I'm really glad that you made these videos. You are so clear and concise on all of these complex matters.
@rickdunn3883
7 ай бұрын
Good points in this video.
@ProPilotWannaBe
2 ай бұрын
Thank you Eric! I was introduced to your videos by the staff at NewRetirement, and I am very thankful for that. I have a question on timing. Currently, my plan is to do several conversions over 5 years starting in 2026, the year I turn 59-1/2, because I don't have side savings to pay the taxes from. But will miss the current tax categories, sadly, because I'm only 57. But a thought came to me while watching your video. What if I max out my 22% tax bracket this year with a conversion. Next year, when taxes are due, I would need to withdrawl the taxes for it. Even with the 10% "fee", that makes it a 24.2% tax on the conversion. Might that be worth it? Meaning, I'm not payign 10% fee on the full conversion, just the tax part.
@josephj7991
2 жыл бұрын
I Have $25k in Loan and Credit Card; shid I pay them OFF W RETIREMENT MONEY? Since they Must be paid? Pay OFF In 1 fell sweep?
@twhite8308
Жыл бұрын
If I pay Roth conversion tax out of Roth. at age 66, it seems like I can make a bigger Roth conversion bc the Tax amount won't add to my taxable income ... I hope you video about this.
@jonscrivner9087
Жыл бұрын
Do you ever address the tax effect on social security income when doing a conversion? In the 12% bracket, I calculate almost 24% tax on the combination of income tax plus the addition of taxes owed on the increased social security being taxed. Let me know. Thank you.
@SafeguardWealthManagement
Жыл бұрын
Yes, this is big reason why we are proponents of delaying SS while converting. If you are on SS and only converting in small brackets like the 12% bracket, you find yourself smack dab in the middle of something we call the SS tax torpedo. This can be quite costly. Keep in mind, however, later in life RMDs can push you into the same tax hurdle so your options are converting now or being forced into it later. Depending on your situation, suspending benefits is an option.
@jonscrivner9087
Жыл бұрын
@Safeguard Wealth Management Thank you. Fortunately I was funding the Roth account and doing conversions in my later working years and in early in retirement. I delayed SS until 70. I fumbled along and luckily it turned out to be the right plan. There has been a mountain of bad advice about time sensitive actions to take out there. Thanks to the information you provide, we stand a fighting chance of retirement success.
@gabriellejones2465
2 жыл бұрын
The $70,000 conversion, is that including employment income combined with an IRA or is that the funds in a traditional IRA only being converted into a Roth? I’m trying to understand the $15,400.00 owed in taxes, is that amount determined from the IRA account alone or combined with employment income?
@beach376
2 жыл бұрын
After watching dozens of videos on personal finance and Roth IRA topics, I must commend you for providing the clearest and most helpful videos on the topic without a sales pitch. Thanks!
@cassandragonzalez5660
2 жыл бұрын
What if you want to convert a traditional IRA to ROTH, but this would be your opening of the ROTH. So I have a ROTH account open, without funding. I was going to parse it out in $10k clips/year. But how would I convert $100k in one shot? Seems like there aren't any solutions in that scenario? I'm 50, and don't have that big of a savings, nor that big of a tax return. I'm in the 23% tax bracket.
@josephj7991
2 жыл бұрын
I am 60, I DONT Have money to pay taxes on Roth Conversion. Cud I take a Distribution from Traditional IRA and then use That money to pay for Future Roth Conv? Or ahud I just stick with Traditional IRA DIstributions since I will be using these as bridge to Soc Sec at 67? I can take more than "needed" and put in Savings to lower RMD ? Other shows. RAGE Against paying for Roth Conv taxes out of the Conversion but if I done Have the cash...
@philly1776
Жыл бұрын
Thank you for this info. At this time (Sept 23) my 2 high yield savings accounts are paying 4.3% APY and 4.5% APY. I plan on starting my 401K to Roth IRA conversion in the coming months. Hate to take money out of those high yield savings accounts for the conversion taxes as I love the passive income they provide. I think I will pay the taxes from the Roth conversion. Just seems much simpler. Thanks again!!!!!
@carolbohlmann2265
2 жыл бұрын
I absolutely love your channel. I love your concise delivery. I watch every episode. I learn every day from your presentations. Thank you for your time and efforts. I will be calling you soon. Thank you.
@SafeguardWealthManagement
2 жыл бұрын
Thank you so much Carol! These comments make our day :)
@jeromewagner6746
2 жыл бұрын
Another great video Eric. Very helpful and makes total sense.
@rpguitar
2 жыл бұрын
One category of money that ends up in a Roth, but is nearly always ignored, is money rolled over from a Roth 401(k). Besides contributions, conversions, and earnings, we also have these rollovers for people who have left employers and moved their Roth 401(k) balances into their Roth IRAs. The reason I point this out is because this rollover money is also *partly* accessible without penalty or waiting period. It's essential to know how much of the rollover is comprised of post-tax payroll deductions (i.e. contributions), and how much represents earnings. Once rolled over, this distinction is gone forever, so it's critical to save statements and W2s showing the history of Roth 401(k) contributions during the worker's term of employment.
@toddsmith4280
2 жыл бұрын
Can you convert your IRA to ROTH in Q2 then pay the taxes out of Roth in Q4 to take advantage of the stock appreciation for 3 quarters? I am currently 62 and don’t have any 5 year restrictions.
@chrisdestry5394
2 жыл бұрын
What if you are over 59-1/2 and want to use Roth funds to pay the taxes. Is this still tax equivalent to paying out of the conversion?
@ScottAshmead
2 жыл бұрын
So if you convert a Traditional to a Roth, it was my understanding that all the money that went into the this new Roth (from converting) is now considered to be contribution in the Roth. This video makes me think otherwise. Is it or not? Is there a video that will explain in more detail?
@SafeguardWealthManagement
2 жыл бұрын
You are correct but depending on your age you may be subject to a 5 year lock up of that Roth Conversion. If over 59 1/2, then yes, the conversion is essentially treated as a contribution immediately after the conversion.
@julieokel2005
2 жыл бұрын
What about using funds to pay taxes from a 401K using the rule of 55??? For example, do a Roth coversion of $50,000 and do a "withdrawal/distrubution" and dedicate those funds to be 100% for taxes?
@SafeguardWealthManagement
2 жыл бұрын
Yes Julie, this is a valid strategy as well!
@randyh6027
2 жыл бұрын
I need a little more convincing that paying the taxes out of a separate Roth IRA isn't actually the best strategy. To avoid going into a much higher tax bracket, you need to convert not-more-than a certain amount of your tax-deferred account in any given year, and we only have a few years before taxes are likely to go up again. So-- it behooves you to convert as much of your tax-deferred account in the next few (3-4?) years as possible. Selling taxable assets to pay tax on your conversions increases your income and reduces the amount you can convert each year, but using your existing Roth accounts allows you to maximize your conversion each year, thereby lowering your RMDs in the future and lowering your taxes in the future as well. Lowering my RMDs in the future (I'm 64 now) may well allow me to be in a lower tax bracket at age 72. It just seems more practical to me to be able to convert as much as possible before I'm forced to take the RMDs rather than selling taxable assets and thereby reducing the amount I can convert each year. Doesn't that make sense? Thank you - i very much enjoy (and learn from) your videos.
@stevenobrien595
3 жыл бұрын
Eric, I really think you should consolidate all these conversion concepts you have and shared with us into a book format. There really isn't a book that I know of that is available with this fantastic information.👍 Please consider. Keep up the great work!
@SafeguardWealthManagement
2 жыл бұрын
Thanks Steven! Great suggestion
@randythomas6874
3 жыл бұрын
I had a 401k at a previous employer. I did a rollover to traditional IRA when I left. Now I want to do a Roth conversion. Is the total amount of the conversion considered a contribution or is it still separated into contributions and earnings? I'm 62.
@SafeguardWealthManagement
3 жыл бұрын
Once you perform the conversion from Trad. IRA to Roth, the amount you have converted will be classified as a contribution. Immediately when it starts earning money on top of the conversion, it will be 'separated' again. Does that make sense?
This video is gold. I never thought about using funds in my Roth to pay for a conversion. I assume the holder of it can tell me how much I have in it in terms of contributions?
@SafeguardWealthManagement
2 жыл бұрын
Thanks Cary! Yes, they should be able to
@damacx
2 жыл бұрын
Hmm ok, so if I understood this video correctly - if I'm under 59 1/2 yrs old and I'm performing a Roth conversion, there is no way to avoid the 10% early withdrawal penalty tax?
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