Should I Convert My Retirement To Roth?

[@KennedyVerbruggen]

I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.

[@NorthCarolinaForward]

Safest approach i feel to tackle it is to diversify investments. By spreading investments across different asset classes, like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown. its important to seek the guidance of an expert

[@SavannahMitchell-b3d]

It's true that many people underestimate the importance of advisers until their own feelings burn them out. A few summers ago, following an ongoing divorce, I needed a significant push to keep my company afloat. I looked for licensed advisors and found someone with outstanding qualifications. She has contributed to my reserve increasing from $275k to $850k regardless of inflation.

[@antoniaribeiro8073]

How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?

[@SavannahMitchell-b3d]

Rebecca Nassar Dunne is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.

[@KatyaSantos-g4c]

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

[@NicholasBall130]

Investing in Roth IRA can be a good choice since they are funded with after tax dollars, your contributions can grow tax-free over time. When you withdraw money from your Roth IRA in retirement, you won’t have to pay tax on it, which will help you keep more of your hard-earned money. I retired with 5 million dollars

[@RafuqueAhmed117]

If you’re new to investing or have a more complex financial situation, It can be helpful to work with a financial advisor who can provide personalized guidance and help you make informed investment decisions.

[@StacieBMui]

On the contrary, even if you’re not skilled, it is still possible to hire one. I am a project manager and my personal port-folio of approximately $750k took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my port-folio this red season. I’ve made over $150k since then

[@JerryOrion]

My portfolio has been in the gutter for the entire year, so I started researching new ways to profit in the market, but everything I tried just seemed to miss the mark. Please let us know the name of your financial advisor.

[@StacieBMui]

Credits goes to " Sonya lee Mitchell" one of the finest portfolio managers in the field. She's widely recognized; you should take a look at her work.

[@lolitashaniel2342]

I searched her up, and I have sent her an email. I hope she gets back to me soon. Thank you

[@Pelham04]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get 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.

[@Lourd-Bab]

Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks

[@Pelham04]

@@Lourd-Bab However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.

[@Lourd-Bab]

@@Pelham04 Oh please I’d love that. Thanks!.

[@Pelham04]

@@Lourd-Bab Clementina Abate Russo is her name.

[@Pelham04]

Lookup with her name on the webpage.

[@HarryBishopm]

Dave said “Don’t do a Roth if you’re over 55 because it doesn’t have time to grow”, But I have a cash savings of $600K which I need to invest for retirement, and I’m 57. What strategy should I use?

[@JordanReam8186]

What about throwing it into a roth where it grows. Or you can consult with an expert CFP to guide you.

[@WestonScally7614]

There are many ways to approach this. Converting your IRA to a Roth IRA can be beneficial, especially if done when the market is down. For example, if you're in a 22% tax bracket and convert $30k, you'll owe $6600 in taxes. If the market rises at a modest rate of 7% per year, you can recoup the $6600 in about three years. Converting when the market is high means it takes longer to recoup taxes. Since I'm over 72.5 and have to take RMDs, my CFP suggested this strategy, and it's working well. You need to consider your tax situation and goals. If you plan to spend the money soon, keeping it in a traditional IRA might be better.

[@SaintYvess]

Pls can you refer me to this CFP?

[@WestonScally7614]

Thanks for sharing, just copied and pasted *Victoria Louisa Saylor* on my browser and found her consulting page no sweat.. she is valid

[@WestonScally7614]

Thanks for sharing, just copied and pasted "Victoria Louisa Saylor" on my browser and found her consulting page no sweat.. she is valid

[@CrystalJoy-32]

I am in my 40s and This is no time to taper retirement savings. I want to max out my retirement funding and I also have another $200k in a savings account that i want to invest in a non-retirement account.Would it be better going to housing? Maybe own property and let it till im ready to move in at 65.

[@Sampson-jh7yq]

Research some dividend aristocrats and choose six to ten firms with over 25 years of dividend payments. Also consider working with an asset-manager to build a strong portfolio.

[@FrankPatrick-no8zo]

I wholeheartedly concur; I'm 58, recently retired, and have about $1,450,000 in outside retirement assets. I have no debt and, when compared to the value of my entire portfolio over the previous three years, I have very little in retirement funds. To be honest, investing with a portfolio advisor is brilliant!

[@RuthEvelyn-rc3bg]

It's always beneficial for a novice investor to hear from someone who has experienced all the bad times and overcome them. What are some successful strategies that I can use?

[@FrankPatrick-no8zo]

Monica Shawn Marti is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.

[@albacus2400BC]

Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance

[@BrandonIvan-c6e]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get 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.

[@Lourd-Bab]

Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks

[@BrandonIvan-c6e]

@@Lourd-Bab However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.

[@Lourd-Bab]

@@BrandonIvan-c6e Oh please I’d love that. Thanks!

[@BrandonIvan-c6e]

@@Lourd-Bab Clementina Abate Russo is her name

[@BrandonIvan-c6e]

Lookup with her name on the webpage.

[@johnben9]

I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement, I'm 55.

[@suzannehenderson5]

Consider financial advisory so you don’t keep switching it up, Top 3 payers for the month were $OHI, $KMI, and $EDP for an over all payout of a little over $20.. not bad for a 350k portfolio.

[@emiliabucks33]

Agreed, I’ve been investing in the market for 11 years now, last 4 years with the help of a fiduciary advisor apparently due to the covid-19 pandemic crash. Throughout these years of guidance, I've been fortunate enough to 10x my return as a DIY investor, summing up nearly $1m ROI as of today.

[@frankbarnes22]

No doubt, having the right advisor is invaluable, mind leaving info of your advisor here please? I only invest in 401k for now but particularly interested in diversifying my portfolio and exploring alternative options.

[@emiliabucks33]

I've shuffled through investment coaches and yes, they can be positively impactful to an individual's portfolio, but do your due diligence to find a coach with grit, one that withstood the 08' crash. For me, Carol Vivian Constable turned out to be better and smarter than all the advisors I ever worked with till date, I’ve never met anyone with as much conviction.

[@frankbarnes22]

Thank you for this. I just sent her an email, and I hope she gets back to me soon.

[@r4ym1n13]

I converted my traditional 401k to a Roth 401k. No tax break now but I'll be smiling later in life when it's time to retire

[@monharris28]

same

[@Nepthu]

As long as politicians don't change the rules.

[@apnudi]

@@Nepthu what other choice do we have?

[@davidt5770]

@@Nepthu If you think the rules are changing, are you expecting taxes to rise or to fall? If your expectation is that tax rates rise (which I would guess) Then start conversions is a very good plan if you are able. (Not already in a high bracket) At least taxes should go up in 2026 when the jobs act expires and we revert to the less favorable schedule.)

[@Gheuns3251]

What happened to the money that was already in the traditional ? Does it get tax after conversion or does the Roth start accumulating on a seperate bucket ?

[@Oheeeoh]

One advantage to converting the ROTH that wasn't mentioned is it potentially lowers the amount of your social security benefit that is subject to tax.

[@Cathy-xi8cb]

You would have to earn almost NOTHING to avoid paying taxes on SS. That takes some fancy money management early in your career, or the desire to eat cat food. My mother was able to do that by spending years, decades really, craftily moving money into non-taxable investments, but you have to have money to live on while you do it. Most people with under 500K in assets and paid-off home/car/education/etc cannot do that.

[@hubster4477]

Retirement earnings dont affect SS.

[@cnewton6527]

@@hubster4477 it does affect the taxable income. Therefore affects the Social Security taxable amount and your Medicare rates.

[@brianfolding40]

Irritating when callers finally ask the question they want to ask and while Dave is doing his best to answer the question, the caller keeps interrupting...

[@miketracy9256]

When tax rates go way up in 2026, the more we have in Roth and the less we have in taxable retirements the better. Short-term pain today will yield long-term gain in the future.

[@maxshiraz3447]

Probably makes sense to do a conversion to max out the 22% bracket and have a better bsalance of Traditional and Roth

[@maryjones6115]

We plan to do conversions next year. My husband is retired so our only income would be the Roth conversion amount. So, let's say we move 50K from Roth to 401K and the married deduction is $24,800 ; we will only be taxed on$ 25,200!!! Our state does not tax retirement income, incl. Roth. So, we are set.

[@krugcpa]

Assume you are drawing Social Security? If so, a portion of that income will be become taxable. The conversion still is worthwhile, but it will cost more in taxes than you are thinking.

[@Mechulus]

That is the RIGHT way to do it. Too many people here are converting at 22-24% for no good reason, and they lose the compounding effect of that lost tax money. It drives me crazy seeing how people make such bad choices just because they heard Roth is the best. There's a right way and a wrong way to do it, and you've shown the right way.

[@BrandonMinguez]

It’s reasons like this that the Roth 401k should always be looked at when considering a workplace retirement account.

[@jdmulloy]

They only recently became available and common. So many already have substantial assets in traditional. Also employer match has always been traditional, even if you're doing it all Roth. The next bill that just passed will sometime soon allow 401k plans to have an option to pay taxes to make the match Roth, but I assume it will still require plan administrators to see that option up, so it will likely be a few years before most of us have the ability to make our match money Roth.

[@tommyg6178]

I do 100 dollars in scratch off lottery tickets every Friday. That’s my retirement plan. So far I’m still working.

[@sonnysamu2645]

A few comments regarding this. If I was young and worked for a company that had a 401k plus employer match I would definitely take advantage of that. I would open a traditional roth while working and contribute to what you can. When you retire convert all or a portion into your traditional roth. Most people today when they retire will be in the same tax bracket or higher. If you are in a lesser tax bracket then you probably did not save enough. So your tax situation for the most part will probably not change if you have both. Even if you and your spouse worked 40 or more years then your social security will be pretty significant. Couple that with any withdrawals and you increase your income. So really the one big advantage in this case regarding a traditional roth is that it is tax free but it also does not count against social security taxation when calculating your provisional income. This is a nice little perk since most of us middle class are on a FIXED income. If retired, then at age 65 everyone needs to sign up or go on Medicare which can be another significant cost per month depending on the options you select after part A & B. Remember parts A&B do not provide a complete blanket of coverage. You also need to consider medicaid costs which will significantly affect your spouses ability to live if one of you end up in a nursing home. Just my .02.

[@damondiehl5637]

Converting from Traditional to Roth at retirement just creates a huge tax event for yourself. Doing it the same year that you are still employed could easily move you into a higher tax bracket, as well. The whole benefit of a Roth account as that all the growth is tax free. Converting to Roth late in life only makes sense if you are going to let that investment sit for another 15 years or more.

[@Aortadetroit]

Confusing, you actually made the argument for a Roth. Tax rates for a young person are almost certain to be higher and Roth is the best way by far to minimize taxes.

[@sonnysamu2645]

Not confusing you would open a traditional Roth separate from your 401k. You take advantage of the 401k employer match while working. Once you retire you roll the 401k into a traditional IRA or into your Roth. If the tax hit is to high just roll into a traditional IRA. Do conversions yearly to lessen the income tax hit. I am referring to total income earned not taxes on the converted amount. You will have to pay taxes on that amount. The idea is to not throw yourself into a higher tax bracket based on the converted amount. So yes a Roth in your later years makes more sense since you would probably not be in a lower tax bracket. Remember I am assuming you started a Roth relatively early after you left your employment that had the 401k. Most people do not stay with the same company for 35-40 years just a fact. Once you leave employment with that company the 401k is essentially dead unless you can roll it into another 401k plan with your current employer. If not this is where your Roth comes into play. Most companies allow you to roll-over into their plan. However, if you take a new job that only offers a pension then you would be foolish to contribute extra post tax money to your 401k. You should contribute any money to your Roth at that point. Do the conversions when appropriate into the Roth. Remember conversions and contributions are not the same. So you can contribute up the limits each year and do conversions at the same time. I no it sounds confusing but that is because people think they only need one retirement account. While that would be true if you worked 35-40 years with the same company, most will not achieve this. Believe me I am living proof of that scenario. Hope this helps.

[@alanm2842]

@@Aortadetroit young people raising a family are usually in a low tax bracket. max out a roth if this is you

[@Aortadetroit]

@@alanm2842 I'm rich actually. Anyway several serious pitfalls here. 401K fees are notoriously high and most 401K's return far less than a low cost ETF/Fund. That is a huge deal. Obviously if you get matching funds from your employer you max it out and that offsets some of the losses caused by fees. Checking Bloomberg Corporations 401K you would think it has low fees and excellent performance. It has neither and it's pretty typical these days. Pensions were much better. Again ,obviously use a regular IRA to drop yourself out of a tax bracket otherwise never use them. Use an HSA instead and a Roth. If you can max your Roths now not later because there is a very high probability conversions will be taken away by Congress. Were HSA's even mentioned? Maybe I missed that. Those are fucking magic. I'll stop here but I would recommend doing a LOT more research and rethinking that comment. Which of course has some great info and is well intentioned. But if you are 55 or less you are screwed on medicare (start HSAs now!) and your taxable SS will likely go from 80% taxable to 100% because neither Party works for us anymore. The only hope of low taxes in retirement with a diversified income stream is from inside Roths. Or you can own Hotels and real estate like I do but I struggle to stay out of the top bracket. Everything is harder than it looks now after 65.

[@JakeTheSnake500]

I like how Dave told Rachel that he's leaving the Roth to the kids. It avoids coversations like in that TV commercial, "Awkward question, but is there going to be anything...left?" 😅

[@goldengriffon]

This video leaves out some important considerations, most notably what your income tax bracket is or will be. For most people, I think their future/retired income will be lower than their current income. So it would make more sense to NOT convert, and wait until they are in a lower income tax bracket to have to pay taxes on the money. Plus, leaving the money that will eventually be used to pay taxes in the account will let your balance grow faster!

[@daisyreinacher5022]

False. We needed the same income as when we were working. It’s just spent in different ways.

[@mnotlyon]

If you make less money in retirement than you did while working, you did it wrong.

[@matthewsheahan9435]

Also, things change when you hit 72 and have to take mandatory withdrawals. If you've amassed a sizeable amount in your traditional, you may be forced to start drawing a large taxed salary. Also when estate planning. If you leave a sizeable amount when you pass to someone (depending on who and their age), they may have to withdraw that amount over 10 years.

[@followthesun2115]

Excellent point. Many people are in a lower tax bracket after they retire.

[@HodgeChris]

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.

[@Pamela.jess.245]

For the average person, the strategies are fairly demanding. In actuality, most professionals who have the necessary abilities and knowledge to complete such occupations do so successfully.

[@carssimplified2195]

I wholeheartedly concur, which is why I appreciate giving an investment coach the power of decision-making. Given their specialized expertise and education, as well as the fact that each and every one of their skills is centered on harnessing risk for its asymmetrical potential and controlling it as a buffer against certain unfavorable developments, it is practically impossible for them to underperform. I have made over 1.5 million dollars working with an investment coach for more than two years.

[@Justinmeyer1000]

I need a guide so i can salvage my port-folio due to the massive dips and come up with better strategies. How can one reach this advisor???

[@carssimplified2195]

Do your due diligence and opt for one that has tactics to help your portfolio continue consistent and steady growth. "JULIE ANNE HOOVER’ is accountable for the success of my portfolio, and I believe she has the qualifications and expertise to accomplish your objectives.

[@Justinmeyer1000]

This is useful information; I copied her whole name and pasted it into my browser; her website appeared immediately, and her qualifications are excellent; thank you for sharing!!

[@captsorghum]

Actually you would want to do it before starting Social Security, not wait until just before RMDs start.

[@tomfields3682]

Yeah, the guy's wife took SS at age 62 and he is still working. She should have waited until 70 to take SS.

[@kzalaska4804]

Also, who believes that tax rates are going to go anywhere but up in the next few decades?

[@AudraZapoticky55]

investing requires good experience and knowledge to carry out a good and successful trade, I have lost a lot trying to trade all by myself May I ask which investments are good??>>>>>>.

[@Annis-co7vu]

I understand your concerns, my friend. I recommend exploring passive index fund investing and expanding your knowledge in this area. Personally, I experienced both successes and challenges when initially seeking a reliable passive income......,,,,,,,

[@Madlyn55]

how do I get in touch with this consultant that assist??>>>>

[@Annis-co7vu]

STEPHANIE KOPP MEEKS, that's whom i work with look her

[@Madlyn55]

Thanks for these recommendations.....,,,

[@rkirkend]

Except if he lives in a high income tax state today and plans on retiring to a low or no state income tax in retirement that could change the equation

[@MrBrewman95]

I have a Roth IRA and just started with a new company for a 401k. I need to convert it to Roth because I don’t see taxes being lowered in the future at all and I’m not making a ton of money anyway.

[@blackworldtraveler3711]

Taxes set to rise in 2026. Tax rate will go back to what they were before 2017.

[@damondiehl5637]

Lots of companies now offer Roth 401k plans. The company match has to be Traditional, but everything you kick in goes into the Roth side.

[@cliftongreen1281]

I would just leave it and just contribute to both.....

[@justgoto8]

One thing to note, if you’re self employed or 1099, you can use the regular IRA to reduce your taxable income. If I under pay my estimated taxes by 2k, my accountant calls me up and says, you can either give the government 2-3k or you can put that in a regular IRA. Good to have both but the regular IRA is a good a way to reduce taxable income, and the Roth isn’t.

[@titanrain3374]

Pro tip - just fast forward to 2:01.

[@johnscott2746]

Roth has a lot of benefits. I started one a long time ago and did a couple of conversions too. Now I can take distributions from my traditional Ira and supplement it with distributions from my Roth IRA and have plenty of money to live on and pay no income tax and my much younger wife gets fully subsidized health insurance. By the time I turn 73, I should have used up the balance of the traditional Ira and I will take Social Security at 70. Then we can start moving my wife’s retirement accounts over to her Roth IRA and when I pass on she gets my larger Social Security benefit and all of her investments will be in Roth accounts so no taxes.

[@PH-md8xp]

Sound like a solid plan. What if you outlive your wife. Yes, she’s younger but life happens.

[@johnscott2746]

@@PH-md8xp don’t see why that would matter. If it happened before I turned 70 I might rethink things. But if I’m already 70 and drawing my benefit then I will have that larger check for the rest of MY life anyway.

[@legarockefeller]

I love how she helped dad and blocked the caller from talking 😂❤

[@hlakegollum1]

Guy won't shut up.

[@huskypup3489]

Why would you convert and pay the taxes when the income will be added to your job W2 income. By 72, he may not be working, with no W2 income, the tax rate will be lower on the IRA withdrawal.

[@iamhischosen3866]

That’s what I’m thinking

[@southpaw9995]

This is exactly right. Majority of people will be in a lower bracket when they retire and that’s why saying to consult your tax advisor would’ve been appropriate advice in this video. You need a decent amt of time after the conversion for it to make sense. This could be from either not needing income or making sure you’re not close to dying. Your non spouse heirs will have to take it all out of the Roth within 10 yrs now with the new rules.

[@ttenner9179]

Roth conversion makes sense if your tax bracket now is lower than in retirement. That is the only consideration. Dave missed that. His teaching does not go far beyond very basic stuff. The caller still works and his wife already collects social security. They have 600k saved, which will give them some 25k a year - probably less than what the husband makes now. So their future tax bracket is likely lower than it is now. RMD’s are not a great concern in this situation.

[@MikeS-7]

The reason CFPs don't want you to take it out of your 401K, at least if they are managing it, is they get paid on the entire portfolio, typically 1-2%. They should really only get that on profits only.

[@briemann4124]

I was wondering this a few months ago. I’m glad someone had the courage to ask!!!

[@paulharmon8947]

Pay off your mortgage. Huge step to a good retirement. As time goes on invest in different things, U.S. based, and let it ride. The point is to invest in Roth's and solid companies that are mostly American because they have good staying power. Recycle your money tax free.

[@leemcfarland4769]

Roth is a fantastic tool. I'm 60 (and retired) and will convert $150k each yeay till 70 from my standard IRA. Most of my money will be in Roth then. I'll start collecting Social Security and live off my Roth.... and never pay taxes again. And YES, financial advisors don't tell you this. Another benefit is your beneficiaries never pay taxes, and they can keep it in a Roth. Tax free forever. Dave is converted... you should too.

[@Savedcitytitan7118]

I'm envious of rachels abilities to listen and absorb

[@MyLifeThai371]

I know. She is such a sponge.

[@HB-yq8gy]

I disagree most qualified CFPs don't recommend using the IRA to pay taxes, for the Roth conversion, especially at 65 y/o. You're gambling that the market will gain huge in 7 years? What happens if we have an extended bear market then you were better off not doing the Roth. Don't listen to these talking heads due your own search hire only hourly base CFPs no AUM! Also, there is a free NewRetirement Planning.

[@howard1431]

If one regularly donates to 1 or 2 not-for-profits, why convert to Roth and instead do a qualified distribution directly to the charity? Thus, no tax hit on 401k RMD and donations are tax-free without needing to exceed standard deduction. Sure, it might be different if you want to pay the taxes on the conversion, depending on who might inherite your money. When ones estate is going to 1 or 2 charities, I can not figure out the benefits of a Roth conversion.

[@philipgerry5228]

It’s best if you can pay the taxes with outside money. Roth means you never pay tax on gains. That’s better than deferred taxes which will be on a larger amount of money.

[@ralphparker]

You should have a professional do you a forward looking tax plan to see if it makes sense and how much to do each year.

[@nateitscake88]

Trump lowered taxes in 2018. I decided to take advantage of the lower income tax rates before they go up again in 2026. So I fully convert my traditional 401k to a Roth 401k over the past 3 years. I am also now only contributing to my Roth 401k maxing it out every year. I'm 35 with 300k all in Roth, currently averaging 13% gain being 100% invested in the US Equity Index Fund, which is basically an SP500 Index Fund. I'm hoping to retire at 56.

[@ivanvargas2425]

Wish I would of started my Roth IRA a long time ago. I don’t agree with everything Dave says in regard to real estate and CC but he’s dead on with this and debt

[@Leeon_King]

What part of the real estate do you disagree with? I know his stance on CC (which I disagree with) but not sure of his stance on real estate.

[@ivanvargas2425]

@@Leeon_King the part about buying a rental and paying it off in full. Plus your home has to be completely paid off first before getting into real estate. At that rate it would take forever to become a millionaire.

[@Snake-bq3kf]

How old are you?

[@matthewgardner2144]

@@ivanvargas2425 Agree..sometimes some careful leverage can be a useful thing in building wealth through a few rentals. The idea is not to get too crazy. Dave is wrong with this.

[@JS-sv4ol]

If you wouldn’t mind - curious and wondering what decade you started investing into a Roth?

[@dpragain]

If it is a new Roth account you have to wait five years before you can take money out of it.

[@blackworldtraveler3711]

That never mattered to me. It's a retirement vehicle. You might as well use a regular brokerage or savings/checking account if you're going to pull from it in five years.

[@ElJefe360]

why you want to wait until you are 85 yrs old to access your money or enjoy life? It doesn't make sense at all. Why not starting making lots of money when you are in your 40's so you can start enjoying in your 50's. The only people who are going to enjoy your money is the Hospitals when you are 85

[@SK-qt1rm]

I’ve been considering converting, my issue is the RMD curve. Im at a 12%, so if I convert a portion to keep me under the 22% each year until I’m either done or 73 (RMD), I can reduce the huge required withdrawal hit in my early 80s and might put me in the higher brackets and also cause Medicare cost increased and increased social security taxes: the secondary cost of traditional IRA.

[@fabiGBOtown]

I wish I could ask dave some questions about saving on taxes while investing. I keep getting bits and pieces from the internet but not one "path" to maximize deductions and invest.

[@plathiasjenkins1011]

Honestly, this probably isn't the best advice for a man of this age. There are significant tax implications for pulling that much money out of a traditional 401k. This couple will almost certainly move up to a higher tax bracket and end up paying more in taxes. It didn't sound as if the caller had a bunch of cash sitting around, but I could be wrong. Many people develop health issues later in life, often unexpectedly, and are essentially forced into retirement physically. If the caller starts accessing that money sooner than Dave said, then it likely would be the wrong call. Dave may be a great resource for getting out of debt or real estate, but he isn't an investment or tax expert. I'm sure he has more knowledge than the average person, but I suggest seeking expert advice on topics of that level of importance.

[@FloppedPizzaParty]

@@plathiasjenkins1011 well said. It just depends on if the caller will actually use the money before being forced to use it by 72 and pay taxes on it. And I like what you said towards the end, great resource for getting out of debt, but best to speak to financial advisor or tax expert.

[@blackworldtraveler3711]

@@plathiasjenkins1011 Higher tax bracket at retirement could trigger IRRMA as well.

[@dwights1464]

@@blackworldtraveler3711 Good catch. Also, once one spouse passes, the income thresholds for the various federal marginal income tax brackets are cut in half, so the remaining spouse could wind up paying more in income taxes on less income (when the lower Social Security check stops).

[@Cathy-xi8cb]

Your path is to hire a CFP, not watch a show.

[@FinanceMind]

Roth is a fantastic option for folks early on in their career. I don't think its a good idea to pay a penalty to convert at this stage in life.

[@rajbeekie7124]

It is if the money is going to the kids. Think long game.

[@CSM-68]

just what I have been dealing with. If you are married with children, converting some or all of your 401K and Trad IRA to ROTH will make sense once you realize a couple of things. RMD's with a married couple filing joint is one thing, when a spouse dies, now you are a single filer and still have RMD's. This Could Jump your tax bracket. Consult a tax professional. Second point, when you die, your heirs don't have their lifetime to draw down the 401K, Trad IRA or ROTH. They have to draw those vehicles to 0 in 10 years. This WILL cause tax problems for them if it is a Trad IRA or 401K. ROTH IRA will not affect their tax burden as it was already taxed.

[@kerrylim6058]

[@DerrickNat]

I would really love to know how much effort you put in,to get to this stage

[@donnareynolds8649]

I'm from the UK 🇬🇧 please I just got recommended to her How was your experience trading with Maxine Kathleen?.

[@martinjackson3194]

When you see me use bitcoin, it also represents every other cryptocurrencies!

[@kerrylim6058]

@Maxinekathleen That's her username ✅

[@barttfisher]

TheseIncreasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account.

[@PennyBergeron-os4ch]

Effective personal finance management matters more than your income source, whether from a job or investments. A certified financial advisor can offer tailored guidance to reduce expenses and boost income, optimizing your financial situation.

[@HildaBennet]

I completely agree; I have approximately $650k in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.

[@JosephineKenney]

This is exactly how i wish to get my finances coordinated ahead or retirement. Can I get access to your advisor?

[@HildaBennet]

SONYA LEE MITCHELL is the manager I use. Just research the name. You'd find necessary details to set up an appointment.

[@JosephineKenney]

I just googled her 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 caII.

[@frances4773]

Thank you ! I am trying to make the same decision

[@josephschultz6750]

Bad advice. Tax bracket will change based on how much/when it's pulled out of traditional ira. Always run the numbers.

[@tedhansen3846]

Another aspect I hadn't considered Dave, thank You

[@2Cambell]

This is something that needs to be explained better. I am looking at this situation (possibly, not quite like this) in a few years.

[@damondiehl5637]

So, a follow-up post. With ETrade, you have to have the cash you want to use to pay the taxes in your Traditional account. I did a conversion last year and managed to not have to pay a penalty on top of the taxes, but it was very close to the point where I was going to incur a penalty. The folks at ETrade were not good at explaining this and the electronic process did not explain this at all. I converted more stock this year, twice, and the first time, I ran into the same issues of not understanding where the cash to pay the tax was supposed to be. I had enough money in my account to pay the tax, but it wasn't in the right place and as I went through the process, it kept saying that I didn't have enough cash to do the conversion. I finally had the money in the right place (the Traditional account) for the most recent conversion. If you do not set up the conversion to use some of the stock to pay taxes and you do not have cash in the Traditional account, you would be wise to use IRS Form 1040ES to send an estimated tax payment to the IRS. Send at least 10%. When you settle up on your taxes in April, you might still owe some money, but not so much that you incur a penalty (this would really depend on how much you are converting).

[@jeffa7671]

The general timeframe is 10 years. If you aren’t going to need it for 10 years then convert it

[@kimberlyg5770]

This too was on my mind also.

[@cindysalazar8774]

Is it best to max contributions to my 457B or open a Roth? My confusion is being taxed now at a higher percentage vs. being taxed at a lower percentage when retired. I’m still learning. Help!

[@e79422]

I don't understand why you would want to give the government 200K to invest with your tax bill and not just keep it for you to invest and grow until you need it?

[@BobSmith-zd2nv]

Between the increasing amount of RMD each year, Soc Security taxes added on to the IRA/401K withdrawals, and the possibility of IRMMA taxes on Medicare benefits, it makes sense to move move some portion to Roth thru a backdoor conversion…. IF you have $1 million or more in your tax deferred balance. I thought Mr Ramsay’s reply was very muted in this video. The answer is not if you are never going to touch the Roth money until death… it’s simply can you let it grow for 5-7 years before you start withdrawing from it. It’s even better if you can pay the taxes on the conversion from savings rather than using the IRA to fund the Roth conversion.

[@terryneal5569]

Does a conversion count as a RMD if a person is at that age?

[@terrybumpass4799]

If you are looking at taking social security a Roth makes more sense because of the way social security taxes outside income. People in this situation will know what I am talking about. Maybe someone there can offer more insight.

[@markkile8215]

To buy into a Roth one has to assume that their retirement income will be greater than what it is when you are working, This is just the opposite of the norm is, most folks income drops significantly after retirement, therefore a converting to a Roth is a poor financial decision, as CPA I see most affluent folks die with their IRA $$ because it’s the very last money they want to pay tax on, then the account goes to their heirs.and if you convert before you retire then you pay tax on 100% of your IRA balance, I would rather leave it for my heirs to pay tax on !

[@1964robw]

RMD age will be 75 when this gentleman hits that age. You would have to take an in service withdrawal. I think it makes more sense to change the current contribution to a Roth401k while working. Then since he is in the current 22% now putting him a higher bracket does not make sense. Have him take out enough over the 10 years to keep him in the same bracket. So his Rmd at 75 will be insignificant and his Roth will pay him tax free for the rest of his life.

[@jg11596]

Is there a formula or calculation to help determine how long it will take to recover paid taxes on a Traditional IRA conversion to Roth?

[@Cathy-xi8cb]

Yes; you need to stay alive about 10 years.

[@pastordoogie8438]

Bad years in the market are good years to do Roth conversions.

[@Excalibur2]

One thing I never considered is the risk of accidentally converting an IRA to a Roth. I usually convert an amount every year to avoid state taxes (my state doesn't tax traditional, but does if the money goes straight to Roth) They changed the law recently so now if you convert an amount, you can't cancel or reverse it. Having a traditional is now a liability in my eyes if you aren't super careful with it.

[@whitleyca]

How do your conversions avoid state tax? Do you mean when you finally draw from the Roth?

[@Excalibur2]

@@whitleyca Illinois, Pennsylvania, and Missouri are the states I found that don't tax traditional IRA contributions, but if you do it directly to Roth then they don't give you a tax break to compensate for it. It's actually kind of weird, they give the deduction on it when you convert it, so it's not until you distribute the fund or convert that your tax break is felt. That means that most people probably see the state tax break in retirement when their income is the lowest.

[@Excalibur2]

@@whitleyca so basically, I put the money in and then convert it to Roth at the end of the year and it shows up as -6000 taxable state income, saving a few hundred bucks.

[@whitleyca]

@@Excalibur2 wow! that is really curious to me. and great for y'all in those states. I live TX, so no state tax issues to be concerned with / understand. thanks for your response.

[@spankynater4242]

You will get taxed on your account when you draw it out.

[@nofeerz]

can't access for 5 years and an opportunity cost of the $$$ paid in taxes lost so the money you're paying in taxes to do this that return is LOST

[@papasquat355]

With taxes set to return to pre-Trump levels in 2026, it may be worth taking the hit now at the lower rates than to pay the taxes thru the 401k later when they go up 3 to 4% and the standard deduction is cut in 1/2.

[@Aortadetroit]

Seriously, for some reason Dave is the worst person in the world to ask this question of. It's one of his blind spots.

[@HRCISASKNK]

So if you already knew all of this why did you call and ask him?

[@jdboyd1861]

How TF does dave qualify for a ROTH? backdoor? I think the max income for one is something like $130K

[@RalstigRacing]

Back doors there also a thing called a mega back door. There’s plenty of KZbin videos out there.

[@nopetv1053]

I asked myself the same but im assuming he had them before he got as rich as he did

[@JayRay9999]

he did say it was a 401k. This year people over 50 can put 30K in their roth 401k. And then on top of that you can put ANOTHER 36K! (you after tax and your match). You convert the 36k to a roth (you pay tax on the match) That is how you get 66k of ROTH in 2023. Then you do a back door roth for 7K and that is a total of 73K!!!! in Roth for the year. You owe it to your yourself and your family to know all of the benefits that our tax code provides. The benefits are there.

[@davidt5770]

@@JayRay9999 I do not think there is a cap now on converting from IRAs, etc. to a ROTH IRA.

[@JayRay9999]

@@davidt5770 Correct, no cap on conversions. You can convert (from existing pretax retirement $) as much as you want and pay tax on it all! That is the rule for now. The video was about filling up your 401k with the income that you make in the current year. It was not about converting.

[@TheRealTommyBear33]

roth sounds better than traditional unless you to rich to roth thought it had an income limit idk

[@derrickyegge1303]

Noooooo, think taxes. He will be in a lower tax bracket when he's retired in traditional. If he pays taxes on it this year, he will give the absolute most to the government. Bad call Dave.

[@dellparker7686]

Why not make interest in the taxes you owe Uncle Sam instead of worrying about the tax rates at 72 when RMDs are required? Keeping in mind I’m 63 and I understand age is a factor!

[@erichearduga]

If you plan to move to another country in retirement you might want to check if they recognized Roths ... if not you'll be paying taxes twice.

[@dellis8267]

Would in not make more sense to roll over your IRA to a Roth after you retire? Seems to me when you eliminate your main source of income, you should be at the lowest tax bracket possible.

[@damondiehl5637]

If you wait until then, most of the growth has happened, and you are losing much of the benefit of a conversion. Converting to a Roth creates a taxable event, and you won't be in the lowest tax bracket, anymore. Depending on how much you are converting, some will be taxed at 10%, some at 12%, some at 22%, etc. potentially all the way up to 37%. Waiting until retirement to convert does mean you will have more room in the lower brackets during the conversion because you aren't filling them with with work dollars. But, to get any benefit from being in a Roth account, you need to leave that money alone for at least 10 years, so you get some tax-free growth before taking distributions.

[@keithmcphail1152]

This conversation seems very risky. There is no opportunity for this fellow to work and recoup his money or if he needs cash. If the market goes South, and he's used some/all of his cash to pay taxes on the switch to Roth, then he's screwed. Maybe you guys have handled this question too much. You have to be more sensitive to the situation that you're being asked to contribute advice to. He might go do exactly what you say and when the Bull market ends in 10 months, he could be in real trouble becuase that remaining $400K is not going to be $600K for 20 yrs. If ever. I just will not increase by 50% quickly enought to provide him with coverage (esp'ly since he might be dipping into it to live on so the base is getting smaller).

[@Betty-dc5ck]

Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.

[@Helen-tg4tr]

People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.

[@JC-21470]

He should not convert all at once but instead in small chunks over time when your income is lowest. Dave should tell him to consult an expert prior to doing this.

[@bellmattwebb]

Yup, not going to work, not going to get health insurance. Can't work, too bad, still no health insurance.

[@david.6040]

If one was to move their traditional 401k to a Roth 401k can the money be used penalty free before retirement age???

[@damondiehl5637]

After-tax CONTRIBUTIONS can be withdrawn from a Roth any time without tax implications or withdrawal penalties. Early withdrawal of EARNINGS can lead to a 10% penalty and income taxes unless it’s a qualified distribution. To withdraw EARNINGS tax- and penalty-free, you must have held a Roth IRA for at least five years and be at least 59½.

[@mbank3832]

I thought Dave the caller probably named himself after Dave Ramsey too

[@jimroscovius]

Question - we have all IRAs and no Roths. We'll start withdrawing in 5 years. Should I convert anything, or just start some new Roths?

[@damondiehl5637]

Like Dave said, the benefit of Roth accounts is letting the investment in them grow, which requires time. The Rule of 72: Divide the rate of return into 72 and that is how long it will take to double. If you get a 6% return on an investment, it will double in 12 years. If you get a 10% rate of return your investment will double in 7 years (roughly). You probably need to leave your investment in a Roth account for AT LEAST 10 years for it really to be beneficial. You may be better off by just putting any new investments in a Roth account. When you start to draw down accounts instead of building them, take from the Traditional accounts first and leave the Roth accounts for last.

[@absurdnerd7624]

​@@damondiehl5637rule of 72 is a myth. Rule of 76 is closer to the truth.

[@TheLifetraveler1]

At 70 with a few dollars in an old company's 401K. What to convert it to as I have to withdraw it soon, Dave.

[@damondiehl5637]

Like Dave said, if you can't let it sit in the new Roth account for 10-20 years, there is no point in converting. The real benefit of a Roth account is giving the investment time to compound, as all the growth is not taxable. What kind of fees will you have taking distributions from your 401k? If they are heinous, that would be incentive to do just a straight rollover from 401k to IRA, Traditional --> Traditional. If you will be able to let it sit for 10 years, or if you plan to never use it and just let it pass to your heirs, it might be worth it to do a rollover conversion from Traditional 401k to a Roth IRA. Then it can just sit in that Roth \IRA and grow until you finally use it or it goes to your heirs. never

[@onemorething100]

Even Dave was annoyed with the guy's inability to STFU and listen

[@mikeshaw4610]

If the minimum you have to pull out at 72 creates extra why not just reinvest the extra into a Roth

[@Cathy-xi8cb]

You have to have earned income to do it without paying taxes.

[@sydneynguyen8064]

If we don’t have to pay income tax on earned money at all ( capital gain) , then it seems that Roth IRA is far more superior With traditional IRA, we have to pay income tax on the whole amount when we withdraw

[@PD-dy8kw]

This guy ever held a regulated Fiduciary license or actually worked in the industry or just a former real estate agent with a mic?

[@ddh158]

convert 401k to roth don't forget can't use for five years.

[@dr.ellieabdi9540]

I'm a teacher & retiring in 3yrs with full pension. Not sure when I'm going to withdraw SS but what is the best option for my 403b? Leave it in there? Transfer over to Roth? CDs or else?

[@cliftongreen1281]

I would leave it there...if u want after tax money then just contribute to a Roth IRA or invest more into the Roth portion of your workplace retirement fund but I would personally fatten that pension up and max out your HSA account

[@thekippers-r3c]

These advisers never help disabled. SSDI or veterns😢

[@iamhischosen3866]

What is the purpose to rollover from 401 to Roth if you have to pay taxes based on your bracket?

[@davidt5770]

You may be chosen. But what tax brackets you are in now and what brackets you are in when you take your RMDs will make a difference.

[@damondiehl5637]

All future growth once you convert is tax free. You are accepting a little pain now for greater rewards, later. It would be wise to keep track of tax brackets. If you convert too much at one time, you could move yourself into a higher bracket. And, as Dave said, you need to leave the money in the account long enough for it to make a difference. If you convert and then immediately start withdrawing, you are defeating the purpose of the conversion.

[@iamhischosen3866]

@@damondiehl5637 I appreciate your response.

[@stevencole7331]

Can't take it with you when you go .

[@enermaxstephens1051]

Ramsey is the guy who fills in for the failed U.S education system. Economics should have been required to graduate, and it should have always been a core course like math. So taught in every grade. That said he's teaching to the financially illiterate, so it's no wonder they're so thankful and soak up most of what he says.

[@X.MillennialResponder.X]

Your better off stop contributing to your 401(k) traditional and instead put all the money into Roth. If you have over 20 years before you have to take it out your brother off having both buckets if you don’t really need a traditional which you may not understand if you do or don’t, you can never predict the future and if you can then, let me have that crystal ball because I’d love to 10 times my money at this point. I would instead put any contributions into a Roth or HSA, and keep both invested until you retire, and then anything that you had left over you can pull out of your 401(k) traditional, not touching your Roth or HSA unless you need it.

[@paulharsh78]

I’m not getting it, why would I trigger a taxable event?

[@chetanjilhewar1669]

Because you have to pay taxes on the money.

[@BobSmith-zd2nv]

Because it saves you thousands in the long run. Your IRA will likely grow over the years you are in retirement, so you pay taxes in retirement on a larger amount. Pay now at current low tax rates, then it’s tax free money going forward.

[@chetanjilhewar1669]

@@BobSmith-zd2nv better answer than me.

[@davidt5770]

@@BobSmith-zd2nv (Many many thousands!)

[@kannermw]

This guy doesnt know what he is talking about. Capital gains taxes are at a low point and unlikely to stay that way into the future. Similarly if you time conversion with market low point you pay less capital gains tax and get all of the future run-up tax-free! A Roth may allow you to stay in lower tax bracket while living same lifestyle. If inflation remains high you will pay tax on inflated value and if income brackets dont increase with inflation then you will be taxed at higher marginal rate. Especially when RMDs kick in for higher wealth individuals. At the end of the day do you really trust the government wont be coming after those with accumulated wealth? I say the big money grab is coming so not a chance in hell.

[@mingthemercy4605]

This is a bragging show, callers just show off their net worth instead of seeking advices.

[@MyLifeThai371]

I didn't realize Dave is 61. I thought he was younger than that...

[@Cathy-xi8cb]

That's because he stays young yelling and putting on a show.

[@backyardgardenguy9466]

David is not resegregated.

[@sarahshanahan2222]

Secures 2.0 act.. that will most likely pass... they will start allowing Roth 401k.. !!! Yay!!! And they also will have business pay your 401k the same amount that you pay your student loans... I wish Dave would talk about this a little