A short video by Craig Wear, CFP® explaining strategy and trade-offs for Roth conversions. The speaker argues that the primary problem Roth conversions solve is reducing future taxable required minimum distributions (RMDs), and that converting sooner—even at a higher tax bracket over a shorter timeframe—is often advantageous.
A lot of people will tell you that the number one thing is what do you think tax rates are going to do? And that that becomes your number one factor, Meaning if you believe your future tax rates are going to be higher than what they are today, then you should do. Then you should do conversions. The problem that you're solving with Roth conversions is not a interest. I mean a tax bracket risk. The problem you're solving is you're eliminating or dramatically reducing the massive amount of taxable RMDs that you're going to have come into your life over the rest of your life. You're better off to convert sooner at a higher tax bracket and over a shorter time frame than you're currently comfortable with. Almost. In every case that we see.
