Roth conversions are one of the most talked about strategies in retirement planning, and for good reason. A well timed conversion can reduce future required minimum distributions, lower your lifetime tax bill, help you avoid Medicare IRMAA surcharges, and even make things easier for a surviving spouse or for your kids.
However, a poorly timed conversion can backfire. It can increase your taxes unnecessarily, eliminate Affordable Care Act premium credits, trigger IRMAA, or create tax you never needed to pay in the first place.
In this video, I walk through who should consider a Roth conversion and who probably should not. I use real situations that are similar to what I see when working with retirees.
What you will learn:
➡️The low income window many new retirees fall into, and why it can be a golden opportunity for conversions at the zero to twelve percent brackets
➡️Why retirees with large IRA balances may want to convert before required minimum distributions begin
➡️The hidden tax impact that surviving spouses often face, and how conversions can help
➡️How Social Security taxation and Medicare IRMAA fit into the picture
➡️When qualified charitable distributions can completely change the math
➡️How the SECURE Act affects the taxes your children may pay on inherited retirement accounts
➡️Situations where conversions do not make sense, including Affordable Care Act subsidy cliffs and households that will likely remain in very low tax brackets throughout retirement
➡️Why your future tax bracket is really the key question
Roth conversions can be one of the most powerful tools in retirement, but they can also be one of the most expensive mistakes. The key is understanding your income, your timeline, and how the rules apply to your situation.
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