Should I Convert My Retirement To Roth?
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- Опубликовано: 30 июл 2024
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I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.
Got it! Buying stocks during a recession when prices are down could be a good move. You might get them at a lower price and sell later when they go up. Just do your homework and be aware of the risks before diving in!
That's awesome! Investing in stocks with a reliable trading system can lead to great outcomes. It's fantastic that you've been working with a financial advisor for a year now. Starting with less than $200K and being just $19,000 away from making half a million in profit is impressive! Keep up the good work!
Mind if I ask you to recommend this particular coach you using their service?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
I'll suggest you create a diversification strategy because building a good financial-portfolio has been more complex since covid. Recently my colleague advised me to hire an advisor, surprisingly I have accrued over $120K under the guidance of my coach during this crash. She figured out Defensive strategies to protect my portfolio and make profit from this roller coaster market.
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.
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
Due to the market falls, I need advice on how to rebuild my portfolio and develop more successful tactics. Where can I find this teacher?
I work with Sharon Lee Peoples as my fiduciary advisor. Simply look up the name. You would discover the information you needed to schedule an appointment.
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
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.
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
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.
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.
I searched her up, and I have sent her an email. I hope she gets back to me soon. Thank you
The concept of mini-retirement changed my life. I'm no longer waiting for some retirement paradise when I'm 65. It helps to know how to fund the lifestyle. You know, making money while you sip that piña colada by the beach does help. I wouldn't have been able to do it otherwise.
Yeah, people miss that part. You don't jet out to Puerto Rico with your life savings. Proper investing and a good business acumen are big pluses. Invest in the stock market, real estate, build businesses. That's just it.
Safe to say not everybody has the skill to pursue investing. But it's always easy to follow the advice of someone who knows how to i.e a financial advisor. You could anywhere between 10--40k with the right ones. Online businesses are a good bet too if you are savvy.
I think most people want to try out a financial advisor, but the amount of information on the internet is overwhelming. Could recommend any good one(s)?
Yes, it feels overwhelming when you are starting out, but with time you'll find your foot. I personally suggest sticking with one who understands your goals. I'll recommend *Sharon Lynne Hart* because I work with her and you could check her website out, but I'm sure there are other good ones, too.
I have an Investment portfolio that's worth $1million, I don't think that'll be enough for retirement. I need an average risk investment strategy in stocks that'll give me more yield. Is buying stocks now a goods idea?
As they say, time IN the market is better than trying to time the market. I think you should seek advice from a licensed financial advisor. They’ll give you guide on high risk and low risk investment strategies for your portfolio
Working with a financial advisor has been a game-changer for me. They provided invaluable insights and tailored strategies that aligned perfectly with my risk tolerance and financial objectives. With their support, I've seen significant growth in my investments and gained confidence in my financial future.
I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advis0r? I'll be happy to use some help.
*Jennifer Leigh Hickman* is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
I'm pleased with the advisr's prompt and knowledgeable assistance. Their professionalism instills confidence. Looking forward to further discussions.
I am 27 and i just started my ROTH IRA and deposited the max for 2024! I feel stupid for how long it took to get my life straight. The problem here is, what is the best way to invest the money to grow to $1 million for retirement?
I believe every Investor should start with ETFs for a solid foundation, then diversify across asset classes and maintain disciplined, regular investing to minimize risks and maximize growth.
You don't need to find the next NVDA to succeed in investing. Just choose top-notch ETFs and partner with a financial advisor like I did. I turned $100k into $20,000 in annual dividends-a significant milestone for me today.
Impressive! I admit I'm scared about retirement as I turn 60 on my next birthday. I need to ensure I have enough money to survive on. How can I consult your advisor? My retirement account isn't performing well.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
Please be careful soliciting this advice from random people on the internet. Dave has a place on his website where you can sign up for a financial coach, or a financial advisor called a Smartvestor Pro. Or you can find your own advisor.
Dave’s books also outline basics of how to diversify your portfolio, I’d start there.
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.
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.
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!
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?
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.
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
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.
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.
Impressive can you share more info?
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.
"any earnings on investments can also be withdrawn tax-free and penalty-free" that's misleading claim and false before retirement age
I'd let the $338K ride where its at and make any and all contributions from now forward as Roth. Its stupid to convert when you'll likely pay 22%. I'd only convert if your income falls dramatically (like below 45k for single filers) as then your conversion would happen at 10 to 12%. If you do it the way I'm saying, you can use your traditional 401k up to $44,000 / year and stay under the 22% bracket by filling anything over 44k with your Roth money.
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.
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.
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.
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.
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.
Thank you for this. I just sent her an email, and I hope she gets back to me soon.
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
same
As long as politicians don't change the rules.
@@Nepthu what other choice do we have?
@@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.)
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 ?
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.
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
@@PilouBen However, if you do not have access to a professional like JUDITH ANN PEACE, 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.
@@Ingridlourd02 Oh please I’d love that. Thanks!
@@PilouBen Judith Ann peace is her name
Lookup with her name on the webpage.
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...
I do 100 dollars in scratch off lottery tickets every Friday. That’s my retirement plan. So far I’m still working.
Probably makes sense to do a conversion to max out the 22% bracket and have a better bsalance of Traditional and Roth
Two things to consider: 1) Future RMDs, if high enough, can not only put you into a higher tax bracket (which may be higher than today's brackets), but may also push you into an increased IRMAA payment which can be significant, and an additional Net Investment Tax. 2) Traditional IRAs inherited by your heirs will be fully taxable to them (with a 10 year requirement for full withdrawal), but inherited Roths are not taxable.
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.
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.
Retirement earnings dont affect SS.
@@hubster4477 it does affect the taxable income. Therefore affects the Social Security taxable amount and your Medicare rates.
Weird suggestion? Every advisor I have talked to - including my ELP - suggest traditional to Roth conversion.
I was wondering this a few months ago. I’m glad someone had the courage to ask!!!
Certainly! I understand that living expenses and taxes can take up a significant portion of one's income in the UK, which can limit how far that income can go. Even 100k doesn't get you very far and the dream of retiring early is starting to seem like a fairy tale. I have roughly $200,000 in 401(k) that I need to grow quickly. Please leave a comment if you can help.
Invest in the financial market. I heard that people make millions if you know the tricks of the trade. Bloomberg and other finance media have been recording cases
@@ktube2020 It depends on your personal preferences and comfort level. However, one option is to keep things simple and consult an investment-advisor. They can help you determine your risk appetite, avoid common mistakes, and provide a broader perspective on your investment landscape.
@@kkybaggy This is exactly how i wish to get my finances coordinated ahead or retirement. Can I get access to your coach?
@@c.t.u.o Yes, a Fidelity financial advisor named "NICOLE DESIREE SIMON" put an end to my fears about investing, and after making more investments, I was able to reach the high six-figure mark in less than 3 years. A licensing advisor satisfies the necessary security criteria; hence, reimbursement is guaranteed if I'm dissatisfied with the service, so I'm much better off hiring one.
@@kkybaggy I just copied and pasted her full name on my browser, super impressed with what I've seen so far. thanks for sharing!
I wonder if people that experienced the 2008 crash had it easier because. my portfolio has lost over $27000 and I don't see my retirement turning out well when I can't even grow my stagnant reserve
You have an opportunity to rebalance thanks to volatility. In order to help you diversify your portfolio, you must hire a financial counselor or broker.
I'll suggest you create a diversification strategy because building a good financial-portfolio has been more complex since covid. I have accrued over $120K under the guidance of my coach during this crash
I’m new to all this, heard it's a good time to buy and basically I've just got cash sitting duck in the bank and I’d really love to put it to good use seeing how inflation is at an all time-high, who is this coach that guides you, mind I look them up
My advisor is *Alicia Estela Cabouli* she’s highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field.
She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; thank you for sharing.
Another aspect I hadn't considered Dave, thank You
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.
It’s reasons like this that the Roth 401k should always be looked at when considering a workplace retirement account.
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.
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.
69 and looking to convert some amount to ROTH this year and in 24 and 25 before tax rate go back up in 2026. It's always been said doing conversions late in life isn't a good strategy since it won't grow to offset the taxes paid at conversion. No heirs to pass to, so this is all about reducing RMD tax liability in the future. Too bad so complicated. Oh well. Thanks Dave for all your "life" advice. It has worked well for me.
This too was on my mind also.
There's actually a simple answer regarding Roth conversions. If your current effective tax rate is greater than it will be in your retirement, then you should not be paying excess tax now by moving tax deferred money into a Roth IRA. If you cannot estimate your effective tax rate in retirement, then you don't have enough information to make an informed decision regarding a Roth IRA.
@@timtoolman9940 If you do the math, for most people, pension, social security, plus RMD at 72 will still be less than the several highest earning years for a household. The average SS is $1,600/mo. 90% of America doesn't have a huge retirement nestegg. And every year, fewer workers have a pension.
This is the correct answer tax rate now versus later is all that maters
@@davidcason7805 More or less, and unfortunately the later rate is unknowable! But there are a few other factors, such as IRMAA (and the base cost of the premium). These aren't directly related to a percentage of income: if you are in a certain range of income, you will pay X% extra on a base of $Y (and Y is the same for everyone). Doing a reasonable sized Roth conversion at 63+ will probably push you into an IRMAA threshold, not doing one, come RMD time, will probably push you into another, with the unknowns of base cost, ranges for surcharge, and surcharge %.
@@timtoolman9940 True..and if you had a decent paying job, waited to 67-70 to collect SS, have a good chunk in ret. funds and lucky to have a pension [many people dont] then it can add up and you may be in a higher bracket.
New RMD Rules As of Jan. 1, 2023, the SECURE 2.0 Act increased the age for starting RMDs from 72 to "73". This is applicable to individuals turning 72 on or after Jan. 1. In "2033", the starting age increases again to "75".
So an IRA say $800k, they're healthy, family usually lives into their 90's, they wait to 70 to for SS, have a pension...at 73 y.o the RMD's..[example]..w/$800k is $2,500/mo, at 84 y.o. w/$585k it's $2,900/mo, at 95 w/$375k it's $3,500/mo...then add SS that's probably grown, the pension= possible higher tax bracket.
What if the government incurs an insurmountable amount of debt and then raises taxes to cover it? The Roth shields you if/when when the country follows Denmark.
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.
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.
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.
In my case I estimate I will be needing to withdraw only 2% of my retirement saving to live on.
I am planning on moving about 50% of my 401k into a Roth to go to my kids.
The remaining 50% that is still in my 401k I will use to live off of making the withdrawal rate of 4% from the 401k only.
Yes you should do the conversions between 65 and 7x (when you have to take RMDs). Convert up to the 20%ish tax rate for an effective tax of 10-12%. Do so that your 401k is almost eliminated.
That said, probably not a factor for many who barely have savings in their 401k.
I think withdraw all money slowly make sense if the purpose of withdraw is to save tax. e.g. if you withdraw now all at time, you pay tax on all $600K and that is 37% Tax rate all money, he is working now, but not sure he will do after. I think without full details, it is not easy to make yay or nay decision. Always put all data into sheet and find-out what is income with or without Social security.
Let us say he makes $50K, If he does not take SS until 70, that makes his income to be $50K+Withdraw of 150K for next 4 years. he would pay less tax over 4 years vs doing in one shot.
Regarding growing tax free is silly, since there is a cost basis and there is deferred tax growing too. so technically it is not bad idea to keep deferred tax unless these money pass-down to his kids and they need to pay tax. so it boils down to their health.
Overall Roth is good idea, but rushing to convert and forget means paying full tax while waiting to take advantage was original investment goals.
I love how she helped dad and blocked the caller from talking 😂❤
Guy won't shut up.
Glad I only contributed to aftertax and Roth in my 401k.
If you’re smart you retire with your house and cars paid off. Therefore you should be in a much lower tax bracket when your retired than when you are working. If you like paying extra taxes then you’re doing a really good job. If you want to pay as little taxes as possible the formula is pretax contribution while working
It all depends on what your plan is. One isn't necessarily better than the other by default.
@@TheTurdballs420
I’m good.
I have around $450k taxable in my 401K because of company match and after tax gains.
Not going to complain with close to two million tax free Roth.
Completely debt free with two homes and three rentals.
After being retired for almost two years and observing what others are going through getting slammed by the IRS and IRRMA because of taxable cash emergencies during retirement I see now that I made the right choice…..especially with 2026 approaching.
@@blackworldtraveler3711 you feel you made the right choice because it is the choice you made.....and we always make the right choice. But if you calculate all the taxes you paid on the money before you put it in the Roth, it may very well come out to more than you would have paid withdrawing it in retirement......and you essentially have more to put away if you put it away before taxes....and therefore would have more than you have now...in retirement.
@@rayjgold
I made the right choice. Glad I contributed to my aftertax and Roth in my 401k.
Started early saving and investing since 10th grade and close to million net worth by 30.
Past ten years I took off 3-4 months without pay each on top of six weeks paid vacation each year to travel and do other things I enjoy.
Best I could do was contribute $45k-$52k a year to 401k and max the Roth IRA.
Other savings/investments, passive income etc..
Retired at 49 two years ago so I have a while anyway with minimum ten years of growth to look forward to with 401k/IRAs.
Paid cash for the rentals and beach home over ten years ago after housing crash.
I’m good.
The market crash and high inflation are stressing me about retirement. Despite the challenges, I know investing is a long-term game, so I'm staying focused on the future.
Wow, that's impressive! Could you provide more details?
She seems highly educated and informed. I looked up her name on Google and found her website. Thanks for sharing.
Generating substantial profits, particularly in a bear market, involves employing intricate strategies that are best executed by seasoned market experts.
I agree. Despite early setbacks and losses in the market, I re-entered in February 2021 with guidance from a recommended investment advisor. Fast forward two years, and I've gained over $720k in profits.
That's impressive ! I could really use the expertise of these advisors.
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.
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.
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.
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.
@@Aortadetroit young people raising a family are usually in a low tax bracket.
max out a roth if this is you
@@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.
Thank you ! I am trying to make the same decision
Consider the widow's taxes being much higher if the husband dies before the money is converted to Roth. All those RMDs will play havoc with the couple already and if one partner dies, the survivor will pay even more tax on income as a single person.
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!
False. We needed the same income as when we were working. It’s just spent in different ways.
If you make less money in retirement than you did while working, you did it wrong.
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.
Excellent point. Many people are in a lower tax bracket after they retire.
Dave - that money will be going to the kids.
Rachel - 🤗
Actually you would want to do it before starting Social Security, not wait until just before RMDs start.
Yeah, the guy's wife took SS at age 62 and he is still working. She should have waited until 70 to take SS.
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.
That’s what I’m thinking
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.
Newer Subscriber here. I have watched several of your videos. I appreciate the content and delivery. I have a question for you. I have a Roth IRA that is over 12 years old at a broker so first 5 year clock is met, I turned 60 a few months ago so second 5 year clock met. I am planning on moving the Roth IRA to a different broker in kind due to expense fees. Does this in any way reset or start another 5 year clock. If so would it be better to leave a minimal amount in the original Roth IRA. Thanks for your help and keep the videos coming. Steve
Need to consider IRMAA, effect on Social Security income and other tax implications when doing a Roth Conversion. It requires a complete analysis to determine if it should be done. Wrong Dave: the professionals talk about Roth Conversions all the time. Using cash to pay the taxes can be more beneficial. Roth Conversion is two steps: 1. Remove some funds from your Traditional IRA-this is a taxable event (ordinary income rates). 2. Deposit into a Roth (Five year rule applies). Lots to think about - these are only a few.
This is something that needs to be explained better. I am looking at this situation (possibly, not quite like this) in a few years.
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).
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.
Taxes set to rise in 2026.
Tax rate will go back to what they were before 2017.
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.
I would just leave it and just contribute to both.....
Also, who believes that tax rates are going to go anywhere but up in the next few decades?
Just send Dave your money, so he can save you money.
Spread it out over a few years to keep the tax rate on the conversions down. If you do it all at once you will pay a much higher tax rate on the funds you convert.
The Ramsey organization should really do a better job of advising high net worth people like the caller to seek advice from their estate planning lawyer and accountant. To me, it's dumb to convert all of the IRA to Roth at their age and pay 37% tax for federal plus state tax on the conversion (and yes the conversion results in taxable income which the caller did not consider). A good advisor could tell the guy to let his kids pay tax on the IRA distributions when it passes to them or consider gifting it to charity as alternatives. It's clear he has had these tax planning discussions and a 5 minute phone call with Ramsey is not going to cut it for this.
Well at 70 you going to be forced to take MD, so depending on your situation it might be better convert, just watch the convert amount. As you are not paying taxes on the growth, additionally with the margins down it would be even better.
@@MDJSTVFL Yeah he could watch it grow if he lived to be 90+. At 64-65 years old, he should have done some estate planning to make an informed decision about what to do with the IRA upon death.
100%. That said, I think Dave did a good job of basically saying “maybe.”
Also if one of them happens to die the survivors tax status switches from married jointly to single which could result in way more taxes paid, especially if forced to withdraw with rmds. Definitely needs a professional planner to examine and give good advice.
Yes, good advice. The conversion decision can't easily be generalized with all the possible variables in play. The tax bracket you're in when contribute to a Roth vs the bracket you're in when pulling $ from a regular IRA is a big factor.
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.
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.
@@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.
@@plathiasjenkins1011
Higher tax bracket at retirement could trigger IRRMA as well.
@@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).
Your path is to hire a CFP, not watch a show.
My daughter is 22 and I have helped fund her Roth for several years. This is the time to create the funds where it will have 45 years to grow. That mean that everything put in up until now will double 6.5 times before retirement. I also started a brokerage account for her and the goal is to get it to 100K in another 7 years. That way when she graduates college this year, she should be well on her way to becoming a millionaire by her 40s. Hopefully by that time she will be good enough to run my portfolio as I start to decline.
I like the "LOVE TO WORK" sentiment. When you love what you do, it is not going to be like work!
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.
Sound like a solid plan. What if you outlive your wife. Yes, she’s younger but life happens.
@@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.
That has to be the most oversimplified answer on Roth conversions on all of RUclips! There are many nuances to this topic. Also, it’s best to pay the taxes on a Roth conversion from assets that don’t originate from the IRA being converted if at all possible. I’ve found newRetirement to be very helpful at modeling various Roth conversion strategies.
Yes, NewRetirement confirmed my suspicion that Roth conversions weren't the way to go in our situation. However, all the financial gurus on YT will tell you otherwise.
@@timtoolman9940 I’m not advertising anything. I’m just an individual retiree trying to figure this stuff out like many others. Don’t make false assumptions please. I do use newRetirement as it provides some excellent insights. Also, yes he mentioned something about paying the taxes from funds derived from outside the conversion, but only as an afterthought from a comment the lady added. All I’m saying is this is a complex topic as it has an impact on ACA subsidies, IRMAA, etc, and this discussion was grossly simplistic and shouldn’t be taken as valid advice in any shape or form.
Most 401k plans don’t let you roll funds into an IRA while you’re still working for that company.
Ramsay’s not the best on sophisticated stuff.
He’s more of a motivational entrepreneur for average Joes.
I'm envious of rachels abilities to listen and absorb
I know. She is such a sponge.
Roth conversion for Dave Ramsey (personally) is fine, but for most other folks in their 60s, it makes more sense to convert to taxable brokerage. Roth has 5 year holding period and there is no guarantee of tax-free growth. In fact, there is chance for losses that cannot be deducted due to lesser time in the market and less chance to dollar cost average.
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.
Lots of ways to think about this. The conversion can work in your favor interest wise. Wait until the market tanks, than do the conversion. Taxes paid on the conversion can be recouped on interest earned on subsequent market rise. As an example, let's say you are in a 22% tax bracket and you only convert $30k to the Roth from your IRA. Taxes due is $6600. The market being markets will likely rise. At a half way modest rate of 7% yearly in three years, you would have recouped the $6600 in interest earned on the $30k. If you do the conversion when the market is high, the time frame to recoup taxes is a lot longer time frame. I am pass 72.5 yrs old and have to do the RMD. My CFP suggested this to me and so far, it's working. You have to play with the numbers and your tax situation. If you intend to spend the money soon, then I would leave it in the traditional IRA.
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.
would it not be better to wait until you retire to move some of the money to the Roth - your tax bracket is typically higher while you are working so the tax bite on the conversion will be higher than when you're retired?
It depends on how much you make and how much you convert. You could stay within the same tax bracket, but the conversion could bump you up to the next bracket. Search the web for tax brackets for the current year. Any number of sites will have them listed.
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?
Yes; you need to stay alive about 10 years.
If it is a new Roth account you have to wait five years before you can take money out of it.
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.
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.
The rule change that requires all inherited IRAs to be liquidated within 10 years of receiving them completely screwed up the idea of leaving my kids Roth IRA money that they could keep “forever”. I would think that distribution change would have a big impact on this decision.
RMD is age 72 not 72-1/2
I was wondering about that. You are right is 72 but with the new secure 2.0, I think that changed based on when you were born.
If one can live on an amount of money that keeps them essentially tax exempt then wouldn’t a conversion cost that person the gains / interest that will accumulate on the tax deferred portion of the funds owed in taxes ?
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.
The problem is he pays the tax now at a higher rate then he may pay later .. in theory inheritance his kids wouldnt’ pay taxes. This is a tougher question because your betting the tax he pays today is less then future tax. I’m not sure here … is he? Perhaps you transition 1/2.
I don’t know what planet you are on but many financial folks talk Roth constantly.
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Does anyone know if the answer given changes, in my scenario: My wife (58) and I file taxes jointly. Are the taxes I would have to pay on converting to an IRA based on our "joint" tax bracket, or only based on my income bracket? I (60) am dropping to part-time work, but her income (fulltime) is much better than my income. We are very financially healthy, with at least 90 % of our total wealth in 403Bs. Is there an advantage to waiting until we are both retired to convert from our 403Bs to Roth IRAs? Can we keep a mixture of some money in Roth IRAs and 403Bs? or is that stupid?
Any conversions you do will be taxable as ordinary income on your tax return. If you file MFJ it will be taxed on the joint brackets. If you file MFS it will be on the single brackets. In most cases married people should file MFJ. Assuming you aren’t an exception, a conversion you do will be on a joint return with her income.
It might make sense to wait. If you are certain your taxable income will be lower for a few years after retirement.
Shooting from the hip… if 90% of your retirement assets are tax deferred. It’s very unlikely waiting is the right call. RMDs force people to pull assets out faster than a “safe withdrawal rate”. That means you incur taxes on the IRS’s timeline. You want control to choose on your timeline!
My advice… Find a fiduciary with the appropriate expertise to run some numbers.
You need a CFP not this guy.
Ideally, in retirement is best to have different buckets to draw upon to finance tour income needs. 90% in 403Bs is a huge chunk in one bucket. They have moved back the RMDs age to 73 or so, look it up. I convert a small % of my IRA to a Roth each year. I'm 63 and retired. Won't draw SS till near 70. I won't convert all of my IRA account because it is too big, over $900k. My IRA is mostly stocks, so when the market is in a swoon, I pick which positions I want to move over to the Roth. My accts are with Schwab and its easy to do. So yes you can convert portions at a time, reduces tax bite, and you don't have to do all once you start.
The whole benefit of a Roth account is that all the growth comes out tax-free. If you convert the money late in life, most of the growth has already occurred. And because you got the tax break each year as you filed your return, you have to pay the taxes as you convert to Roth. Depending on how much you convert, you could bump yourself into a higher bracket, so you need to pay attention to that aspect.
Roth account are really geared for people who have a fair amount of time before they will start accessing the money. That allows the money invested to double, and double, and double again. The caller is talking about not touching the Roth account for another 20 years (or at least Dave said it), so that does give the money time to grow, so there is some benefit to the conversion.
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!
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?
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
I thought Dave the caller probably named himself after Dave Ramsey too
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.
The Roth conversion is most favorable when the person is going to get hit with the required minimum distributions.
Otherwise, the taxpayer is looking at paying taxes today at today's rate versus holding out for retirement when their rates are likely lower and they might be able to avoid taxes on a Traditional IRA - home purchase or medical expense. So waiting can be more favorable to the taxpayer.
If you can convert a portion each year at 12%, it is even better!
For 2023, filing jointly, you pay 10% tax on income from $0 to $22,000.
You pay 12% tax on income from $22,001 to 89,450.
You pay 22% tax on income from $89,451 to $190,750.
You have to keep an eye on this to make sure you don't push yourself into the next bracket.
Convert up to the next tax bracket each year…. Just not all at once
At least the next tax bracket and up to the 24% bracket. It’s best to convert thru 2025, because tax tables AND ranges revert back to 2017 brackets in 2026 (adjusted for inflation)
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
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.
@@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.
How old are you?
@@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.
If you wouldn’t mind - curious and wondering what decade you started investing into a Roth?
Does a conversion count as a RMD if a person is at that age?
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.
Is taking money from my regular savings considered post tax money or do they take additional taxes out when I open a Roth IRA?
That is "post-tax" money that you are putting into a Roth account. You cannot claim the money you contribute as a deduction against your income, like you would for a traditional IRA.
@@damondiehl5637 Thanks for the information. That's what I thought, but someone told me different. Thanks.
How can Dave Ramsey qualified to do Roth IRA when there's an income limit of $144K a year?
It’s called a back door Roth conversion. All high earners can do it. You max a traditional IRA with after tax funds and then immediately turn around and convert it to a Roth IRA.
@@srconrad In this case they were talking about converting an existing pre-tax IRA to Roth. So it's not a "backdoor".
OK, so in that case, he’s doing straight Roth conversions and paying the taxes on it. Still something that can be done at any income level. Also, if his company has a Roth 401K, there’s no income limits for contributing to that.
The general timeframe is 10 years. If you aren’t going to need it for 10 years then convert it
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
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.
It is if the money is going to the kids. Think long game.
If he is still working his tax base will be higher too ? So he will pay more in taxes vs if he did it after retirement?
A big part of the benefit is that the growth is tax free. If you wait to convert, you give it less time to compound.
But yes, if you do that conversion while you are still working, that adds to your taxable income for that year.
There are pros and cons to doing the conversion. I have both a Traditional and a Roth IRA. I plan to draw down the Traditional, first, after I retire and hold off on touching the Roth money.
Born 1960 and later, the RMD rule has changed to age 75.
Hey Man...how are you.
What is the purpose to rollover from 401 to Roth if you have to pay taxes based on your bracket?
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.
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.
@@damondiehl5637 I appreciate your response.
Nope
95?
Man, these people are delusional.
Think they gonna live forevers...
im surprised more people arent saying this
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.
How do your conversions avoid state tax? Do you mean when you finally draw from the Roth?
@@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.
@@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.
@@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.
You will get taxed on your account when you draw it out.
Bad advice. Tax bracket will change based on how much/when it's pulled out of traditional ira. Always run the numbers.
If one was to move their traditional 401k to a Roth 401k can the money be used penalty free before retirement age???
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.
OK, here it is. You want the truth. I will tell you the truth. $600K is too WAY too much in a pre-tax 401K for exactly the reason Dave states. It’s the RMD’s, but it is a bit more complicated and nuanced than Dave explains. RMD’s in your 70’s on $600K WILL cause your social security to become taxable and will double your tax liability. They even have a fancy name for it. It is called the Tax Torpedo. I like Dave but your question is sightly outside his area of expertise. You are on the wrong channel and asking the wrong guy. There is a better channel on you tube called retirement planning education. It is not a huge channel but that guy’s videos are the best I have ever seen. So here is the bottom line. If you or your wife have a pension and the SS to Pension ratio is between 25 and 50%, then you need to have all that pre-tax money converted or spent BEFORE you both draw SS. The reason is the provisional income calculation will cause your RMD’s to be double taxed. If you have no pension, then you want to keep some money in pre-tax but not much, perhaps $250K or less. The key is to have just enough in RMD’s to not cause any tax liability. Good luck and look up that channel. A few hours of watching videos on tax torpedo and provisional income calculation will set you on the right path. Oh, and make sure to watch the one on IRMAA too.
Thanks for recommending the additional RUclips channel. I'll check it out. One additional solution for some people would be Qualified charitable distributions (QCD's) using your RMD. It's one way to get around having your RMD included in your income for income tax purposes as well as IRMAA thresholds.
Is there a limit to how much I can contribute to Roth each year? 6k right?
Yes for Roth IRA it’s max of 6k.
That's a different kind of roth. They're talking about their 401k
$20,500 for Roth 401(k)
Contribute $6000 for Roth IRA
Contribute $20,500 for Roth 401k
7k if over 50
Can you offset roth conversion taxes with stock sale losses?
Yes. Taxable gain and taxable loss. Same category
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.
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
Tapes? What's that? :)
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.
Yup, not going to work, not going to get health insurance. Can't work, too bad, still no health insurance.