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

When to Convert your Roth to a Roth IRA

31 Jul 2024 · 1 min

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A short advisory video by Craig Wear, CFP® about when to convert tax-deferred retirement accounts to a Roth IRA. The speaker explains a market-timing decision rule: convert now if you expect the market to rise (so future growth occurs within the Roth), or wait to convert until prices fall if you expect a market decline (to pay less tax on conversion). Framed as a "take a stand" method — choose your belief about future markets to guide conversion timing.

Chapters

You don't want to wait for, gosh, I'm retiring in a year or two, and I'll wait till then. Those are really big mistakes. And I know it can be a little bit complicated, but just generally, what is your belief about the rest of the year once you decide that you're going to do conversions? Because if you believe the market is going to go up, then certainly you want to do the conversions now. So all the growth that would have occurred in that tax deferred account now happens over in your Roth account. On the other hand, if you believe that the market's going to go down and prices are going to go down, then you want to wait and convert those shares at a lower price. So you pay lower tax on this, on getting those shares converted. So that's the take a stand method. You got to decide what you believe about the markets.