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

Gain More Tax Free Wealth With Your Roth

21 Aug 2026 · 1 min

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1:14

In this educational segment, CFP® Craig Wear explains how the taxable amount of a traditional‑to‑Roth IRA conversion is determined by the market value of the assets at the moment of conversion. He emphasizes that because IRA holdings fluctuate daily, the timing of a conversion can dramatically affect the tax bill. Using a concrete example of converting 1,000 shares, he shows that converting when the shares are priced at $80 each (instead of $100) reduces the immediate taxable income from $100,000 to $80,000. Any subsequent price recovery occurs inside the Roth, growing tax‑free. The core message is that strategic timing and forward planning of conversions can preserve more wealth from future taxes.

Chapters

The value inside your IRA is not static. Your IRA may contain the same funds, stocks, or shares from one day to the next, but the market value of those holdings constantly changes. And when assets are converted from a traditional IRA into a Roth IRA, the taxable amount is based on their value at the time of conversion. So you're not only choosing how much to convert, you're also choosing when that value will be measured. So let's use a simple example. Suppose you planned to convert 1,000 shares of an investment. At the beginning of the year, those shares are worth, say, $100 each. So now you got What, $100,000 of value? If you convert them at that value, you create a $100,000 conversion. But markets don't travel in a straight line. We all know that. At some point during the year, those same 1,000 shares might temporarily fall to, let's say, $80 each. You still own the same number of shares, but that temporary decline is going to create an opportunity to move them into the Roth and only get taxed on that $80,000. Then if they later recover from $80,000 back to $100,000 after the conversion, that $20,000 and recovery takes place inside the Roth without you having to pay additional tax. That's why timing and planning ahead are so crucial for keeping your future wealth safe from taxes.