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Tucson, AZ 85719


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Should you do a Roth Conversion?

Ever wondered if a Roth conversion could help you get a “tax-free” retirement?

When the Roth conversion came out it was all the rage. Advisors and investors clamored to take advantage of the tax loophole and jumped on the bandwagon thinking they “gamed” the system.

Then they got their tax bills…

If you’re like most people we talk to on a regular basis then you’ve most likely heard from other advisors talking about a “tax-free” retirement. The biggest tools being used by said advisors is either the Roth conversion or cash value life insurance (which we’ll talk about later). And while the Roth conversion isn’t inherently bad it almost always comes with many unintended consequences that shock people when they get their taxes done.

Here’s the problem:  Many of the people who do Roth conversions today don’t actually end up saving any money in the long run.

That’s why we’re on a mission to educate retirees in Tucson about retirement and all the hidden “little things” that eat away at the return and put your retirement at risk.

On today’s agenda:  The Roth Conversion

To make it easy, we shot this quick video that explains the good, the bad, and the fine print…

Let’s Recap:

  1. If your tax rate will be lower in retirement than it is today, you may want to avoid them.
  2. When you pull the money out you’ll most likely have to pay the tax bill from other accounts.
  3. If you pay the tax bill from an IRA you may also pay even more in taxes…
  4. If you’re in your lowest tax bracket years then ROTH 401(k)’s and ROTH IRA’s make the most sense.
  5. Convert small chunks up to the next bracket in income to safely use this strategy.

No matter the approach or strategy you need to know the good AND the bad and what long-term consequences you’ll face if you pull the trigger.

That’s why we caution jumping into a Roth Conversion without doing the research or meeting with a CPA who can walk you through the benefits and risks step by step.

Like always, if you’re facing retirement and need a second opinion learn about what makes us different, we’ll audit your entire strategy to make sure you have the right tools to make your retirement as low risk as possible and still drive in a good income.

And if you want a further dive into some of the biggest risks with retirement planning then check out our webinar or download our ebook on taking income in retirement.