Craig Wear explains why high-balance IRA owners avoid Roth conversions: they hate paying taxes now, even though taxes get paid either way. An accelerated conversion plan lets you control when and how much you pay, instead of facing huge tax bills later when RMDs kick in.
If you've gotten to the IRA millionaire kind of status, you're in the top 10% of American savers. You've done the right things for a long period of time and it's worked out. The challenge is when you get to that point, there are reasons why you have to do things different than what somebody maybe that's got a little bit more modest IRA is. You know, we talk to hundreds of people every single week through our CFP®s and through our Rothologists. I've asked the team what they think. I've gotten some input on what they hear a lot. And it's really consistent with what I've heard for 16 years now. So here are the big reasons why that may be keeping you from getting all that you can out of Roth conversions. A lot of people, they just say, look, I just don't want to pay the taxes. I got a great friend right now and that's exactly where he's at. He's got a lot of money in IRAs and he's at a high tax rate and he just psychologically, he just doesn't want to pay the taxes. I get it. But what he doesn't really get and what you may be having a hard time with is just the psychology in all this. So it's not really about if you're going to pay the taxes or not. It's about when you choose to pay them. And by getting an accelerated Roth conversion plan in place, you actually take control over when you pay the tax and how let you pay the tax as opposed to just waiting until your RMDs kick in and then pay whatever the government tells you you have to pay.
