Roth Chunking and Year-End Deadlines & Strategies

Don't Miss These Year-End Retirement Deadlines!
In this episode of the Directed IRA Podcast, Mat Sorensen and Mark J Kohler break down the five crucial actions you need to take before December 31st to maximize your retirement and tax strategy. From Roth conversions to required minimum distributions (RMDs), we cover what you must know to avoid missing out on key opportunities and facing unnecessary penalties.
Highlights:
Roth Conversions: Why you should act before year-end to lock in your tax bracket and optimize your retirement savings.
Year-End Tax Planning:Avoid scrambling on December 30th-get ahead with smart, actionable steps.
Avoid Tax Bracket Pitfalls: How to strategically "chunk" your Roth conversions to stay in a favorable tax bracket.
Required Minimum Distributions (RMDs): Important rules if you're 73 or older to ensure compliance and avoid penalties.
Whether you're a seasoned investor or new to retirement planning, this episode is packed with actionable advice to help you make the most of your year-end planning.
Subscribe for more tips on maximizing your retirement strategy!
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🚀 Disclaimer: This podcast is for educational purposes only and does not constitute financial advice. Consult with a qualified professional before making any investment decisions.

[@ebells33]

You two are the absolute best! You break this all down in simple and easy to understand terms, much appreciate that!

[@humangoodness]

This is awesome! Thank you! If I missed the 12/31 for conversion, is there anyway I could still do the conversion prior to 4/15? I did contribute already to 2024 Roth.

[@MatSorensen]

Unfortunately no. There isn’t a way to go back and convert for 2024 tax purposes. If you convert now it would be on your 2025 tax return.

[@humangoodness]

You are the best!

[@gabrielleavila-robles1827]

Great pro-tip for full time employees(day job) with a side hustle (solo 401k); Do both! 17:17

[@sidneysfamily8760]

When should you have a traditional 401k?

[@gassman55]

Does it make sense to top out the 32% bracket if you plan on being in the 32-35% bracket once RMDs start

[@vchap01]

Are you planning to be a high income earner until your full retirement age? If yes, possibly. Taxes are probably going to be higher due to the deficit (that's an assumption) and your RMDs are going to be high. If are you planning to retire early, do Roth conversions from a traditional account for 5-10 years before the retirement at a low tax rate. They would be counted as earnings which is important for medical insurance subsidies assuming you do not have passive income that puts you over.

[@ironcode]

If you're in the mid/high-end of the 35% bracket (no state income tax), does it still make sense to convert?

[@wernerfoerster3666]

depends how old you are

[@lseh4720]

If you’re in the 35% bracket, you should find a fee-only FIDUCIARY financial consultant who can give you guidance on your tax strategy.

[@KatieLibby1315]

Always wonder if people with mid to high six figure IRA accounts get their tax advice from KZbin.

[@republicunited2183]

Christmas with the cranks.maybe.

[@wernerfoerster3666]

1. any matching account (401k) up to matching amount 2. Roth max 3. max out any remaining tax deferred accounts (401k)

[@charlesg6583]

Be careful about Roth IRA conversions after you are retired or above age 62 and taking social security or taking Medicare. The additional income from the Roth IRA conversion can bump you up on the amount of social security you pay taxes on if it bumps you up over $44,000/year. Also, your medicare premiums can go up significantly if the additional income from the conversion since this additional income counts towards your medicare rates. So dont go above $97k of income as an individual or $194k joint income if you dont want your medicare rates to go up. On the other hand, if you are below age 63 then a conversion could help you stay below the social security tax threshholds and the Medicare premium increase threshholds since a Roth IRA withdrawal wont count as additional income. Medicare premium rates are based on your income 2 years prior. So at age 65, they would be based on your income starting at age 63.

[@nazeercurry5248]

Roth is always better 🎉

[@Bobventk]

I love Roth. This isn’t tru tho