What’s the Break-Even Point on Roth Conversions?

Are there ever times when going all Roth isn’t the best strategy? How do you determine the break-even point on doing Roth conversions? That’s today on Your Money, Your Wealth® podcast number 477, as Joe Anderson, CFP® and Big Al Clopine, CPA spitball on marginal vs. effective tax rates for Joseph Allen, saving to after-tax brokerage or pre-tax 403(b) for Gigi in Illinois, the arithmetic of Roth conversions for Carl Spackler in Florida, and the mega backdoor Roth for Jefe in Texas. For something completely different, we’ll wrap it up with a discussion of tax forms that need to be filed for your solo 401(k) depending on the account balance, for Smitty in The Villages. Access this week's free financial resources and the episode transcript in the podcast show notes, and Ask Joe & Big Al On Air for your Retirement Spitball Analysis, at bit.ly/ymyw-477
00:00 - Intro
00:44 - Marginal Vs. Effective Tax Rate: Going All Roth Isn’t the Best Strategy? (Joseph Allen, Wichita, KS)
14:32 - Free retirement calculator EASIretirement.com/?tum_source=youtube.com&YMYW-477
15:37 - I’m 43 and Will Have $2.4M in Retirement. Should I Save to After Tax Brokerage or Pre-Tax 403(b)? (Gigi, IL)
23:17 - Is There a Break-Even Calculation for Roth Conversions? (Carl Spackler, FL)
29:30 - Retirement Income Strategies Guide - free download: purefinancial.com/white-paper...
How to Create a Steady Stream of Retirement Income - YMYW TV: purefinancial.com/ymyw/episod...
30:38 - Mega Backdoor Roth: Must I Convert Traditional IRA When I Roll After-Tax Money? (Jefe, TX)
36:29 - Must I File Form 5500-EZ If Solo 401(k) Had No Balance at Year-End? (Smitty, The Villages)
42:18 - The Derails
Pure Financial Advisors, LLC is a fee-only Registered Investment Advisor providing comprehensive retirement planning services and tax-optimized investment management to thousands of people across the nation.
Schedule a free assessment with an experienced financial professional: bit.ly/PureAssessment
Office locations: bit.ly/PureLocations
Ask Joe & Big Al On Air: bit.ly/AskJoeAndBigAl
Subscribe to our KZbin channel: bit.ly/YMYW-YT
Subscribe to the Your Money, Your Wealth® podcast: link.chtbl.com/ymyw?sid=y
IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. As rules and regulations change, content may become outdated.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
CFP® - The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.
CPA - Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period.