I'm 60 with ALL PRE-TAX (401k, IRA, etc.). How Do I Minimize Taxes (ROTH CONVERSION CASE)?

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In this video, We will discuss tax planning strategies for individuals with most of their retirement savings in pre-tax accounts like 401ks or IRAs.

Using a couple's case study, we'll discuss how to optimize retirement savings and minimize taxes through Roth conversions.

The video also covers the importance of proper cash flow management and strategic planning to avoid high tax payments in retirement.

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Time Stamp
00:00 Intro 
00:54 Intro to Case Study 
01:52 What are Tax Brackets 
02:55 What happens when RMDs come into the picture
05:24 Dont let your accounts grow unnecessarily
06:01 What Happens When You Do Conversion 
07:21 Don't convert
09:26 Summary Conclusion 
10:30 Work With Us

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Ari Taublieb, CFP®, MBA, is the Vice President of Root Financial Partners (Fiduciary) and host of the Early Retirement Podcast.

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⚠️ "DISCLAIMER:⚠️

All content is not to be received as financial advice, and each individual should consult with their dedicated financial planner, tax preparer, estate attorney, etc., before making any financial decisions.

This video contains content I created and got permission from its creators to use. This Channel DOES NOT Promote or encourage Any illegal activities; all contents provided by This Channel are meant for EDUCATIONAL AND ENTERTAINMENT purposes only.

[annew]

This is all very interesting. But, one thing that is often forgotten is that when one spouse dies, the tax rates on the survivor essentially double. That make it even more important to do this sort of planning at a younger age.

[donaldlee]

I'm a math nerd and actually familiar with the what and why of ROTH conversions, but this was a really nice overview, particularly with the 4 colored lines that represent the borders between tax brackets. It's my opinion that there is hardly any difference between 22% vs 24% so just go up to 24%.

[TheFirstRealChewy]

Before you run off and start converting your tax deferred money to Roth, make sure you actually need to and that its worth it. Remember that RMDs is a problem only if its forcing you to take out more money than you need.

[marteanderson]

Remember if your 401(k) or IRA funds decline in a market correction or recession in that pre-retirement or early retirement window it's a doubly good time to convert and play the recovery of account values in your Roth.

[daveintexas]

Amassed a lot through tax deferred accounts. If my spouse and I are in the 24% tax bracket in retirement, I consider that a success. It’s the system, not all taxes are bad, I would just like to see tax revenues spent wisely on law enforcement / first responders, programs for the elderly, and good schools.

[July..]

Retire early and draw down some of that pretax at age 60. Trust me you will enjoy your money at 60 vs 75.

[julieg.]

Cyanne or cayenne, I laughed out loud when you said that!! Thanks for taking us through a mostly all pre-tax retirement portfolio impact scenario Ari. That’s what my husband and I are facing when I retire in 2 years and he retires the year after me. Roth conversions annually coupled with delaying our SS will address it for us!

[memphistnliving]

I really love all your case study analysis. They offer more confidence when someone is unsure about their financial situation. Good job my friend

[jasonburke]

This is a great video. I’m 54 and have way too much tax-deferred money. I have a good sized after tax brokerage account but I have zero in Roth. I guess when I stop working (56), I need to eat cauliflower and pay tax from brokerage. Thanks for the great content.

[dangrad]

One flaw about going into the next tax bracket (without regard to IRMAA surcharges) is that ONLY those income dollars above the bracket upper limit are subject to the n3x5 higher income tax rate. I don’t think you were clear about that. I’m guessing most viewers think that ALL their income is subject to the higher rate if their income exceeds the high end of the income brackets.

[joefloyd]

Thanks, this explains RMDs better than anyone else I have ever listened to or read !

[bluethundar]

Ari, I ran into this video of yours and I am seriously looking into converting my pre-tax 401k to Roth (in incremental amounts over time), just like you mention. I'm 55 now and my wife is 51, and we are in very similar situation as the hypothetical couple. I am looking into your sites/resources now, and I just subscribed.

[ChristopherEvans-]

Not to mention, if one of them passes away, the surviving spouse is going to get really screwed on taxes. Even more of a reason for them to Roth convert as it is inevitable that one will outlive the other.

[AminaCasazza]

A good video i must say but i will always prefer stocks. AI stocks will dominate 2024. Why I prefer NVIDIA is that they are better placed to maintain long term growth potential, and provide a platform for other AI companies. I know someone who has made more than 200% from NVIDIA. I'll also take these other recommendations you made.

[STJim]

You’ve considered tax brackets for “married filing jointly”. It gets even worse if one spouse dies first, and the survivor suddenly has to file as “single”! Show an example of what happens if one dies at say 75, 80, or 85. Should make ROTH conversion even more important. And don’t forget IRMMA changes!

[janethunt]

I was kicking myself for not starting conversions earlier, but in Georgia, at age 62, no tax on retirement income up to $35K. So we started converting at ages 62 and 63.

[blairkinsman]

We have had RMD in Canada 🇨🇦 for years .. in Canada you can effectively double the tax percentages - a $235K income in Canada has a marginal tax rate of 53.53% .. it’s something big we need to be aware of and plan for in retirement

[steveking]

Financial planners HAVE to be the most overpaid occupation. 1% charged to each account. 100 accounts means their income for the year equals the lifetime investments of their average client. Quite unbelievable.

[dylansran]

Hello Ari, really well done conversion video. I improved my understanding a little bit. a while to go till retirement for me. Definitely starting to deep dive into Roth Conversion with minimum tax implications for the future. Thank you.

[PH-mdxp]

Cayenne is the name of one of Porsche’s SUV models. The color is Cyan. Good video though, you made you point! 😅