and explaination! This tool is exactly what I was interested in!

[@johnbeeck2540]

Rob phenomenal explanation and walkthrough! I subscribe to New Retirement and used the manual Roth conversion tool - love that they have automated the process to make it more user friendly. The variety of options you can model are amazing and most pertinent to those of us who like to dig into the numbers! Keep up the great work!

[@kortyEdna825]

With Roth IRA, the money you are contributing has already been taxed. At any time for any reason, you can withdraw your contributions tax-free and penalty-free. Additionally, any earnings on investments can also be withdrawn tax-free and penalty-free, Not sure how much to contribute, I'm still at a crossroads deciding if to liquidate my $338k stock portfolio.

[@Justinmeyer1000]

@@shannonsally455 Please who is the consultant that assist you with your investment and if you don't mind, how do I get in touch with them?

[@Justinmeyer1000]

@@shannonsally455 Thank you for this tip. It was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her resume.

[@catchristo9406]

Scam

[@williamschwiegeraht2092]

Earnings are tax free only after 59 1/2 years of age.

[@agasque]

This was so helpful! Thanks for the detailed instructions. I followed along in my New Retirement account and was able to run a very effective scenario thanks to your video!

[@brianhoag3120]

I subscribe to a great tool to model Roth conversions "Income Strategy"..IMHO..(and I know nothing)..but recently received notice the company was sold and the program is going away. So, glad to hear New Retirement is improving their Roth tools.

[@chiparooo]

Great topic Rob! I just started using this part of NR. Definitely gave me some other things to look at. Thanks for sharing!

[@davidtvedte1337]

I am fortunate that when the ROTH IRA was first introduced I was able to do a complete conversion and was able to take advantage of paying the taxes over 4 years. In a later year I did contribute to an IRA to help save on taxes. It did not have time to grow very much. I have retired and sold out my business so now have twice as much in Taxable as I do in ROTH IRA and IRA. As I am not collecting Social Security yet I had the opportunity to convert my IRA to ROTH IRA over just a few years and basically stay in the 0% tax bracket. Inheriting an IRA and ROTH IRA has slightly complicated things. Fortunately the Inherited IRA was small enough that I can drain it over 3-4 years tax free as long as I keep my taxable account tax efficient. Due to 2022 I am able to do some tax loss harvesting to enable me to accelerate my plan. Inheriting a large IRA or 401K can leave heirs with huge problems. Thank you Rob for all of your wisdom. I think I've watched all of your KZbin videos at least once. New Retirement does look like a great tool but I have not paid for it so far. For someone with a more complicated set of circumstances it certainly looks well work the investment.

[@carolinevh8849]

Curious how you keep a sizable taxable account tax efficient this year. Invest primarily in CDs and stocks, ie not money market funds?

[@davidtvedte1337]

@@carolinevh8849 Low cost index funds that have next to no capital gain distributions and minimal dividends. ( FSKAX, FXAIX )Also have all of my international index funds ( FZILX,FOADX) in the taxable account where any foreign tax paid can become a tax credit. I do have some I-Bonds, T-Bills and Intermediate treasury index fund as well. These are not as tax efficient but to get the overall allocation I want I chose to keep my Taxable and ROTH IRA bond exposure close to equal. I want the ROTH IRA to grow like Rob suggests “As fat as a tick”. As my Social Security kicks in I may need to shift my fixed income to the ROTH IRA over time when rebalancing.

[@birdman9029]

Rob does it again. When he mentioned that if a spouse died, the survivor would be considered a single filer for tax purposes... that is a HUGE consideration when you look at both the federal and state tax brackets for single filers compared to married filing jointly. Also, keep in mind that 15-20 years from now, all tax brackets will likely be higher due to huge deficit spending by governments.

[@rkaydia]

Rod, you effectively unfreeze the finance-paralyzed mind. Thank you!

[@RecoveringWorkaholicOnTheBeach]

@rob_berger This it's just the tool I have been looking for. Thank you for another insightful video. You mentioned that you don't want to deplete your taxable investment the count to 0. Why not? Assuming you are passed 59 1/2, why not withdrawal from traditional retirement accounts up to a tax bracket or IRMAA limit, then from Roth accounts for expenses in a given year? What advantages does the taxable investment account give in this scenario?

[@mooring10]

Interesting model, will have to check it out. I had a spreadsheet that used both tax scenarios, but did not account for IRMAA.

[@Kimmer]

Thanks Rob. One thing I see that is seldom mentioned is that the best time to convert to a Roth is when the market is down since it allows you to essentially convert more shares at a given dollar value. Of course, there are many other factors as you discussed, but I thought I would just mention that since it may be something people haven't thought of.

[@pauravidesai9500]

Yes, you are buying at a lower value but you are also selling at a lower value. It is a wash.

[@Kimmer]

@@pauravidesai9500 No, actually it isn't a wash because your converting more shares from a traditional IRA account with tax liabilities to a Roth IRA account that will grow tax free. So the potential for growth is much higher than if you converted less shares at a higher price. It is a wash on the day you convert, but not in the future.

[@joepollino9416]

Two questions on the 10 percent penalty on a Roth: if one has met the 5 year rule can after tax contributions be withdrawn with out penalty below age 59.5, and can one roll over a traditional IRA to a Roth below age 59.5 without penalty from the traditional IRA

[@berniekeene868]

@@Kimmer I hope you can help me with this question. My work IRA is with MFS. I think it would be better to do Roth conversions into Vanguard lower cost index funds. In this case the number of shares would not matter, would it? I wonder if doing a Roth conversion during a down market and keeping the Roth with MFS, even though they have higher fees, would be better than converting to Vanguard. I am thinking going with the Index fund with lower fees would be better in the long run. I realize this an odd and perhaps difficult question. Thank you.

[@Kimmer]

@@berniekeene868 I'm not familiar with MFS, but I would always choose lower cost funds if available for better long term returns. A Roth conversion will cost you money in taxes regardless. Good luck and best wishes.

[@daisyreinacher5022]

I’m in the middle of converting everything. I’ll be done by the end of next year….Thank goodness! My kids won’t ever get crushed with taxes.

[@goya2695]

Again with the kids 🙄. DO NOT WORK YOUR LIFE AWAY JUST TO LEAVE MONEY TO THE “kids”…. SERIOUSLY! YOU enjoy ALL of YOUR hard earned money. Give them an education and critical thinking--THATS IT

[@sknorling]

Rob, the Portfolio Visualizor tool can help add some ‘science’ to the assumptions. Importing your portfolio into the Monte Carlo tool can help more accurately estimate the optimistic and pessimistic assumptions within New Retirement using the 10% and 50% chance of success column. Better to add some additional quantifiable solution to your individual situation

[@Harry_16710]

Excellent breakdown of what looks like a very capable tool. Thanks for the introduction. 🙏

[@RobWilliams007]

Ahhh, I didn’t think about going to a “single” tax bracket, from married. I did 3 conversions but stopped because I live in CA and get taxed to death on state income tax.

[@goya2695]

COMMIE FORNIA

[@ArthurDentZaphodBeeb]

Rob, as usual, excellent explanations and even-better insights.

[@p56900]

Always great videos..would be great if you talk about Net Investment Income Tax and Roth Conversions

[@michaelnitake2534]

Nice podcast Question even if you can convert an Ira to a Roth And pay the same taxes while not raising your Irma payments it seems the benefits of tax free growth is worthwhile? Is this correct thinking? Obviously if you can fill up lower income tax brackets that’s even more beneficial

[@RobWilliams007]

Like I always tell my kids: you have to make decisions with the knowledge that you have at the time. You can’t do more than that.

[@joemccarty2061]

Thank you everyone, for the information! Just to be clear, I will need the PlannerPlus for the Roth Conversion tool?

[@patti2454]

Great job. We use New Retirement and your tutorials help a great deal.

[@jaymetheaccountant]

thanks Rob - I'm new to New Retirement and absolutely love this feature. It's a robust tool that will model virtually every possibility and maximized value to the person. Thanks for the great content continue to highlight the great features!

[@cellularexpress1619]

I'm curious about your example. The couple has 10 years of no income? How do they eat? I'm retired now and my wife and I get about $100k from SS, int, and dividends. After std deduction we're in a 12% tax bracket. If I do any sizeable Roth conversion, it will bump me into a 22% tax bracket, which increases my taxes in today's dollars. If I wait and take the RMD when I'm 73, I'll still be paying a 22% tax on the RMD. Doesn't make sense to me. Converting now will cause me to pay 22% taxes on our current $100k income vs 12% (an extra $10k per year in taxes), but I suppose folks who can live on $0 income for 10 years could take advantage of it. Maybe I'm missing something?

[@schGjS]

Thank you for the information and run through, it convinced me look New Retirement and after the free basic version, I opted to subscribe to it. I had done some basic spreadsheet analysis of my roth conversion plans, this tool basically confirmed my decisions with some other options.

[@RodHardin]

Hard to plan for pesky life events and tax rates. Very cool if you can avoid RMD's for you and your beneficiaries. So why not smartly convert as much as you can and perhaps donate some when you reach 70 1/2.? Good video.

[@srconrad]

This was great, Rob. Thanks! This is my first week of retirement. Yay! I was able to follow along with my plan and it was interesting that it didn’t change much with the various option changes you mentioned. Apparently, mine is very simple. One 80k conversion in 2024 and then nothing until 2039-2043 with smaller amounts which I found very interesting. My plan is to not take social security until 70 in ten years. Those later projected Roth conversion years will be when my RMDs start at 75 so maybe the suggestion is related to that.

[@EatLeadPal]

I've been using New Retirement for several months. I can't get the Roth Conversion Explorer to work for me. I have tried every different combination of the options and it always tell me it can't do the calculations. Very frustrating. I have an appointment with one of their coaches in a few weeks and hopefully they can tell me what I'm doing wrong. Thanks for doing this video.

[@simone_maya]

I’d be retiring or working less in 5 years, and considering this financial recession, I’m curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $250K per year but nothing to show for it yet.

[@Jennapeters144]

@@Muller_Andr this is huge! would love to grow my reserve regardless of the economy situation, my 401k has lost everything accrued since early 2019, at this point, i'm in need of guidance, can you point me?

[@Jennapeters144]

@@Muller_Andr thanks for info! curiously copied and pasted her full name on my browser, spotted her page easily, she actually looks very distinguished

[@SueTNguyen]

Thank you for this tip! i have been looking for something like this to plan conversions

[@PH-md8xp]

What financial recession?

[@MonicaGz]

Thanks for running through this. I've been playing through some of these scenarios on the software since I purchased it at the beginning of the year. I wish they had a choice for people with no heirs or family and who would like to spend the maximum during retirement and leave as little as possible in the estate. As I'm still learning about all this, your videos are of great help.

[@GeoMo52]

Maxifi Planer will spend all your assets by default, but you can change all the assumptions.

[@kathleencoxwell4612]

@@GeoMo52 The NewRetirement tool does have a feature where you can set maximum spending. It can be found under My Plan > Money Flows > Withdrawals Strategy. (The NewRetirement model makes withdrawals based on stated expenses and Required Minimum Distributions, but Withdrawals Strategies lets you plan to spend your maximum. )

[@MonicaGz]

@@kathleencoxwell4612 I think I've used that feature, but when I do, it couldn't run a Roth Conversion scenario. On the new feature discussed in the video, max spending was not an option and that's where I'd love to see it. Thanks!

[@kathleencoxwell4612]

@@MonicaGz it should work if your active scenario has the desired withdrawal scenario (max spending) selected.

[@kathleencoxwell4612]

@@MonicaGz When using the Roth Conversion Explorer, you are running it on a certain scenario in your plan. If you are using a scenario that has "maximum wihtdrawals" selected, it will consider that for the conversions.

[@nancydunn2620]

I'm 70yrs old am I to old to start a Roth Conversion?? Love your channel !!

[@xwhyzzwhy]

You can convert any time you want, but if you have any significant taxable income like SS, you might not be able to convert much before hitting the IRMAA limit. Even so, a few years of IRMAA can be well worth it if you can reduce the bigger RMDs to a lower bracket.

[@tedhansen3846]

Awesome advice Rob! Thank You

[@gcburkett]

Thanks, I have used the tool but never noticed that function. For end of plan total account values I multiple the IRA balances by a tax factor. The modeling is tough, lots of factors and we have to guess at a lot them. Some factors are just scenarios like when to start taking social security or when each spouse of a couple dies, but others are return rates and tax rates. Clearly there is no way to optimize.

[@euclidessoares6650]

Rob, thanks for the excellent explanation of this aspect of the New-Retirement Tool. Very timely as I am contemplating purchasing the software for the purpose of analyzing future Roth conversions. Like you, I too found strange that increasing the tax rate to 22% did not increase the level of Roth conversions. I can't fully rationalize that yet. Your KZbin channel is a new find for me and I am very pleased with its content.

[@andreawehrle4173]

I am just learning NR as well but I wonder if it’s because you are limiting the dollars converted to what is in the taxable account to pay the taxes so it won’t convert more even with higher tax bracket?? Just a thought.

[@VocalMike]

That was my thought too. If you run out of funds to pay the taxes then it would stop any further conversions.

[@xwhyzzwhy]

That's what it is. It stops doing conversions when the account reaches the minimum that you set. If you tell it to pay tax from the conversion it can often do a lot more, and save more in taxes by limiting the really expensive RMDs further out.

[@Kimmer]

22:38 I wish NewRetirement would have an option for distinguishing between Traditional and Roth when maximizing the end result after Roth conversions. I still find it confusing as to which option is best to model Roth conversions.

[@jimroberts6176]

Anything about Roth conversions vs Medicare premiums in the tool? If you're converting during the 'prime years' (63 y/o, and forward), the conversions will raise your AGI and potentially increase your Medicare premiums.

[@TonyDL]

I did see a section on IRMAA optimization in the video, but either Rob did not delve into it or the tool is very basic with respect to optimizing IRMAA

[@paulscheuer9455]

Can you do a New Retirement Planner video on Roth conversions startimg AFTER ACA subsidies are ised? I.e. conver the year you start Miedicare?

[@cod88188]

Helpful review ~ I'm going to check it out re: why the change to the 22% bracket doesn't change anything (around 16:20 of the video) I believe it ties back to the 2017 tax brackets; there are no 12, 22 nor 24% brackets in 2017 tax code which will be in effect in those years of "no taxes" in the original plan (2027 onward). You would need to choose either the 15 or 25% bracket to have the program work properly.

[@boldinofficial]

Hey Chris Dowling! We're currently testing this but it shouldn't be because of TCJA. The new (or really, old) tax rates are the same brackets as the current rates, so by selecting a current rate, you'll be converting up to the coorsponding bracket regardless of TCJA. However something does look a little funny so our engineers are investigating!

[@cod88188]

@@boldinofficial I haven't reviewed yet myself, but Rob did mention a "disconnect" between the brackets earlier in the video. On the engineering side, I would "expect" that only the brackets which are available in the chosen code for 2026 to be available to check when using that code ~ so clicking / using the current (TCJA) would have only the 12, 22, 24% etc available -and- when clicking on Change to the 2017 Tax Rates only the 10, 15, 25, 28% etc would be available. Watching the video, it does not seem to be such, as Rob chose to switch to the 2017 Tax Rates, but was still able to click on the 22 & 24% brackets (which will not exist under that code) in the 16 min range. Good luck getting the bugs out easily

[@RobWilliams007]

What if you convert and pass away before the 5 year rule?

[@jamesrushton2441]

Good video Rob! Do you know if the tool suggests for people to convert even if they have no after tax money to pay for conversions?

[@amanraj4116]

First time viewer. I really enjoy your videos. Just curious as to how do I get in touch with you via phone or email for further guidance. Thanks Raj

[@thomo1073]

This was very helpful. What kind of impact do Roth Conversions have on the 4% rule. In other words, if you are converting traditional IRA's to Roth, should you be pulling you income from Traditional or Roth Accounts? Does it make a difference?

[@michaelgreskamp1093]

Rob - Went through this exercise a couple of days ago and you nailed it with the number of assumptions that are made........wide guard rails for many of us. My opinion is not to plan to the current tax rate and go with the 17 option. The other huge one is when a spouse passes - there a reason they call it the tax bomb. Now 70 I had years of low taxes selling stock paying no capital gains. Good at the time but wont know if that was the right call until my wife and i pass on. Kudos to New Retirement with a robust RMD tool. Thanks for another excellent video!!

[@rawhideslide]

For me the eye opening "what-if" analysis was to look at strong growth within the 401k, like 10% where RMDs grow to massive numbers. We focus so much on the pessimistic cases and don't balance it with optimistic ones, where Roth conversions make even more sense.

[@wallacebarron103]

What would the taxes have been if you did nothing just paid the taxes instead

[@cathya222]

Rob another great video! I currently do not subscribe to new retirement so this will not be available to me.

[@berniekeene868]

Thank you for this. Since the Roth conversion tool showed you would have LESS money at the end of the plan, does this mean you should NOT do the conversion? What should you look at to determine if you should do the conversion or not? Thank you.

[@lxw3-b8y]

Can the tool take into account QCD at the time of RMD and the beneficiary of IRA as charity for the ROTH conversion?

[@yanbu000]

I gave NewRetirement a spin to explore different scenarios with Roth conversions. Prior to subscribing, my attempts at these conversions were utterly nonsensical. So, I decided to take advantage of the 14-day trial with the intention to subscribe afterwards. It took some tinkering with the system to realize that I needed to perform the Roth conversion in both the money flow module and the explorer Roth conversion model. Oh, and there are a few quirky aspects to navigate in the application. According to the program, in my case, I should convert all of my traditional IRA funds into Roth. Initially (3 years ago), I thought that was the way to go, but then I switched to a model where I only was going converted the stock index funds into Roth and keep the bond index in traditional (this was Vanguard's advice). We'll see what I actually end up doing! But overall, the program is quite intriguing.

[@NatesRandomVideo]

Rob do you know any tools that can add in the effects of inherited IRAs and the options for RMDs on those?

[@JAO-wh3hy]

you find one?

[@lisbethsalander1723]

How much would a financial advisor charge to guide my decision for Roth conversion? Will appreciate any input.

[@mikewasserburger9662]

Another great explanation and analysis as usual. While you may not be getting paid much Rob, you are helping so many people (me included). I've been curious about the prime roth conversion years. While I may not have any EARNED income during those years, I plan to withdraw from a traditional IRA during that time at amounts equivalent to my current salary. Wouldn't that mean I'm still in my same tax bracket and any additional withdraws from the IRA would potentially put me in the next tax bracket? I've never seen this aspect explained by anyone before.

[@SecondActswithMarco]

Can you do this analysis with the 2 week trial version or do you need the full subscription? Thank you community and Rob!

[@kevinconners3685]

You can do the full analysis within the two week trial.

[@davidcharlton9235]

A quick question, assume you are already retired and living off your traditional retirement account funds. Will the tool allow you to document the retirement withdrawals as it calculates against tax brackets in planning a ROTH conversion? Thanks

[@jamesstokes8522]

Rob, as you start actually implementing the "plan" (suggested based on the assumptions you picked) that is recommended / picked should you recalculate each year with current numbers?

[@ericr2zz]

Great video! Thank you. Just subscribed!!!

[@Propguypaul]

Fantastic video Rob. Very well done. Thank you!

[@StephanieLe-i9u]

Do you recommend using the CFP advisor at New Retirement? Thank you!

[@RetrieverTrainingAlone]

So in order to use the Explorer in your software requires a $120 upgrade?

[@glenn726]

Does the tool also allow for the tax bracket creep? For instance in2023 the upper limit for 24% bracket went up 7%.

[@00tich]

I subscribe to this site. this software awesome. I even noticed the IRMA projections change based on how I modeled the conversions. Thanks for the referral .well worth $120/year. and comes with a 14 day trial if you want a quick analysis

[@BangNguyen-ux4ie]

Is the Certified Financial Planner option in New Retirement considered unbiased as advisors, say, from fee-only organizations like Garrett Network or NAPFA?

[@fortyofforty5257]

Is there any guarantee that Congress does not one day look at the enormous balances in Roth IRAs and decide to tax those balances again? Given the out of control spending by the government, any "pot" of money they can see and get their hands on is tempting.

[@peter-hr1gl]

OR how about go counter to all financial paradigms and thought and pay income taxes now (while working) when you have sufficient income to do so and then when retired live off the Roth IRA and Roth 401k balances vs having to worry about the tax consequences of taxable retirement accounts. I realize people above a certain age did not have this option years ago, but this is more for young folks who may be reading these comments to pay income taxes now and live income tax free later. Will look into this tool, but if you have to sign up in order to access...no thanks.

[@tmiller9099]

I don't understand at 7:10 why there is no tax. Wouldn't $66k realized gains have been taxed at 15% during the years between retirement and SS or RMD?

[@Intothewind08]

@Rob_Berger, does it ever make sense to do conversions if one's IRA is going to be left entirely to charity? We are in our 60s, do not expect to need to withdraw from our IRAs except as required, and will probably end up donating (QCD) or re-investing most of the RMDs. Our tax brackets will be higher in the future than they are now, even if the rates don't change. Intuitively, I feel like it would be good to reduce the RMDs and tax bills by doing conversions. But, I suspect that I should be solving for "maximum estate value," rather than "lowest lifetime taxes," even though the IRS would have a claim to a lot of that value if we had to withdraw it before death. Any suggestions about how I should think about this?

[@MILGEO]

@RobBerger I'm a bit confused about the children's inheritance on ROTH Ira's. I've heard that ROTH conversions could be used to leave for your children as tax free money after the 2nd spouse passes away. In fact it's been called one of the reasons it might be right for some people (on many retirement channels). I'm getting conflicting views as I've just tried to find the correct answer. The closest to reasonable a answer I could find was that your children can draw the ROTH inheritance tax free with RMD's over their expected lifetime as long as they begin by 12-31 of the year following the 2nd parents death and the earnings are not taxable as long as the parents account has been open for at least 5 years. I hope this is the case as I have had it in mind as I do conversions each year! If this has changed after the Secure Act, it will be a very big disappointment! They should repeal the Secure Act entirely IMHO.

[@TonyDL]

While your kids will not pay tax on the Roth IRA funds as income, they WILL have to withdraw it completely to a non-Roth account I believe over a 10 year period. This was recently changed to reduce the benefit and for Uncle Sam to start receiving cap gain tax on those now 'after tax' funds.

[@patrickdaugharty7475]

I have a conundrum. I am self employed and one year from retirement and currently am in a lower tax bracket. I have earned enough taxable income after expense deductions to contribute the full amount to traditional IRA's for both my wife and I. But I would also like to convert some Traditional IRA money to Roth. Does it make sense to do both to the level I could keep my tax bracket below 22 or am I missing something? I have a free cash set aside to pay any tax owed.

[@martinhanson4342]

So I have played with this a little bit. In all scenarios, there is never any conversion recommendation in 2023--why is that? If you have a large Traditional IRA balance and most scenarios try to lower that balance in the early low-tax years, why isn't there some kind of conversion recommendation for 2023?

[@TheBeezer776]

This is a comment on another blog from Nancy at New Retirement that address your issue. "If you are planning to convert pre-tax money this year, it should be entered as a Transfer. That way it will be recognized by the Explorer when running the algorithm. The Explorer ignores conversions entered in Money Flows and ignores the current year when finding an optimized plan. So if you are planning to convert this year it should be accounted for prior to running the Explorer as it could have a significant impact on the optimization."

[@PH-dm8ew]

Not very happy with NR. To me there appear to be some very misleading interaction between the various tables. I put in a 3.5 % withdrawal and the first year withdrawal tells me i need 65000 for my first year in the insights/withdrawals table. Then i add a couple ROTH conversions and then look at my withdrawal tab and it tells me my first years draw will be $77 dollars. So according to it i just don't pay any other bills if i do a roth conversion. I understand then i need to go back and add a one time expense to compensate. Not very useful and one of several such problems i see with the software. My fear is that most using it don't understand how the various charts and tables interact.

[@JAO-wh3hy]

demonstration with the New Retirement tool very helpful. Does this tool also allow for adding in potential inheritances?

[@RobWilliams007]

Aggregation Rule?

[@user-rh6ji1ot8q]

Is a backdoor Roth conversion a legit way to contribute to my Roth IRA if my MAGI is too high?

[@jimcarbone7816]

Do we have to pay for the New Retirement tool or is there a free version? thx

[@jimdavis9581]

site says it''s free for 14 days.

[@jimcarbone7816]

@@jimdavis9581 great thanks

[@asdd5033]

I'd like an option to Convert All - convert until there is nothing but Roth left even if it is not Taxes Paid optimal. Whenever I have run these scenarios it leaves some RMDs and taxes to be paid. I have modeled it manually but I'd be curious what the software would come up with as a comparison. I may choose to NOT convert all but I'd like to see it

[@testodude]

This is an excellent, bs-free video.

[@AlanBram]

similar to the effect on IRMAA, I wonder about the effect on the Premium Tax Credit. I gather it could be quite substantial, and if it's not considered wouldn't one be at risk of making a detrimental decision?

[@likethesky]

Alan, my understanding of the PTC is that it only 'smooths' the premium payments (allowing credits to be applied throughout the year), rather than giving you the benefits of lower premiums based on your income, only when you file your taxes; particularly useful for those who can't afford to pay the full premiums during the year, then get back what they're 'owed' (qualify for, as assistance) when filing taxes. So as long as New Retirement deals with ACA in general, I'm guessing the only difference the PTC might have would be the interest rate you could earn on the overpayment of the premiums during the year, which you eventually get back as a refund (or lowered taxes) when you file? Not sure, but that's my first guess. I'm interested to learn more, if you know more about it than that.

[@michaelnitake2534]

Fantastic info

[@mrjb8502]

Thanks for the great video. I just bought the NewRetirement tool last week and I’m very happy with it. Just a couple questions: I read it assumes AGI = MAGI for the IRMAA calculations. But shouldn’t MAGI include the untaxed portion of Social Security? Also, can you verify that it uses the correct two year MAGI/AGI look back? Thanks again.

[@kevinconners3685]

I can confirm the program does look back two years when calculating irrma. I don’t believe magi includes untaxed social security but not sure.

[@Idahomie]

Good info.. as always....thx

[@lakerfam]

Is New Retirement the same or better than Empower?

[@jorgevelasquez9955]

I'm 65, If I create a backdoor Roth conversion, do I have to wait 5 years to withdraw from it?

[@lizs502]

Do any tools handle the situation of, although being in the 12% bracket, being on Social Security and having an income level that doesn't tax 85% of the SS, so that the conversion amount causes income that increases the percent of the SS that is taxed?

[@Ambassador055]

I’m wondering if this tool can be back-checked with ChatGPT?

[@christopherstewart9874]

Remember that the key word in Artificial Intelligence is "Artificial." Chat GPT often provides answers that are grammatically correct but factually incorrect. I wouldn't trust it for anything of importance.

[@joerozario4406]

What is the correct way to add annual income that is lump sum? Let's say in every January I receive taxable lump sum bonus income. It seems like to add income in New Retirement, it has to be monthly.

[@hanwagu9967]

first, you should start paying estimated taxes. second, just about everything out there would say it is better to just invest the entire lump sum. The reason is that if you say decide to invest over 12 months, 11/12ths of your money is just sitting there doing nothing and so on over the next 12 months. Don't confuse this with dollar cost averaging, which means you invest periodically as investable money becomes available.

[@joerozario4406]

@@hanwagu9967 Thanks. I am doing that already but my question was how to use the New Retirement software. I feel like the software does not allow me to add an income that occurs once a year. It seems like only thing it allows is for me to make it monthly income artificially.

[@djscra89]

Question Can we take withdrawals based on the rule of 55 and convert them to Roth without the 10% penalty?

[@J-2024-v8i]

Yes, if the rule of 55 applies then the 10% penalty is avoided, whether the money goes to you or is converted to a Roth IRA. Also, if converted, you avoid the 20% mandatory withholding for taxes, so that you can later pay your taxes from a taxable account when you file.