Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

3 MAJOR Mistakes People Make With Their Roth Conversions

22 Oct 2024 · 1 min

Watch on YouTube

0:49

This short YouTube explainer by Craig Wear, CFP® outlines three major mistakes people make with Roth conversions. He warns against (1) stopping conversions merely because they reach the top of the current tax bracket, (2) halting conversions to avoid crossing IRMAA (Medicare premium) thresholds, and (3) stopping to avoid increased taxation of Social Security benefits—each of which can be a suboptimal, overly-conservative decision depending on broader tax planning goals.

Chapters

And if you're in your 60s still or early 70s, there's far more benefit for you than there's going to be for your heirs. And all of this. Okay, so the first mistake we watch people make is they stop converting at the top of their current tax bracket. The second is that they is similar in that they stop doing conversions that might push them to a higher IRMAA threshold. IRMA is just the acronym for this Medicare premium thing that we're talking about. Mistake number three is kind of similar, and it's going to a ceiling that says, hey, I'm going to stop the conversions, because if I do any more, my Social Security benefits are going to be taxed more. As you probably are aware, once you start taking Social Security, you can only have so much taxable income before Social Security benefits are taxed.