Is your Roth Conversion strategy optimized to ensure you gain the most from this powerful tax strategy? You can schedule an appointment with one of our Retirement Experts to look at your situation and help you plan for your future. Call us at (920) 544-0576 or go to https://www.safeguardinvest.com/contact.
What is the most optimal way to pay Roth Conversion taxes?
Running the numbers in a ‘clean’ calculation shows that paying out of your taxable account is the most optimal.
But what happens when the calculations aren’t so clean? What happens when paying Roth Conversion taxes out of our taxable account causes us to sell an asset and thus generate more in taxes.
Does this ruin the value of this Roth Conversion strategy?
In some cases, yes. In many, no.
Paying conversion taxes from our taxable account requires us to factor in a lot of different variables:
✅ The long term capital gain rate we are paying today vs. the rate we would be paying in the future
✅ Whether we will be using the taxable account for income during our life or using it as an estate planning tool for the next generation?
✅ How much tax drag we are generating by investing the taxable account?
✅ How much unrealized growth is in the taxable asset we are selling?
✅ and many more…
Coordinating these variables in the most optimal way is a layered calculation that will adjust with very small changes in each of these given variables.
In this video, we talk through these variables and finding the Roth Conversion sweet spot for paying Roth Conversion taxes out of your taxable account.
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Always remember, “You Don’t Need More Money; You Need a Better Plan”
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Safeguard Wealth Management is a Registered Investment Advisor in the State of WI. Safeguard Wealth Management is not an insurance provider. All content on Youtube is for informational purposes only and should not be taken as personal advice for your situation. You can read more disclosures at https://www.safeguardinvest.com/fiduciary