Craig Wear shows how converting a $1 million IRA all at once could cost $612,000 in taxes at a 35% bracket. Most people should convert gradually instead to avoid taxes becoming their biggest lifetime expense.
Without an optimized strategy for converting your IRA to a Roth, taxes will likely become your single greatest expense during the rest of your lifetime. So how can this be? Sometimes we get asked that, how can it be? I got 1 million 3 quarter in IRAs and 35% maximum tax bracket. If I converted it all Today, it's only $612,000 of total tax. You may be thinking, and you would be correct if you said, well, I'm just going to convert the whole thing. And realistically, that's normally not the best game plan for most people. Occasionally we do a one and done, but most of the time it's better to make sure to preserve your net worth, you do it over a period of time.
