January 31, 2025 • 31 mins
To convert or not…that is the question – If the title of this podcast captured your attention, let
us be clear from the outset that there will not be any religious recruitment efforts forthcoming.
What we will be digging into is the question of whether you should convert some or all of your
assets from a traditional individual retirement account (IRA) to a Roth IRA. Jeff Perry and Russ
Ball explore the advantages of a Roth conversion as well as some reasons why it may or may not
be the right time for you.
For more information or to reach Chris Boyd, Russ Ball or Jeff Perry, click the following link:
https://www.wealthenhancement.com/s/advisor-teams/amr
https://www.thestreet.com/retirement-daily/saving-investing-for-retirement/roth-ira-conversions-
strategic-retirement-savings
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to something more with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner
and senior vice president, financial advisor at wealth
enhancement group.
One of the nation's largest registered investment advisors.
We call it something more because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome to another episode of something more with
Chris Boyd.
My name is Jeff Perry.
I'm a financial advisor with the team AMR
of wealth enhancement group.
(00:42):
And I'm sitting in for Chris today, who's
working with some clients today.
So he left the control panel to my
partner today, Russ Ball.
Russ, welcome.
Thank you.
Thank you, Jeff.
And myself.
And, um, so we're going to try not
to screw this up too bad.
Right, Russ?
That's right.
So Russ, you know, for the, for our
regular listeners, and we have a lot of
(01:04):
listeners who listen to every episodes.
And then of course we have occasional listeners
who listen to some, this could be someone's
first time hearing you.
How, how long have you been on part
of our team now?
How long has it been?
So I started on November 4th, I believe.
So we're coming on three months here.
Okay.
Yeah.
It's been a, it's been a great ride
(01:25):
so far.
Time goes quickly.
I felt more like a month to me,
maybe six months to you.
I don't know.
I know we have the holidays in there,
a few different, you know, long weekends.
So, uh, yeah, it's all kind of jumbled
in with the holidays, but yeah, almost three
months.
So how's it going?
Great, great.
I love, I love everything about it.
(01:45):
I, um, um, what do you like the
most?
I love to ask like new employees or
people like, well, first of all, was it,
is it what you expected?
It would be working.
You have some background working in the financial
services industry, so you probably had some sense
of what it could be like.
Is it what you expected?
Yeah.
I mean, I feel like it's definitely been
(02:07):
a better experience than I, than I expected,
which is, you know, great.
All I could ask for.
Um, I, I had exposure to, uh, working
with a number of different advisor teams throughout
the country, uh, but actually being on a
team and a team that, you know, I
feel like I get along with everyone on
the team and it's really good, um, environment
to work in.
(02:27):
So, uh, that has really surpassed my expectations.
I'm not surprised that, you know, when I,
when I joined in March of 21, so
I'm coming up on my four-year anniversary.
I knew Chris before.
I don't think you did.
No, no.
No.
So I knew Chris before, uh, from community.
(02:47):
We lived in the same community and, um,
politics and different things that our paths crossed.
So I had a sense that he and
Kristen were like super, uh, easy to easygoing
people with a lot of integrity.
They really cared about their customers.
So that's what attracted me.
You know, I felt like I was going
(03:08):
into a good environment, but you were kind
of more in the dark.
So that's probably why it exceeded your expectations,
right?
Yeah.
And I think from, from the interview phase,
uh, it was, you know, we, we had
a good rapport and, um, it seemed like
the type of team I would really want
to be joining and pursuing this side of
my career.
Well, you've been a great fit so far.
(03:30):
Is there something that you particularly enjoy as
your, you know, day-to-day different thing?
You do a lot of different things cause
we all do a lot of different things
to serve our customers.
But, um, is there something you particularly enjoy?
Yeah.
And I have, uh, you know, friends that,
that know I started a new job recently,
asked the same question and I referenced the
(03:50):
fact that, uh, day one, you know, I
was, I was just getting to know the
people I was working with.
I was immediately meeting with clients and a
big reason why I wanted to work in
the field as opposed to like the backend,
the corporate side of this industry is to
work with clients and to talk to people
and help people with their, with their financial
lives.
(04:11):
So having that exposure day one was like,
wow, this is, uh, couldn't, couldn't ask for
more than this.
Um, so yeah, I think that's been a
real, you know, and the fact that Chris
and the team is, you know, trusting me
to be part of those conversations and getting
to meet our clients and getting to know
them has really been amazing.
So that was the goal.
And that's what, what I, um, yeah, but
(04:33):
how it turned out as well.
So great.
Well, you're doing a good job, but from
my point of view, I don't have to
supervise you obviously, but it seems like you're
a integral part of the team and gaining
more value with each passing month.
Thanks Jeff.
I feel like definitely learning a lot.
Um, for sure.
Yep.
Um, but I know we, uh, we want
(04:54):
to hop on here today to talk about
a article that you recently wrote for the
street.
And, uh, I know it was picked up
by a couple of other publications online, including
MSN.
So, um, let's, let's dive into that article
that you wrote Jeff.
Yeah.
To convert or not in 2025 was the
title that I gave the article and, um,
(05:15):
you know, I was trying to get some
eyes on it.
Right.
So I didn't want, I wanted to get
people, you want them to click it, to
read it.
Right.
And it's on mostly financial sites.
So, you know, when I hear convert, like
most people, when you're not thinking about finances,
you're thinking about a religious conversion, right.
Or something like that.
So that's not what we're talking about.
(05:35):
If you're listening in and wondering if we're
going to try to sway you to one
denomination or the other, we're going to disappoint
you.
But, uh, we're talking about Roth conversions, Roth
IRAs.
And so for our, our listeners who may
not know the term, uh, a Roth IRA
is an IRA that is a little bit
different than the traditional IRA in the sense
(05:57):
that the benefit of a Roth IRA and
why you would do it is everything that
you would draw later in life, when you
retire and you need the funds, or you
want the funds generally, there's some rules that
we can dig into, but generally comes out
tax free.
The downside, if you will, or the reason
why some people don't choose to do a
Roth is that money going in your contributions
(06:19):
are pre-taxed, right?
So you don't get that, you know, some
people contribute to a 401k or an IRA
in part, because they like the tax deduction
off their income taxes.
Right.
Uh, this is not the case for the
Roth IRA.
You, you don't get any deductions for it.
And the reward is when you take it
(06:40):
out, you don't pay any taxes.
So I think over the years, um, the
value, the inherent value of the Roth IRA
has been growing and growing, and people really
kind of want some funds in a Roth
IRA at some point in their retirement.
And you can do that through contributions, right?
You can contribute to an IRA, um, every
(07:02):
year.
And there's limits this year, 2025, the limits
are $7,000.
I believe into a Roth IRA.
We'll just talk about those for now.
Um, and $8,000, if you're 50 or
over, when you think about contributions, there are
some income limits.
So, and this is another reason why some
people may choose to convert.
(07:23):
We'll talk about that.
Um, but if you are a married couple,
your 2025 contribution of seven or $8,000,
depending how old you are, if you go
over $246,000, you are not eligible to
make a Roth contribution, right?
If you're under 236,000, you are eligible.
(07:46):
And there's that $10,000.
I don't know why they did this.
I, there's this $10,000 space where you
can make a partial contribution if you're over
236, but under 246, just to confuse things
a little bit more.
Yeah, I get, they could have a partial
contribution limit and, you know, they could have
(08:06):
a partial limit, but to make it only
$10,000, uh, that Delta is, I don't
know, I don't see the logic in there,
but it is, maybe it's just to confuse
people and keep the CPAs and the financial
advisors employed.
Right.
Could be.
Well, that, so that's, and that's one piece
of the, the Roth IRA is the, you
(08:27):
know, contributions up to 7,000.
That's what I try to max out every
year.
Uh, it's definitely a goal that's seemed, you
know, relatively attainable for a good amount of
people.
And, um, it's something that you're rewarding your
future self for, for, um, that, you know,
tax payment that you're basically making right now.
So, uh, there's the other aspect of that
(08:48):
as well as the, um, a lot of
retirement plans through work offer a Roth option.
So that's another way to, to contribute or
a tax-free.
Yeah, that's, that's, that's, that's really something relatively
new.
You know, when people have a 401k or
whatever the retirement plan they have, I think
most people have 401ks.
Some people have simple IRAs.
(09:10):
If maybe they're working for a small company
or a SEP, if they're, you know, working
individually, but thinking about the 401ks when 401ks
have been around for decades, but you didn't
have the Roth option and even when you
started to have the Roth option legally, a
lot of companies didn't adopt it for their
particular employees.
But I think the demand from employees, you
(09:32):
know, asking their HR directors and their supervisors,
can I have a Roth?
Can I have a Roth is really grown.
And it's, I'd say it's, I don't know.
Do you agree?
It's kind of the standard now that most
corporations that you work for have that Roth
option.
At least from what I've seen.
Yeah, probably.
You know, definitely the larger corporations out there
(09:52):
would, would, would offer that as an option.
Now, again, it comes back to the question,
like you said, you know, would I rather
pay taxes on an hour or down the
road?
And a lot of the time people like
those 401ks, those traditional 401ks, because that money
goes in pre-tax from your, from your
paycheck.
So there's obviously a lot to like there,
(10:14):
but then the Roth portion, and I think
we'll, we'll dive more into this is something
that can really be beneficial when you're entering
that retirement visa or nearing that retirement.
Yeah.
And like so many things in the financial
planning sector is it depends, you know, what's
your best choice?
It depends.
Right.
And it also is not an all or
(10:35):
nothing.
So if you're just starting out, for example,
and you're saying, all right, this is my
first real job.
I have this opportunity to make contributions to
both, to either.
That's your choice.
You can do either or both.
You can, most companies let you split it
up.
So I'd love it.
I love when clients or people that I
(10:57):
advise do both because the younger you are,
you know, you get all this years of
compounding and you get all this, this years
of growth and all of that.
Think about that.
You know, when you retire, if you're starting
at 25, if you retire in 30 or
40 years, getting all those earnings and all
that growth and in a setting, a setting
(11:20):
that is totally tax free, that, that is
pretty powerful.
Yeah.
Yeah.
And that's a big reason why a lot
of people like to use the Roth as
something to use at the very end when
the last, the last thing that you touch
in retirement, because it's has all that growth
potential without the tax impact and without the
RMDs, but I know we'll dive into a
(11:40):
little bit more, I think back to the
conversion question, I think in your article, Jeff,
you, you write about a couple of questions
that investors need to consider before they think,
Oh, let's just convert everything or, or let's
not do a conversion at all.
What, what do you, what do you make?
What do you think those two key questions
are for, for investors?
(12:00):
Right.
So two questions, whether or not you, so
the scenario is the typical scenario is you
have all or most of your retirement savings
in a traditional IRA or traditional 401k, and
you're now being, you know, you're getting older
and you're thinking about your planning and you're
saying, gee, I really wish I had some
(12:22):
money in a Roth so later I could
get this money out tax free, or later
I could give a bequest this money to
my heirs and transfer tax free and they
could have a tax free or whatever the
reasons is, or I don't want to take
RMD someday.
I don't think I'm going to need it.
So there's no RMD in a Roth.
So that you're at, people are asking themselves
(12:42):
or clients are asking us, so should I,
should I convert, which the IRS code allows
us to do some or all of traditional
IRA to a Roth conversion?
So the question is, do I want to
pay the taxes now to convert?
Because any amount you convert a traditional IRA
(13:05):
to a Roth IRA is 100% taxable.
So if you're going to convert, say you
have a IRA for a hundred thousand dollars
and you convert the a hundred thousand dollars
in that year that you convert that a
hundred thousand dollars, that is all ordinary income.
It goes on to your earned income.
(13:26):
You're going to be taxed on it.
So is it worth it to do that?
And those two questions that you alluded to
are, where am I in my own personal
income level and my own tax bracket in
the year that I'm going to do it?
So let's say for example, you're in a
year that happens to be, for some reason,
(13:49):
you're having a low level of earned income
that year.
Maybe you've started a business, maybe you're been
unemployed for a while.
You took a sabbatical.
Whatever the situation is, you just happen that
year to have an income level that's less
than you normally have.
So therefore you have a tax bracket.
You're probably in a lower tax bracket than
you usually are, than you expect to be
(14:11):
in the future, right?
So if you are, and you're thinking about
a Roth conversion, the fact that your income
is level in this given tax year, it's
a compelling reason on the plus side of
doing a conversion because you might still be
in the, you know, to use the extreme
example, you might still be in the 15
% tax bracket and maybe you believe in
(14:32):
your future earnings years or historically you've been
in the 24% tax bracket, so this
could strategically be a reason to convert the
money this year.
And on the flip side, let's say you're
thinking about a Roth conversion for 2025 and
you're in a really, you're in a peak
of your earning season.
Uh, you're, you know, you're making two, $300
(14:54):
,000 a year, you're, you know, your, your
tax brackets up there.
And you might even jump tax brackets by
adding this $100,000 in hypothetical Roth conversion
to your income.
And you might be paying more in taxes
than you might later in life.
So it might not be the right time.
(15:14):
That's kind of the first question is where
are you in your own income tax bracket
level?
Is it a good time for you personally
to think about this?
Right.
And I think a lot of, uh, clients
have been asking about Roth conversions.
I think it's, um, kind of gaining a
little bit more popularity.
Uh, people are starting to consider these types
of things.
And, um, it really does come down to,
(15:37):
well, uh, where's your income now?
And, um, is it, is there any, uh,
is there any period in the, in the
next couple of years where it's going to
be lower or is there anything you anticipate
that would, would make it lower?
And if it's lower, obviously it leaves more
of that room in that tax bracket to,
uh, to get some more, some more income
and not, not have a big effect on
(15:58):
it.
Right.
So there's two like little asterisks I'll put
next to those comments, like danger, danger, go
away.
You know, um, one is Irma, which is
a.
Calculation that they have when you're a couple
of years out from filing for Medicare at
age 65.
Medicare looks at your income two years back.
(16:19):
So say when you hit age 63 to
calculate what your premium will be for Medicare.
So you may be thinking, well, I'm retiring
when I'm 62.
Um, so my income is going to be
low.
I'm just going to be using my investment.
So I'm not going to have any earned
income.
I'm just going to investment income.
So maybe I'll convert my a hundred thousand
(16:42):
dollars.
We'll just keep that same figure.
When I'm 63 and I'm in a very
low tax bracket, well, that's going to be
on your tax return, discerned income, right?
So it could, you could do it at
exactly the wrong time when you're thinking about
how low is my Medicare premium going to
be, right?
So that's something you just got to like,
(17:02):
stay away from if you're close to that
age or some, or some other type of
benefit that you may be able to receive.
That's based on income.
Just be aware that this is going to
come as a taxable event.
That's going to look like income on your
tax return and it could skew a different
benefit.
The other asterisks I want to make is
this is not a all or nothing proposition.
(17:26):
We're using this a hundred thousand dollar example,
but if you are in, say you're in
the 22% tax bracket and you've got
a little bit of room before you jump
up to the 24% tax bracket, meaning
you, your income is like $20,000 below
the next tax bracket.
Well, you can convert $20,000 and stay
(17:47):
within the tax bracket you're in.
You don't have to convert your entire IRA.
You convert as much as you're comfortable with,
or maybe as much as you want to
pay taxes on.
Because, you know, sometimes people get in trouble
by making financial decisions in life that impact
your taxes.
And they say, I'll worry about the taxes
later.
(18:07):
Yeah.
So if you're converting this kind of, you
know, big money here, a hundred thousand dollars,
$50,000, whatever it is.
You have the option of withholding the taxes
from the conversion, paying the taxes through withholding,
which is not wrong, we don't suggest it.
We'd rather have you pay the taxes from
(18:29):
other taxable accounts or savings that you have
so you don't lose the money that's in
that IRA setting.
But whichever way you do it, make sure
you are prepared to pay the taxes.
Right.
Yeah.
I think that's a, that's a key point.
Um, in order to really maximize, and you
(18:49):
read about this in the article too, in
order to maximize the benefit of that Roth
IRA, that it's not taxable.
You don't want to take tax money out
of there to pay the taxes.
So if, if you anticipate a Roth coming,
I mean, a Roth conversion coming up, having
some money saved on the sidelines to pay
those taxes would be the ideal way to.
(19:10):
It is the ideal way.
And this is where age, your age starts
to come into it.
Um, cause in essence, you're, let's say you're
in the 24% tax bracket.
And if you live in a state with
a state income tax, that might be another
5% for Massachusetts, I think that's what
it is.
So, you know, you're close to 30%
that's going to be contributed from another account
(19:33):
or withheld.
And if you're nearing retirement, even though it's
still going to be in this tax-free
setting after the conversion, it depends on when
you're going to be withdrawing, if you, it
doesn't make a lot of sense if you're
going to convert and then start withdrawing.
Right.
Like, cause you're going to miss all those
additional years of tax-free compounding.
(19:54):
Right.
Yeah.
So there's a lot of thought that goes
into, you know, your own personal situation, when
do I need the money?
What's my current tax bracket?
What do I think it's going to be?
And these other caveats of, should I do
a little bit?
Should I do a lot?
Does this affect any other benefits I have
like Medicare?
Right.
Uh, the other, the other question of my
(20:17):
two part question, that was a long part
of question one.
Uh, the other one's simpler, but less clear,
right?
So the question is, where do you think
federal income taxes are headed in the future?
So we have the tax cuts and job
deck that we're living in now, um, where
the brackets were reduced.
(20:38):
And so we're, we're in a period of
lower than typical, lower than historical income taxes.
It, you know, president Trump was reelected or
elected.
How would you say that?
Cause he had a hiatus.
Yep.
So he's in office and he's hoping to
pass an extension to that tax cut and
(20:58):
jobs act.
And so we could be staying in these
tax rates for a few more years.
So that's good, but kind of your, your
general sense of where do you think income
taxes are headed?
And you may say, well, I have no
idea.
Taxes go up and go down.
How would I be able to predict that?
Well, that's an accurate thought, but you can
think about it generally.
(21:20):
You know, we're in a period of record
high budget deficits and national debt levels of
$37 trillion.
We have a social security crisis coming in
nine years where, you know, if we don't
do reforms, which reforms usually cost us money,
right.
And money comes primarily from taxes.
(21:41):
Um, and then we have Medicare that needs
to be reformed as well.
We are having a peace through strength type,
uh, president, which means increased military spending.
I know they have doge and they're trying
to cut spending and I wish them well,
but it's tough.
So, you know, the question is, do you
(22:02):
think after president Trump say, do you think
that there is a period of higher or
lower federal taxes?
Which means I'm going to pay higher federal
taxes if I do a Roth conversion later,
or if all my money is in a
traditional IRA, when it comes out.
(22:22):
So if you believe that higher taxes are
in your future, either when you do a
conversion or when you would draw your traditional
money, that kind of puts the thumb on
the scale to say, maybe it's a good
time to do it now.
Right.
Right.
Yeah.
At least that's my logic.
I think, so I was listening to a,
(22:42):
uh, another podcast with, um, a guy named
Ed slot and his name is very familiar
in the, uh, wealth management industry and finance
in general, he is a sort of, uh,
IRA and, um, as a tax expert, tax
guru, uh, he's the go-to guy really
out there in the United States.
He is, he is.
And, um, what he was saying was, uh,
(23:04):
you know, yeah, you might think like some
people might think that taxes are going to
be lower in the future.
Uh, they've done a bunch of surveys.
Most people don't think that most people think
it's probably going to go higher.
So, uh, if that's the case, taxes may
not be lower than they are today.
Why not take advantage?
Um, ASAP, if, you know, if it matches
what you're, what you're looking for and what
your needs are.
(23:25):
Yeah.
Um, and yeah, I think, uh, his point
as well in that, in that podcast, uh,
that I was listening to was, uh, he's,
he loves, uh, the Roth IRA.
He does not seem to love a traditional
IRA just because, uh, you know, the, the
tax impact of, of taking RMDs and, and,
(23:45):
um, over time that basically increasing your, your
tax bracket and, um, making it pay, pay
more in taxes potentially.
So, um, definitely a lot of, uh, uh,
key things to consider.
Um, one question I had for you as
well, Jeff, uh, when would someone typically think
about, uh, a Roth conversion?
When would be at me like an ideal
(24:05):
time?
And I know it, it depends.
It's different for everyone's circumstances, but if a
Roth conversion was something that really wanted to
do, or really we're considering.
When would be a typical time in the
life cycle and the career cycle that would
take place?
I think anytime that you're starting to build
wealth, you know, you have control of your
budget, your meeting, your expense, monthly expenses, you
(24:26):
have your emergency fund, you're saving for retirement,
I think as early as when you start
saving for retirement is a, you know, that's
not so much a conversion is where should
I put my money?
Right.
But at any time, uh, before your retirement,
you should be thinking about this and if
you're working with a trusted financial advisor, fiduciary,
someone who has your best interest at heart
(24:47):
as compared to maybe someone selling you a
product, right.
Someone who's compensated, not on what they sell
you, but on how well you do generally
speaking.
Um, sit down with them and discuss it.
There's so many factors, you know, we're just
touching on kind of the big ones here,
but, you know, I'll just touch on a
(25:08):
few other reasons why you might want to
have a Roth and so, which would add,
um, add the thumb on the scale to
maybe I should talk to my advisor about
this is it's stay with me on this.
Cause it's kind of counterintuitive.
You know, a lot of people, one of
their biggest, um, risks to their financial plan
(25:28):
and one of the things they worry about
the most is a long-term care event.
And they go through that process of, should
I buy insurance or, you know, should I
have a trust and hide, not hide, uh,
segregate all of my assets from potentially receiving
some government assistance, right?
How am I going to handle this?
This could be three or $400,000 event.
(25:50):
If I was in a long-term care
and it's not covered by Medicare, the only
the first a hundred days is.
So a Roth, well, well, not designed for,
or commonly thought of, of, of a way
to dealing with future long-term care event
can be just that if.
And why would I use a Roth?
Well, you'd use a Roth because you never
(26:12):
have to take money out.
Meaning you don't have RMDs.
If you have a traditional IRA that you're
thinking, well, I can use my IRA money.
Remember two things about that traditional IRA.
One is at age 73 or 75, you're
going to be taking our RMDs so that
you're going to be diminishing that account, which
is what you're supposed to do in retirement,
you're supposed to take your money and it's
(26:34):
taxable when it comes out.
So if you're taking large chunks out of
that to fund a long-term care event,
you're adding another 30% to your withdrawals
or the cost of your long-term care
event.
Right.
So if you have these funds, segregated funds
in a Roth, it can serve certainly to
supplement your retirement if you need it, but
(26:55):
if you don't need it, especially in the
early part of your retirement, and it's just
building compounding, it's a great segregated nest egg
to say, well, I've saved this and it's
here for long-term care.
If I need it.
Another reason to have a Roth and to
consider a conversion and build up that account
(27:16):
is legacy, a Roth.
So if you pass for the Roth and
your beneficiaries, they receive that tax free.
If it's a spouse, that Roth can be
inherited to the spouse.
They just keep the Roth.
There's no withdrawal schedule.
(27:38):
There's no RMDs for the spouse.
They just have it all come out tax
free.
If it's not a spouse, there's a five
-year rule on that, but the funds still
come out tax free.
There's some asterisks there, if the money's been
there for five years and so forth.
So it's a great way to think about
legacy as well.
(27:59):
If you receive an inheritance, you're thankful that
your loved one left you something.
You're not going to say, is it a
traditional IRA or a Roth?
Oh no, it's a traditional.
I don't want it.
Of course not.
Right?
Right.
But if you're offered two, with the same
amount of money in each one, pick the
Roth because there's a lot more flexibility and
(28:22):
no taxes to pay if you follow the
rules.
And then when an heir would inherit a
traditional IRA, they have to think about, well,
how much am I taking out each year
so that I'm still within a certain tax
bracket?
It's kind of the same analysis, isn't it?
There's a lot more to consider.
Exactly.
It's the same kind of thinking that goes
(28:42):
into it.
Whereas with the inherited Roth, you need to
still take the money out after 10 years,
but you could take it all at the
10th year, let it grow as much as
possible, and the heir would receive that in
the 10th year and not have to pay
taxes on it.
So pretty good deal.
And again, like you mentioned, if it's not
money that needs to be taken out right
(29:03):
away, all the better.
That would really only make sense if you
did save it for the longer term.
But yeah, I think it's a great option
to consider.
There's a lot that goes into it, and
there's a lot that we can do on
our end on the financial planning side to
model what that might look like and when
it might be a good time to make
(29:25):
that conversion decision.
Yeah, it's a dynamic decision.
It really depends on your circumstances.
You know, we haven't even talked about life
expectancy.
We haven't even talked about a lot of
factors that a good financial planner who knows
you knows all these factors, and they can
decide if it's something you need to think
about, and then they can model it out.
(29:45):
You know, you can actually have software that
can model it out longer term and say,
yes, there's a benefit, or no, I don't
think there is.
So good point.
Any other last thoughts on that article, Jeff,
that come to mind?
No, you know what I'll do, Russ?
I'll throw the article, the link to the
article in the notes of the show.
So if people want to read the whole
article, they can read that.
(30:07):
And also in the notes of the show
is a link to contact Chris Boyd, myself,
or yourself, so we'd love to hear from
you.
And thanks for listening.
And please tune in next time.
Until then, keep striving for something more.
Thank you for listening to Something More with
Chris Boyd.
Call us for help, whether it's for financial
(30:27):
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
.com, or call us toll free at 866
-771-8901.
Or send us your questions to amr-info
(30:48):
at wealthenhancement.com.
You're listening to Something More with Chris Boyd
Financial Talk Show, Wealth Enhancement Advisory Services, and
Jay Christopher Boyd provide investment advice on an
individual basis to clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
(31:10):
information from this show will generate profits or
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
Welcome to something more with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner
and senior vice president, financial advisor at wealth
enhancement group.
One of the nation's largest registered investment advisors.
We call it something more because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome to another episode of something more with
Chris Boyd.
My name is Jeff Perry.
I'm a financial advisor with the team AMR
of wealth enhancement group.
(00:42):
And I'm sitting in for Chris today, who's
working with some clients today.
So he left the control panel to my
partner today, Russ Ball.
Russ, welcome.
Thank you.
Thank you, Jeff.
And myself.
And, um, so we're going to try not
to screw this up too bad.
Right, Russ?
That's right.
So Russ, you know, for the, for our
regular listeners, and we have a lot of
(01:04):
listeners who listen to every episodes.
And then of course we have occasional listeners
who listen to some, this could be someone's
first time hearing you.
How, how long have you been on part
of our team now?
How long has it been?
So I started on November 4th, I believe.
So we're coming on three months here.
Okay.
Yeah.
It's been a, it's been a great ride
(01:25):
so far.
Time goes quickly.
I felt more like a month to me,
maybe six months to you.
I don't know.
I know we have the holidays in there,
a few different, you know, long weekends.
So, uh, yeah, it's all kind of jumbled
in with the holidays, but yeah, almost three
months.
So how's it going?
Great, great.
I love, I love everything about it.
(01:45):
I, um, um, what do you like the
most?
I love to ask like new employees or
people like, well, first of all, was it,
is it what you expected?
It would be working.
You have some background working in the financial
services industry, so you probably had some sense
of what it could be like.
Is it what you expected?
Yeah.
I mean, I feel like it's definitely been
(02:07):
a better experience than I, than I expected,
which is, you know, great.
All I could ask for.
Um, I, I had exposure to, uh, working
with a number of different advisor teams throughout
the country, uh, but actually being on a
team and a team that, you know, I
feel like I get along with everyone on
the team and it's really good, um, environment
to work in.
(02:27):
So, uh, that has really surpassed my expectations.
I'm not surprised that, you know, when I,
when I joined in March of 21, so
I'm coming up on my four-year anniversary.
I knew Chris before.
I don't think you did.
No, no.
No.
So I knew Chris before, uh, from community.
(02:47):
We lived in the same community and, um,
politics and different things that our paths crossed.
So I had a sense that he and
Kristen were like super, uh, easy to easygoing
people with a lot of integrity.
They really cared about their customers.
So that's what attracted me.
You know, I felt like I was going
(03:08):
into a good environment, but you were kind
of more in the dark.
So that's probably why it exceeded your expectations,
right?
Yeah.
And I think from, from the interview phase,
uh, it was, you know, we, we had
a good rapport and, um, it seemed like
the type of team I would really want
to be joining and pursuing this side of
my career.
Well, you've been a great fit so far.
(03:30):
Is there something that you particularly enjoy as
your, you know, day-to-day different thing?
You do a lot of different things cause
we all do a lot of different things
to serve our customers.
But, um, is there something you particularly enjoy?
Yeah.
And I have, uh, you know, friends that,
that know I started a new job recently,
asked the same question and I referenced the
(03:50):
fact that, uh, day one, you know, I
was, I was just getting to know the
people I was working with.
I was immediately meeting with clients and a
big reason why I wanted to work in
the field as opposed to like the backend,
the corporate side of this industry is to
work with clients and to talk to people
and help people with their, with their financial
lives.
(04:11):
So having that exposure day one was like,
wow, this is, uh, couldn't, couldn't ask for
more than this.
Um, so yeah, I think that's been a
real, you know, and the fact that Chris
and the team is, you know, trusting me
to be part of those conversations and getting
to meet our clients and getting to know
them has really been amazing.
So that was the goal.
And that's what, what I, um, yeah, but
(04:33):
how it turned out as well.
So great.
Well, you're doing a good job, but from
my point of view, I don't have to
supervise you obviously, but it seems like you're
a integral part of the team and gaining
more value with each passing month.
Thanks Jeff.
I feel like definitely learning a lot.
Um, for sure.
Yep.
Um, but I know we, uh, we want
(04:54):
to hop on here today to talk about
a article that you recently wrote for the
street.
And, uh, I know it was picked up
by a couple of other publications online, including
MSN.
So, um, let's, let's dive into that article
that you wrote Jeff.
Yeah.
To convert or not in 2025 was the
title that I gave the article and, um,
(05:15):
you know, I was trying to get some
eyes on it.
Right.
So I didn't want, I wanted to get
people, you want them to click it, to
read it.
Right.
And it's on mostly financial sites.
So, you know, when I hear convert, like
most people, when you're not thinking about finances,
you're thinking about a religious conversion, right.
Or something like that.
So that's not what we're talking about.
(05:35):
If you're listening in and wondering if we're
going to try to sway you to one
denomination or the other, we're going to disappoint
you.
But, uh, we're talking about Roth conversions, Roth
IRAs.
And so for our, our listeners who may
not know the term, uh, a Roth IRA
is an IRA that is a little bit
different than the traditional IRA in the sense
(05:57):
that the benefit of a Roth IRA and
why you would do it is everything that
you would draw later in life, when you
retire and you need the funds, or you
want the funds generally, there's some rules that
we can dig into, but generally comes out
tax free.
The downside, if you will, or the reason
why some people don't choose to do a
Roth is that money going in your contributions
(06:19):
are pre-taxed, right?
So you don't get that, you know, some
people contribute to a 401k or an IRA
in part, because they like the tax deduction
off their income taxes.
Right.
Uh, this is not the case for the
Roth IRA.
You, you don't get any deductions for it.
And the reward is when you take it
(06:40):
out, you don't pay any taxes.
So I think over the years, um, the
value, the inherent value of the Roth IRA
has been growing and growing, and people really
kind of want some funds in a Roth
IRA at some point in their retirement.
And you can do that through contributions, right?
You can contribute to an IRA, um, every
(07:02):
year.
And there's limits this year, 2025, the limits
are $7,000.
I believe into a Roth IRA.
We'll just talk about those for now.
Um, and $8,000, if you're 50 or
over, when you think about contributions, there are
some income limits.
So, and this is another reason why some
people may choose to convert.
(07:23):
We'll talk about that.
Um, but if you are a married couple,
your 2025 contribution of seven or $8,000,
depending how old you are, if you go
over $246,000, you are not eligible to
make a Roth contribution, right?
If you're under 236,000, you are eligible.
(07:46):
And there's that $10,000.
I don't know why they did this.
I, there's this $10,000 space where you
can make a partial contribution if you're over
236, but under 246, just to confuse things
a little bit more.
Yeah, I get, they could have a partial
contribution limit and, you know, they could have
(08:06):
a partial limit, but to make it only
$10,000, uh, that Delta is, I don't
know, I don't see the logic in there,
but it is, maybe it's just to confuse
people and keep the CPAs and the financial
advisors employed.
Right.
Could be.
Well, that, so that's, and that's one piece
of the, the Roth IRA is the, you
(08:27):
know, contributions up to 7,000.
That's what I try to max out every
year.
Uh, it's definitely a goal that's seemed, you
know, relatively attainable for a good amount of
people.
And, um, it's something that you're rewarding your
future self for, for, um, that, you know,
tax payment that you're basically making right now.
So, uh, there's the other aspect of that
(08:48):
as well as the, um, a lot of
retirement plans through work offer a Roth option.
So that's another way to, to contribute or
a tax-free.
Yeah, that's, that's, that's, that's really something relatively
new.
You know, when people have a 401k or
whatever the retirement plan they have, I think
most people have 401ks.
Some people have simple IRAs.
(09:10):
If maybe they're working for a small company
or a SEP, if they're, you know, working
individually, but thinking about the 401ks when 401ks
have been around for decades, but you didn't
have the Roth option and even when you
started to have the Roth option legally, a
lot of companies didn't adopt it for their
particular employees.
But I think the demand from employees, you
(09:32):
know, asking their HR directors and their supervisors,
can I have a Roth?
Can I have a Roth is really grown.
And it's, I'd say it's, I don't know.
Do you agree?
It's kind of the standard now that most
corporations that you work for have that Roth
option.
At least from what I've seen.
Yeah, probably.
You know, definitely the larger corporations out there
(09:52):
would, would, would offer that as an option.
Now, again, it comes back to the question,
like you said, you know, would I rather
pay taxes on an hour or down the
road?
And a lot of the time people like
those 401ks, those traditional 401ks, because that money
goes in pre-tax from your, from your
paycheck.
So there's obviously a lot to like there,
(10:14):
but then the Roth portion, and I think
we'll, we'll dive more into this is something
that can really be beneficial when you're entering
that retirement visa or nearing that retirement.
Yeah.
And like so many things in the financial
planning sector is it depends, you know, what's
your best choice?
It depends.
Right.
And it also is not an all or
(10:35):
nothing.
So if you're just starting out, for example,
and you're saying, all right, this is my
first real job.
I have this opportunity to make contributions to
both, to either.
That's your choice.
You can do either or both.
You can, most companies let you split it
up.
So I'd love it.
I love when clients or people that I
(10:57):
advise do both because the younger you are,
you know, you get all this years of
compounding and you get all this, this years
of growth and all of that.
Think about that.
You know, when you retire, if you're starting
at 25, if you retire in 30 or
40 years, getting all those earnings and all
that growth and in a setting, a setting
(11:20):
that is totally tax free, that, that is
pretty powerful.
Yeah.
Yeah.
And that's a big reason why a lot
of people like to use the Roth as
something to use at the very end when
the last, the last thing that you touch
in retirement, because it's has all that growth
potential without the tax impact and without the
RMDs, but I know we'll dive into a
(11:40):
little bit more, I think back to the
conversion question, I think in your article, Jeff,
you, you write about a couple of questions
that investors need to consider before they think,
Oh, let's just convert everything or, or let's
not do a conversion at all.
What, what do you, what do you make?
What do you think those two key questions
are for, for investors?
(12:00):
Right.
So two questions, whether or not you, so
the scenario is the typical scenario is you
have all or most of your retirement savings
in a traditional IRA or traditional 401k, and
you're now being, you know, you're getting older
and you're thinking about your planning and you're
saying, gee, I really wish I had some
(12:22):
money in a Roth so later I could
get this money out tax free, or later
I could give a bequest this money to
my heirs and transfer tax free and they
could have a tax free or whatever the
reasons is, or I don't want to take
RMD someday.
I don't think I'm going to need it.
So there's no RMD in a Roth.
So that you're at, people are asking themselves
(12:42):
or clients are asking us, so should I,
should I convert, which the IRS code allows
us to do some or all of traditional
IRA to a Roth conversion?
So the question is, do I want to
pay the taxes now to convert?
Because any amount you convert a traditional IRA
(13:05):
to a Roth IRA is 100% taxable.
So if you're going to convert, say you
have a IRA for a hundred thousand dollars
and you convert the a hundred thousand dollars
in that year that you convert that a
hundred thousand dollars, that is all ordinary income.
It goes on to your earned income.
(13:26):
You're going to be taxed on it.
So is it worth it to do that?
And those two questions that you alluded to
are, where am I in my own personal
income level and my own tax bracket in
the year that I'm going to do it?
So let's say for example, you're in a
year that happens to be, for some reason,
(13:49):
you're having a low level of earned income
that year.
Maybe you've started a business, maybe you're been
unemployed for a while.
You took a sabbatical.
Whatever the situation is, you just happen that
year to have an income level that's less
than you normally have.
So therefore you have a tax bracket.
You're probably in a lower tax bracket than
you usually are, than you expect to be
(14:11):
in the future, right?
So if you are, and you're thinking about
a Roth conversion, the fact that your income
is level in this given tax year, it's
a compelling reason on the plus side of
doing a conversion because you might still be
in the, you know, to use the extreme
example, you might still be in the 15
% tax bracket and maybe you believe in
(14:32):
your future earnings years or historically you've been
in the 24% tax bracket, so this
could strategically be a reason to convert the
money this year.
And on the flip side, let's say you're
thinking about a Roth conversion for 2025 and
you're in a really, you're in a peak
of your earning season.
Uh, you're, you know, you're making two, $300
(14:54):
,000 a year, you're, you know, your, your
tax brackets up there.
And you might even jump tax brackets by
adding this $100,000 in hypothetical Roth conversion
to your income.
And you might be paying more in taxes
than you might later in life.
So it might not be the right time.
(15:14):
That's kind of the first question is where
are you in your own income tax bracket
level?
Is it a good time for you personally
to think about this?
Right.
And I think a lot of, uh, clients
have been asking about Roth conversions.
I think it's, um, kind of gaining a
little bit more popularity.
Uh, people are starting to consider these types
of things.
And, um, it really does come down to,
(15:37):
well, uh, where's your income now?
And, um, is it, is there any, uh,
is there any period in the, in the
next couple of years where it's going to
be lower or is there anything you anticipate
that would, would make it lower?
And if it's lower, obviously it leaves more
of that room in that tax bracket to,
uh, to get some more, some more income
and not, not have a big effect on
(15:58):
it.
Right.
So there's two like little asterisks I'll put
next to those comments, like danger, danger, go
away.
You know, um, one is Irma, which is
a.
Calculation that they have when you're a couple
of years out from filing for Medicare at
age 65.
Medicare looks at your income two years back.
(16:19):
So say when you hit age 63 to
calculate what your premium will be for Medicare.
So you may be thinking, well, I'm retiring
when I'm 62.
Um, so my income is going to be
low.
I'm just going to be using my investment.
So I'm not going to have any earned
income.
I'm just going to investment income.
So maybe I'll convert my a hundred thousand
(16:42):
dollars.
We'll just keep that same figure.
When I'm 63 and I'm in a very
low tax bracket, well, that's going to be
on your tax return, discerned income, right?
So it could, you could do it at
exactly the wrong time when you're thinking about
how low is my Medicare premium going to
be, right?
So that's something you just got to like,
(17:02):
stay away from if you're close to that
age or some, or some other type of
benefit that you may be able to receive.
That's based on income.
Just be aware that this is going to
come as a taxable event.
That's going to look like income on your
tax return and it could skew a different
benefit.
The other asterisks I want to make is
this is not a all or nothing proposition.
(17:26):
We're using this a hundred thousand dollar example,
but if you are in, say you're in
the 22% tax bracket and you've got
a little bit of room before you jump
up to the 24% tax bracket, meaning
you, your income is like $20,000 below
the next tax bracket.
Well, you can convert $20,000 and stay
(17:47):
within the tax bracket you're in.
You don't have to convert your entire IRA.
You convert as much as you're comfortable with,
or maybe as much as you want to
pay taxes on.
Because, you know, sometimes people get in trouble
by making financial decisions in life that impact
your taxes.
And they say, I'll worry about the taxes
later.
(18:07):
Yeah.
So if you're converting this kind of, you
know, big money here, a hundred thousand dollars,
$50,000, whatever it is.
You have the option of withholding the taxes
from the conversion, paying the taxes through withholding,
which is not wrong, we don't suggest it.
We'd rather have you pay the taxes from
(18:29):
other taxable accounts or savings that you have
so you don't lose the money that's in
that IRA setting.
But whichever way you do it, make sure
you are prepared to pay the taxes.
Right.
Yeah.
I think that's a, that's a key point.
Um, in order to really maximize, and you
(18:49):
read about this in the article too, in
order to maximize the benefit of that Roth
IRA, that it's not taxable.
You don't want to take tax money out
of there to pay the taxes.
So if, if you anticipate a Roth coming,
I mean, a Roth conversion coming up, having
some money saved on the sidelines to pay
those taxes would be the ideal way to.
(19:10):
It is the ideal way.
And this is where age, your age starts
to come into it.
Um, cause in essence, you're, let's say you're
in the 24% tax bracket.
And if you live in a state with
a state income tax, that might be another
5% for Massachusetts, I think that's what
it is.
So, you know, you're close to 30%
that's going to be contributed from another account
(19:33):
or withheld.
And if you're nearing retirement, even though it's
still going to be in this tax-free
setting after the conversion, it depends on when
you're going to be withdrawing, if you, it
doesn't make a lot of sense if you're
going to convert and then start withdrawing.
Right.
Like, cause you're going to miss all those
additional years of tax-free compounding.
(19:54):
Right.
Yeah.
So there's a lot of thought that goes
into, you know, your own personal situation, when
do I need the money?
What's my current tax bracket?
What do I think it's going to be?
And these other caveats of, should I do
a little bit?
Should I do a lot?
Does this affect any other benefits I have
like Medicare?
Right.
Uh, the other, the other question of my
(20:17):
two part question, that was a long part
of question one.
Uh, the other one's simpler, but less clear,
right?
So the question is, where do you think
federal income taxes are headed in the future?
So we have the tax cuts and job
deck that we're living in now, um, where
the brackets were reduced.
(20:38):
And so we're, we're in a period of
lower than typical, lower than historical income taxes.
It, you know, president Trump was reelected or
elected.
How would you say that?
Cause he had a hiatus.
Yep.
So he's in office and he's hoping to
pass an extension to that tax cut and
(20:58):
jobs act.
And so we could be staying in these
tax rates for a few more years.
So that's good, but kind of your, your
general sense of where do you think income
taxes are headed?
And you may say, well, I have no
idea.
Taxes go up and go down.
How would I be able to predict that?
Well, that's an accurate thought, but you can
think about it generally.
(21:20):
You know, we're in a period of record
high budget deficits and national debt levels of
$37 trillion.
We have a social security crisis coming in
nine years where, you know, if we don't
do reforms, which reforms usually cost us money,
right.
And money comes primarily from taxes.
(21:41):
Um, and then we have Medicare that needs
to be reformed as well.
We are having a peace through strength type,
uh, president, which means increased military spending.
I know they have doge and they're trying
to cut spending and I wish them well,
but it's tough.
So, you know, the question is, do you
(22:02):
think after president Trump say, do you think
that there is a period of higher or
lower federal taxes?
Which means I'm going to pay higher federal
taxes if I do a Roth conversion later,
or if all my money is in a
traditional IRA, when it comes out.
(22:22):
So if you believe that higher taxes are
in your future, either when you do a
conversion or when you would draw your traditional
money, that kind of puts the thumb on
the scale to say, maybe it's a good
time to do it now.
Right.
Right.
Yeah.
At least that's my logic.
I think, so I was listening to a,
(22:42):
uh, another podcast with, um, a guy named
Ed slot and his name is very familiar
in the, uh, wealth management industry and finance
in general, he is a sort of, uh,
IRA and, um, as a tax expert, tax
guru, uh, he's the go-to guy really
out there in the United States.
He is, he is.
And, um, what he was saying was, uh,
(23:04):
you know, yeah, you might think like some
people might think that taxes are going to
be lower in the future.
Uh, they've done a bunch of surveys.
Most people don't think that most people think
it's probably going to go higher.
So, uh, if that's the case, taxes may
not be lower than they are today.
Why not take advantage?
Um, ASAP, if, you know, if it matches
what you're, what you're looking for and what
your needs are.
(23:25):
Yeah.
Um, and yeah, I think, uh, his point
as well in that, in that podcast, uh,
that I was listening to was, uh, he's,
he loves, uh, the Roth IRA.
He does not seem to love a traditional
IRA just because, uh, you know, the, the
tax impact of, of taking RMDs and, and,
(23:45):
um, over time that basically increasing your, your
tax bracket and, um, making it pay, pay
more in taxes potentially.
So, um, definitely a lot of, uh, uh,
key things to consider.
Um, one question I had for you as
well, Jeff, uh, when would someone typically think
about, uh, a Roth conversion?
When would be at me like an ideal
(24:05):
time?
And I know it, it depends.
It's different for everyone's circumstances, but if a
Roth conversion was something that really wanted to
do, or really we're considering.
When would be a typical time in the
life cycle and the career cycle that would
take place?
I think anytime that you're starting to build
wealth, you know, you have control of your
budget, your meeting, your expense, monthly expenses, you
(24:26):
have your emergency fund, you're saving for retirement,
I think as early as when you start
saving for retirement is a, you know, that's
not so much a conversion is where should
I put my money?
Right.
But at any time, uh, before your retirement,
you should be thinking about this and if
you're working with a trusted financial advisor, fiduciary,
someone who has your best interest at heart
(24:47):
as compared to maybe someone selling you a
product, right.
Someone who's compensated, not on what they sell
you, but on how well you do generally
speaking.
Um, sit down with them and discuss it.
There's so many factors, you know, we're just
touching on kind of the big ones here,
but, you know, I'll just touch on a
(25:08):
few other reasons why you might want to
have a Roth and so, which would add,
um, add the thumb on the scale to
maybe I should talk to my advisor about
this is it's stay with me on this.
Cause it's kind of counterintuitive.
You know, a lot of people, one of
their biggest, um, risks to their financial plan
(25:28):
and one of the things they worry about
the most is a long-term care event.
And they go through that process of, should
I buy insurance or, you know, should I
have a trust and hide, not hide, uh,
segregate all of my assets from potentially receiving
some government assistance, right?
How am I going to handle this?
This could be three or $400,000 event.
(25:50):
If I was in a long-term care
and it's not covered by Medicare, the only
the first a hundred days is.
So a Roth, well, well, not designed for,
or commonly thought of, of, of a way
to dealing with future long-term care event
can be just that if.
And why would I use a Roth?
Well, you'd use a Roth because you never
(26:12):
have to take money out.
Meaning you don't have RMDs.
If you have a traditional IRA that you're
thinking, well, I can use my IRA money.
Remember two things about that traditional IRA.
One is at age 73 or 75, you're
going to be taking our RMDs so that
you're going to be diminishing that account, which
is what you're supposed to do in retirement,
you're supposed to take your money and it's
(26:34):
taxable when it comes out.
So if you're taking large chunks out of
that to fund a long-term care event,
you're adding another 30% to your withdrawals
or the cost of your long-term care
event.
Right.
So if you have these funds, segregated funds
in a Roth, it can serve certainly to
supplement your retirement if you need it, but
(26:55):
if you don't need it, especially in the
early part of your retirement, and it's just
building compounding, it's a great segregated nest egg
to say, well, I've saved this and it's
here for long-term care.
If I need it.
Another reason to have a Roth and to
consider a conversion and build up that account
(27:16):
is legacy, a Roth.
So if you pass for the Roth and
your beneficiaries, they receive that tax free.
If it's a spouse, that Roth can be
inherited to the spouse.
They just keep the Roth.
There's no withdrawal schedule.
(27:38):
There's no RMDs for the spouse.
They just have it all come out tax
free.
If it's not a spouse, there's a five
-year rule on that, but the funds still
come out tax free.
There's some asterisks there, if the money's been
there for five years and so forth.
So it's a great way to think about
legacy as well.
(27:59):
If you receive an inheritance, you're thankful that
your loved one left you something.
You're not going to say, is it a
traditional IRA or a Roth?
Oh no, it's a traditional.
I don't want it.
Of course not.
Right?
Right.
But if you're offered two, with the same
amount of money in each one, pick the
Roth because there's a lot more flexibility and
(28:22):
no taxes to pay if you follow the
rules.
And then when an heir would inherit a
traditional IRA, they have to think about, well,
how much am I taking out each year
so that I'm still within a certain tax
bracket?
It's kind of the same analysis, isn't it?
There's a lot more to consider.
Exactly.
It's the same kind of thinking that goes
(28:42):
into it.
Whereas with the inherited Roth, you need to
still take the money out after 10 years,
but you could take it all at the
10th year, let it grow as much as
possible, and the heir would receive that in
the 10th year and not have to pay
taxes on it.
So pretty good deal.
And again, like you mentioned, if it's not
money that needs to be taken out right
(29:03):
away, all the better.
That would really only make sense if you
did save it for the longer term.
But yeah, I think it's a great option
to consider.
There's a lot that goes into it, and
there's a lot that we can do on
our end on the financial planning side to
model what that might look like and when
it might be a good time to make
(29:25):
that conversion decision.
Yeah, it's a dynamic decision.
It really depends on your circumstances.
You know, we haven't even talked about life
expectancy.
We haven't even talked about a lot of
factors that a good financial planner who knows
you knows all these factors, and they can
decide if it's something you need to think
about, and then they can model it out.
(29:45):
You know, you can actually have software that
can model it out longer term and say,
yes, there's a benefit, or no, I don't
think there is.
So good point.
Any other last thoughts on that article, Jeff,
that come to mind?
No, you know what I'll do, Russ?
I'll throw the article, the link to the
article in the notes of the show.
So if people want to read the whole
article, they can read that.
(30:07):
And also in the notes of the show
is a link to contact Chris Boyd, myself,
or yourself, so we'd love to hear from
you.
And thanks for listening.
And please tune in next time.
Until then, keep striving for something more.
Thank you for listening to Something More with
Chris Boyd.
Call us for help, whether it's for financial
(30:27):
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
.com, or call us toll free at 866
-771-8901.
Or send us your questions to amr-info
(30:48):
at wealthenhancement.com.
You're listening to Something More with Chris Boyd
Financial Talk Show, Wealth Enhancement Advisory Services, and
Jay Christopher Boyd provide investment advice on an
individual basis to clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
(31:10):
information from this show will generate profits or
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
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