The Setup:

Last episode we provided a basic understanding of Roth conversions. Now it’s time to take it a step further and look at the option from a strategic point of view. Is this something you should be considering for your retirement plan? We discuss who would and wouldn’t benefit and share the conversation we have with clients to help them make the decision.

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Click the timestamps below to skip to a specific topic in the episode.

The Combination and Key Points: 

A key aspect of retirement planning is considering all of your investment options and deciding which one(s) best fit your needs and goals.

One of the options we’ve discussed with a number of clients recently is Roth conversions. This is the process of converting a traditional retirement account like an IRA or 401k or 403b and moving those assets into a Roth. If you want a fully detailed explanation of conversions, check out our last podcast. For those that know about the option, you’re probably trying to decide if it’s a move you want to make.

We want to use this episode of Unlocking Your Financial Future to discuss the strategy behind Roth conversions and how we come to a decision with our clients in Ohio. With every retirement planning option, it will work for some people but doesn’t benefit others.

How do you know which side you fall on? Ben will provide a general view of the type of client that utilizes a conversion and those that wouldn’t need to. We’ll also take you through the conversation we have with people to help determine if the strategy is appropriate. It’s a discussion we have on a yearly basis and typically towards the end of the year when we have a good idea of income and taxes.

Plus, Ben will identify one of the common misunderstandings people have when it comes to Roth accounts.

Strong planning is such an important aspect to Roth conversions and working with an advisor can help you determine the best course of action.

Thanks for listening to another episode of Unlocking Your Financial Future. We’ll talk to you again next week!

1:40 – Getting to Know Ben: What is your favorite sport?

3:54 – A quick summary on what a Roth conversion is.  

4:44 – How does the conversation go with clients to determine whether a Roth conversion might work for them?

5:55 – What type of person would benefit from a Roth conversion?

7:23 – Who probably shouldn’t look at the Roth conversion?

8:35 – There will be tax implications. Here’s what we’re looking at.

10:01 – Contributions versus conversions. Here’s the difference.

11:39 – We consider conversions on a year-by-year basis with clients.


Related Content:

Understanding the Basics of Roth Conversions

Is Retiring at 65 Still a Realistic Goal?

SECURE Act Brings Changes to Retirement Accounts