For some investors, converting from a Traditional IRA to a Roth IRA can create significant tax efficiencies. But the calculation depends on a number of factors, and the answer isn’t the same for everyone.
Michael Johnston takes a deep dive into this topic, explaining the “levers” that determine whether an investors is better off doing a conversion or staying with their Traditional IRA.
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Episode Highlights
- How to think of your IRA options at a high level.
- Review of the numerous factors that impact the expected wealth creation or destruction from completing a Roth IRA conversion today.
- Explanation of the interplay between tax rates today and in the future on the Roth conversion decision.
- Illustration of changing assumptions on the expected future value of a Traditional and Roth IRA.
- Discussion of qualitative characteristics, including flexibility and uncertainty, that may also impact the decision.
Episode Resources
About The Tax Efficient Investor Podcast
On the Tax Efficient Investor podcast, we show you how to protect, grow, and transfer your wealth by implementing tax-advantaged investment strategies. Host Michael Johnston demystifies tax strategies that are favored by the most successful and sophisticated investors, including 1031 exchanges, IRA & 401k plans, HSA accounts, trusts, real estate, and more.
