Love listening to Ed Slott. Great video and content. One topic that wasn't covered is the impact of higher Medicare irmaa premiums when doing Roth conversions in the higher brackets. Would like to see more of these Q&A sessions with Ed!
@ronniebb7 ай бұрын
My Vanguard financial wealth management agent says only do this if you can pay the taxes out of your income. If you have to use your investment income to pay the taxes, that would mean that you are losing (in my case) about a 7% annual return on that money. In my case, a $40,000 conversion costs me about $4,800 in extra income taxes. I can't pay this out of my income, so I have to take it out of my Vanguard account. I'm in the 12% tax bracket. The future value of $4,800 at a 7% annual return over 20 years is approximately $18,574.49. That's how much I'm losing. Is it still worth it?
@susieq91867 ай бұрын
Good video. I'm doing Roth Conversions for my child. Currently, since I'm still working, we are able to pay the taxes mostly with our income. Will do this as long as we can.
@TK-setophaga7 ай бұрын
Thanks and I understand. Just hard to know that paying ~30% now, to convert, is good for me.
@gerardmiller33628 ай бұрын
More Ed Slott please!!!!
@carianin52937 ай бұрын
Yes, more Ed Slott please.
@someguy953766 ай бұрын
It's also a bet that Congress won't change the rules and subject Roth's to some level of taxation.
@headlibrarian19967 ай бұрын
The question is whether Congress can resist screwing over Roth account holders. Balance limits with forced withdrawals and/or tax on “excessive” balances is being floated in the media. They could indirectly tax Roths by adding their distributions to income for SS taxation and IRMAA.
@BobSmith-zd2nv8 ай бұрын
How much of the IRA should you convert? 50% 80% 100% ?
@edwardhayes61117 ай бұрын
Great discussion 2 real experts
@jorgevelasquez99555 ай бұрын
Don't you have to wait 5 years before you can use that converted money?
@sowmyak55918 ай бұрын
Love this
@davidmorrison74245 ай бұрын
No mention of the 2 year look back for Medicare on one’s income. Any conversion, no matter how favorable it is individually, counts as income. If you go over the IRMAA income limits it costs more for monthly Medicare premiums for everyone in the household.
@ReformedTryHard5 ай бұрын
For higher income earners (right now, still working), you really think our tax bracket will be higher when we’re retired and only earning passive income? Intuitively, that makes zero sense to me.
@stevemercieca37657 ай бұрын
How does living in CA affect these Roth Conversion examples? 9.3% State tax.
@frankkeel84107 ай бұрын
How about 3% Annuities dump them that are not insured?
@philipmartin262218 күн бұрын
Since I use my RMD for charity and don't pay tax on it, the Roth conversion seems less beneficial.
@Susanhartman.5 ай бұрын
Small taxes can affect investment decisions such as whether to choose tax-free municipal bonds over taxable bonds or do a Roth IRA conversion. I’ve been sitting on over $745K equity from a home sale and I want to invest on the stock market, how do I achieve this without being taxed twice?
@danshowalter99365 ай бұрын
Would it make sense to convert to the top of the 24% bracket if you believe it will be the 25% tax bracket in 2026?
@sonnysamu26455 ай бұрын
How and when does one pay the state income tax. I am assuming the payment to the IRS is just federal income tax. Or do both payments get made to the IRS.
@cc-RUtt455 ай бұрын
I have two pensions. I would much rather have had a Roth 401k throughout my working lifetime. $500/month invested from 25 - 65 at 9% is $2.3mil. I hate my job but can't leave because of I won't get my state pension. What do you think about doing a 70/30 stocks bond ratio?
@douglaskbrown11547 ай бұрын
If one converts 100% of their IRA to a Roth now, they pay 100% of the taxes immediately, at the dollars highest value, and lose the potential gains that would have come from the taxes-not-paid?
@Scylla-456t5 ай бұрын
I like to have SCHD. 20% of each ROTH IRA Portfolio. Yield: 3.75% 60% SPY. 20% Various Income Funds, PFF, ILTB, TLT.....What are more interesting buys for long term growth? I want to get in with about 300k in cash savings lying waste to inflation
@jamesemmerling69527 ай бұрын
Is Roth conversion a good idea if you need to borrow money to pay the tax (for example, a home equity loan @ 8%)?
@FlagstaffChief5 ай бұрын
The key to making sure this works for you is to pay the tax upon conversion from external funds and convert ALL the traditional IRA investment account to the Roth. 5:52
@Brad40835 ай бұрын
As of the date I'm writing this, neither Biden nor Trump want to raise taxes for the average taxpayer. So I'm not willing to bet that tax rates for me and other average Joes will be higher after 2025. But we won't know until the end of 2025 because Congress won't do anything before then.
@Susanhartman.5 ай бұрын
Small taxes can affect investment decisions such as whether to choose tax-free municipal bonds over taxable bonds or do a Roth IRA conversion. I’ve been sitting on over $745K equity from a home sale and I want to invest on the stock market, how do I achieve this without being taxed twice?