Today I’m talking about Roth conversions.
But instead of talking about why they’re so great…
…I’m sharing 5 reasons why you might NOT do them.
To help, Steven Jarvis, CPA joins me. Together, we share a handful of often-overlooked reasons that might make you pause.
If you’re ready to learn why you might pass on Roth conversions (today or in the future!), today’s episode is for you.
Key Takeaways
- A Roth conversion is the process of converting Traditional IRA dollars to Roth IRA dollars
- Proactive Roth conversions can significantly reduce lifetime taxes for the right person
- Roth conversions are not a universal solution for everyone
How to Listen to Today’s Episode
Episode Links & Resources:
- Retired or Close to It? Need a Retirement + Tax Analysis?
- Steven Jarvis:
Five Reasons NOT to Do a Roth Conversion:
- Shadow Taxes
- Two common shadow taxes are Medicare IRMAA and the Premium Tax Credit (PTC)
- If IRMAA is increasing your Medicare premiums, learn tips for how to avoid IRMAA here.
- They are Permanent
- Consider IRA 60-Day Rollover as an alternative
- You don’t have the cash to pay the tax bill
- Consider updating your Form W-4 to increase withholdings
- You don’t want to do it
- “There’s the textbook answer, and then there’s YOUR answer. As long as YOUR answer doesn’t put your retirement in jeopardy, I support it.” ~Taylor Schulte
- Giving your money away at the end of life is most important to you
- Qualified Charitable Distributions (QCDs) and Donor-Advised Funds are likely better tax strategies
