“I have a difference of opinion with our financial advisor as it relates to Roth conversions that I would like to get your perspective on. Our retirement assets include $1.7M in traditional IRAs, $220K in a Roth IRA, $81K in an HSA and $865K in taxable brokerage accounts and cash. Our investments are mostly balanced between stock and bond index funds, with a cash reserve to cover 2-3 years living expenses. I collect a pension from my former employer of $62K/year. We are deferring our Social Security until age 70 at which time we expect to get around $78K/year. That plus a deferred fixed annuity should give us around $150K/year of lifetime income by age 70. I want to draw down the traditional IRAs during our “gap” years and pay the taxes now at the current historically low rates, maxing out the 22% bracket each year (no state income tax in Florida). This amounts to about $150K of traditional IRA distributions each year. I am allocating $50K of the $150K of IRA withdrawals to Roth conversions each year. My goal is to fund the Roth while using the remaining IRA proceeds and other savings to cover our living expenses. I plan to continue with annual $50K Roth conversions at least until the current tax rates expire in 2026. Our financial advisor strongly disagrees with my Roth conversion strategy. His reasoning is that since we are drawing down the IRAs for our living expenses during our “gap” years the Roth conversions provide little benefit. By the time we take RMDs the IRA will be depleted to the point that the RMD tax hit will be inconsequential. He feels it is better to leave the money in the IRA and allow it to grow tax deferred until needed. I’m not sure that I agree with our financial advisor on this. We’re maxing out the 22% bracket with our IRA distributions anyway. I see little harm in directing some of this money to the Roth. The Roth will give us financial flexibility and the opportunity to pass tax free assets to our heirs. Brad, Sarasota, FL”

Listen to the entire Your Money, Your Wealth® podcast:

Ultimate Roth Guide – free download:

Pure Financial Advisors, LLC is a fee-only Registered Investment Advisor providing comprehensive retirement planning services and tax-optimized investment management to thousands of people across the nation.

Schedule a free assessment with an experienced financial professional:

Office locations:
Ask Joe & Big Al On Air:
Subscribe to our YouTube channel:
Subscribe to the Your Money, Your Wealth® podcast:

IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
CFP® – The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.
CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period….(read more)

LEARN MORE ABOUT: IRA Accounts

CONVERTING IRA TO GOLD: Gold IRA Account

CONVERTING IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

Who’s Right About My Roth Conversion Strategy: Me or My Financial Advisor?

Deciding on the best strategy for your Roth conversion can be a complex and personal choice. As an individual, you have unique financial goals, considerations, and risk tolerance that may differ from your financial advisor’s perspective. So, who should you trust when it comes to determining the right Roth conversion strategy: yourself or your financial advisor?

The YMYW (Your Money’s Worth) Podcast aims to provide insights into personal finance, investing, and retirement planning. In this podcast episode, the topic of Roth conversion strategies is discussed, shedding light on the differing opinions that may arise between individuals and financial advisors.

As the first step, it is important to understand what a Roth conversion actually entails. A Roth conversion is a process where you move money from a Traditional IRA (or other pre-tax retirement plan) to a Roth IRA, in return for paying taxes on the amount converted. The key advantage is that once the funds are in a Roth IRA, any future growth and withdrawals are generally tax-free.

Financial advisors often have a wealth of knowledge and experience, which can be invaluable when it comes to making sound financial decisions. They can provide guidance based on their understanding of market conditions, tax laws, and a holistic view of your overall financial situation. They may suggest a specific Roth conversion strategy that aligns with your goals and objectives.

However, it is important to remember that financial advisors are not infallible. They too can make mistakes or have biases that could impact their recommendations. Ultimately, you have a personal connection to your financial situation that your advisor may not fully grasp.

When it comes to determining the right Roth conversion strategy, you should consider a few factors:

1. Educate yourself: Take the time to understand the basics of Roth conversions, tax implications, and the potential benefits or drawbacks in your specific circumstances. This will enable you to have informed discussions with your financial advisor and make independent decisions.

2. Communicate your goals: Clearly articulate your financial goals, retirement plans, and risk tolerance to your advisor. By doing so, you provide them with the necessary information to tailor a strategy that aligns with your objectives.

3. Challenge assumptions: Don’t be afraid to question your financial advisor’s recommendations. Ask for explanations and clarifications to ensure you fully understand the rationale behind the suggested strategy. This will help you make an informed decision and ensure your advisor has considered your unique circumstances.

4. Seek a second opinion: If you find yourself at odds with your financial advisor, consider seeking a second opinion from another trusted professional. It is essential to have multiple perspectives before committing to any long-term financial strategy.

Ultimately, there is no clear-cut answer to who is right about your Roth conversion strategy – yourself or your financial advisor. It is a collaborative process where both parties bring their expertise and insights to the table. By staying informed, communicating openly, and challenging assumptions, you can make an informed decision that aligns with your financial goals and values.

Remember, the most important thing is to take control of your financial future. Empower yourself with knowledge and seek out advice that resonates with your personal situation. After all, it is your money and your retirement at stake.