Why Roth Conversions Are An AWFUL Idea. #savemoney #retirement #socialsecurity #financialfreedom #retirementplanning

Everywhere you look right now, someone's telling you to do Roth conversions. Your advisor, YouTube, the article you read last week, is a hot strategy and it sounds smart. Pay the taxes now, never pay it again, and watch it grow tax-free forever. But after nearly 30 years of helping people retire, I'm going to tell you something most advisors want. For a huge number of people, a Roth conversion is an awful idea, not because the concept is wrong, but because the way it's being sold to you is built on assumptions that don't hold up for most retirees. And the worst part is, by the time you realize that it was wrong move, the money is already gone and you can't undo it. So, before you hand the government a check that you might never get back, let me show you the things almost nobody tells you about Roth conversions. I'm not saying there's to scare you off conversions completely, I'm saying it because this is a decision you can't undo and too many people make it on autopilot because someone told them to do so. If you do nothing else, get a real second opinion before you pull the trigger. That's the kind of thing that my team does and I look at every single day at River Bend. There's a link in the description below if you want to book a call. But honestly, even if it's not us, talk to someone who looks at your whole picture first before you make a conversion. All right, point number one, the first thing to understand, the problem isn't the conversion, is how the advice gets handed to you, like on a formula or one size fits all. Almost every advisor says the same thing. Convert a chunk every year, like clockwork, move all that money in January, no matter what. And I know it sounds disciplined and smart, but that's exactly where the damage gets done. Some years your income is already higher than you expected and if you convert on top of that, you pay taxes, you really didn't need to. Some years you get a big medical bill and when that bill is large enough, it actually can become a deduction which cancels out some of the taxes on the money you would pay if you pulled the money out. So that pre-tax money can come out nearly tax-free, but if you convert too much too early, you burn that opportunity. Some years the market's down and you've got better moves you can make than a Roth conversion. So the run it every year approach ignores that. It's just on autopilot, but there's a better way. You don't have to decide the whole thing in January like a lot of people do. You can convert part of it early, then wait, watch and see how the year plays out, check your income, your expenses and the market, see if that leaves more room to convert more of it later in the year. And if it doesn't, stop right there. So you get until December 31st, so why a lot the whole thing up in January before you knew all the details? The formula guess is in January, but real planning acts, waits, watches and then adjust. Most people are hurt by conversions, aren't hurt by the idea, they're hurt by doing it blindly all at once when they don't know all the details. The whole pitch for a conversion rests on one idea that your traditional retirement account is the problem, a tax bomb waiting to go off. Something you need to diffuse before it's too late. But for most people, that pre-tax account is actually one of the most flexible, useful assets you own and convert it all the way, strips that flexibility right out of your hands. Think about what the traditional account let you do. In low income years, you can pull from it on purpose and pay almost nothing. And when you get a big deductible expense later in life, you can pull from it and that deduction all sets the tax. And if you're charitable inclined, listen closely. This is something a lot of people just don't know about. It's called a qualified charitable distribution or QCD for short. Here's how it works. Once you turn 70 and a half years old, you can give money straight from your IRA to a charity.