When Roth Conversions Don't Make Sense (And When They're a No-Brainer)

·43 min·4 clips

TJ from PA has $7.2 million but huge capital gains—should he still do a Roth conversion?

The episode begins with an introduction by executive producer Andy Last, followed by hosts Joe Anderson and Big Al Clopine addressing listener emails. First, TJ from PA asks about Roth conversions given his $2.5 million IRA, $700,000 Roth, and $4 million taxable account with 150% capital gains. The hosts discuss income distribution strategies, tax management, and forecasting over 20 years. They mention charitable remainder trusts as a sophisticated option. Next, Rebels without a gauze, a retired nurse couple aged 70 and 72, inquire about conversions with $1.1 million in traditional IRAs. The hosts emphasize the widower's tax and legacy planning for their four kids. Viking Barnsey, a 62-year-old retiree from Arkansas with $1.7 million in retirement accounts, questions conversions while spending on travel like Polaris class flights. The hosts analyze his 3.8% withdrawal rate and tax bracket. ZZC, a couple aged 59 with $18.7 million, details a plan to convert $300,000 annually to avoid RMDs and Net Investment Income Tax. The hosts suggest strategies like exchange funds or direct indexing. Throughout, the hosts blend humor with technical advice, promoting their free financial assessment and Roth Papers guide. The episode concludes with a teaser for next week's show on 72t elections and employment incentives.

As heard by us

A practical Roth conversion discussion for listeners balancing tax brackets, RMDs, and spending needs.

Roth conversions are treated here as a planning question, not a default recommendation. Jill Anderson, CFP, and Big Al Clopine, CPA, move through several listener situations: TJ in PA with large capital gains, a New England couple over 70, Viking Barnsey's tax-deferred accounts,…

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Why you'd press play

Need a calm second opinion on whether Roth conversions fit around tax brackets, RMDs, Social Security, military retirement, and spending you may not actually need portfolio withdrawals to cover?

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