Use Roth Conversions to Reduce your Lifetime Taxes: Turning Financial Lemons into Lemonade (Ep. 17)
There are many benefits to Roth conversions. But beware! Don’t step on a land mine when implementing that can blow your finances up!
In this episode, Adam introduces his new co-host, Patrice Sikora, before discussing the benefits of Roth conversions. They highlight how these conversions can help reduce taxable income and potentially avoid higher taxes and higher Medicare premiums in retirement. Adam also discusses the impact of Roth conversions on financial aid for college and the importance of considering state taxes. The conversation concludes with an important reminder to not jump into Roth conversions alone and to avoid common mistakes by consulting a financial professional.
Adam discusses:
- An explanation of Roth conversions and their benefits
- A story about a client who benefited from a Roth conversion during a low-income year
- What the widow’s penalty is and how Roth conversions can help mitigate it
- Why it’s important to plan carefully and consult a financial professional for Roth conversions
- Benefits of doing Roth conversions during the “golden decade” of retirement (ages 60-70)
- Potential impact of Roth conversions on financial aid for college
- Why keeping state taxes in mind when planning Roth conversions is important
- Tax arbitrage and the benefits of having different investment buckets (pre-tax IRAs and Roth IRAs) for managing taxes during retirement
- And more
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