In this video, Craig Wear, CFP®, addresses why many investors postpone Roth IRA conversions, acknowledging that the reasons—market uncertainty, tax‑season timing, spousal readiness—are logical but often lead to substantial hidden costs. Drawing on analysis of thousands of client conversion plans, he illustrates the financial impact using a sample scenario. An immediate, well‑executed Roth conversion yields about $1.8 million in lifetime tax savings. Delaying the conversion by one tax year reduces those savings to roughly $1.7 million, a $66,000 loss. A five‑year delay cuts lifetime savings to about $1.4 million, costing $357,000. Wear emphasizes that these lost dollars stay with the IRS, reducing the wealth available to the individual, spouse, and heirs. The segment concludes with a promotion for an RMD (required minimum distribution) calculator, backed by data from over 3,000 clients, inviting viewers to assess their own potential tax savings and estate outcomes.
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So let me start by saying something I mean very sincerely. The reasons people wait on this are not crazy. They're actually pretty reasonable, pretty logical. The markets feel uncertain. You're not sure which accounts to touch first. Maybe you want to get your CPA involved, but tax season just ended and you don't want to bother them. Or maybe your spouse isn't fully up to speed yet or on board. And it feels like just one of those things that needs a little more runway and time to breathe before you pull the trigger. Those aren't irrational reasons. And I've heard every one of them multiple times over in different shades, and I understand every single one of them, but here's the problem. Waiting has a price tag, a very specific one, and most people have never seen the numbers, so that's what we're going to do today. So we've looked at thousands of conversion plans, how they were built, when they started, what they produced, and we calculated exactly what delay costs those people year by year in actual dollars. Let me show you what we found. We're going to look at a real sample plan. The numbers I'm about to show you are for illustrative purposes. Your situation is going to be different. Every plan is different, but the direction is the same. same across thousands of cases. So pay attention to the shape of this, not just the specific figures. In this plan, a well-executed Roth conversion strategy started now with a full planning year, properly coordinated, produces lifetime tax savings of roughly $1.8 million. Okay, so we're going to call that the baseline. That's what acting looks like. Now, let's look at what waiting looks like. If this person waited 1 year, 1 tax year, so they waited from the middle of the year to January for whatever good logical reason they have, Their lifetime tax savings drops to $1.7 million and some change. So what's the cost of that 1 year? $66,000. I want you to sit with that for just a second. $66,000 of tax benefit that they could have had that they will never have an opportunity to get before. Not because the plan got worse, not because anything went wrong, simply because the window was now 1 year narrower. Let's look at maybe this person waited 5 years. And often we have people say to us, well, I'm going to be retiring in several And so I'm going to be in a whole lot lower tax bracket then. I'll just wait till then. Or whatever their reason is for waiting, right? But we hear a lot of it. We hear a lot of excuses. Lifetime tax savings in that case drops to $1.4 million. So the cost of waiting over 5 years then, $357,000 just because they waited. That's the price of 5 years of, eh, I'll get to it, or I'll handle it next year, or I'll wait till things are more certain, or I'll wait till I'm in a lower tax bracket. And here's what makes that number so significant. That money doesn't disappear into thin air. It just stays in the pockets of the IRS. Comes directly out of what your family would have kept. Now it's exposed and it's no longer protected. This also comes out of what your spouse has if something happens to you, out of what your kids inherit. It's not an abstract number. That's real money that either stays in your family or it doesn't.
Hey, if you've got $1 million or more in your IRAs, the IRS already has scheduled one of the biggest tax bills of your entire lifetime. It starts at 73 or 75 years old. The problem is most people just haven't seen the number yet. We have an RMD calculator that we've put together that'll give you an idea what the taxes are going to be over your lifetime, as well as maybe what's going to be left for your heirs if you leave it all to them. We've taken it a step further and we've cross-referenced that to people just like you that have been clients of ours, of over 3,000 of our clients. And we want to be able to give you an idea of what's possible for you to save if you get Roth conversions done right. So click the link below. It'll take you about 2 minutes and it'll be pretty alarming. Take care.
