When and for Whom Are Roth Conversions Most Beneficial: A New Set of Guidelines, Cautions and Caveats
Guest Expert: Edward F. McQuarrie, Leavey School of Business at Santa Clara University
Date:
Webinar Replay Description
Much has changed since penalty-free Roth conversions were inaugurated in 2010. Tax rates have gone up and down. The re-characterization provision went away.
Comments
Here are comments from listeners:
"Compounding tax drag" is a good term for a concept I have mathematically proven to several clients making the decision to invest in a ROTH IRA. Many feel they are in the top bracket and can only go down. But, the fact remains even at a lower tax bracket, the ROTH offers other flexibility.
- Aaron
I learned an aspect of determining a factor (IRMAA) that is relevant in Roth IRA conversions that I did not know before.
- James
It helped me to understand the L.T. benefits to IRA conversions going on through 20yrs after retirement.
- Jeff
It was interesting to see the spreadsheet with different tax rates and rates of return, tax drag, etc. I had thought that the benefit from a profitability standpoint for a conversion would have been greater and accumulated more quickly.
- Michelle
Roth conversions are beneficial even in constant tax rate case due to tax drag
- Graham
There are so many, such as; back door Roth IRA, saving on conversion from Traditional to Roth, and ETC.
- Sima
Watch for IRMAA; Look at Health / Life Expectancy; Look at potential state issues now vs lower or no state tax later
- Steven
"Compounding tax drag" is a good term for a concept I have mathematically proven to several clients making the decision to invest in a ROTH IRA. Many feel they are in the top bracket and can only go down. But, the fact remains even at a lower tax bracket, the ROTH offers other flexibility.
- Aaron
I learned an aspect of determining a factor (IRMAA) that is relevant in Roth IRA conversions that I did not know before.
- James
It helped me to understand the L.T. benefits to IRA conversions going on through 20yrs after retirement.
- Jeff
It was interesting to see the spreadsheet with different tax rates and rates of return, tax drag, etc. I had thought that the benefit from a profitability standpoint for a conversion would have been greater and accumulated more quickly.
- Michelle
Roth conversions are beneficial even in constant tax rate case due to tax drag
- Graham
There are so many, such as; back door Roth IRA, saving on conversion from Traditional to Roth, and ETC.
- Sima
Watch for IRMAA; Look at Health / Life Expectancy; Look at potential state issues now vs lower or no state tax later
- Steven
05.10.2022 - Roth Conv
Attendees Comments:
"Compounding tax drag" is a good term for a concept I have mathematically proven to several clients making the decision to invest in a ROTH IRA. Many feel they are in the top bracket and can only go down. But, the fact remains even at a lower tax bracket, the ROTH offers other flexibility.
- Aaron
I learned an aspect of determining a factor (IRMAA) that is relevant in Roth IRA conversions that I did not know before.
- James
It helped me to understand the L.T. benefits to IRA conversions going on through 20yrs after retirement.
- Jeff
It was interesting to see the spreadsheet with different tax rates and rates of return, tax drag, etc. I had thought that the benefit from a profitability standpoint for a conversion would have been greater and accumulated more quickly.
- Michelle
Roth conversions are beneficial even in constant tax rate case due to tax drag
- Graham
There are so many, such as; back door Roth IRA, saving on conversion from Traditional to Roth, and ETC.
- Sima
Watch for IRMAA; Look at Health / Life Expectancy; Look at potential state issues now vs lower or no state tax later
- Steven