Craig Wear explains how market crashes create rare windows for Roth conversions that can lower your RMDs and taxes for heirs. You need a plan in place before the crash hits, because these opportunities may not come again for years.
This isn't about hoping for market crashes. Nobody wants to see their retirement account drop, but over a long retirement, market declines are going to happen. And having a system in place before they happen gives you the chance to really take advantage of it. So, because when one of these windows closes, it doesn't come back the same way, and it may be months before you have it again or years. And if you miss it, the costs may not just show up on your tax return this year. It can show up as higher RMDs. And a larger tax bill for your surviving spouse, and even in the amount for your family after you and your wife are both gone. So that's why we don't look at Roth conversions as a one-time trick. We look at them as part of a larger IRA exit strategy. That strategy starts with knowing your numbers. So with the right plan in place and a system watching for the right moment, what feels like a market collapse to everyone else becomes your shining opportunity. You get to move money out of your IRA into a better long-term tax position.
