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When Roth Conversions Might Not Be the Right Move · How to Retire on Time

• 0:00
  Mike: Hi. Mike Decker, author of the book How to Retire on Time. Here's a question I was recently asked on my Retire on Time q and a. Check it out. What's your position for Roth conversions?
• 0:15
  Oh, I'll... You can go deep on that. We just open the Pandora's box. For those who haven't gone to one of our workshops, every Tuesday night at 06:30, attend the workshops. I talk deeper about this.
• 0:28
  But here is the plain truth of Roth conversions. Okay? They're right for some, and they're not for others. Online, it's like everyone's talking about how everyone needs to do IRA to Roth conversions. Taxes are going up.
• 0:40
  Well, that might happen, but it might not. But every year, you do get a coupon. It's called the standard deduction. Every year, you get a coupon. It's called the lowest tax bracket.
• 0:49
  So for some people, it does not make sense to max out 22 or 24% brackets when they could stay in a very... A much lower bracket in perpetuity. And even if the 1012% bracket is 15% in the future, those taxes go up. The lower brackets don't usually change that much, especially with the affordability crisis we have. I don't see that being a huge issue.
• 1:13
  Mhmm. And so you're actually hurting yourself more than helping yourself by accelerating conversions when you could be patient and just cash in those coupons every single year for the rest of your So be very careful with absolute opinions on IRA to Roth conversions when you when you work with us, if you decide to work with us, and that's up to you to decide that. Putting the plan together first exposes the strategies and whether you should do IRA Roth conversions or not. And there are several factors. Do you need...
• 1:42
  Are you gonna self insure? Do you need more money and something that's tax free that doesn't disrupt your taxes later on? Maybe we do some IRA to Roth conversions and then not touch the Roth for 30. Maybe you already have some Roth and it's enough that you don't really need to touch it, and so you can just slowly drain your IRA assets. And we've got clients with $710,000,000, a lot of it's in their IRA, they need to do IRA to Roth conversions because the surviving spouse is going to get destroyed with taxes.
• 2:08
  Everyone's situation is different. So the opinion is it depends, and that's why you've got to have a plan first, not products first, a plan first, strategy second, how to get more out of your money based on your financial individuality, and then you can figure out what's right in the portfolio. Mhmm. Alright. That's all the time we've got for today's show.
• 2:34
  Appreciate you being here. We'll be back noon Central Time next week, every Tuesday. Q and A, we just take your questions. Nothing's off limits, and hopefully by now you realize how playfully transparent we are in how things go. We're a flat fee advisor.
• 2:48
  Like we... It's fine. We're just here to build really good plans. Tuesday night, so tonight 06:30 central time, we do have our retire on time implementation workshop. We actually walk through and do the first version of your plan, and then I explore strategies with you in greater detail so you can understand that if you change one thing, the ripple effect that it has in there, how to handle sequence of returns risk, three different ways you can lower your risk, what...
• 3:13
  With with what we call reserves, and so on and so forth. Retireontime.com. Click the workshop button, and you can schedule for this Tuesday, next Tuesday, or any of the Tuesdays in the future. Appreciate you all being here. Have a great rest of your day.