Craig Wear explains why staying under your tax bracket to avoid Roth conversion taxes misses the bigger picture. Converting now, even into a higher bracket, can slash future required minimum distributions and save $900k in taxes over a lifetime. His calculator, built from 3,000+ client cases, shows IRA owners with $1 million or more how to protect wealth from future tax bills.
Most financial advisors will advise against doing Roth conversions because it means you pay more tax. And that's their job. They make sure you don't pay taxes when you can avoid it. But when it comes to RMDs, that's kind of like painting over a rusty pipe. On the outside, it looks as good as new, but on the inside, corrosion keeps spreading and it won't be long until you're dealing with a big leak. So if all you look at are this year's taxes, then avoiding extra taxable income seems like a smart move. But protecting your IRA from taxes now is also stopping it from getting smaller, which means your future RMDs aren't aren't getting smaller either. So instead of aiming to stay in your current bracket, by strategically moving into higher brackets now, you relieve more of the pressure RMDs cause than if you had just played it safe. And that's the shift that most people miss. Because the goal is not to win the tax bracket game this year. The goal is to reduce the amount of money that's still trapped inside that future forced tax system. So stop trying to win the tax bracket game. Tom and Kathy were actually doing this, but once we showed them the bigger picture, they They realized paying some tax now was really a much better trade-off, and that helped them save an additional $900,000 of taxes that were going to be due on their IRAs that were worth about $2 million. So also a quick note, I've actually seen analyses where converting at the client's current tax bracket submitted them to more taxes than if they'd done nothing to convert at all. They simply walked into a nightmare using a totally logical but misinformed strategy, at least for IRA millionaires.
Hey, if you've got a 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, uh, you leave it all to them. Um, we've taken it a step further and we've cross-referenced that to people just like you that have been clients of ours, over 3,000 of our clients, And we want to be able to give you an idea what's possible for you to save if you get Roth conversions done right. So click the link below, take you about 2 minutes, and it'd be pretty alarming. Take care.
