Important clarification for the 5 year Roth Conversion Rule: There are a few exceptions to this five-year rule. The important one for most retirees watching this video will be the 'over 59.5 exception". If you perform a Roth Conversion and are over 59.5, you can access the converted money immediately. The example given in Mistake #2 may be confusing given this exception. We apologize for the confusion.
That's tapping the cost basis of the conversions, not the gains, correct? Over 59.5 there is no penalty, but you would pay taxes on any gains taken before the 5 year limit?
@@dancasey9660, the exception allows you to tap the gains as well. The only hurdle that may arise is if you hadn't established the Roth more than 5 years prior. Then the gains could be subject to the contributory rule
I am happy you added this clarification. You only need one Roth contribution to one Roth account established for 5 years once you are 59.5 or older. There’s no additional 5 year clocks on each conversion if you are older than 59.5 and first opened the Roth more than 5 years ago.
@@dancasey9660 I am honestly not sure if there’s a separate 5 year rule for Roth 401k’s and Roth IRA’s. I played it safe and opened, then contributed to both accounts more than 5 years ago.
Some states currently have Ira in payout mode protected from Medicaid. We have converted some Ira to roth. This year planning to take long term capital gains in taxable account and buy same asset back to get a step up in basis tax free as long as we keep taxable income within limit
Thank you for your presentation. $60000 IRA plus an additional $5000 is a 22% tax bracket? The example is confusing show the SSI numbers. We are delaying SSI until 67 y/o my pension of $68000 & a $35000 IRA distribution will keep us in the 12%.
At 60 to 62, quit your 6-figure job and get a very low paying job. Each year move enough from pre-tax into a Roth, keeping the limits below IRMAA penalty limits. Make sure your low paying job has qualified health insurance if your spouse is not working. Push Social Security out until the Maximum, at age 70. Stay off of Medicare Part B and Pard D as long as you have health insurance. If you can make it to 70, you may not have any RMDs, moving all your pre-tax accounts over. No widow/widower tax trap. No RMDs to force on your heirs. At 70, starting Social Security, your taxes on it will be very minimal. I am well into this plan. Will be at FRA this year.
So much of what you talk about is very valuable and “food for thought” and well explained. But the tax torpedo explanation is very confusing and after watching it over several times it occurs to me that this is just for people to worry about if their income falls in a certain window. Those of us who are already paying 85% on 1/2 of our social security don’t need to worry about this and if we are trying to do Roth conversions then we should focus on staying in our tax bracket and converting as much as possible right up to that point. I could not figure out why the torpedo dropped off dramatically at the far end. You might want to include an explanation for that in your next video. Again, your information is super valuable. I would like a video on Roth Conversions and why you would want to stay in your original tax bracket and why or how you would calculate why you would want to go up to the next tax bracket. I know you already touch on this from several angles, but I would want to know how to calculate or how to do a forecast. This is probably what you do for you clients, but just sayin’. Thanks for this content!
Thank you for your comment so I don't have to watch it a few times. I agree that the lack of specification on when that tax torpedo is applicable. I too will likely be over that amount and therefore not impacted by this perceived bomb.
Okay! Great! Love it! 🙋♀️ Question. Is it better to do a fast TRAD-ROTH conversion (with tax hit), and GROW it…..vs leaving it small as possible, (and converting it in fractions),so it won’t get big tax hit in the TRAD-ROTH conversion?
I am going to be 72 in a month and working full time question will all tax deferred Multiple IRA Question is if i consider converting tax deferred ira to roth is the requirement for conversion requires all my multiple ira to convert or can i convert some and leave others so pay capital gains tax only on part of converted ? Appreciate your help this is my first workshop of yours also need some advise thanks
Thank you for all you do! I have found your videos to be so beneficial and thought-provoking. I did get a bit sad at the end when you described all that you may be offering to your new Facebook group. I feel like I'll be missing out somehow. Am I the only senior out there not on Facebook?? Will the topics discussed on FB supplement or replace what would have been future video content? Without being selfish, I'm trying to be mindful of the time it must take you to produce YT videos vs. FB. (I'm trying really hard.)
This assumes that Roth is not taxed later a few years after Congress determines that there are not enough tax payers due to low birth rate everywhere. Or Congress can increase the corporate tax rate while they make net billions.
Problem with taxing corporations is that they are "international". When congress decides to really put tax pressure on those corporations, watch out for the exodus.
At 47:00. Accounting for total tax savings can be misleading. What you want to optimize is post taxed value of the accounts. for instance, if you convert but the tax rate is the same as if it was not converted. You will pay less in taxes but there won't be any net financial benefit because roth and regular Ira are identical (assuming no impact on Social Security or other program money/ taxes) .
This is how the tax savings are calculated. For instance, if a tax was paid at 22% to avoid 25% or 28% in the future, that % spread is calculated as the tax savings. If someone was paying 22% to avoid 22% in the future, that would not translate to a tax savings in our software
@@shkim103 If the tax rate is the same there is no benefit. However, LTCG and Social Security are impacted by additional incomes. So withdrawals from regular IRA can cause a higher percentage of SS and move LTCG up into higher brackets.
@@ralphparker If I convert $100,000 from Traditional to Roth, I will pay $22,000 in taxes today. If that is paid out of the conversion (only one option), the remaining $78,000 will grow tax-free for the next 30 years. At 7% growth rate, that doubles every 10 years: $156,000 in 2032, and $312,000 in 2042. Withdrawals are tax-free, so I saved 22% of the difference: taxes on $400,000 (taken over time at 22%) = $88,000. I can pay $22,000 today or $88,000 over the next few decades. If I pay the taxes out of my savings, however, that's like adding $22,000 to my Roth account! In that case, I have $400,000 in the Roth having only paid $22,000 in taxes and gaining an $88,000 benefit. Am I missing something?
@@gregoryellis324 If you are taking monies out of your conversion to pay taxes And the tax rate stays the same. It is a wash. Follow this equation: [Principle * (1-TR) ]*(1+GR)^Years where TR = Tax Rate and GR = Growth Rate. In this equation You calculate the after tax principle : [ Principle * (1 - TR) ] and grow it over the years. Now if you waited and did not make a roth conversion and stayed at the same tax rate the equation would look like this: [Principle * ( 1 + GR)^Years] * (1-TR) where you can see that the principle grew first and then you taxed it later. Now it is obvious that you paid less taxes in the first scenario than in the second scenario but the principle at the end is the same. Now in the second case: You pay taxes out of a Taxable fund the equation looks like this: Principle = Conversion * (1 + GR)^Years - TP * (1+GR(1 - TR2)) ^ Years where TP is taxes Paid and TR2 is the tax rate applied to the taxable account [because it is a combination of interest, dividends, qualified dividends, shortterm and longterm cap gains it will have a different tax rate that standard income]. The new principle in the Roth account is Conversion * (1+GR)^ Years. But the lost principle in the taxable account is accounted for in the second part of the equation TP * (1 + GR(1-TR2))^ Years. Since Taxes are paid on the growth each year from your taxable account, there is a tax drag on the actual principle growth. So in your second paragraph you did not account for the lost growth in principle that you paid your taxes from. My summary: Roth conversion + 30 years at 7%, taxes Paid from conversion at 22%: Principle = 593755.9, Taxes Paid = 22000 No roth conversion + 30 Years, 7% taxed at 22%: Principle = 593755.9, Taxes paid = 167469.6 Roth conversion +30 Years, taxes paid from Taxable account, 7% growth, both the IRA and the Taxable account growth are taxed at 22%: Principle = 761122.5-108406.6 = 652818.9 Where 108406.6 represent the future loss from the taxable account. which is an optimum case. This is the optimum case, if the the Taxable account growth is taxed at a lower rate and probably is, the benefit is less. Is there a chance I've played pickleball with you?
Do the math....it works out the same. If you invest now and pay taxes later or if you pay taxes now and invest. The end result is the same given the same tax rate and ROI.
@@ronloftis9080 Exactly. There is not an opportunity cost to paying taxes. The benefit of a conversion all comes down to tax rates now vs. tax rates in the future.
The contribution limits can impose an opportunity cost here. Assume the 2022 limit of $6,000 for IRAs and a 22% marginal tax rate. If you're able to max out your accounts with after-tax money, and you're in the 22% marginal tax bracket, then you can put the equivalent of $7,692.31 of pre-tax income in a ROTH ( $7,692.31 * (1-0.22) = $6,000). But if you choose to go with a traditional IRA, then you can only invest $6,000 of pre-tax income. Your tax savings of $1,692.31 can't be invested in an IRA, so there's a cost to choosing a traditional IRA in this scenario. On the other hand, investing in a ROTH essentially sets your tax rate in stone. There's no chance that that money will be taxed at a lower rate due to lower income in retirement. With a traditional IRA, there's a chance your income will be taxed at a lower rate in retirement. After all, your income can be lower since you don't need to put any of it into savings anymore. So losing this chance to pay a lower tax on, is the opportunity cost of choosing a ROTH.
I lost my job during the pandemic and I have no earned income now. Can I still rollover my 401k into a Roth IRA? Is there an earned income requirement for the roll over? Thanks.
I'm not a financial advisor, but all my research says that you do not have to have earned income for a Traditional to Roth conversion. Retirees have that option. In fact, a Roth conversion timed during a period when you have zero earned income may drop the tax liability dramatically. If nothing else, you can convert an amount equal to your Standard Deduction essentially tax-free!
I lost my job at age 48, and never went back. I started Roth conversions at age 54. I'm 62 now, and have 2 more years of Roth conversions. My avoided taxes on my Roth withdrawals from age 65 to 95 will be $2.4 million. Of course I'll have paid $83,000 in taxes on my 11 years of Roth conversions. My conversions are done in Texas (no state income tax), while my Roth withdrawals will be in California (high state income tax rate). Bottom line: there can be financial benefits to losing a job.
Of course. We have shared this in a few other videos I can link to. Its important to note that the subsidy cliff has ben adjusted for 2021 and 2022 because of the American Rescue Plan. Here are the trainings: Navigating Obamacare - th-cam.com/video/kQP6qfaXlis/w-d-xo.html American Rescue Plan - th-cam.com/video/COhz6ocQy4s/w-d-xo.html
1. Roth conversions are not a loophole. 2. There is no indication it is going away any time soon. 3. Saving tax dollars is not the right comparison. After tax net worth is the right comparison. Conversions are only beneficial if you pay a lower tax % on the conversion vs deferring. 4. Your example of 40% tax is selective to make converting look better. That is specific to a particular income where you went from not paying tax on SS to having to pay tax. Since SS limits are low and not indexed for inflation, it will be hard for most people to avoid tax on SS in the future. You could be selective the other way as well. If you are at the top of the 12% bracket and convert to Roth, you will now pay 15% instead of zero % on your cap gains and qualified dividends.
Five year rule. THE ONLY PLACE TO GET INFORMATION ON THE FIVE YEAR RULE IS DIRECTLY FROM THE OFFICIAL IRS PUBLICATION OF TAX RULES AND REQUIREMENTS. Don't ask anyone else! Everyone (99%) get this wrong.
You lost me very early when you threw in the “extra income” of $5000. You’re not saying where this is coming from. Social Security? Income from the IRA? Am I to assume something?
If it was a bad thing to delay RMD to 72, would it actually be a great thing to start taking IRA distributions (or better, Roth conversions) as soon as your eligible?
You might need to clarify your question for my but I'm understanding it as you are asking why would IRA distributions/conversions make sense early in retirement if we don't like them later in retirement? There are a lot of reasons. I would point you to our Roth Conversion playlist on our channel to explain the reasons why. - th-cam.com/video/wGFDeyUJuEA/w-d-xo.html RMDs by definition are a forced withdrawal whether you want the money or not. The golden rule of tax planning is that we want to have complete control over our income. In our practice we typically see RMDs pushing retirees into various tax hurdles like the SS tax torpedo, Capital Gain Bump Zones, Widow Penalty, Tax hikes (because of the Tax Cuts and Jobs Act), etc.
Important clarification for the 5 year Roth Conversion Rule:
There are a few exceptions to this five-year rule. The important one for most retirees watching this video will be the 'over 59.5 exception". If you perform a Roth Conversion and are over 59.5, you can access the converted money immediately.
The example given in Mistake #2 may be confusing given this exception. We apologize for the confusion.
That's tapping the cost basis of the conversions, not the gains, correct? Over 59.5 there is no penalty, but you would pay taxes on any gains taken before the 5 year limit?
@@dancasey9660, the exception allows you to tap the gains as well. The only hurdle that may arise is if you hadn't established the Roth more than 5 years prior. Then the gains could be subject to the contributory rule
I am happy you added this clarification. You only need one Roth contribution to one Roth account established for 5 years once you are 59.5 or older. There’s no additional 5 year clocks on each conversion if you are older than 59.5 and first opened the Roth more than 5 years ago.
@@JFreeUNC Does that apply to Roth 401K's also?
@@dancasey9660 I am honestly not sure if there’s a separate 5 year rule for Roth 401k’s and Roth IRA’s. I played it safe and opened, then contributed to both accounts more than 5 years ago.
Some states currently have Ira in payout mode protected from Medicaid. We have converted some Ira to roth. This year planning to take long term capital gains in taxable account and buy same asset back to get a step up in basis tax free as long as we keep taxable income within limit
Flat rate plans. Do you do those?
Thank you for your presentation. $60000 IRA plus an additional $5000 is a 22% tax bracket? The example is confusing show the SSI numbers. We are delaying SSI until 67 y/o my pension of $68000 & a $35000 IRA distribution will keep us in the 12%.
Great video! Is there a tool available that would create my own tax torpedo view/timeline?
At 60 to 62, quit your 6-figure job and get a very low paying job. Each year move enough from pre-tax into a Roth, keeping the limits below IRMAA penalty limits. Make sure your low paying job has qualified health insurance if your spouse is not working. Push Social Security out until the Maximum, at age 70. Stay off of Medicare Part B and Pard D as long as you have health insurance. If you can make it to 70, you may not have any RMDs, moving all your pre-tax accounts over. No widow/widower tax trap. No RMDs to force on your heirs. At 70, starting Social Security, your taxes on it will be very minimal. I am well into this plan. Will be at FRA this year.
Do you offer tax strategy sessions for those who watch the replay?
You really should not call withdrawing money from IRA to deposit into bank accounts as a conversion. Just call it a withdrawal.
Or distribution
So much of what you talk about is very valuable and “food for thought” and well explained. But the tax torpedo explanation is very confusing and after watching it over several times it occurs to me that this is just for people to worry about if their income falls in a certain window. Those of us who are already paying 85% on 1/2 of our social security don’t need to worry about this and if we are trying to do Roth conversions then we should focus on staying in our tax bracket and converting as much as possible right up to that point. I could not figure out why the torpedo dropped off dramatically at the far end. You might want to include an explanation for that in your next video. Again, your information is super valuable. I would like a video on Roth Conversions and why you would want to stay in your original tax bracket and why or how you would calculate why you would want to go up to the next tax bracket. I know you already touch on this from several angles, but I would want to know how to calculate or how to do a forecast. This is probably what you do for you clients, but just sayin’. Thanks for this content!
I also don't get the torpedo that drops back down. Like you said, is it not a concern if you will have over a certain amount in income?
Thank you for your comment so I don't have to watch it a few times. I agree that the lack of specification on when that tax torpedo is applicable. I too will likely be over that amount and therefore not impacted by this perceived bomb.
Okay! Great! Love it! 🙋♀️ Question. Is it better to do a fast TRAD-ROTH conversion (with tax hit), and GROW it…..vs leaving it small as possible, (and converting it in fractions),so it won’t get big tax hit in the TRAD-ROTH conversion?
I am going to be 72 in a month and working full time question will all tax deferred Multiple IRA Question is if i consider converting tax deferred ira to roth is the requirement for conversion requires all my multiple ira to convert or can i convert some and leave others so pay capital gains tax only on part of converted ? Appreciate your help this is my first workshop of yours also need some advise thanks
Thank you for all you do! I have found your videos to be so beneficial and thought-provoking.
I did get a bit sad at the end when you described all that you may be offering to your new Facebook group. I feel like I'll be missing out somehow. Am I the only senior out there not on Facebook?? Will the topics discussed on FB supplement or replace what would have been future video content? Without being selfish, I'm trying to be mindful of the time it must take you to produce YT videos vs. FB. (I'm trying really hard.)
Thank you!
Thanks Marsha!
This assumes that Roth is not taxed later a few years after Congress determines that there are not enough tax payers due to low birth rate everywhere. Or Congress can increase the corporate tax rate while they make net billions.
Problem with taxing corporations is that they are "international". When congress decides to really put tax pressure on those corporations, watch out for the exodus.
If i just wanted a future roth conversion plan set up considering my total available funds, does your company do that and what is the fee?
We do but unfortunately we do not perform fee-for-service at this time. We do this as a service for clients that have assets with us, however.
This is a great video. Too bad it's not been more widely viewed.
Is it true Safeguard only works with people that have $2M in liquid assets?
What about annuities?
It depends on the policy. Some allow for conversion within the annuity
At 47:00. Accounting for total tax savings can be misleading. What you want to optimize is post taxed value of the accounts. for instance, if you convert but the tax rate is the same as if it was not converted. You will pay less in taxes but there won't be any net financial benefit because roth and regular Ira are identical (assuming no impact on Social Security or other program money/ taxes) .
This is how the tax savings are calculated. For instance, if a tax was paid at 22% to avoid 25% or 28% in the future, that % spread is calculated as the tax savings.
If someone was paying 22% to avoid 22% in the future, that would not translate to a tax savings in our software
Don’t you still have savings even if the rate stays the same, since future growth is not taxed?
@@shkim103 If the tax rate is the same there is no benefit. However, LTCG and Social Security are impacted by additional incomes. So withdrawals from regular IRA can cause a higher percentage of SS and move LTCG up into higher brackets.
@@ralphparker If I convert $100,000 from Traditional to Roth, I will pay $22,000 in taxes today. If that is paid out of the conversion (only one option), the remaining $78,000 will grow tax-free for the next 30 years. At 7% growth rate, that doubles every 10 years: $156,000 in 2032, and $312,000 in 2042. Withdrawals are tax-free, so I saved 22% of the difference: taxes on $400,000 (taken over time at 22%) = $88,000. I can pay $22,000 today or $88,000 over the next few decades.
If I pay the taxes out of my savings, however, that's like adding $22,000 to my Roth account! In that case, I have $400,000 in the Roth having only paid $22,000 in taxes and gaining an $88,000 benefit. Am I missing something?
@@gregoryellis324 If you are taking monies out of your conversion to pay taxes And the tax rate stays the same. It is a wash. Follow this equation: [Principle * (1-TR) ]*(1+GR)^Years where TR = Tax Rate and GR = Growth Rate. In this equation You calculate the after tax principle : [ Principle * (1 - TR) ] and grow it over the years. Now if you waited and did not make a roth conversion and stayed at the same tax rate the equation would look like this: [Principle * ( 1 + GR)^Years] * (1-TR) where you can see that the principle grew first and then you taxed it later. Now it is obvious that you paid less taxes in the first scenario than in the second scenario but the principle at the end is the same.
Now in the second case: You pay taxes out of a Taxable fund the equation looks like this: Principle = Conversion * (1 + GR)^Years - TP * (1+GR(1 - TR2)) ^ Years where TP is taxes Paid and TR2 is the tax rate applied to the taxable account [because it is a combination of interest, dividends, qualified dividends, shortterm and longterm cap gains it will have a different tax rate that standard income]. The new principle in the Roth account is Conversion * (1+GR)^ Years. But the lost principle in the taxable account is accounted for in the second part of the equation TP * (1 + GR(1-TR2))^ Years. Since Taxes are paid on the growth each year from your taxable account, there is a tax drag on the actual principle growth. So in your second paragraph you did not account for the lost growth in principle that you paid your taxes from.
My summary:
Roth conversion + 30 years at 7%, taxes Paid from conversion at 22%: Principle = 593755.9, Taxes Paid = 22000
No roth conversion + 30 Years, 7% taxed at 22%: Principle = 593755.9, Taxes paid = 167469.6
Roth conversion +30 Years, taxes paid from Taxable account, 7% growth, both the IRA and the Taxable account growth are taxed at 22%: Principle = 761122.5-108406.6 = 652818.9 Where 108406.6 represent the future loss from the taxable account. which is an optimum case. This is the optimum case, if the the Taxable account growth is taxed at a lower rate and probably is, the benefit is less.
Is there a chance I've played pickleball with you?
how come no one talks about the lost opportunity cost when you pay a tax?
What is the opportunity cost you are referring to?
@@SafeguardWealthManagement - I'm guessing he's referring to the opportunity to invest the money you would otherwise be paying in taxes.
Do the math....it works out the same. If you invest now and pay taxes later or if you pay taxes now and invest. The end result is the same given the same tax rate and ROI.
@@ronloftis9080 Exactly. There is not an opportunity cost to paying taxes. The benefit of a conversion all comes down to tax rates now vs. tax rates in the future.
The contribution limits can impose an opportunity cost here. Assume the 2022 limit of $6,000 for IRAs and a 22% marginal tax rate. If you're able to max out your accounts with after-tax money, and you're in the 22% marginal tax bracket, then you can put the equivalent of $7,692.31 of pre-tax income in a ROTH ( $7,692.31 * (1-0.22) = $6,000). But if you choose to go with a traditional IRA, then you can only invest $6,000 of pre-tax income. Your tax savings of $1,692.31 can't be invested in an IRA, so there's a cost to choosing a traditional IRA in this scenario.
On the other hand, investing in a ROTH essentially sets your tax rate in stone. There's no chance that that money will be taxed at a lower rate due to lower income in retirement. With a traditional IRA, there's a chance your income will be taxed at a lower rate in retirement. After all, your income can be lower since you don't need to put any of it into savings anymore. So losing this chance to pay a lower tax on, is the opportunity cost of choosing a ROTH.
Send me the 60/40 book please.
I lost my job during the pandemic and I have no earned income now. Can I still rollover my 401k into a Roth IRA? Is there an earned income requirement for the roll over? Thanks.
I'm not a financial advisor, but all my research says that you do not have to have earned income for a Traditional to Roth conversion. Retirees have that option. In fact, a Roth conversion timed during a period when you have zero earned income may drop the tax liability dramatically. If nothing else, you can convert an amount equal to your Standard Deduction essentially tax-free!
That's what I thought. Thanks!
I lost my job at age 48, and never went back. I started Roth conversions at age 54. I'm 62 now, and have 2 more years of Roth conversions. My avoided taxes on my Roth withdrawals from age 65 to 95 will be $2.4 million. Of course I'll have paid $83,000 in taxes on my 11 years of Roth conversions. My conversions are done in Texas (no state income tax), while my Roth withdrawals will be in California (high state income tax rate).
Bottom line: there can be financial benefits to losing a job.
@@larryjones9773 Wow! That's very impressive!
Thank you for this great info! I did get a bit lost on your Mistake #4 white board explanation, scenario 2, after "taxes = 13.2k"
What is the income cutoff for Obama care for single people? Please include this. There are a lot of us single folks out here.
Of course. We have shared this in a few other videos I can link to. Its important to note that the subsidy cliff has ben adjusted for 2021 and 2022 because of the American Rescue Plan.
Here are the trainings:
Navigating Obamacare - th-cam.com/video/kQP6qfaXlis/w-d-xo.html
American Rescue Plan - th-cam.com/video/COhz6ocQy4s/w-d-xo.html
9:55 Convert a 1M IRA to Roth, no other income, married, $300K in taxes. in 2021!
Correct. Tony misspoke by saying it was all at once. Our apologies for any confusion
1. Roth conversions are not a loophole.
2. There is no indication it is going away any time soon.
3. Saving tax dollars is not the right comparison. After tax net worth is the right comparison. Conversions are only beneficial if you pay a lower tax % on the conversion vs deferring.
4. Your example of 40% tax is selective to make converting look better. That is specific to a particular income where you went from not paying tax on SS to having to pay tax. Since SS limits are low and not indexed for inflation, it will be hard for most people to avoid tax on SS in the future. You could be selective the other way as well. If you are at the top of the 12% bracket and convert to Roth, you will now pay 15% instead of zero % on your cap gains and qualified dividends.
Five year rule. THE ONLY PLACE TO GET INFORMATION ON THE FIVE YEAR RULE IS DIRECTLY FROM THE OFFICIAL IRS PUBLICATION OF TAX RULES AND REQUIREMENTS. Don't ask anyone else! Everyone (99%) get this wrong.
You lost me very early when you threw in the “extra income” of $5000. You’re not saying where this is coming from. Social Security? Income from the IRA? Am I to assume something?
capital gains from investment, I believe
I think taxes won't double but inflation could skyrocket as they print money so one way or the other they will brutiize our 401k investments.
If it was a bad thing to delay RMD to 72, would it actually be a great thing to start taking IRA distributions (or better, Roth conversions) as soon as your eligible?
You might need to clarify your question for my but I'm understanding it as you are asking why would IRA distributions/conversions make sense early in retirement if we don't like them later in retirement?
There are a lot of reasons. I would point you to our Roth Conversion playlist on our channel to explain the reasons why. - th-cam.com/video/wGFDeyUJuEA/w-d-xo.html
RMDs by definition are a forced withdrawal whether you want the money or not. The golden rule of tax planning is that we want to have complete control over our income. In our practice we typically see RMDs pushing retirees into various tax hurdles like the SS tax torpedo, Capital Gain Bump Zones, Widow Penalty, Tax hikes (because of the Tax Cuts and Jobs Act), etc.
They didn't say it was a bad one, rather that this is good but overshadowed by the tax increases which are a real gutpunch
This was 2020! Look what Congress and Biden are doing!!! FJBLGB!SMFH