Bob Fraser shows how delaying tax-advantaged conversions costs $66,000 in permanent lost savings. Waiting for lower retirement income doesn't recover the loss because the conversion window just shifts, leaving $250k-$300k unconverted and the tax benefit gone forever.
Well, if I took a million bucks and I looked out over my lifetime of what kind of tax am I going to pay? And then I said, well, let's do this at the most optimal rate. And now what taxes am I going to pay? But now let's wait a year to start doing the optimal. The cost is $66,000 of tax avoidance that you can't get anymore. So people say, well, I'm going to be retiring in 2 years. I'm not going to be making $350,000 a year. I'm going to be making $120,000. So I think I'm just going to wait till then. So now what you just did under that same analysis I just gave you is you just said, okay, I'm willing for there to be another $250,000 or $300,000 I have to convert in 2 years, and then I'll start converting when it's worth that much more. You never can make it up.
